Rags to riches saga underlines China's transformation

The rags-to-riches story of Chinese real estate mogul Zhang Xin is perhaps an apt reflection of China's unprecedented economic transformation over the past 30 years, but Zhang says that China's startup boom today is just as strong.

Zhang, 50, earned her school fees as a young girl by working on assembly lines in the textile and electronics industries before going to England at the age of 19. She completed degrees in economics and worked as an investment banker in London and on Wall Street before returning to China in 1995 to found the commercial real estate development firm SOHO China together with her husband Pan Shiyi.

The business became China's largest commercial property developer in first tier cities, and in 2014 Zhang was ranked as the 62nd most powerful woman in the world.

Her fame and achievement also made her one of the young global leaders at at this year's World Economic Forum in Davos, where she shared her views on China's business environment in a panel alongside global leaders such as the managing director of International Monetary Fund, Christine Lagarde.

Sitting down for an interview in a cosy room overlooking the snow covered mountains in Davos, Zhang says China's entrepreneurial culture today is no less strong than 20 years ago when she founded her own firm, and her team now generates much revenue from a project known as SOHO 3Q, which provides office management services to startup firms.

"As I walk into SOHO 3Q, I'm attracted by this wide variety of companies. They are all young, vibrant, and have high energy," says Zhang.

SOHO 3Q was launched in February 2015 and rapidly expanded across China from two locations and 1,500 desks to more than 10,000 desks in 11 locations in Beijing and Shanghai. In October 2015, a flagship SOHO 3Q was launched at Guanghualu SOHO II in Beijing, which became the largest co-working space in the world with close to 3,300 desks.

SOHO 3Q boosts efficiency and flexibility, and it allows users to rent individual desks on a weekly basis. Made to suit the needs of today's digital savvy entrepreneurs, SOHO 3Q's services such as reserving a desk or a conference room, extending leases and making payments, can be completed on the website or on the mobile app.

The first tenants of SOHO 3Q were two girls doing movie production, and now it hosts a wide range of Chinese firms with a few dozens of staff, as well as large international companies like Uber which are rapidly expanding in China.

"China has culture of entrepreneurship and by now everyone wants to be an entrepreneur. In Europe you see vast contrast, as not many people want to do startups,"she says.

China's power couple in the spotlight

  • Property magnate Zhang Xin, 49, says her whirlwind engagement in 1994 to twice-divorced Pan Shiyi, now her husband, is her biggest venture.
  • Some 20 years later, the power couple behind real estate giant Soho China have added to their track record of opting for the unconventional.
  • Their combined net worth is estimated at US$3.6 billion (S$4.6 billion)
  • They announced last week they were giving US$10 million to Yale University, once again prompting an angry outcry from Chinese netizens who believe that the money should have gone towards education in the country.
  • In July, the couple's gift of US$15 million to Harvard University also sparked a similar controversy.
  • Both sums of money are part of the Soho China Scholarships, a US$100 million endowment in financial aid aimed at encouraging less well-off Chinese students to study abroad.
  • The Soho China Scholarships aim to provide the best possible educational opportunities to the most outstanding students from mainland China, enabling them to maximise their potential in their contribution to mankind.
  • Mr Pan, 50, grew up in an impoverished part of western China after his father, who was a college lecturer, was purged as a "rightist" and sent to the countryside in Gansu province in the late 1950s.
  • After graduating from Beijing Petroleum Institute, he went to work in the oil ministry.
  • He ventured into property development in Hainan island in 1987, at a time when southern China was reaping the economic benefits from the opening-up policy and the Shenzhen special economic zone.
  • As a teenager growing up in Hong Kong, Ms Zhang worked 12-hour shifts in the city's fire-trap sweatshops in the day and attended classes at night.
  • Raised by a single mother, she eventually saved enough money to fly to Britain when she was 19.
  • With the help of scholarships, she first got into Sussex University and then Cambridge. She later worked for Goldman Sachs in New York.
  • Zhang returned to Beijing in 1994 looking for opportunities to be part of the transition that was sweeping the country.
  • She met Mr Pan, then a partner of property development firm Beijing Vantone, on a double date, although it was her friend who was supposed to be set up with him.
  • In 1995, the couple set up Soho China, which has since become Beijing's largest commercial property developer.
  • The couple's renewed focus is on charity and education, even as they try to pass on the values of thrift and hard work to their sons.

