Recently, China's business giants have been referred to, in total, as a group of "impure magnates", because of the activities and reputations of men like Yang Rong, Yang Bin and Zhou Zhengyi. These businessmen, who have been listed on Forbes' China's 100 Rich List, have all been caught and charged with wrongdoing, one after another. And their fall has come to symbolize the end of an era. Two prominent billionaires talk about the problems of being rich in modern China.

Host - Zhao Xiao, a postdoctoral researcher from the Economics Research Center of Peking University.

Interviewee - Mr. Yang Zhuoshu, board chairman of Zhuoda Group (Hebei Province, set up in 1993). Age: 51. Education: second/third level. Industry sector: real estate, tourism, education. Ranked 17 in Forbes 2002 China's 100 Rich List. Asset Value: US$265 million.

Interviewee - Mr. Feng Lun, board chairman of Beijing Vantone Industrial Group Co Ltd (1991). Age: 40. Education: second/third level (BS in Economics, MS in Law). Industry sector: real estate.

"Impure magnates" usually belong to the second sort of businessmen

Host: Recently, China's business magnates have been almost completely referred to as a group of "impure magnates", because of the activities and reputations of men like Yang Rong, Yang Bin and Zhou Zhengyi. These businessmen, who have been listed on Forbes' China's 100 Rich List, have been caught one after another. Someone said that the Forbes's entrepreneurship list is in fact a "convicts list". What is your opinion about the list and these apprehended "impure magnates"?

Feng Lun: I believe that these cases represent just a few instances in the progress of contemporary wealth accumulation; an inevitable phenomenon of a society in transition. Just as the official corruption cases showed, there are always bad people amongst good, as is naturally the case. As these Forbes listed magnates have great influence and power, they attract public attention and catch your eye.

Since 1978 many of China's individuals have accumulated great wealth. During those 24 years, there have been three sorts of rich people. The first group were wildcats who played the market in the 1980s by monopolizing product sectors, but who have now nearly all disappeared.

The second group were those who became rich in the 1980s to the 1990s. Their "primitive accumulation" (Marxist term for capitalist acquisition of material wealth) was described as an "original sin", but they later got themselves back on track and gradually made their wealth operate and develop in a more legal and normal fashion.

The third group were entrepreneurs in newly emerging industries, like the CEOs of Sohu.com and NetEase.com. They founded their companies, absorbed venture capital for expansion and then managed going public. They were beneficiaries of a new and vibrant stock culture. Their wealth was open and aboveboard and nobody had reason to doubt it.

Thus, the ways of being (and getting) rich have differed in various historical periods, naturally leading to different problems. Amongst the magnates charged recently, problems were exposed in activities from periods of "primitive accumulation". It is possible therefore to see that private wealth, accelerating in recent times, say over the recent couple of years, usually reflects a tendency of being clean of corrupt origin or what in China is called "sunshine wealth".

Yang Zhuoshu: The appearance of the "impure magnates" is not just caused by the Forbes list. "One can only get help after first one helps oneself, while one only gets ruined after one first ruins oneself", too. But I dislike being called a rich businessman as I feel it's a title that is superficial, ignorant and disappointing.

In terms of Marxist historical materialism, the cases were not only the product of individual problems, but also affected by the realities of historical background and a particular social environment. To some extent, almost all those charged had a difficult past, and their problems occurred mainly in a period of social transition. However, they don't represent the leading track of private enterprise development in China today. It's unfair to blame private enterprises too much.

To be too critical of the private sector could result in less employment and lower speed of national economic development. So, what we need is to protect private companies not create a culture that blames them.

I could say, even if there were 99 rich boys being arrested, I would be the last one to be caught. I believe no one will be overthrown if they are good throughout their life.

Someone once said, everyone is selfish. But I have a principle: a man should consider himself only after he has benefited others. 

When I gave my speech at a donation ceremony in the Great Hall of People in Beijing, I said, I am not the richest man in China, but I am the one giving the largest donation. I don't display myself in public unless it's necessary. I felt sad when I heard that only 23 million yuan had been collected after all the activities held in 100 cities around the country, as I had already donated 10 million yuan. Then I pitched in another 10 million yuan. When I stepped out of the Hall, one reporter said to me, "Society doesn't believe in generosity". I answered that, "It's none of my business if others believe in it or not, but I believe in it."

A hotbed of "impure magnates" still exists

Host: A hot debate on the "original sin" of these criminal magnates has now come about. What is your opinion about the "original sin" of wealth collected during the period of development, in the transition to a market economy in China?
 
Feng Lun: Different people have different explanations for the legal meaning of "original sin". Previously, we defined "original sin" as a sin of investment, even if you had no money to begin with. The sin was some enterprises' violent tendencies caused by huge debts undertaken in the initial period, resulting in an incorrect attitude towards money.

