Liu Yongxing
Quail breeder Liu Yongxing is being hailed as China’s working class fairytale and the country’s richest man. As reported by MSNBC, Liu and his three brothers founded a quail-breeding farm around 1980 with $125 in the impoverished village of Gujia and are now worth a combined estimate of more than US$5.2 billion. While mainstream media clings to this heartfelt rags to riches story, the first thought that came to my mind was, “I wonder when the Forbes curse will trash his nest.”
Liu Xiaoqing
As Chinese novelist Wang Gang pointed out in an interview with Gady Epstein, if you’re Chinese and “you get onto the Forbes list you’ll be dead meat in no time.” He has a point. Rich people in China who happen to find themselves in the public spotlight are also known to end up in jail. Just look at sports beverage executive Zhang Hai, real estate tycoon Zhou Zhengyi, orchid king Yang Bin, actress Liu Xiaoqing, and entrepreneur Tang Wanxin. They’ve all basked in the glory of Forbes fame, and they’re all perched behind bars today.
In the incredibly insightful book China Entrepreneur, importer-exporter Oto Petroski states that “from the moment private people become richer than the national banks, then the central government cannot tell these people what to do. In the last few years, some very rich people have emerged but the Chinese government can still find something in their background to expose them, and then remove them from the page.” As the Chinese Communist Party’s 60th anniversary approaches on October 1st, China’s well-heeled may want to consider keeping a low profile until nationalist fervor dies down.
Tang Wanxin
As for Liu Yongxing, while many will find the tale of his rise to the top inspiring, others are surely asking the question, “how’d he do it?” for very different reasons. If you study the economics of happiness, you will find that people generally do best when they share the same income bracket with their neighbors. Once circumstances shift and your neighbor demolishes his hut to make room for a mansion, the green-eyed monster tends to rear its ugly head. Given this lesson, Mr. Liu may want to consider building a very high wall around his nest before he lays anymore golden eggs. Oh and, maybe Forbes will be kind enough to overlook him next year.
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What an incredible coincidence if that were the case. Corruption just eats the nouveau rich?
Aimee, interesting post!
Following the link to the Forbes article, I liked the comment from the protagonist of Wang Gang’s article…burdened by the “original sin” of corruption that made their wealth possible.
Are you suggesting that the reason why wealthy people who become prominent become jailed is because they almost invariably were involved in some kind of corruption that facilitated their wealth creation?
Would you agree that the people who get rich in China are generally the ones who have been willing to become involved in corruption? And do you see that changing now that China is increasingly “killing chickens to scare the monkeys” by making examples of a few prominent wealthy people?
There is another theme that, unfortunately, I don’t have a Chinese saying to emphasize. I think the Western saying is “the tall poppy is the one that gets’ cut down” or something. Do you think this is also the case with the wealthy that are unsuccessful at remaining quiet and modest about their wealth?
Great questions, Elliott! While I would not be so quick to state that every wealthy person in China has been involved in corruption, it is certainly a factor that has played into the success for many. The government is definitely “killing chickens to scare the monkeys” but what I find most interesting now is the point made in “China Entrepreneur”- that government will continue to crack down on the independently wealthy as a means to maintain social order. Consider that an estimated 880,000 people in China have been persecuted on corruption-related charges over the past 5 years- that’s a pretty hefty number.
For your last question, I’ll share a story with you. As I’ve written about on my blog, I lived with a businessman in China who had been publicly accused of corruption. To my knowledge, he never had a major problem until he began driving a bright yellow car. In the dusty city where we lived, there weren’t any other bright yellow cars- it was a status symbol which screamed “look at me!” In some of the letters that his company received regarding his wealth, that bright yellow car was mentioned (he got rid of it promptly). So to answer your question, I think that the problems really start to occur when China’s well-heeled begin flaunting their worth in public in ways that are hard to ignore. Bright yellow cars are never a good idea.
This is interesting. My initial inclination is to conclude that, because so many wealthy people have ended up behind bars, they all must have broken the law somewhere along their paths to riches. Indeed, I would be surprised if none of them had.
However, could this phenomenon be similar to Russia where wealthy people have appeared to an authoritarian government as potential threats to unchecked power?
Since China lacks an independent judiciary, should we assume that all of these wealthy Chinese people who have been jailed have truly broken the law?
This area is ripe for in-depth research.
Greg, thanks for the comment and I definitely agree that this area is ripe for in-depth research, which is exactly what I aim to do! Your comparison to Russia is interesting and along the same lines as the point made in “China Entrepreneur”- no doubt that, as private wealth increases in China, so too will arrests for corruption-related activities. At some point, however, a shift will need to occur in order for China to continue on its current economic path. What incentives will entrepreneurs have if they know that their success may bring them jail time? I read somewhere that for every 100 instances of corruption in China, only 3 are held accountable- a very low percentage. However, if this number rises significantly, how many will want to take the chance?
Can we assume that wealthy Chinese people who have been jailed have truly broken the law? This is a complex question- what is considered “breaking the law” these days is also a rampant business practice integral to securing contracts, accounts and clients. The attitude that still prevails is “everyone is doing it; why shouldn’t I?” I think this is really a major flaw in the system- “do as I say do, not as I do do” rarely works out in the end.
How about similar corruption cases in Taiwan, South Korea, and Japan? And in some US states (http://www.newwest.net/index.php/city/article/3377/C110/L110 and http://www.time.com/time/nation/article/0,8599,1865681,00.html)? These are not totalitarian governments at all, are they?
From my point of view, the similarities are: business involvements in politics and the risks of taking sides. Could it be possible that the top riches in the US/EU are not indicted not because they are clean but because they are more integrated into the power structure in these places therefore less prone to the crossfires of the power struggles?
The maxim is 樹大招風, or “a big tree catches the wind”.