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Entrepreneur a symbol of China's shift
Wealthy entrepreneur a symbol of China's freewheeling gallop away from Mao's policies
Thursday, November 23, 2006


Photo courtesy of Broad Ltd.
While hundreds of millions in his country live on less than $1 a day, Zhang Yue is near the top of the economic ladder. His net worth is $304 million, according to Forbes.com, making him the 100th wealthiest person in China.
Click photo for larger image.

China's richest


CHANGSHA, China -- Few men in China are richer than 46-year-old Zhang Yue.

The first in his country to own a private Cessna jet -- he now has five -- and a private helicopter, helipad included, Mr. Zhang parks a yellow Ferrari, a red Hummer and a black Rolls Royce down the road from two homes, ringed by ponds, that he built for himself and his parents in south central China.

He makes enough money from an $800 million air conditioning business to send his son to Carnegie Mellon University, also a user of his solar-powered cooling technology, and to build a statue on the south end of CMU's Oakland campus honoring a Chinese engineering hero. While hundreds of millions in his country still cling to life on less than $1 a day, Mr. Zhang has a net worth of $304 million, according to Forbes.com, making him the 100th wealthiest person in a nation of 1.3 billion.

Most remarkable is that the entrepreneur became so affluent here in the agricultural hometown of Chairman Mao Zedong-- China's violent enemy of capitalism.

Dan Fitzpatrick, Post-Gazette
The Broad Ltd. air conditioning factory is part of Zhang Yue's 90-acre corporate compound in Changsha, China.
Click photo for larger image.
"If Mao were alive today," Mr. Zhang said, optimistically, "he might agree with this concept."

Thirty years after Mao's death, Mr. Zhang is emerging as an important symbol of the new China, a country striving to regain its old grandeur by embracing economic reforms and private ownership as it produces an economy growing faster than any in the world. Three or four decades ago, Mr. Zhang would have been stripped of his possessions and thrown in jail, beaten or even killed during a brutal period of violence and repression engineered by Chairman Mao, who urged his citizens to wipe out all "capitalist roaders" in the name of "class struggle."

The new China, though, is more aligned with the philosophy of Mao successor Deng Xiaoping, who opened the door to private enterprise in the 1980s and 1990s, proclaiming that "to get rich is glorious." China is suddenly awash in new wealth, much of it concentrated along the coasts, in big cities such as Shanghai, Beijing and Hong Kong, and much of it tied to the nation's booming, government-sponsored real estate development.

Mr. Zhang's story is different -- and a sign of what has to happen if China hopes to sustain its remarkable rise.

The son of rural Communist Party workers, Mr. Zhang was a public school teacher and interior decorator before pooling $3,000 and starting Broad Ltd., a company that makes air conditioning systems that operate without electricity.

Dan Fitzpatrick, Post-Gazette
A statue of Confucius outside a building on Zhang Yue's campus.
Click photo for larger image.
It was 1988, the year before China's crackdown on student protesters in Beijing's Tiananmen Square, and he started without any government assistance -- a rarity in a country that only officially acknowledged the existence of private enterprises a few years ago.

He refused to bribe local officials or dodge taxes or take government loans, as other companies in China have done. To instill discipline, he asked that all employees attend a seven-day boot camp headed by a former army sergeant. And he built a 90-acre corporate compound that is part factory, part theme park and part resort, surrounded for miles by low-lying farms and the rural poverty that so characterizes inner China.

Discipline, morality, inspiration and attainable wealth are the themes at the complex, known as "Broad Town" and separated from the rest of Changsha by gates and guards. Past the gates are roadways wiped clean of any trash, framed on either side by neon-lit angels. One end of the compound is anchored by a giant replica of an Egyptian pyramid.

Across the expanse of a carefully manicured, football-field-sized garden is a classical, European-style building that is used for management training. It looks like a stand-in for the Palace of Versailles, with statues of Mr. Zhang's heroes, from Martin Luther King, Abraham Lincoln and George Washington to Jack Welch, Thomas Edison and Peter Drucker, ringing the building. There are 43 statues in all, hinting at Mr. Zhang's appreciation for Western culture.

Elsewhere in Broad Town are dorms for the workers -- one has the phrase "Perfect Ourselves" written on the side; an auditorium called "Aspiration Theater;" and a fish farm, hog farm and vegetable garden that feed Broad's 1,600 employees. There is a hotel for guests, and next to the hotel is a five-star guest house with a pool, bowling alley, gym with ping-pong tables and badminton courts, special guest rooms (the "Josephine" suite is outfitted in the style of 18th century France) and a restaurant where the fish and vegetables grown on campus are served.

