Zhang Yin

Article: Thanks to Mao, Zhang Yin's a billionaire

It was one of China's proverbs that Mao loved to quote; women, he would say, hold up half the sky. But until the communist revolution of 1949 the Chinese had not meant it. The Chinese imperial system, famously, had been one of the most anti-feminist societies on Earth. Women had no rights, existing only to have babies and please men, the richer forced to hobble and disfigure themselves by binding their feet from birth to affirm their essential purpose - decorative daintiness.

But last week it was reported that China's richest billionaire is now a woman - 49-year-old Zhang Yin is worth a cool $3.4bn (£1.8bn). The tycoon is the world's richest self-made woman, having built China's largest paper recycling business, Nine Dragons Paper, which was floated on the Hong Kong stock market just six months ago. She seems an eloquent symbol of the new China; a capitalist whose success and wealth was unthinkable before Deng Xiaoping freed China from the embrace of Maoism in 1978. It is capitalists such as her who are proof that paradoxically it is communist China that is home to the globe's most vigorous capitalism. And she is a woman.

In China, though, beware. Nothing is quite what it seems. Zhang Yin owes her success both to pro-market Deng Xiaoping and ardent communist Mao. As the eldest daughter of a family with eight children, her expectation before the communist revolution would have been to grow up illiterate before becoming her husband's chattel. Mao's radical egalitarianism may have given China the murderous mayhem of the Cultural Revolution. But he also transformed the role, expectations and education of women.

In 1949 female illiteracy in rural China was 99 per cent. In 1976 when Mao died it was 45 per cent and today it is 13 per cent. One of Mao's first acts was to give women the same rights in divorce as men, and for all his other barbarism he consistently championed the equality of women.

China is still a sexist society, but compared with the rest of Asia it is light years ahead. Female illiteracy in rural India, for example, is still 55 per cent. The change has gone deep into the marrow of Chinese society. One survey recently revealed that Chinese girls between 16 and 19 name becoming president, chief executive or senior manager of a company as their top career choices; Japanese girls between 16 and 19 say they want to become housewives, flight attendants or child-care workers. One of China's most formidable economic and social resources has become its women.

As the daughter of an officer in the People's Liberation Army, Zhang Yin also understands the corrupt and controlling pathology of Chinese communism well - and has understood the imperative to keep ownership and direction of her company as distant as possible from Beijing. In China the party controls, or has the capacity to control, everything; the number of companies forced into decline or even bankruptcy because they were compelled to support party aims - bailing out an endemically loss-making company to protect jobs or buying a state-owned company at an astronomic price to feather the nest of a senior official - is beyond counting. Indigenous Chinese capitalism is a form of hit-and-run guerrilla economic warfare in a constant battle with the world's greediest and most corrupt officialdom. Survival depends upon paying tribute. It is no accident that two thirds of China's six million private businesses are owned and run by ex-communist officials. Almost every private businessperson in China is either a party member or applying to join.

Zhang has avoided much of that - courtesy of Hong Kong, a Taiwanese husband and managing to get out of China in the months after Tiananmen Square when repression was at its height and the prospects for any kind of private enterprise seemed nil. Her cleverest moves were her first; incorporating her company in Hong Kong in 1985 and then marrying a Taiwanese with a non Chinese passport. In exile in Los Angeles in 1990 the pair founded America Chung Nam - a company specialising in scrap paper brokerage as she had been doing in Hong Kong.

Scrap paper is one of the few industries the party considers non-strategic and which it indulges - another smart choice for an ambitious woman. In December 1991 the Soviet Union collapsed, and in January 1992 the ageing Deng Xiaoping declared in a tour of Guangdong, China's most pro-capitalist province, that as international communism was dead the only way for Chinese communism to survive was to embrace pro-market reform. In particular it should welcome inward investment from foreign companies with know-how and technology. It was glorious, he said, to be rich.

There was an avalanche of inward investment, including America Chung Nam building a paper and board mill in the very same Guangdong- a foreign investor even if owned by a Chinese living abroad. After all, China's booming exports would need to be wrapped in paper and paperboard. Guangdong's exports have grown phenomenally; so have sales of paper and board.

And six months ago Zhang Yin and her husband cashed in - floating their shares not in one of China's stock markets on the mainland, but in Hong Kong. Here a private company can keep its distance from the party; if there is a dispute with the communists it gets settled in Hong Kong's still independent legal system - legacy of the British - and not in one of the mainland's rigged courts.

The extent of China's reform, and its subsequent growth, is stunning. It is also true that Ms Zhang could not have made her money if China had not opened to the world. But nobody should believe that somehow her fortune means that China has made the full transition to capitalism. Rather she has exploited the system's fault lines. This remains a one-party state, in which every institution - from the media to its companies - is constructed to sustain its monopoly of power.

Entrepreneurs such as Zhang Yin only succeed if they find ways around the system; they can only push the economy so far. One day the party will have to let go properly. The issues are only how and when.

· Will Hutton's book on China and the West, The Writing on The Wall, will be published in January

From: TheObserver
Link: http://observer.guardian.co.uk/comment/story/0,,1922797,00.html