china’s billionaires 2

China’s Billionaire Boom



miracle forbidden to grant us and audience
jade influence conglomerate
taboo analogy nuanced
poverty Popsicle counterpart
rugged estimated perseverance
forfeit charity ruthlessness
diligence initiative indomitable
steer threshold perseverance
harness commerce rubber stamp
bribe wholesale phenomenon
intrinsic congress paperweight
potent evident superstition
usher instigation ostentatious





Beijing’s Forbidden City: once the center of an empire, now a tourist playground.

This is the new Forbidden City, built on the back of a new economic miracle: The hidden world of China’s billionaires.

Here is one of them, Madame Zhou Xiaoguang. And there are several hundred more dollar billionaires on Mainland China.

The billionaires like making money rather than talking about it.

But some of them granted us and audience.

Hong Weihua, Minghua Enterprises Group: “Sixty percent of this piano is natural jade. Michael Jackson bought it. Then I bought it for millions of dollars.”

Welcome to the world of half-million-dollar dogs.

Hong Weihua is from Shengyang in the northeast. His conglomerates stretches from luxury goods and the media to mining and property.

Hong Weihua: “Well I keep several dogs here. Some of them are quite rare, like the Tibetan Mastiff which people like pretty much. Well a white Tibetan Mastiff is rarer, maybe one in ten thousand. Most are black or yellow.”

He likes to show his wealth.

But property developer Dai Zhikang prefers to talk about the influence of the new entrepreneurial class.

Dai Zhikang: “In the economical world, the leadership should be entrepreneurs. People are gradually understanding and accepting it. Maybe not forever, but the next hundred years will be like that.”

This new openness of wealth and its role in such a nuanced society is partly thanks to one man: British-educated Rupert Hoogewerf.

His company Hurun, tracks the wealth of the richest thousand Chinese.

Rupert Hoogewerf: “What I’ve done is broken a taboo with people able to talk about wealth. Now the number of people taking part in this Fortune Olympics, I want to use that analogy, and try to go out and make money, is justified by every able bodies person in China today.”

There are two big differences between Chinese billionaires and their Western counterparts.

First, they are much younger, with an average age of just 54.

Second, almost all of them knew extreme poverty when they were young.

Hong Weihua, Minghua Enterprises Group: “She was a great mother. She used to eat last when the family was very poor in the old days.

She usually got nothing to eat in the end. We got something solid to eat; but she only got soup.

Zong Qinghou is China’s richest businessman with a fortune estimated at $12 billion. It comes from his 80% ownership of a soft-drinks company, Wahaha.

Zong Qinghou: “When I first started in 1987, it was a little shop in a school, selling Popsicles and soft-drinks. That’s how I started.

My family was really, really poor. I had no food to eat, as we were so poor.”

Rupert Hoogewerf: “What I’m seeing in China is capitalism in its rawest. I can make a comparison to the late 19th century America, when you got the Morgans, the Rockefellers, they all came up. They then had brilliant ideas and perseverance and ruthlessness, and today, they’re household names.

This is what’s happening in China today.”

The difference between American 19th century business barons and today’s China’s billionaires is that Americans saw the world in terms of rugged individualism.

Chinese business leaders like Hong Weihua talk in terms of their responsibility to society.

Hong Weihua: “I think responsibility is the first task of a man. Accountability. It’s a man’s capability to shoulder his impressibility. Then his diligence and indomitableness. Those elements comprise a real man.”

This sense of responsibility causes some of the super rich to forfeit enjoyment of their wealth.

Zong is an old-style communist, a member of the National People’s Congress, 2,700 member rubber stamp parliament.

He uses his money to further economic growth.

Zong Qinghou: “There’s an old saying in China, ‘help people in an emergency; but not those who depend on charity’.”

So I help poor people to get the opportunity to work, start their own business.

I don’t spend much on food, and I don’t spend much cash. I use the money to invest, to create more jobs; to create more wealth for society, to accomplish my life’s goals.

I don’t have much joy in my life.”

In their role as social leaders, the billionaires suggest all sorts of reforms and initiatives to members of the seven member steering committee that ultimately runs the country.

In 2010, Mr. Zong led calls to raise the threshold for paying income tax; it was raised in 2011.

In 2009, Madame Zhou harnessed her power and wealth to promote the town of Yiwu — withing two years, it became one of the world’s top trading post.

Mrs. Zhou: “This is the place where we first started our business.”

Yiwu is an international phenomenon. It has a huge market share in small goods.

It’s vast wholesale mall, as big as an airport, sells everything from plastic flowers to fax machines to Christmas balls.