Zhang Yue's compound in Changsha features statues of his heroes, including Scottish inventor James Watt, as well as a replica of an Egyptian pyramid, which Mr. Zhang plans to turn into a museum.
Click photo for larger image.
At the center of the guest house, on this evening in late September, are violinists and a piano player warming up for an evening performance arranged for a group of American businessmen and their wives. When the Americans arrive -- part of Mr. Zhang's plan to crack the U.S. market -- they take their seats in the hall of marble, glasses of wine in their hands.

The lights go down, and for the next hour, Mr. Zhang sends out a litany of young female performers, all employed by Broad: three violinists dressed in red Chinese-style silk pajamas; four ladies dressed in Hawaiian garb, hips and heads shaking; a lone dancer in traditional Indian dress; a woman in a pink dress signing "My Dear Daddy"; a woman with long fingernails demonstrating a seductive Thai dance routine; and a woman in white regaling the crowd with three songs, including her version of "Edelweiss."

At one point, a businessman emerges from his seat and kisses the woman-in-white on the cheek while presenting her with a rose -- prompting the other guys in the audience to hoot their approval.

The night is going so well that Mr. Zhang caps the event with a Spanish love song that he performs in Chinese, holding the microphone with both hands, eyes closed as the emotion builds. The Americans obviously cannot understand a word, but they still crowd around Mr. Zhang at the song's end and push their business cards in his direction.

Dan Fitzpatrick, Post-Gazette
Zhang Yue's compound also features a statue of the Wright brothers. The Chinese letters in the background say "Perfect ourselves."
Click photo for larger image.
One man, a tall mechanical contractor, holds his right hand in the air, hoping for a high-five from the diminutive Mr. Zhang, but he receives only a puzzled look from the Broad chairman. After an awkward period of miscommunication, Mr. Zhang finally provides the American with the sought-after gesture. "There you go!" the American said, triumphantly, slapping hands.

That delayed "high-five" would be the last the New York businessmen would see of Mr. Zhang over their two days at Broad Town, while they zipped around campus on motorized golf carts, listened to lectures about Broad's cooling systems, why the technology is environmentally sensitive and why that matters to China, which is in the midst of a countrywide pollution crisis.

Where Mr. Zhang could be found was in his office overlooking the expanse of the campus, where blue-uniformed factory workers are on the job until 8 p.m. and many white-uniformed administrative employees can be found in their offices well past dark. By the end of the second day, the buttons on his white shirt sleeves are undone. As evening fell, Mr. Zhang did not have much time to talk, with a fresh pot of tea and a pile of work still awaiting him. He did, though, say that he looked forward to a visit to Pittsburgh, where he planned to see his son and donate a new solar-powered cooling system to CMU's School of Architecture, where his son studies. The system is being installed on the roof of CMU's Robert L. Preger Intelligent Workplace and will be used to study environmentally sound building cooling practices.

CMU is a frequent stop for Mr. Zhang, who earlier this year gave the university a statue of Chinese engineer Mao Yisheng, the first person to graduate with a doctorate from CMU in 1919. It now stands on the south end of the campus, between the Baker and Porter halls.

For Mr. Zhang, such statues are an expression of his values, a way to learn from the "immortal wisdom" of people who contributed greatly to human history.

It should be noted, then, that among the 43 statues Mr. Zhang built in Changsha, not one is of hometown boy Mao Zedong, the Communist Party chairman from 1949 to 1976. The only Chinese politician rendered in bronze is Deng Xiaoping, who ushered in the country's economic reforms, making Mr. Zhang's wealth possible.

Before Mr. Xiaoping came to power, China was "in a mess" and "chaotic," Mr. Zhang said. Mr. Xiaoping "was the one who got everything right."


China's richest

NET WORTH

BUSINESS CITY
1. Wong Kwong Yu 2.3 billion retail Beijing
2. Xu Rongmao 2.1 billion real estate Hong Kong
3. Larry Rong Zhijian 2 billion real estate Hong Kong
4. Zhu Mengyi 1.9 billion real estate Guangzhou
5. Yan Cheung 1.5 billion manufacturing Hong Kong
6. Zhang Li 1.45 billion real estate Guangzhou
7. Shi Zhengrong 1.43 billion manufacturing Wuxi
8. Liu Yongxing 1.16 billion manufacturing Shanghai
9. Guo Guangchang 1.15 billion manufacturing Shanghai
10. Lu Guanqiu 1.14 billion manufacturing Hangzhou
100. Zhang Yue 304 million manufacturing Changsha


First published on November 23, 2006 at 12:00 am
Dan Fitzpatrick can be reached at dfitzpatrick@post-gazette.com or 412-263-1752. Source: Forbes.com
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