Zhang sees the waves of Western-educated young Chinese students returning to China to make the most of the economy's booming opportunities and start their own businesses as a continuation from her time, although now industries like internet and digital are the big focus.

When she started, in comparison, the property market was booming as China increasingly became urbanized and Zhang said entering the property market was an obvious decision.

Reflecting on the key reasons of her success, Zhang says "the right moment, the right timing and right partner" are key. When SOHO China was founded, there were very few residential houses and very little commercial building. "The need was obvious".

Her 15 years of experience living overseas allowed her to develop unique views on architecture, and when she returned to China she brought many Western architects to work on SOHO China projects, and consequently the firm's projects became known for architectural achievements.

In addition, her Wall Street experiences also helped her to understand the fundamentals of running her business, including how to raise capital, take the company public and speaking to investors, Zhang adds.

The woman who rose from poverty to billions, and built much of Beijing’s skyline while she was at it.

Posted by Christiane Amanpour on Thursday, January 21, 2016

As a keen observer of new opportunities, Zhang grabbed the chance to transform the business model from construction based work to building management in recent years.

"The economy is transitioning from investment led to consumption led real estate market. If you look at Beijing and Shanghai, most of these cities are already built, the opportunities of buying land and building hugely reduced."

She says the Starbucks style SOHO 3Q is very profitable for her firm, and creates important communities for China's next generation entrepreneurs to realise their dreams.

"I get excited seeing those exciting companies."

As Zhang is now one of the world's most successful businesswomen, she feels there is now a change in her life as she wants to now devote more time to philanthropy work where she is able to help other talented and ambitious young people realise their dreams.

"I think at some point in life you'd want to do things beyond yourself. At this stage I want to allocate enough time to help others who are young, who need help."

With her husband, the billionaire couple is endowing US$100 million (S$143 million) dollars to support talented young Chinese students to attend universities like Harvard and Yale. The project started this year with 16 SOHO China scholars at Harvard and Yale, and Zhang's team held an engagement forum with them last October.

"We don't want to just give them the money, but give them a community, a sense of social responsibility," she says.

China's power couple in the spotlight

  • Property magnate Zhang Xin, 49, says her whirlwind engagement in 1994 to twice-divorced Pan Shiyi, now her husband, is her biggest venture.
  • Some 20 years later, the power couple behind real estate giant Soho China have added to their track record of opting for the unconventional.
  • Their combined net worth is estimated at US$3.6 billion (S$4.6 billion)
  • They announced last week they were giving US$10 million to Yale University, once again prompting an angry outcry from Chinese netizens who believe that the money should have gone towards education in the country.
  • In July, the couple's gift of US$15 million to Harvard University also sparked a similar controversy.
  • Both sums of money are part of the Soho China Scholarships, a US$100 million endowment in financial aid aimed at encouraging less well-off Chinese students to study abroad.
  • The Soho China Scholarships aim to provide the best possible educational opportunities to the most outstanding students from mainland China, enabling them to maximise their potential in their contribution to mankind.
  • Mr Pan, 50, grew up in an impoverished part of western China after his father, who was a college lecturer, was purged as a "rightist" and sent to the countryside in Gansu province in the late 1950s.
  • After graduating from Beijing Petroleum Institute, he went to work in the oil ministry.
  • He ventured into property development in Hainan island in 1987, at a time when southern China was reaping the economic benefits from the opening-up policy and the Shenzhen special economic zone.
  • As a teenager growing up in Hong Kong, Ms Zhang worked 12-hour shifts in the city's fire-trap sweatshops in the day and attended classes at night.
  • Raised by a single mother, she eventually saved enough money to fly to Britain when she was 19.
  • With the help of scholarships, she first got into Sussex University and then Cambridge. She later worked for Goldman Sachs in New York.
  • Zhang returned to Beijing in 1994 looking for opportunities to be part of the transition that was sweeping the country.
  • She met Mr Pan, then a partner of property development firm Beijing Vantone, on a double date, although it was her friend who was supposed to be set up with him.
  • In 1995, the couple set up Soho China, which has since become Beijing's largest commercial property developer.
  • The couple's renewed focus is on charity and education, even as they try to pass on the values of thrift and hard work to their sons.

