The Mission of Chinese Entrepreneurs Is Obtaining Power

China's struggle for power.


6/2/2010



The Chinese companies listed overseas are frequently involved in two types of scandals: One is making false accounting in order to benefit financially, and the other is breaking through the marketing regulatory rules in order to reach a private gain. The chairman of an Asian medium in the Tokyo Stock Exchange took more than a billion yuan deposit as a guaranteed loan to his company and resulted in being taken off the stock exchange. The founder of newly listed Oriental Era in Singapore continued his false accounting practices, and last year admitted the difference between the actual account and reported account was 2 billion yuan. The former chairman of the Guangdong Land in the London Stock Exchange created the biggest possible loan fraud in the history, 4.7 billion yuan; making loans under its subsidiary and reported to the shareholders of being debt free. Unfortunately, scandals like these are on the rise.

Matsushista, founder of Matsushista Electric Industrial Co. had pondered for a long time and then decided that the mission of his company was to create benefits for the society. The achievement of Matsushista Electric Industrial Co. has indeed been just that. The mission statements for Western companies may be varied but the majority of them aiming to create benefits for certain aspects of the society. Chinese companies also have their corporate culture and their mission statements. However, the Western companies are sincere in carrying out their missions while Chinese companies use their mission statements to serve only as a decorative purpose.

In a privileged society, privilege becomes the most enviable of all. When the general public is being regulated and pressured, the privileged can go everywhere without interference. Privilege is another name for the government officials. It belongs to them. However, the officials need not only privilege but also money. As a result, the rich can exchange privilege with money. Years back, when the ordinary people could not visit Hong Kong and Macao, the rich could buy a permit from the public security department and some could even buy a permit to live in Hong Kong. When the ordinary people could not buy land, the rich could buy land even with a special discount. Lastly, if the rich were interested, they could become an official or a member of the NPC or CPPCC at various levels—the more money one has, the higher level one climbs.

Ten years ago the owners of large real estate companies toured around the country and they went to all different provinces and met with government officials. They were offered maps so they could drive around and created more GDP for the locals. The more money one has, the more privileges one will be granted. Everyone is pursuing greater wealth. It is not an exaggeration to say that Chinese entrepreneurs have no other mission but obtaining power!

These entrepreneurs, with only ten or twenty years in the business of either traditional industries or new technologies, cried out startling slogans such as, “Marching into the Fortune 500!” The whole society is filled with the enthusiasm of endless pursuing of wealth and the desire for quick success.


Companies have grown rapidly and owners have built things up in a short amount of time while facing various rules, requirements and limitations. Their anxious mentality has pushed China with 10% economic growth for quite a few years. Unfortunately, at the same time, they have also buried the landmines for themselves.

Warren Buffett said that only after the tide recedes, we know who has been swimming naked. The coming of a storm, the explosion of the landmines soon turn into scandals. The main cause of these scandals is the pursuit of power. No matter how impressive a mission statement they reveal, they are not concerned about what benefits their business can bring to the consumers. They have extraordinary courage to break any rules to reach extraordinary expansion, but ignore ethics along the way.

The Western society does not really understand this mentality. They are not even alarmed with a growing number of corporate scandals. Investment involves risk. Some people say if you can pick the right person to invest with, there would not be any risk. It is rare that you find such an investor. To invest in China, you are taking a great risk.

The desire for wealth connects two totally different worlds, but culturally they cannot integrate with or penetrate into each other. Everyone in China knows that the constitution of China is a trap. The Chinese entrepreneurs have all learned since childhood how to do lip service and their mission statements are nothing but decorative pieces. Even one day, when the Stock Exchange is having a sworn-in ceremony for the Chinese listed companies to ensure compliance with all regulatory norms, I am sure that owners of those companies will only talk the talk but not walk the walk.