Lunch with the FT: Guo Guangchang

Over vegetarian food, the billionaire behind China’s biggest private conglomerate talks about Cultural Revolution-era cuisine, learning from eastern and western sages, and what tai chi and investing have in common

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When a rich Chinese businessman is about to enter a room, my radar usually picks it up well in advance – the give-away is the sound of underlings tripping over themselves in the corridor to get out of the great man’s path.

But there’s no scurrying and kowtowing before Guo Guangchang arrives for lunch in the management canteen of his headquarters at the unfashionable end of the Shanghai Bund. Suddenly he’s just there, a slight bespectacled man looking like a cross between a librarian and the migrant worker he might have been – if he hadn’t built an $8bn conglomerate.

Guo is not China’s richest man; nor is he the flashiest, nor – according to him – even the cleverest. But in his 47 years, he has risen from peasant penury to having so much money that the desire to be rich no longer gets him up in the morning.

Fosun, the group he co-founded with three university friends in 1992, is the largest private conglomerate in China. It owns big stakes in the Shanghai hospital where my children get their flu shots, the cake shop where they get their birthday cakes, the holiday village where they’d love to spend half-term, quite apart from a fair amount of the ground we walk on (through its vast Shanghai property holdings).

It has also recently tried (and failed) to buy Forbes magazine, is trying (and will probably manage) to buy Club Med and has already bought Portugal’s largest insurance group, Caixa Seguros. Fosun has made 12 overseas acquisitions so far this year and there’s a good chance it will be coming to a country near you soon, looking to buy a company you know well. So this seems the ideal time to try to figure out what makes Guo Guangchang tick.

According to Guo, it’s a mixture of Buddhism, Daoism, Confucianism, and Warren Buffett. He says he finds inspiration for his investment decisions from China’s oldest sages (and that other one from Omaha). He is also a devotee of tai chi, the Asian martial art that he practises as often as he can. But the first thing we discuss is food – and not just because we’re having lunch.

Food (and the lack thereof) was a big issue in China when Guo was born in the eastern province of Zhejiang in 1967. The country had recently embarked on Mao Zedong’s Cultural Revolution, resulting in widespread economic and social turmoil. He recalls that his family weren’t starving but neither were they banqueting (basic foods were rationed by how much each family contributed to their Communist production team). “We could definitely eat our fill but the food could be very bad,” he says, recalling how his mother “used to plant sweet potatoes secretly to feed us”.

Like many Chinese of his generation, however, Guo seems more nostalgic than critical of those darkest days of China’s recent history. He becomes positively lyrical on the topic of his mother’s signature dish from that period, meigancai (literally translated as “mouldy dried vegetables”), which he says tastes best with a generous dollop of pork lard.

“We were poor then. We used to steam a bowl of rice and then put one layer of meigancai on top of the rice. Then the pork fat would melt into the rice. It smelled very good. Even today, it still makes my mouth water whenever I think about it,” he says, “meigancai is our nostalgia.”

As well as acting like Guo’s own version of Proust’s madeleine, this sun-dried pickle also became his staple ration at boarding school: in China most rural children, including those from peasant families like Guo’s, have no choice but to board in the nearest town if they are to attend school at all. His mother loaded a pot of meigancai with lard and as many pieces of pork as the family could spare, and he carried enough to school to last the whole week.

He roars with delight when I ask whether we’ll be eating meigancai at our lunch, served in a private room of Fosun’s free all-vegetarian management canteen. But it seems we won’t – not because this earthy dish is not grand enough but because it’s not vegetarian enough. As he slurps a bowl of steaming handmade noodles, and takes an oversized mouthful of the kind of sweet potato his mother used to plant, I ask Guo if he is a vegetarian. He says he isn’t, though he spent a month off meat when he was mourning his mother’s death, since she was a devout Buddhist. If possible, he also eats a meat-free meal in the canteen every day at lunchtime.

Today’s fare is cold steamed sweetcorn, sautéed winter melon with black mushrooms, okra, spinach, and potato with cowpea. At most business lunches in China this would be lubricated by a type of firewater known as baijiu, but not here. It’s all part of the Guo approach to life and getting rich – do nothing by extremes, whether it’s food, drink or market speculation. Tai chi, he continues, is about keeping the extremes of yin and yang in balance.

