Listen to this article
Zhou Chengjian was running a village shop by the age of eight but was bankrupted twice before he was 18. Liu Yonghao spent his youth barefoot and hungry, forced to cart buckets of human faeces around as fertiliser. When Wang Wenyin started his working life, he was living in a cement pipe.
Now Zhou owns a clothing empire, Liu heads an agribusiness kingdom, and Wang is a metals mogul. They are among the wealthiest men in one of the world’s wealthiest countries, and they all started with almost nothing. Rags to riches: isn’t that how everyone does it in China, the people’s republic of self-made billionaires?
In recent months, the Financial Times has published a series of articles about such people — cogs in the vast machine who drove China’s transformation from an agrarian backwater to a modern digital society in the blink of an economist’s eye: three short decades.
This economy is now slowing — not suddenly, not unexpectedly, but perhaps a bit faster than Beijing forecast when it predicted 7 per cent growth in gross domestic product this year. This slowdown has seriously rattled markets worldwide for the past few weeks but China’s growth is losing speed — not grinding to a halt. There’s no shortage of wealth in the country, even if it’s being amassed more slowly than in the past. So how did these three do it?
Part of the answer is migration. In 1978, on the eve of economic reforms that ushered in China’s halcyon years of double-digit growth, less than 20 per cent of the Chinese populace lived in big cities. Now, as the economy built by all those migrants endures its most challenging period yet, more than half of all Chinese live in cities.
The past 30 years have been glorious ones not just for these three men but for all of China, which has risen to become a formidable economic and political power. But they have also been wrenching years for Chinese society, precisely because of the social dislocation caused by those migrating millions, who left behind children to be raised by illiterate and impoverished grandparents.
For decades, millions of Chinese migrants believed they had no choice. Few got as rich as these three dollar multibillionaires. But most managed at least to raise their standard of living significantly by exploiting roughly the same combination of attributes as the trio: brains, grit and luck.
Intriguingly, these three men also came from families where business was to some extent already in their blood. Yasheng Huang, China scholar and author of Capitalism with Chinese Characteristics: Entrepreneurship and the State, says this was an “important impetus” for some early Chinese entrepreneurs: the fact that they came from a “criminal background”, meaning that their families were classified as “landlords or merchants”, or they “engaged in market activities”, deemed illegal during the Cultural Revolution.
Some migrants have clearly prospered more than others: they don’t all have marble staircases and fish ponds in their front room like Wang; or a replica of the ancestral homestead at the heart of their corporate campus like Zhou; or 80,000 employees like Liu. But even the least among them has raised children with college degrees, the latest iPhone, and, in many cases, a determination never to suffer as their parents did.
China can boast an entire generation of beneficiaries of the “migrant miracle”: the three profiled here are just the most extreme examples of the feats of social mobility achieved when the answer to every economic problem was simply to throw more migrants at it.
But now that’s no longer the case: the migrant tide is turning, leading to labour shortages and rising migrant wages. Many prominent economists believe China has reached the so-called Lewis turning point, a theory developed by Nobel Prize-winning economist Sir Arthur Lewis that explains the moment when the supply of cheap rural labour to the industrialised economy runs out. China will never be the same again.
So has the rags-to-riches era come to an end too? In rare interviews, these three men told us the story of their own migrant miracles: how they went from having nothing to having everything. But they also wave a few warning flags about today’s generation of migrants: are they as hardworking as their predecessors? Are they willing to sacrifice quality of life and even family relationships, as their parents did? Is money enough for them? And, most of all, is the Chinese market still as easy to crack in today’s very different China as it was for them?
Founder of clothing company Metersbonwe Group, one of China’s leading homegrown brands
Zhou started life lazy — he’s not ashamed of it. That’s how he ended up managing the local shop in Shikengling, the mountain village where he grew up in China’s coastal Zhejiang province. His parents and siblings farmed but, as he was both spoiled and good at maths, his job was to sell rice, soy sauce, and monosodium glutamate to other peasants. By the age of eight, he was making a good profit from what amounted to a peasant form of arbitrage. “I walked for an hour to a nearby village and took a bus from there to town,” says Zhou. He bought the goods he needed and “sold them in the village. I made money by pocketing the difference.”
