Recently, China's business giants have been referred to, in
total, as a group of "impure magnates", because of the activities
and reputations of men like Yang Rong, Yang Bin and Zhou Zhengyi.
These businessmen, who have been listed on Forbes' China's
100 Rich List, have all been caught and charged with wrongdoing,
one after another. And their fall has come to symbolize the end of
an era. Two prominent billionaires talk about the problems of being
rich in modern China.
Host - Zhao Xiao, a postdoctoral researcher
from the Economics Research Center of Peking
University.
Interviewee - Mr. Yang Zhuoshu, board chairman
of Zhuoda Group (Hebei Province, set up in 1993). Age: 51.
Education: second/third level. Industry sector: real estate,
tourism, education. Ranked 17 in Forbes 2002 China's 100
Rich List. Asset Value: US$265 million.
Interviewee - Mr. Feng Lun, board chairman of
Beijing Vantone Industrial Group Co Ltd (1991). Age: 40. Education:
second/third level (BS in Economics, MS in Law). Industry sector:
real estate.
"Impure magnates" usually belong to the second sort of
businessmen
Host: Recently, China's business magnates have
been almost completely referred to as a group of "impure magnates",
because of the activities and reputations of men like Yang Rong,
Yang Bin and Zhou Zhengyi. These businessmen, who have been listed
on Forbes' China's 100 Rich List, have been caught one
after another. Someone said that the Forbes's
entrepreneurship list is in fact a "convicts list". What is your
opinion about the list and these apprehended "impure magnates"?
Feng Lun: I believe that these cases represent
just a few instances in the progress of contemporary wealth
accumulation; an inevitable phenomenon of a society in transition.
Just as the official corruption cases showed, there are always bad
people amongst good, as is naturally the case. As these
Forbes listed magnates have great influence and power,
they attract public attention and catch your eye.
Since 1978 many of China's individuals have accumulated great
wealth. During those 24 years, there have been three sorts of rich
people. The first group were wildcats who played the market in the
1980s by monopolizing product sectors, but who have now nearly all
disappeared.
The second group were those who became rich in the 1980s to the
1990s. Their "primitive accumulation" (Marxist term for capitalist
acquisition of material wealth) was described as an "original sin",
but they later got themselves back on track and gradually made
their wealth operate and develop in a more legal and normal
fashion.
The third group were entrepreneurs in newly emerging industries,
like the CEOs of Sohu.com and NetEase.com. They founded their
companies, absorbed venture capital for expansion and then managed
going public. They were beneficiaries of a new and vibrant stock
culture. Their wealth was open and aboveboard and nobody had reason
to doubt it.
Thus, the ways of being (and getting) rich have differed in
various historical periods, naturally leading to different
problems. Amongst the magnates charged recently, problems were
exposed in activities from periods of "primitive accumulation". It
is possible therefore to see that private wealth, accelerating in
recent times, say over the recent couple of years, usually reflects
a tendency of being clean of corrupt origin or what in China is
called "sunshine wealth".
Yang Zhuoshu: The appearance of the "impure
magnates" is not just caused by the Forbes list. "One can
only get help after first one helps oneself, while one only gets
ruined after one first ruins oneself", too. But I dislike being
called a rich businessman as I feel it's a title that is
superficial, ignorant and disappointing.
In terms of Marxist historical materialism, the cases were not
only the product of individual problems, but also affected by the
realities of historical background and a particular social
environment. To some extent, almost all those charged had a
difficult past, and their problems occurred mainly in a period of
social transition. However, they don't represent the leading track
of private enterprise development in China today. It's unfair to
blame private enterprises too much.
To be too critical of the private sector could result in less
employment and lower speed of national economic development. So,
what we need is to protect private companies not create a culture
that blames them.
I could say, even if there were 99 rich boys being arrested, I
would be the last one to be caught. I believe no one will be
overthrown if they are good throughout their life.
Someone once said, everyone is selfish. But I have a principle:
a man should consider himself only after he has benefited
others.?
When I gave my speech at a donation ceremony in the Great Hall
of People in Beijing, I said, I am not the richest man in China,
but I am the one giving the largest donation. I don't display
myself in public unless it's necessary. I felt sad when I heard
that only 23 million yuan had been collected after all the
activities held in 100 cities around the country, as I had already
donated 10 million yuan. Then I pitched in another 10 million yuan.
When I stepped out of the Hall, one reporter said to me, "Society
doesn't believe in generosity". I answered that, "It's none of my
business if others believe in it or not, but I believe in it."
A hotbed of "impure magnates" still exists
Host: A hot debate on the "original sin" of
these criminal magnates has now come about. What is your opinion
about the "original sin" of wealth collected during the period of
development, in the transition to a market economy in China?
?
Feng Lun: Different people have different
explanations for the legal meaning of "original sin". Previously,
we defined "original sin" as a sin of investment, even if you had
no money to begin with. The sin was some enterprises' violent
tendencies caused by huge debts undertaken in the initial period,
resulting in an incorrect attitude towards money.