What, I ask, has all this got to do with buying Portuguese insurance companies? Guo takes a stab at explaining how it applies to his investment decisions.

“The aim of tai chi is not to strike first to gain dominance over an opponent but to wait and hit at the right moment,” he says. “That is, to be the first one to take action after feeling the change in momentum. Investing is similar to doing tai chi. No one holds a permanent speed advantage in the market due to the limits of human intelligence and vision. Your advantage comes from your ability to feel the change faster and take decisive action faster.”

Though any tai chi master worth his salt will tell you that it takes years to understand the first thing about this martial-cum-spiritual art form – and I know I have only grasped a fraction of his meaning – I do have some idea of the whole “feel the change” thing. Having recently tried tai chi, I learnt how, by simply extending one finger down my outer thigh, I could alter my balance to the point where even the instructor’s determined pummelling couldn’t topple me.

Guo says he used to practise tai chi almost every day; even now that he’s too busy to practise more than a couple of times a week, he “can still do tai chi even by sitting” – including while having lunch, it seems. “You see, I rarely sit like this,” he says, slouching for emphasis. “I usually sit like this,” he explains, perching upright on the edge of the chair. “In this way, your qi is flowing smoothly inside your body.” He adds that this helps him “have a good mental outlook” and “recover from general physical complaints”.

My grasp of the Chinese medico-spiritual concept of qi or “spirit” is about as weak as my grasp of tai chi. But Guo is so intent on helping me understand that he breaks into a rare bit of English to insist, “If you just practise the movements for five or 10 minutes, it’s good for your health. Even sometimes during conference calls, I listen to the other side while practising some movements,” he says. Staff say he’s been known to break into spontaneous tai chi in the coffee breaks during tough dealmaking sessions.


The influence of eastern spirituality on his investment strategy doesn’t end here. Buddhism, Guo explains, teaches you that “everything starts from your heart, and feeling the heart of others is the most important doctrine in Buddhism. In doing business that means seeing things through other people’s eyes. I feel that doing business is just like practising Buddhism. Money is not your only purpose. Your purpose is to make things better for other people, and in the end, money will come as a result.”

“Business,” he adds, “is also the best form of charity” (or that is what he tells Buddhists who come asking for donations). “By making a company successful, you can provide more employment, and, if you treat your staff well, then your business itself becomes a charity.”

Guo has been quoted as saying that intelligence isn’t the key to wealth. Instead, this is something known as xinli. It’s a term that many otherwise articulate people struggle to translate; this is how Guo explains it: “Some people make the wrong decisions but that’s not because they don’t have superior intelligence but because they can’t resist the temptation of the monsters hiding in their heart.”

For example, “Many people bought subordinated debt in the US before the subprime crisis when they knew clearly it was problematic but they knew if they didn’t buy it, their bonus that year would be reduced, so they made a decision based on short-term interests, not because they were ignorant of the risk.” Those people didn’t have xinli. Admitting when you’ve made a mistake is another form of xinli, he says – even if you are the chief executive and you think you should always be right. Think of Forrest Gump, he says: “He wasn’t intelligent but he was very successful”.

Guo also uses the example of Warren Buffett, the man on whom he has modelled his strategy of building a conglomerate that uses insurance funds to invest in widely diverse businesses. “I don’t think he’s been successful because he is smarter than others,” says Guo. It’s more about investment discipline, sensitivity to the market, and taking the long view, he adds. Those things, it seems, are also xinli.

Buddhism and Buffettism aside, there is another sage whom Guo credits with his success: Deng Xiaoping, the leader who steered China through wide-ranging economic reforms after Mao’s death and who is famous for his (possibly apocryphal) saying, “To get rich is glorious”. Guo says: “If [Deng] hadn’t distributed the land to the peasants, we would never have had enough food to eat. Most [villages] in Zhejiang were starving”. He says that, without Deng’s reforms, he could never have attended university, “and then there would be no Fosun”.