It probably didn’t hurt that his father was also the manager of the state-owned abacus factory in the village. “Compared with other families in the village, we were better off,” he says. (Lift the curtain on many a rags-to-riches story in China, and one finds a father or grandfather who was a businessman or a government official; none of the men interviewed has descended purely from tillers of the soil.)
Still, Zhou says, his family was poor enough: they had to get by mostly on sweet potatoes. “I craved rice a lot,” he says, recalling that at lunar new year, the biggest of traditional feasts, his family would pass around a bowl of noodles with a chicken leg on top — but no one would eat the meat, only the noodles. The chicken leg just kept circulating, for days or even weeks, there more for show than for consumption.
It’s not hard to imagine what life must have been like in Shikengling all those years ago, because Zhou has reconstructed part of his village home — complete with vegetable fields — inside the Shanghai headquarters of his clothing brand. Smack in the heart of a campus where the strategic focus is on becoming an ecommerce titan, Zhou’s octogenarian father tills the fields in a floppy straw hat on a fiercely sunny day while his billionaire son chats idly about wealth creation.
Silicon Valley may have free gyms but how many US corporate campuses have a Chinese eggplant patch? “I love this kind of environment,” says Zhou, adding that his elderly parents would “feel like they were in jail” if he put them up in a luxury villa.
The rags part of his story is literal: by age 12, he had quit school, tried his hand at carpentry and bricklaying, and finally trained as a tailor. By 14, he’d built a tidy little fortune of Rmb280,000 (£29,000), trading antique silver coins. But as the trade was illegal, the money was confiscated and, since he was too young to go to jail for it, his father spent a year in prison. Zhou was bankrupt before other boys his age had left school.
Before too long, he was back on his feet, hiring more than 100 tailors to fulfil a clothing contract worth nearly Rmb500,000. But that deal failed too after the client rejected the garments on quality grounds but refused to return them. “I was heavily in debt at the age of 18. But we have a saying that ‘ignorant people fear nothing’, so I didn’t care,” says Zhou. Now he has 4,000 clothing stores all over China, Metersbonwe is one of the most famous homegrown brands, and his wealth was estimated last year at nearly $2bn.
So he got it right in the end?
“When the planned economy was just starting to be overturned, products were in demand, so as long as you were brave enough, and your performance was not too bad, you could be successful. But now the demographic dividend has ended,” he says. This leads to rising labour costs, and the dividend from suddenly becoming a market economy has been exhausted too. Tighter regulation of companies that overproduce or consume too much energy will deliver a further dividend, bringing new opportunities. But today’s companies need to be more competitive, says Zhou.
“In the past you only needed to be brave but now you need to have knowledge and professional skills. You have to know what customers want, you need to know big data and provide tailor-made service. My model of success couldn’t apply to today’s youth,” he says — not least because they don’t have the “patience and persistence” for it.
Founder of New Hope Group, one of China’s largest agribusiness companies
Liu Yonghao, like Zhou, does not fit the image of a stereotypical Chinese entrepreneur. Liu is 14 years older, more than twice as rich and he started out even poorer than Zhou. But both men keep fit, dress modestly, and speak humbly. There is not much bling about either of them.
Liu, too, has his own vegetable patch. At his homes in Beijing and Chengdu, he grows chilli peppers and cucumbers — “we grow half the vegetables that we eat”. Neither man seems eager to forget his roots on the land — even if Liu’s familiarity with farming was, at the beginning, anything but voluntary.