50 of Asia's most powerful businesswomen

  • The mining mogul remains Australia’s richest person, despite a US$5.4 billion (S$7.31 billion) plunge in her net wealth to US$12.3 billion over the past year as the price of iron ore halved.
  • CEO, Harvey Norman. One of Australia's top retailers, Page runs the Harvey Norman furniture and electrical-goods chain founded in 1982 by her husband, Gerry Harvey, and the late Ian Norman.
  • Vice Chairman, Foshan Haitian Flavoring & Food. Cheng joined Haitian as strategy executive in 1997 and ascended to vice chairman in 2012. The Guangdong company has 4,000 employees and each year produces 1 million tons of flavorings, including soy sauce, vinegar, chicken extract and oyster sauce.
  • Chairman and President, Gree Electric Appliances. Dong leads the world's largest residential- air-conditioner maker, with 2014 revenue expected to near $22 billion, helped by a move into e-commerce.
  • Founder and President, Capital Today. Xu upped assets under management of her Shanghai-based private equity firm by 76 per cent to $1.2 billion last year.
  • General Manager, China General Technology. Li Dang runs one of China's largest industrial conglomerates, with annual revenue of US$25 billion. The state-owned Genertec has 45,000 employees and 90 units involved in manufacturing, trade and engineering contracting, pharmaceuticals, technical services, construction and real estate.
  • Chief Executive Officer/Cofounder and CPO, Ant Financial Services Group/Alibaba. Alibaba's most powerful woman executive heads the group's fast-expanding stand-alone financial services unit.
  • Chief Financial Officer, Alibaba. Of Alibaba's top female executives Wu is its most visible and most vocal.
  • Chairman, Huawei Technologies. Seen as one of the world's most powerful women executives thanks to her perch at Huawei.
  • Cofounder and Chairman, Luxshare Precision Industry. Luxshare listed in Shenzhen in 2010.
  • Managing Director/CoChairman, Shun Tak Holdings/MGM China. She's still the richest woman in Hong Kong with US$5 billion in wealth, but Ho saw the value of her stake in MGM China take a beating last year, part of an overall decline in Macau's gaming industry.
  • Vice Chairman and Chief executive, Hang Seng Bank. Lee runs Hong Kong's second-largest incorporated bank, with a market cap of $35 billion, overseeing 10,000 employees and annual revenue of $3.5 billion (2013).
  • Cofounder/Director, Horizons Ventures/Li Ka Shing Foundation. Chau continues to invest in tech ventures, including companies that address global environment and food objectives, tackle infectious diseases and tap artificial intelligence (AI) and virtual reality.
  • Chairman, State Bank of India. Referred to as the first lady of Indian banking, Bhattacharya chairs State Bank of India, a behemoth with 225 million customers and assets of $300 billion.
  • Managing Director, Life Insurance Corp. of India. Two years ago Sangawan made history at state-owned LIC when she was appointed managing director. The first woman to occupy the post, she’s one of 3 managing directors at the 59-year-old behemoth, which remains India’s largest insurer.
  • President, COO and Director, S.T. Corp. In early 2013 Suzuki took over the household products maker founded by her father, after the previous president lasted only a year. Her task is to improve profitability at Japan’s biggest maker of mothproofing agents and No. 2 producer of deodorizers and air fresheners, with a midterm target of a 10% operating profit margin.
  • Managing Director, City Mart Holding. Homegrown retailer City Mart has become a leading supplier to Myanmar’s stirring consumer market.
  • Vice Chairman/Chairman, SM Investments/Banco de Oro Universal Bank. Sy-Coson’s vision for the family company continued to widen in 2014. Under her lead SMIC became the largest listed company on the Philippine Stock Exchange by market cap.
  • Executive Chairman, Straits Trading. Scion of one of the island state’s most prominent families, Chew continues to refocus the 127-year-old tin mining and smelting firm for regional and global reach and higher returns by asset sales and new real-estate-related investments.