For Guo’s company name reflects his treasured university education: Fosun means “star of Fudan University”, his alma mater and Shanghai’s most prestigious academic institution. But he didn’t just get a philosophy degree from Fudan: he honed his business skills there by selling bread to hungry classmates when they finished studying at 11 each night. He earned Rmb5 a night, which seems a paltry sum until he points out that his monthly expenses were only Rmb30 at that time.

After graduation in 1989, he had planned to study overseas but, instead, used the tuition money to found Fosun with three classmates (all of whom remain involved). Today, 22 years after the company was founded, it has investments from steel to mining, tourism to pharmaceuticals.

This kind of “Zhejiang-to-riches” tale is not totally unheard of in modern China: Jack Ma, founder of internet giant Alibaba, is also a Zhejiang boy – and a fellow fan of tai chi. Guo is often compared with Ma but the Fosun chief says he’s not as clever as the ecommerce tycoon (nor, for that matter, so good at tai chi): “No one is as smart as Jack Ma,” Guo says, exploding with mirth. “He’s a . . . what do you call it . . . an alien. I’m just a normal guy,” albeit one with a personal wealth of $4.3bn, according to Forbes’ China Rich List.

Talk turns to more recent developments. Fosun has been battling for more than a year to take majority control of French holiday chain Club Med, and it recently paid $725m to buy New York’s Chase Manhattan Plaza. But its most important strategic move recently was to spend €1bn buying Caixa Seguros, an insurance group that gives him the funds he needs to buy overseas companies that can capitalise on China’s growing affluence, such as Club Med, without taking on more debt at a time when rating agencies already say Fosun has too much borrowing.

“Owning that insurance company means we own €13bn in insurance assets that we can use for investment,” he says, adding that assets from the Portuguese group funded Fosun’s $100m stake in Alibaba’s recent US listing. But, I say, you can’t just milk the Portuguese company for funds, you also have to sell insurance to Portuguese people (and deal with insurance regulations that are very different from those in China), isn’t that a bit difficult? “It’s not the first time we have invested in an insurance company. We understand insurance,” says Guo. This has the ring of famous last words but his confidence won’t be shaken. Buffett uses insurance to drive investment, and Guo is determined to do that too.

It’s time to finish up but Guo has hardly touched his noodles, and I still want to know: what does a boy who grew up in a peasant family during the Cultural Revolution think about the current state of the soon-to-be biggest economy on earth? Pundits wring their hands over greed, ostentation, and the decline of traditional values. Is Guo worried that China will just collapse under the weight of its own acquisitiveness?

He rebukes me gently. “I hope you can understand that we were poor for a very long time. I hope you can understand our desire for a good life and for money. Let’s not rush to criticise it. That is my opinion”.

He adds: “I believe Chinese culture, including Confucianism, Buddhism and Daoism, is very balanced. It will lead people back to what they really need in their hearts. When people are rich enough, what they hope for will be different. At the beginning, a man wants to be rich, he wants to show off his wealth, it’s normal. But, gradually, he finds it’s quite boring. He will gradually find that inner spiritual balance is more important so he will turn to that.”

With that, the philosopher entrepreneur heads out, possibly to buy another famous name near you.


Rise of a business empire

1992 Guo founds Guangxin Technology Development Company, a market research group, with classmates from Fudan University, using Rmb38,000 as the company’s founding capital. Guangxin subsequently takes a founding stake in Fosun Group.

1994 Expands investments to property and pharmaceuticals.

2004 Fosun International founded in Hong Kong, listed on main board of Hong Kong stock exchange in 2007.

2010 Acquires 7.1 per cent of Club Med, the first time a quoted Chinese group has taken a direct holding in a listed French company.

2012 Sets up joint venture Pramerica Fosun Life Insurance with Prudential Financial. Also invests in Minsheng Bank, China’s largest privately owned lender.

2014 Wins bidding war for an 80 per cent stake in Portugal’s largest insurance group, Caixa Seguros, for €1bn. Other investments include Malaysian restaurant chain Secret Recipe, and US film production venture Studio 8. Raises bid for Club Med.

Patti Waldmeir is the FT’s Shanghai correspondent. Additional reporting by Zhang Yan

Illustration by James Ferguson

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