23 October 2016
Wang Jianlin has increasingly become the face of Chinese big business abroad. Photo: Bloomberg
Wang Jianlin has increasingly become the face of Chinese big business abroad. Photo: Bloomberg

Cadres and the capitalist – why Wanda boss is richest Asian

Wang Jianlin controls the world’s biggest cinema chain and is building skyscrapers that will redraw the skylines of London and Chicago. 

Among the 430 US dollar billionaires in China, Wang, the richest person in Asia, whose fortune is worth more than US$35 billion, stands out.

He has emerged as a rare private-sector tycoon able to advance Beijing’s interests abroad, with clout in industries and communities around the world, The New York Times reported.

In March, at an event to woo foreign investors, he was one of only a dozen businessmen to meet US President Barack Obama.

Wang’s key achievement is to have built one of the world’s most valuable real estate portfolios in a country where the state retains ownership of all land.

He says he has prospered by delivering what ambitious party officials crave: real estate developments that propel economic growth and bolster their careers.

In return, he says, the officials sell him the rights to develop choice parcels of land at prices far below what his competitors pay.

His conglomerate, Wanda Group, is known in China for its signature Wanda Plazas, massive shopping complexes with cinemas, office towers, hotels and apartments.

Since he built the first one in Changchun, Jilin province, in 2002, he has opened more than 100 in at least 70 other mainland Chinese cities, generating the revenue that funds his overseas ventures.

But a yearlong examination by the newspaper sheds light on a key ingredient in Wang’s success: his ability to obtain the backing of relatives or associates of top Communist Party leaders.

A review of corporate records filed with the government identified several such investments made from 2007 to 2011, when Wanda was privately held and rarely sold shares to outsiders.

Among those given an early chance to buy a stake was Qi Qiaoqiao, an active investor who is the elder sister of President Xi Jinping, the report said. (Qi sold or transferred her shares in the company in October 2013 to a longtime business associate.)

Other early investors included a business partner of the daughter of former premier Wen Jiabao, and relatives of two other members of the ruling Politburo at the time, Jia Qinglin and Wang Zhaoguo, the newspaper said, citing records and interviews with family members and business associates.

Together, their stakes in Wang Jianlin’s real estate division, Dalian Wanda Commercial Properties Co. Ltd. (03699.HK), were valued at US$1.1 billion when it held an initial public offering in Hong Kong in December, it said.

Their shares in Wanda’s cinema subsidiary were valued at US$17.2 million when it listed separately in January. Their holdings in both companies are worth more than US$1.5 billion now, the newspaper said.

It said there is no indication that any of the politicians whose relatives and business associates owned shares in Wanda intervened on the company’s behalf in any of its dealings with the government.

Nor is there evidence that any of the politicians personally benefited from the windfall that these investors reaped, the newspaper said. 

Wang often uses the same phrase to describe how he manages his relationship with the authorities: “Stay close to the government and distant from politics.”

He told state television in an interview in February: “It’s a fact that China’s economy is government-led, and the real estate industry depends on approvals, so if you say you can ignore the government in this business, I’d say that’s impossible.

“I’d say it’s hypocritical and fake to say that … But at the same time, for example, we don’t pay bribes.”

Wang’s father was a veteran of the Communist Party’s Long March, and Jianlin followed him into the army as a teenager, which may account for his demanding management style.

After leaving the military, Wang took a government job in Dalian, Liaoning province.

He was transferred to a failing state-owned builder of residential apartment blocks. Wang said he secured a loan with the help of an old army buddy and returned the firm to profitability.

In 1992, the firm was restructured as one of China’s first companies with shareholdings. Over the next decade, Wang oversaw its privatization, emerging as its majority owner.

The mayor of Dalian for much of that time was Bo Xilai, who would rise to the Politburo before falling from power in a corruption and murder scandal in 2012 after he had moved to Chongqing as party secretary.

Wang was a major benefactor to Dalian during Bo’s tenure, buying the city’s soccer team, which helped make it a national champion, and donating tens of millions of yuan to build schools.

Since Bo’s fall, Wang has sought to distance himself from him.

In a recent interview, he said he struggled during those years because he refused to pay bribes and did not get along with Bo. That limited his access to land, he said, which Bo’s administration would not sell him.

“We still made money, but it wasn’t a pleasant time,” Wang told Bloomberg Markets magazine.

It turns out, however, that Wang is not short of friends — or backers — in high places.

[See the full report in The New York Times]

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