Yiwu’s new status is an example of the billionaires bringing fresh ideas to the government and outgoing premier Wen Jiabao.

Zhou Xiaoguang: “As a deputy to the People’s National Congress, I’m the one who put forward the first commerce reform proposal to Premier Wen.

But I hadn’t expected that Premier Wen to comment on this proposal.”

Behind the carefully weighed words of the business leaders, and the changes that are commonplace in modern China, there lies one unchanging fact: the all enveloping power of the Communist Party.

Hoogewert believes the connection between wealth and political power is even more evident in China than it is in the West.

Rupert Hoogewert, Hurun Report: “When we looked at the top 70 people in the Chinese Congress, and compared their wealth to the US Congress, we found that the top 70 individuals in the Chinese Congress were richer than the entire US Congress all combined including the President and the thirteen members of the Supreme Court.”

Perhaps the opportunity for corruption is greater in China than elsewhere because of the role of gift giving which is intrinsic to Chinese culture.

This is a photograph of all the staff of Jenge Investment Company. And this is a paperweight from the Tang Dynasty. And you can hit any one of us with it, if he doesn’t behave well.”

“Time has proven that none of our gifts to officials were seen as bribes. None during all these years. The method I use is different.

And that is how I can avoid unnecessary problems for officials, while they get material benefits.

For example, I once gave gifts not only for the benefit of our company but also to help Shenyang City, and even Bilyangmin Province.

Thirty one government officials went to the US, and I paid for their expenses there.

I gave the money for the expenses, $3 million, to the city government. But if I had given money to the mayor or the vice mayor, that would be enough to give me problems.

Gift giving is not the only element of traditional Chinese culture to survive the Maoist period: religion and superstition are still potent forces at the highest levels of Chinese society.

With a private temple on the top floor of the family home, Madame Zhou and her husband, Yu Yunxin, are also devout Buddhists.

Entrepreneurs tend to enroll at business schools partly for networking, but most of them stop their education by the time they were 16.

Many are still influenced by superstition and feng shui when making their business decisions.

Although Madame Zhou and Mr. Yu had little schooling, their son Thomas graduated from the London School of Economics. He is leading their online strategy.

Children of newly wealthy parents are often regarded as too ostentatious. But most of the second-generation billionaires I met was as modest and hard working as their parents.

As they prepare to hand over to the next generation, it seems the billionaires are taking power at the instigation of the party.

But if the current system is to be called capitalism, is it possible to have capitalism without democracy?

Journalist: “Will the success of the opening up policy lead to more opening up?
Dai Zhikang, Zendai Group: “At least now it’s not an open question. I think it’s not in that direction now. Open is the word twenty years ago.”
Journalist: “If it’s not open, what’s the new word? Is it democracy?”
Dai Zhikang: “No.”
Journalist: “What is it then?”
Dai Zhikang: “Socialism.”
Journalist: “New Socialism. What does it mean then?
Dai Zhikang: “Economy for the majority. Not for the minority.”

Madame Zhou: “We never say we belong to capitalism. People have more demands. They want to be much happier and more respected, like our prime minister said. That’s our mutual goal.

Not everyone would do anything to make money.

And our system doesn’t allow that conduct.

Most people make their fortune by hard work.”

Mr. Dai talks about the entrepreneurs’ leadership role.

Madame Zhou has transformed her local economy by making Yiwu a global market for small goods.

Mr. Zong ushered in a raise in the income tax threshold.

So perhaps it is the super rich themselves who are insuring capitalism without democracy in what will be the world’s biggest economy.

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1. “The billionaires like making money rather than talking about it.” What does this mean? Why do they feel like this?

2. Hong Weihua likes to show off his wealth. True or false? What line of business is he in?

3. Is Rupert Hoogewerf a trader or businessman? What does he do?

4. What are the main differences between Chinese and Western billionaires?

5. What do they say about American individualism and Chinese responsibility?

6. The billionaires have a lot of political influence. Yes or no? How does Rupert compare Chinese and American politicians?

7. What do they say about corruption?

8. Due to communism, the top business people are completely secular. Is this correct or wrong?

9. Is the younger generation spoiled, wasteful and lazy?

10. According to the billionaires, how is China changing?
A. Do you know any billionaires? Who is the richest person in your city? What businesses are they in?

B. Are the rich ostentatious or modest or does it depend?

C. Do the rich care about poor people? Do they help them or establish charities? Should the rich help the poor?

D. Is it good, bad, both or neither that the rich have a strong influence on politics and the government?

E. What will happen to the children of the rich?

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