China's `red capitalist' takes on the West. Wang Guangying is the first mainlander to set up a private business in Hong Kong
Hong Kong — A decade ago, Wang Guangying lived in solitary confinement in Qin prison, near Peking, as a ward of China's ultra-left Red Guards. Today he commands the attention of Peking's most powerful politicians. Along the way, Mr. Wang picked up some unlikely titles. Among other things, he has been declared a citizen of Minneapolis and an admiral in the Texas Navy.
Billed as China's ``red capitalist,'' Wang was the first of socialist China's citizens to test the capitalist waters of the West. In mid-1983 he launched modern China's first private company here. Despite great expectations, Wang and his company got off to a miserable start.
``If he were a Texan, you'd have said he was all hat and no cattle,'' one foreign executive recalls.
Now, however, Wang seems to be earning his spurs.
A businessman for much of his life, Wang is slowly demonstrating socialist China's new talents for surviving in the wide world of free markets.
In many ways, Wang's career represents the story of China's emergence from decades of political power struggles and centuries of xenophobia. As might be expected, it has not been easy -- and still isn't.
Two years ago local executives watched in awe as Wang launched the Everbright Industrial Company here with much fanfare. Everbright was to serve as a broker between Western companies and markets in China. Wang also planned to make heavy investments in Hong Kong's hotels, housing projects, and the stock exchange.
One by one, however, Everbright began pulling out of its agreements -- either by canceling them or by revealing ``escape clauses'' in contracts with its joint-venture partners.
In Hong Kong's unforgiving business environment, Wang was quickly sized up as having more style than substance. The question of where his money came from became moot: He did not seem to have much.
Lately, however, Wang's business seems to be doing better. ``I'd count Everbright a qualified success to date,'' says one foreign business executive, ``although it still doesn't approach its advanced billing.''
Last year the company was involved in $990 million worth of trading, joint ventures, and project development -- up from $48 million in its first year. Only a fraction of that involved Everbright's own funds. Wang works chiefly as an intermediary between mainland enterprises and overseas investors and suppliers.
``Our job is mainly to introduce foreign capital and technology into China,'' says the mainland's premier capitalist. Everbright's direct investments will be limited to light industries and textiles, Wang adds.
Wang was born in Peking, the sixth of 11 children. His father was a senior diplomat for one of China's northern warlords.
After his schooling in the capital, Wang taught chemistry in Tianjin and eventually prospered as head of a chemicals factory in that city.
He relinquished the plant to the communist government in 1954, but continued to cooperate with the five-year-old regime of Mao Tse-tung.
Trouble started in 1966, when Wang -- along with his brother-in-law, the late president Liu Shaoqi -- became the object of Red Guard wall-poster campaigns. Wang spent the following year working in a factory and was then imprisoned.
Wang reentered public life in the late 1970s -- after a spell as a cook in Tianjin. In 1982, he returned to Peking and was elected to a senior post in the Democratic National Construction Association -- a group of 30,000 ``personalities of industry and commerce,'' as Wang puts it. His translator uses another phrase, ``the capitalists.''
Wang retains his links to Peking's senior leadership and reports directly to Premier Zhao Ziyang ``when it's necessary.'' It was Premier Zhao, in fact, who authorized Wang to launch Everbright several years ago.
Does all this make Wang a socialist in a capitalist sea -- or is it the other way around?
The chairman does not answer directly. ``Everything we help to import,'' he says, ``goes toward the modernization of China.''
Wang arrived in Hong Kong at a crucial moment for the colony. Peking and London were then negotiating Hong Kong's eventual return to Chinese sovereignty.
Both the stock market and the property market -- key measures of economic confidence here -- were chronically depressed. Accordingly, Wang's much-trumpeted dealings seemed at least partly intended to boost the colony's flagging morale.
Just the opposite was achieved when Everbright turned out to be more show than commitment. The low ebb was reached a year ago, when Everbright withdrew from a $130 million development project planned jointly with Li Ka-shing, Hong Kong's leading property tycoon.
Stock in Mr. Li's company, International City Holdings, nearly doubled after the venture with Everbright was announced. Wang pulled out, citing a contract clause that allowed him six months to do so at no cost to his company.
``That deal cost Everbright tremendous credibility in the local Chinese business community,'' says a Western commercial adviser.
Since then Wang has taken Everbright out of the limelight, and he has largely avoided the Hong Kong property scene. ``We have too much to do already,'' he says demurely.
Instead, Everbright has quietly concentrated on matching the mainland's burgeoning needs for investment and imported equipment with the capabilities of United States, European, and Japanese companies. Wang has also reorganized Everbright into six divisions, including one to look after business in the 14 coastal cities Peking threw open to foreign investment last year.
There have been some notable successes. Late last year Wang brokered a deal whereby Burroughs, the US high-technology company, agreed to assemble computers here and on the mainland with a Chinese partner.
Several months ago Morrison-Knudson, also of the US, completed a master industrial plan for China's Zhuhai special economic zone with Everbright as its partner. Wang has also started numerous construction projects on the mainland in a joint venture with Kumagai Gumi, a leading Japanese building concern.
All this means a hectic schedule for Wang. For much of this month, for instance, he will be touring the US, ending up at Everbright's new branch office in New York's World Trade Center. It was during his travels last December that Wang received the title honorary admiral in a meeting with Texas Gov. Mark White.
Asked what his clearest success has been, Wang mentions a $145 million land-reclamation project in Zhuhai, which will make about 45 square miles available for sugar cane cultivation. He says the project will also help control flooding along the Pearl River on which Zhuhai borders.
Not everyone agrees with Wang's assessment. ``That's the most harebrained scheme I've ever heard of,'' says one Western diplomat, citing the extremely low world sugar price. ``And adding acreage to the world's largest land mass?''
Despite the trials of opening China's markets to the West, Wang Guangying seems never to have lost the warm smile with which he greets a constant and varied stream of visitors to his Hong Kong offices. This is perhaps not surprising from a man who spent eight years of his life in solitary confinement during China's Cultural Revolution.