  • Founder and Chairman, KOP Group. Since its start in 2006 Ong’s pursuits have brought KOP the Cranley Hotel in London and Montigo Resort on Indonesia’s Batam island, as well as the Hamilton Scotts flats in Singapore, which garnered international attention with its en suite sky garages.
  • Chairman, Hyundai Group. Hyun made a comeback in 2014, raising nearly $3 billion to restructure her debt-ridden Hyundai Group by selling subsidiaries and assets as she exited the financial sector to focus on shipping, machinery and North Korea operations.
  • Cofounder and CEO, Soho China. Zhang heads China's largest prime office developer, Soho, which in the first half of 2014 enjoyed a 29 per cent climb in net profit on an 83 per cent surge in revenue to $776 million.
  • CEO, Siam Piwat, Siam Paragon Development. The stylish CEO of some of Bangkok’s flashiest shopping malls finally broke ground in July on the riverside IconSiam, a $1.54 billion, 20-acre shopping and residential complex.
  • Presiden, Hiwin Technologies. Tsai was working as secretary to entrepreneur Yung-Tsai Chuo in the 1980s when he founded machine-tool maker Hiwin. Though an avid learner, Tsai struggled to fit into the male-dominated industry, but with Chuo’s encouragement she became a creative marketer.
  • President and CEO/President of Business Strategy, Hotel Shilla/Cheil Industries. Restructuring across and within companies in the Samsung Group, founded by her grandfather, as well as the IPOs of de facto holding company Cheil Industries and IT-services unit Samsung SDS, has made Lee much richer in the past year.
  • Chairman and CEO, SSI Group/Rustan’s Commercial. With more than 700 sales outlets in 69 malls nationwide, including the upscale Rustan’s department stores, Tantoco is poised to build further on what her parents founded 60-plus years ago.
  • Chairman and Founder, Monpolymet Group. Tseden founded Monpolymet in 1992 with a focus on gold mining but has since expanded into construction, mineral exploration and land rehabilitation. She runs the company—with annual revenue of around $60 million —with her daughter, who is CEO.
  • Executive Director and CEO, Temasek. The 40-year-old state agency has diversified into a global investment powerhouse under Ho over the past decade and is now the world’s ninth-largest sovereign wealth fund, with an estimated $164 billion in assets as of March 2014.
  • Group CEO, Singtel. Chua, a chartered accountant, has led Singtel, majority-owned by Singapore state investor Temasek, since 2007.
  • CoDirector, James Pascoe Ltd. Group. Norman learned the business as she and husband, David, expanded the small jewelry chain founded by her grandfather into a retail realm spanning New Zealand and Australia. With annual revenue estimated at $1.5 billion, the group encompasses 9 brands and 690 retail outlets, including New Zealand department store chain Farmers and Whitcoulls bookstores.
  • President and Representative Director, Yushin Precision Equipment. Yushin’s biggest sellers, accounting for about three-quarters of revenue, are take-out robots using air-driven suction cups or mechanical pinchers to pull parts out of their molds quickly and efficiently and stack them for shipment or further processing.
  • President Director and CEO, Nippon Indosari. Yap cofounded the largest mass-market Japanese-style bread producer in Indonesia, Nippon Indosari, known for its Sari Roti brand. Holding more than 90% of the domestic market, it estimates revenue grew 25% last year to $147 million.
  • President Director, Blue bird Group Holding. Blue Bird has become Indonesia’s biggest taxi operator and one of its most successful brands. Its immaculately kept Toyota Yaris compact cars and polite drivers have turned hailing a cab into a safe bet rather than a calculated gamble. But with its 30,000 or so taxis dominating most major cities the company is looking for new growth.
  • Vice President Director, Pan Brothers. Sutanto has played a vital role in turning Pan Brothers into Indonesia’s largest garmentmaker. The company, which makes apparel for well-known brands such as Uniqlo, Reebok and Nike, has annual revenue of $340 million and 14 factories across Indonesia, with another 3 to come by 2016.
  • Founder, Chairman and Managing Director, Biocon. India’s biotech queen built Biocon from a garage startup into India’s largest publicly traded biopharma firm, with $480 million in sales, mostly in low-cost drugs for diseases such as diabetes and cancer.