He represents an earlier generation of Chinese businessman — the kind that had an even tougher start in life, thanks to communism. He was born of educated parents in a town in Sichuan province, but “when I was about 15 or 16 years old, I was sent to be a peasant in the village”, he says. He became what in China is known as a “sent-down youth”: a relatively privileged urban youngster sent to a rural area during the Cultural Revolution to see how the other half lived. “During my four years and nine months as a sent-down youth, I grew rice and vegetables, and carried buckets of human faeces [used then and now as manure in parts of China]. “I did all the work that a peasant was expected to do. I might have a pole across my shoulder carrying 75kg,” he says, adding: “I was very hungry. I was as tall as I am now but I only weighed 55kg.”
He eventually secured a coveted government job as a teacher. “It was a good job and there was no need to start my own business, and starting a business was hard then, you would be looked down on,” he says. But, with his brothers, he began a small venture assembling speakers. They needed money and proposed to the village production team that they set up a speaker factory with communal funds. “But the party boss of the local commune said what we were doing was capitalism. That marked the end of our first attempt at doing business,” he says. He might be China’s leading electronics tycoon today, if it weren’t for that, he says.
After the speaker venture failed, “we started to think about what kind of vegetables we should grow”, he says. Later they sold two of the family’s most prized possessions to raise cash — a watch and a bicycle purchased with cash presented to his father as compensation for punishment he received during the Cultural Revolution — and used that as seed capital for a poultry business. “We started to raise chickens and quails. We made several million yuan by raising quails,” he says, adding that though there were no private factories and private trading was banned at the time, “peasants could sell their extra eggs, chickens and vegetables. The policy was just beginning to be relaxed.”
Today Liu is chairman of the New Hope Group, which has 80,000 employees, and has a personal fortune estimated by the Hurun Rich List at $4.8bn last year, making him China’s 30th richest man.
He thinks poverty was integral to that success. “I never had proper shoes before the age of 20 and I was almost always hungry,” he says, from a plush armchair in Beijing’s elite American Club. “Because I was very poor, I was very diligent and worked very hard. That creates values . . . and before I had nothing but now I have many things. So my attitude is great. I can look at my career and my life with a calm attitude.”
Luck played a big role too. “In the previous 2,000 years, Chinese growth was flat. But in the past 30 to 40 years there was dramatic growth. I was lucky to [be born] during this era. If not, my hard work and abilities could have achieved nothing. And China’s policy allowed individuals to open a factory. Without that policy relaxation, no matter how capable I was, I could have achieved nothing.” But surely at least one billion other Chinese also shared those advantages? “I think I am as smart as any other Chinese but the difference is I work harder and am more diligent.”
That’s not enough to get rich quick in today’s China, he says. “China is now facing a turning point, the so-called new normal. Many traditional industries are facing huge pressures because of oversupply and rising costs. Tighter environmental protection is also adding more cost, and demand is slowing,” he says. “Diligence and hard work are not enough for today’s youth to be successful.”
Both he and Zhou seem to agree: they are glad to have made their money when there was more low-hanging fruit to be plucked.
Founder of Amer International Group, supplier of cable and copper products
Wang Wenyin is younger, richer, shorter, more traditional and, altogether, a different kettle of fish from Zhou and Liu. Among other things, it’s a bit hard to figure out what he’s talking about a lot of the time, because he is so often quoting from the Tao Te Ching and other impenetrable ancient Chinese classics. That’s not meant as a criticism — “a good entrepreneur must be a good philosopher”, Wang insists. So he spends two to three hours a day reading, consumes 100 books a year (and insists that his top lieutenants present him with detailed reviews of 24 books a year), and keeps handwritten Post-it notes filled with philosophical aphorisms inside the transparent case of his iPhone, so he can refer to them quickly. But he doesn’t need crib sheets anyway: he has the memory of a MacBook.
“I started to study the Tao Te Ching in junior high school and now I can recite it,” he says, beginning to do so. “Nature is complete because it does not serve itself. The sage places himself after and finds himself before. He ignores his desires and finds himself content.” Wang has a silk-paged bilingual translation of the classic to hand but that doesn’t help much, since language isn’t really the issue. “The philosophy of the Tao Te Ching is profound, its wisdom applies to anyone, no matter what country you are from,” he says. But having read the Tao Te Ching 300 times, as he’s done, it probably makes more sense to him than to the average untutored Financial Times journalist.