Yang Zhuoshu: For wealth, I understand it as the amount of money given "free gratis" or regenerated with charge, for benefiting others and society. Now I have 4.5 billion yuan. If it could not be invested but only consumed, I would not say it was wealth. I give "wealth" a second definition: a kind of responsibility, which means, you bear more responsibility as you have greater wealth. The "wealth" does not belong to one alone, nor to a family or a group. Real wealth should belong to society.

Wealth in itself is unimportant, but becomes important as it does things. Every year, the rich people of the United States contribute US$800-1,000 billion in donations, almost equal to all the GNP of China.

As regards wealth, how many Chinese businessmen can contribute their wealth to charity? I don't think there are many among us. No more than 5 percent of China's bosses donated their money from their safes. I am not the richest one, but I think it's more important for me to have a better understanding of wealth than to know how much money I have.

Host: The "original sin" of contemporary wealth, someone proposed, requires a special amnesty, while someone else said it should be exposed and criticized. What is your opinion about these concerns on past experiences?

Yang Zhuoshu: Media unseemingly recommended the concept of "original sin", a Christian term. When we talk about "impure magnates", we should not blame them only, but also check on the defects of the current system. If those defects haven't been abolished, a new group of criminal magnates will emerge again as the hotbed for breeding immoral magnates is still in existence.

Tax dodging and evasion obviously violate the law. Thereafter, I don't think there needs to be an amnesty given to businessmen involved in this kind of crime. History has its own way. There are always lucky fellows escaping and guys hitting the skids. Everyone should be responsible for what they do, it's not necessary to make a special case.

I feel investigating criminal wealth is a good thing, but there is also a need to consider the large amount of social problems arising afterwards. Wealthy people in the private sector without any problems should be protected. However, the most important thing is to demolish the bugs existing in the current system. Generally said, these two ways, neither thorough investigation nor giving amnesty is maneuverable in China.

Feng Lun: In order to solve the problem of this kind of "original sin", it's a must for legislating a law to define clearly who is involved in the "sin" and who is not. However, it would be a mission impossible, therefore, I don't claim the method of legal absolution. Absolution needs a definition to first tell who committed the sin, and it is this that creates hot debates.

In addition, I don't approve of settlement by being brought to account either, and I think it's impossible too. In fact, it would neither be applauded by society, nor good for social development.

In my opinion, a measure of reckoning would result in large amounts of money fleeing to foreign countries, while amnesty would bring moral condemnation on the rich. So, for "original sin", I feel it is practical to end up it with nothing definite.

Are "Sunshine" billionaires absolutely aboveboard?

Host: As some magnates' lies are exposed to the public and their behavior brings shame to all China's magnates, more businessmen eagerly need trust from the public. Facing public condemnation, how can you stand out and justify yourself and most billionaires? Can you claim yourself to be absolutely aboveboard businessmen?

Yang Zhuoshu: No doubt about that. I am fair and like to be a "sunshine" billionaire.

Feng Lun: I'd like to say that I am 95 percent clear or "sunshine", because my comment is not complete, and I should leave some margin for other's comments.

Under the administration of America's near-perfect legal system, we still find that many American companies have been involved in scandals. Poverty can make people steal and money can bring fraud and bullying. Problems differ from different conditions.

Low profile can reflect a thieving mentality

Host: Most of China's magnates listed in Forbes remain low-key and aren't willing to face the media and public. What is the reason?

Feng Lun: In an agricultural and unopened society, or a society with undeveloped information, being of a low profile is an effective method of avoiding danger. But it wouldn't be effective in today's society, rich with information.

Some entrepreneurs and businessmen have a thief's psychology. Thieves are low-key while gentlemen are not. Because of "original sin", some magnates prefer to hide.

I think they should not take the measure of hiding themselves if those magnates want to live in the sunshine. They should neither overstate their corporations' information nor misdirect their consumers. In an open society, these businessmen should stay in contact with the public, with an open attitude not a thief's mind.

I think magnates should handle the relationship with society well and bear more responsibility as a "corporation citizen", such as having the correct attitudes towards environmental protection, disadvantaged groups, city management and tax issues.

Host: What kind of entrepreneurs belong to the "sunshine" magnates?
 
Yang Zhuoshu: I think "sunshine" magnates should have four qualifications. First, the enterprise should gain the acceptance of local government, local people and customers, which is a prerequisite condition. Second, the master of the enterprise dares to open all information to the public. If he can do this, it shows he is innocent. Third, an open and just judgment by an authoritative media without any material gain is needed. Fourth, an effective evaluation system should be provided to judge the implementation of basic social responsibility by the enterprises. This should include things like tax payments, providing jobs and ordinary participation.

Feng Lun: If enterprises require the support from governments and also a positive response from media, the only way left is for them to take the right path guided by correct principles.

(China.org.cn, translated by Wang Zhiyong, September 29, 2003)