Wenzhou ex-fugitive shares business journey during China's 40-year economic reform

By Xie Jun Source:Global Times Published: 2018/7/16 18:08:40

Zhejiang merchants key players in China’s 40-year economic reform


A view of an expressway built around Wenzhou, East China's Zhejiang Province Photo: VCG



 

Wenzhou businessman Hu Jinlin Photo: Xie Jun/GT



Merchants from Wenzhou, East China's Zhejiang Province are known for their talents in doing business. Many of them have grasped opportunities created by China's reform and opening-up policy to make ventures. The Global Times recently interviewed Hu Jinlin, a Wenzhou businessman nicknamed the "electric appliance king," to talk about his business ups and downs during the 40 years of reform and opening-up. 

In the 40-year history of reform and opening-up, merchants from Wenzhou, a city of less than 12,000 square kilometers located in East China's Zhejiang Province, have caught China's and even the world's attention for their brilliant business minds, pioneering spirits and successes in building the powers of Chinese companies.

"Wenzhou had a large population but little land... We had to mainly count on ourselves. We were not like big city graduates who had their jobs arranged so they could feed themselves. We had to go with the times and adapt to society," Wenzhou businessman Hu Jinlin told the Global Times.

On Wednesday, he flew back to Phnom Penh, capital of Cambodia, where he now lives and works. For Hu, he cherishes memories of his business heydays in Wenzhou, where he was a pioneer of the local hardware and electrical appliances industry, but he knows those days are gone.

Pressured into business

Zhang Yili, a professor with the School of Business at Wenzhou University, echoed Hu's views in saying that the success of Wenzhou merchants is the result of a harsh reality.

"It's a tradition that Wenzhou farmers would often do business in the slack season. If they didn't do so, they wouldn't be able to make a living," Zhang told the Global Times.

In some way, Hu is a typical example of a generation that was forced to stand up on its own.

Born into a big family of 8 brothers, Hu in 1974 followed a relative to Central China's Hubei Province to work, just one year after he graduated from junior high school.

"We were taken to the mountainous area, which is now the Shennongjia region in Hubei, to build a radar station. I still remember the mountain roads - they were so rough! When we arrived, I immediately requested to go back to my hometown," Hu said.

"But that trip made me realize that China is very vast, and it inspired me to do business for a living," he said.

After returning to Yueqing, his hometown, in 1976, Hu started his hardware business.

"When I started the business, I often spent whole days sitting at my booth, while many of my peers talked about where to hang out. But I knew that when doing business, a very important thing was that the customers could find sellers whenever they wanted."

With the market economy budding in China, Hu's business also flourished locally.

"By the end of October 1976, I had already managed to build a house of my own. By the end of that year, I had about 50,000 yuan in cash," Hu said. But that was a rare case, as many people at that time only earned dozens of yuan in monthly salaries. It was, therefore, a dream to earn a yearly income of more than 10,000 yuan.

Back in the 1970s, the Chinese currency was not as depreciated as it is now, with its value standing at about 1.5 yuan per dollar.

In the 1980s, Hu shifted his business focus to selling electric appliances, and it was a success. Later, he was nicknamed the "king of electric appliances" in Wenzhou, becoming one of the eight local business kings.

The other seven ran businesses related to making catalogues and molding.

Driven by energetic and aggressive Wenzhou merchants, the city's GDP surged from about 1.32 billion yuan in 1978 to 550 billion yuan ($82.4 billion) in 2017, according to media reports. 

Undertows in reform

For Wenzhou merchants, however, doing business 30-40 years ago was not always rainbows and unicorns. In reality, they had their own hurdles to jump along the bumpy road of reform and opening-up.

In the early 1980s, a wave of anti-speculation swept across China, and Wenzhou businesspeople were not safe from it.

Speculation at the time referred to buying products at low prices and selling them at higher prices.

Due to that campaign, 164,000 economic crime cases were investigated across the country, resulting in the sentencing of 30,000 people, Chengdu-based newspaper West China City Daily reported in May.

According to Hu, the central government in 1982 sent some officials to Zhejiang's Yueqing county where talks were to be held.

After the talks, Hu sensed that danger was on the horizon. A few days later, he made some false certificates, hired a boat and fled Yueqing.

Being a fugitive, Hu wandered from Wenzhou to Shanghai and eventually up to North China's Heilongjiang Province. 

But Hu said that he was never desperate, as he believed the trend of China's marketization was irreversible despite temporary setbacks.

Hu, along with the other seven Wenzhou business kings, was put into prison around 1982 on speculation charges.

But the local government later dropped the charges against them and championed them as reform pioneers, in accordance with the central government's reform and opening-up policy, according to the report.

In 1984, Hu eventually returned to Yueqing and continued his business in his hometown. 

Going global

In 2000, after hearing a speech by then Chinese premier Zhu Rongji about the proposal of a free trade zone between China and the Association of Southeast Asian Nations (ASEAN), Hu studied the 10 ASEAN countries and picked Cambodia to develop his business.

"Cambodia is like a pool in a forest with big fish and deep water. The question is how can you catch the fish," Hu noted, adding that on average, electric appliances in Cambodia were four or five times more expensive than those sold in China, which made room for business.

In July 2001, he opened his electric appliance company in Cambodia, which is still operating today. Now, the domestic market only accounts for a very small portion of Hu's business, while the overseas markets are his core focus.

According to a report released by Wenzhou-based news website 66wz.com in June 2017, about 680,000 fellow Chinese from Wenzhou are living abroad, accounting for one-third of all Zhejiang natives living overseas.

In 2017, 16.3 percent of the Zhejiang population was living in Wenzhou, according to media reports.

Zhang said that a common trait of Wenzhou merchants is that they dare to go out of their comfort zone.

"They like to source information from here and there, and to research far-away markets," Zhang said.


Newspaper headline: Wenzhou’s ‘electric appliance king’


Posted in: INSIGHT,BIZ FOCUS,BUSINESS

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