Yang Zhuoshu: For wealth, I understand it as
the amount of money given "free gratis" or regenerated with charge,
for benefiting others and society. Now I have 4.5 billion yuan. If
it could not be invested but only consumed, I would not say it was
wealth. I give "wealth" a second definition: a kind of
responsibility, which means, you bear more responsibility as you
have greater wealth. The "wealth" does not belong to one alone, nor
to a family or a group. Real wealth should belong to society.
Wealth in itself is unimportant, but becomes important as it
does things. Every year, the rich people of the United States
contribute US$800-1,000 billion in donations, almost equal to all
the GNP of China.
As regards wealth, how many Chinese businessmen can contribute
their wealth to charity? I don't think there are many among us. No
more than 5 percent of China's bosses donated their money from
their safes. I am not the richest one, but I think it's more
important for me to have a better understanding of wealth than to
know how much money I have.
Host: The "original sin" of contemporary
wealth, someone proposed, requires a special amnesty, while someone
else said it should be exposed and criticized. What is your opinion
about these concerns on past experiences?
Yang Zhuoshu: Media unseemingly recommended the
concept of "original sin", a Christian term. When we talk about
"impure magnates", we should not blame them only, but also check on
the defects of the current system. If those defects haven't been
abolished, a new group of criminal magnates will emerge again as
the hotbed for breeding immoral magnates is still in existence.
Tax dodging and evasion obviously violate the law. Thereafter, I
don't think there needs to be an amnesty given to businessmen
involved in this kind of crime. History has its own way. There are
always lucky fellows escaping and guys hitting the skids. Everyone
should be responsible for what they do, it's not necessary to make
a special case.
I feel investigating criminal wealth is a good thing, but there
is also a need to consider the large amount of social problems
arising afterwards. Wealthy people in the private sector without
any problems should be protected. However, the most important thing
is to demolish the bugs existing in the current system. Generally
said, these two ways, neither thorough investigation nor giving
amnesty is maneuverable in China.
Feng Lun: In order to solve the problem of this
kind of "original sin", it's a must for legislating a law to define
clearly who is involved in the "sin" and who is not. However, it
would be a mission impossible, therefore, I don't claim the method
of legal absolution. Absolution needs a definition to first tell
who committed the sin, and it is this that creates hot debates.
In addition, I don't approve of settlement by being brought to
account either, and I think it's impossible too. In fact, it would
neither be applauded by society, nor good for social
development.
In my opinion, a measure of reckoning would result in large
amounts of money fleeing to foreign countries, while amnesty would
bring moral condemnation on the rich. So, for "original sin", I
feel it is practical to end up it with nothing definite.
Are "Sunshine" billionaires absolutely
aboveboard?
Host: As some magnates' lies are exposed to the
public and their behavior brings shame to all China's magnates,
more businessmen eagerly need trust from the public. Facing public
condemnation, how can you stand out and justify yourself and most
billionaires? Can you claim yourself to be absolutely aboveboard
businessmen?
Yang Zhuoshu: No doubt about that. I am fair
and like to be a "sunshine" billionaire.
Feng Lun: I'd like to say that I am 95 percent
clear or "sunshine", because my comment is not complete, and I
should leave some margin for other's comments.
Under the administration of America's near-perfect legal system,
we still find that many American companies have been involved in
scandals. Poverty can make people steal and money can bring fraud
and bullying. Problems differ from different conditions.
Low profile can reflect a thieving
mentality
Host: Most of China's magnates listed in
Forbes remain low-key and aren't willing to face the media
and public. What is the reason?
Feng Lun: In an agricultural and unopened
society, or a society with undeveloped information, being of a low
profile is an effective method of avoiding danger. But it wouldn't
be effective in today's society, rich with information.
Some entrepreneurs and businessmen have a thief's psychology.
Thieves are low-key while gentlemen are not. Because of "original
sin", some magnates prefer to hide.
I think they should not take the measure of hiding themselves if
those magnates want to live in the sunshine. They should neither
overstate their corporations' information nor misdirect their
consumers. In an open society, these businessmen should stay in
contact with the public, with an open attitude not a thief's
mind.
I think magnates should handle the relationship with society
well and bear more responsibility as a "corporation citizen", such
as having the correct attitudes towards environmental protection,
disadvantaged groups, city management and tax issues.
Host: What kind of entrepreneurs belong to the
"sunshine" magnates?
?
Yang Zhuoshu: I think "sunshine" magnates should
have four qualifications. First, the enterprise should gain the
acceptance of local government, local people and customers, which
is a prerequisite condition. Second, the master of the enterprise
dares to open all information to the public. If he can do this, it
shows he is innocent. Third, an open and just judgment by an
authoritative media without any material gain is needed. Fourth, an
effective evaluation system should be provided to judge the
implementation of basic social responsibility by the enterprises.
This should include things like tax payments, providing jobs and
ordinary participation.
Feng Lun: If enterprises require the support
from governments and also a positive response from media, the only
way left is for them to take the right path guided by correct
principles.
(China.org.cn, translated by Wang Zhiyong, September 29,
2003)