China's Rich Want Their Say on Policy Reform

Self-made men and princelings argue for reform in ever-louder voices
He Di co-founded the Boyuan Foundation Photograph by Adam Dean for Bloomberg Businessweek

Pan Shiyi is a real estate tycoon whose company Soho China has built some of the most fashionable developments in the country. Pan has a political side, too, which he expresses in a blog followed by 16 million Chinese. After Pan posted a call for increased transparency on how authorities monitor pollution, the governments of Beijing and 73 other cities started releasing more daily pollution data. He was also invited to tour the offices of the environmental protection agency for Beijing after a heated online exchange with its spokesman.

Such an episode would have been unthinkable in China 10 years ago, given the tight censorship. But China now has an emerging business class that wants to influence the debate on pollution, economic reform, U.S.-China relations, and broader political change. Some, such as Pan and Lee Kai-Fu, ex-head of Google China, use the Internet to spread their views. Others, including the founders of the Boyuan Foundation, take an institutional approach to reform and seek ways to engage the government. Most of these executive-activists back what’s known in China as universal values—the rule of law, free markets, and freedom of speech, assembly, and religion.

Lee’s two microblogs have more than 66 million followers, an audience nearly as big as the Communist Party’s membership. In between notes on his family, Lee points out cases of corruption and censorship and advocates greater freedom of expression. In the past half year, the government imposed a temporary gag on his social media activities after he criticized the state’s backing of a search engine run by the People’s Daily. (Lee is back blogging.) An army colonel has accused Lee of being an American spy.

Celebrity venture capitalist Charles Xue, the Chinese American author of a popular and politically sensitive microblog under the pen name Xue Manzi, has had trouble, too. He was recently called in by the authorities for a meeting where officials advised him and other bloggers to cease their disruptive activities. Xue did not: On Aug. 23 he was arrested in Beijing for allegedly hiring a prostitute. He hasn’t been seen since. On China’s blogosphere, his arrest has reignited debate over a government backlash against the growing assertiveness of businessmen in politics.

Unlike Xue, the Boyuan Foundation tries to engage the government rather than antagonize it. Because of the pedigrees of founders He Di and Qin Xiao, Boyuan has access to high officials and a network of academics who supply it with original research about China.

The foundation got its start in 2007 when two prominent bankers decided they wanted a forum where officials could discuss public policy with outside experts. He Di, ex-head of Swiss bank UBS’s China operations, and Qin Xiao, ex-chairman of China Merchants Group, are part of the in crowd. Their childhood friends are some of China’s most powerful men, including Zhou Xiaochuan, governor of the central bank, and Wang Qishan, the Politburo member running the anticorruption drive. Boyuan’s board includes Gao Xiqing, head of China’s sovereign wealth fund, and former U.S. National Security Advisor Brent Scowcroft.

The new minister of finance, Lou Jiwei, wrote a book for the foundation about how to use taxes to address rising inequality. “You can’t have social justice without a more fair and transparent tax system,” says Ding Xueliang, a professor at Hong Kong University of Science and Technology who researches state capitalism for Boyuan.

Both He and Qin were affected by the Cultural Revolution, Mao Zedong’s catastrophic effort to purge the party of suspect elements. He Di spent eight years working in a factory and farm. He enrolled when the universities reopened, served as assistant to the director of the Institute of American Studies, earned a master’s in international politics from Johns Hopkins University, and in 1997 joined UBS. He played a key role in the bank’s biggest China deals.

After the Asian crisis of 1997 prompted officials to seek his advice on keeping China free of financial contagion, He thought a place for private-sector economists to meet with government officials would serve both sides. A decade later, he stepped down from UBS and set up the foundation. “The goal was to be one of the voices to cause the debate. Maybe in 10 years we’ll be like Brookings,” says He. The Brookings Institution was set up by a philanthropist in 1916 to analyze public policy.

Joining He was Qin, a princeling with family ties to President Xi Jinping. Dubbed “China’s intellectual banker” by Chinese financial magazine Caixin, Qin, besides his work at China Merchants, served as president and vice chairman of Citic Group, the state-controlled investment conglomerate. In the Cultural Revolution he joined the Red Guards, the shock troops of Mao’s assault on Chinese society. Instead of embracing the violence often unleashed by the Guards, Qin and some classmates protected older party officials from persecution, according to Caixin.

Qin was sent to the countryside and returned to school after the Cultural Revolution ended. He joined Citic in 1995 and earned a Ph.D. in economics from Cambridge University in 2002. When he retired from China Merchants in 2010, he didn’t go quietly. In a commencement address at elite Tsinghua University, he said that the China model of development didn’t work. Qin instead embraced universal values, a loaded term seen by some Chinese as a back-door way to undermine China’s power. “It’s like saying at the age of 60 you’re buying a Harley-Davidson,” says David Kelly, research director at China Policy, a research and advisory company. “Universal values is a wedge issue, exactly like abortion in America.”

Qin’s critique angers some of his oldest friends. “Are you still a Communist Party member? Do you have faith?” fellow Red Guard Dan demanded, according to online accounts of an argument they had at a public forum in April. Qin said: “You sent your wife and kids to America. Do you have faith?”

Will the authorities crack down on He and Qin? Says Hong Kong University’s Ding, “Boyuan comes from a senior leadership background. That gives it some political protection, a great asset for its survival in an unpredictable environment.”


    The bottom line: Prominent Chinese financiers and business executives have provoked the government with their calls for reform.

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