  • Managing Director/Non-Executive Director, Shriram Life Insurance/Shriram Capital. In less than a decade Srinivasan has catapulted Shriram Life Insurance into one of the top 5 private players in its industry in India in terms of profitability.
  • CEO/Executive Director, Rosewood Hotel Group/New World Development. Cheng is spearheading a major expansion, aiming to more than double the number of hotels under her management to 130 by 2020 from 55 in 18 countries now.
  • Chairman and CEO, Goldis. Valued at $430 million, Goldis is the biggest shareholder in IGB, a property group founded by Tan’s father, Tan Chin Nam, and uncle, Tan Kim Yeow, both on the FORBES ASIA rich list for Malaysia. IGB built and manages Mid Valley Megamall, one of the largest malls in Southeast Asia, and operates hotels in London, New York, Manila and soon Australia.
  • Chairman, TH Group. In 2009 Thai entered the milk business, vowing to change the nature of the industry in Vietnam, which has mainly used powder to produce liquid milk. Since then her TH Group has invested $450 million to import and raise cows to produce fresh milk products, using Israeli technology.
  • President and Director, Thai Summit Group. Somporn and her late husband built Thai Summit into an auto- and motorcycle-parts powerhouse with 23,000 employees and operations in 7 countries in addition to Thailand. The privately held company said its 2013 sales were around $2 billion.
  • CEO and Chairman, MC Group. Sunee has led MC Group for almost 2 decades, turning it into one of Southeast Asia’s leading producers of jeanswear, with 2013 revenue of $236 million, up 16% on year. In 2014 it added 114 points of sale within Thailand to boost its network to 819 locations and furthered its international expansion, adding Vietnam to sales outlets in Laos and Myanmar.
  • Chairman and CEO, SPCG. While other Thai companies stagnated amid political turmoil last year, shares of SPCG, a builder and operator of solar plants, surged 35%. Wandee founded the company in 1996, but business boomed only in recent years.
  • CEO, Central Department Store Group. With a recent reorganization of Central Group into 8 divisions, Yuwadee became CEO of Central Department Store, overseeing expansion in Thailand and overseas.
  • Chairman and CEO, Vinamilk. Vinamilk is one of the best-known brands in Vietnam and, according to research firm Nielsen, has 51% of the liquid milk market.
  • Group Head of Macquarie Funds, Macquarie Group. Wikramanayake is frequently mentioned as a successor to CEO Nicholas Moore. She heads the investment bank's funds management division, which contributed one-quarter of Macquarie's net operating income in the year ended March 2014.
  • Managing Director and CEO, ICICI Bank. India’s second-most-powerful banker (after Arundhati Bhattacharya), Kochhar has been boss of ICICI, the country’s biggest lender in the private sector, with assets of $100 billion, for 6 years.
  • Chairman, Rizal Commercial Banking Corp. The eldest of 8 children of Philippine businessman and former ambassador Alfonso Yuchengco, Dee runs the Yuchengco Group of Cos., which operates in sectors ranging from education and travel to construction and financial services.
  • Chairman and Co-CEO, Boryung Pharmaceutical Group. Kim is the eldest daughter of the founder of Boryung, which started as a small drugstore in Seoul in 1957. She became head of secretarial services under her father’s chairmanship in 1997 and was promoted to vice chairman in 2001. She assumed the role of chairman in 2009, and Boryung has since become one of the top 10 pharmaceutical companies in the country, with 2014 sales of more than $300 million.
  • Managing Director and CEO, Axis Bank. Sharma, who took over as managing director and CEO of Axis in 2009, was recently reappointed to the post for 3 more years. She’s credited with giving the bank—India’s third-largest private-sector bank, with assets of $67 billion—a retail focus, digitizing transactions and expanding the network.
  • Chairman and Managing Director, Nan Fung Group. Chen worked for her father, Chen Din Hwa, for some 30 years before taking over as head of Nan Fung Group.

To contact the reporter: cecily.liu@mail.chinadailyuk.com

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