Wang seems to have had a scholarly streak from his early days, which were also in poverty. He won a literature prize in primary school, so his parents had a suitable garment made for the ceremony. “But we didn’t even have the money to buy enough fabric to make a pocket, and it was too tight because of the lack of fabric,” he recalls. And their problems were not just economic. “My grandfather was a successful businessman, so we have the business gene in our bones. But he suffered during the Cultural Revolution. Because he was a factory manager he was regarded as a capitalist, so he was publicly shamed. He was forced to kneel on the ground until his knees were damaged.” When that same grandfather died, because the family lacked money for his medical care, Wang gave up plans to be a government official and vowed to make money. In 1993, he headed to the boomtown of Shenzhen, the forefront of China’s economic revolution, taking along Rmb400 from his family, and sleeping at first in a cement pipe.
From there, the only way was up. “During my first year, I earned Rmb10,000, in the second year it was Rmb100,000 and in the third year Rmb1m” — all of it in the cable and wire business. This year, the metals group he founded, Amer International, was number 247 on the Fortune Global 500.
Today he lives in a home where the floors, walls and four-storey staircase are marble, and he sleeps in a carved rosewood canopy bed, stepping out on to a rug that looks and feels like mink. His staff work at desks made of traditionally carved wood and Wang perches on a Rmb1m-plus set of rosewood chairs, upholstered in imperial yellow.
He works at a nearly 5m wide wooden desk, and naps at lunchtime in a carved canopy bed, in an anteroom that also holds his prized collection of bonsai pruning shears. “I farmed [when I was young] and that’s why I like this hobby,” says Wang, pointing out that his bonsais are fully grown trees, not tiny pot plants. “I trim the tree every morning. Do you know how many tools I use? There are several hundred.”
Can others do what he has done? “No success can be copied. Every success reflects a unique time, place and people. We spent 20 years to become successful but today’s youth, if they choose the right road, can be successful after three to five years of hard work. That’s because we are now living in a special age — the age of the internet, big data, cloud computing, and industry 4.0.
“I caught the upward trend in China and the world. I was lucky to be born into a great age. And, of course, I put plenty of effort into it. Normal people wouldn’t work as hard as I do. They are defeated by no one but themselves,” he says.
The one mistake he won’t make is to hand all this over to his children. “If you want your company to die quicker, you can pass it to your son,” he says, adding that it’s too soon to tell if his three children have “the business gene”.
So Wang’s desk will last 100 years but there’s no guarantee another Wang will be sitting behind it. In fact, the shelf-life of any particular Chinese entrepreneur can be hard to predict: some of those who were at the top of the rich list just a few years ago are now nowhere to be found on it or even in jail. Being rich in China can be a temporary condition — whether or not one dabbles in the country’s storm-tossed stock markets. Zhou, Liu and Wang may still be riding China’s capitalist wave next year or next decade — or they may not. They are, of course, just as dependent on the overall health of the Chinese economy as anyone anywhere. No one can predict with certainty how smoothly China’s slowdown will be managed — not the markets, and not these men.
But one thing seems certain. Like many of history’s wealthiest titans, they are very much people of their time — and that time is quickly passing. They grew up hungry, both literally and metaphorically; they rode a wave of economic reform for all it was worth; and they worked hard at staying on top. China’s migrant peasants may still be hungry and hardworking but they may never be in the right place at the right time in quite the same way again. In 5,000 years of Chinese history, only the past few decades have created entrepreneurs quite like these three. Getting rich in China may never be the same again.
Patti Waldmeir is the FT’s Shanghai correspondent. Additional reporting by Jackie Cai
Portraits by Ka Xiaoxi, Algirdas Bakas and Eric Gregory Powell
Photograph: Getty; Corbis
Get alerts on FT Magazine when a new story is published