If default, the impact is more than constant.The reason why the founder of China’s top real estate company Pekkeiyuan owns zero shares

Founded on Deng Xiaoping’s reform and opening up policy

Founded in 1992 in Shunde District, Foshan City, Guangdong Province, which was close to Hong Kong and developed quickly as an export industrial base. In the same year, Mr. Deng Xiaoping called for the acceleration of reform and opening up in various places in order to overcome the economic stagnation after the Tiananmen Square Incident (Southern Tour Lecture), and China’s real estate investment that year more than doubled from the previous year.

Pekkeiyuan’s first project was the construction of a large-scale housing complex in Foshan. The company’s founder, Yang Guoqiang, made the project a success by inviting private schools for high-income earners, known as “aristocratic schools.” Attracting international schools, shopping centers, and hospitals to residential developments is now standard practice, but it seems to have been a very innovative approach in China, which had just opened up to the market, and has been handed down as an anecdote showing Mr. Yang’s ingenuity.

In 1999, as a second project, the construction of collective housing developed in Guangzhou, the capital of Guangdong Province, sold 3,000 rooms in the first month, and sold out in three months. Riding the wave of economic growth, Pekkeiyuan was listed on the Hong Kong Stock Exchange in 2007 and became known throughout China. In 2008, the company undertook 23 large-scale multi-family housing development projects nationwide, including Heilongjiang Province in the far north and Inner Mongolia Autonomous Region.

In 2011, it expanded to Malaysia. In the 2010s, when China’s GDP growth rate slowed to single digits, many Chinese real estate developers, not just Pekkeiyuan, expanded their presence overseas.

“Forest City,” which the company is working on in Johor Bahru, Malaysia, was frequently reported in Japan for a period of time. It was a project to build a new city with 700,000 people by investing about 4 to 5 trillion yen over 20 years on an artificial island adjacent to Singapore, and the main purchase target was not local citizens but Chinese investors. However, Malaysia’s Prime Minister Mahathir (at that time) declared in 2018 that foreigners living in Forest City would not be issued visas, and it is also known that the original plan was greatly derailed.

In any case, Hekkei-en has continued to grow by developing large-scale projects one after another, and in 2017 it was ranked first in China in terms of real estate sales.

The founder who does not appear in the richest ranking

In 2017, when Biguiyuan became China’s top real estate seller, Evergrande Group founder Xu Jiayin climbed to the top of China’s richest list for the first time.

Prior to the Internet age, the real estate industry was a China Dream-like industry that boosted the have-nots into millionaires. Mr. Xu of Evergrande University and Mr. Yang Guoqiang of Heikkeiyuan are both famous people who made their fortunes from poor families, but their lives are in contrast. In the late 2010s, Mr. Xu moved his headquarters from Guangzhou to Shenzhen and began building a skyscraper as a new office building. never appeared.

Yang was born in 1955, the sixth child of a farmer. His family was poor and he never wore shoes or new clothes until he was 17. He earned his income from bullfrog farming and painting, which lifted him out of poverty and entered the construction industry as a construction worker.

There are many mysteries about Mr. Yang, as he does not receive media coverage at all. However, even after he became successful, his lifestyle did not change. Even when he visits his company’s urban development site, he is said to be so ordinary that not only the workers on the site but even the employees notice him.

He did not appear on the list of billionaires because in 2005 he sold all of his shares to his second daughter, Yang Hui-Yun. In 2007, when the company went public, 26-year-old Yang Huiyuan, who owns 70% of the company’s shares, jumped to the top of China’s list of Forbes Asia’s richest people.

Cumulative donation approaches 100 billion yen

Yang Guoqiang and Hui Yuan, father and son, are also known as philanthropists, and are featured on the website of the State Council, which is equivalent to the Cabinet. Mr. Yang Guoqiang himself was exempted from school fees when he was a child and was able to continue his studies. He has invested his own money in , and has helped more than 40,000 children, including fathers and daughters, through the establishment of high schools and vocational training schools with free tuition and dormitory fees. According to the State Council, the total amount donated by the two will exceed 4.8 billion yuan (about 96 billion yen). By the way, even in the current situation where the company is in a financial crisis, Ms. Keien has made news by making large donations.

Yang Guoqiang stepped down from the top position of the company’s board in March, citing his advanced age, and changed his title to “special adviser.” I don’t know if the real estate market conditions or corporate conditions are having an impact.

Yang Guoqiang, who has devoted himself to public interest activities and laid the foundation for China’s growth even before President Xi Jinping advocated “common prosperity,” is the ideal entrepreneur for the Xi administration. He has not moved his headquarters from the Shunde District of Foshan City, where he founded the company, and has made significant contributions to the education infrastructure in the area.

The background of the predicament is not much different from Everdai, but in other respects, Hekkeien, which is an exemplary company, may the government want to save it. I personally think so.

Next time, I will explain the background of Hekkeien’s huge deficit.

Sanae Urakami: Economic journalist, Hosei University MBA practitioner lecturer, English/Chinese translator. He graduated from the School of Political Science and Economics at Waseda University. After working for Nishinippon Shimbun for 12 and a half years, he stayed in Dalian, China for a government-sponsored doctoral program (business administration) and as a lecturer at a university for ethnic minorities for 6 years. Latest publication “New Corona VS China 1.4 billion peopleUnmarried mother for 13 years, 42 years old and married for the first time with a child.