BEIJING – Wang Jing, the enigmatic businessman behind Nicaragua’s $50 billion Interoceanic Grand Canal, shrugs off skepticism about how a little-known entrepreneur can be driving a huge transcontinental project, insisting he is not an agent of the Beijing government.
“I know you don’t believe me,” said Wang, who reckons that he has forked out about $100 million in canal preparation work and is burning as much as $10 million a month on the project. “You believe there are people from the Chinese government in the background providing support. Why, in the end, is only Wang Jing out front?”
High-ranking Chinese officials, including President Xi Jinping, Premier Li Keqiang and former leaders Jiang Zemin and Wen Jiabao, have all visited the state-connected wireless communication technologies company that Wang took control of four years ago.
Wang, whose entrepreneurialism went mostly unnoticed in China and elsewhere before last year’s Nicaragua announcement and a subsequent $3 billion Black Sea port development plan, has not helped matters by refusing to talk in detail about himself or broad swaths of his career.
During two interviews at the headquarters of Beijing Xinwei Telecom Technology and in followup emails, the 41-year-old discussed Nicaragua, Beijing Xinwei’s recent deal to undertake the biggest reverse takeover in Chinese stock market history and his background, providing fresh details to a life that remains mysterious.
‘Very ordinary life’
“I was born in December 1972 in Beijing,” said Wang. “All these years, I’ve lived a very ordinary life.”
Wang grabbed global headlines last June when he sealed a controversial no-bid 50-year renewable concession from Nicaragua’s Sandinista government to develop the canal to rival the Panama Canal.
Preparation is on schedule, Wang said. In January, he and Nicaraguan President Daniel Ortega issued a statement to address what Wang described as “misleading reports” that construction will be delayed.
The proposed scope is enormous, comprising construction of a waterway that may extend 130 miles (210 km), depending on the route selected, along with two ports, a railway, an oil pipeline and an international airport.
The canal will be longer, deeper and wider than the Panama Canal, 500 miles (800 km) to the southeast.
The scale of the project has led some to suggest it could only be viable with the backing of the Chinese government, which might see it as a geopolitical play to balance U.S. influence in Central America.
“I can’t imagine (Wang) would have gone forward without at least coordinating with the Chinese government,” said R. Evan Ellis, assistant professor at National Defense University in Washington. “Big Chinese companies just don’t parachute down into Latin America.”
The project, Ellis estimates, may provide China with commercial leverage over key Latin American governments and local companies, which may prove crucial to guarantee trade routes and access to raw materials.
For Wang, who can make a small fortune from licensing arrangements alone, the project represents a perilous high-wire act. The waterway has been criticized as a white elephant, and Wang has been ridiculed in the global press for lacking experience developing or financing big infrastructure.
Wang only established Hong Kong Nicaragua Canal Development Investment Co. (HKND) in August 2012 and opened offices weeks ahead of last June’s announcement.
Nicaraguan opposition politicians also question Wang’s commitment to addressing social and environmental issues, particularly how the proposed project may affect Lake Nicaragua, an important source of fresh water in the region.
Wang has brought in international specialists to help quell concerns. McKinsey & Co. was hired to conduct an economic feasibility study, while Environmental Resources Management is conducting an environmental and social impact study for the various routes under consideration.
SBE, a Belgian civil engineering firm specializing in canal hydraulics, and the Australian engineering consultancy MEC Mining also have been hired. Washington consultancy McLarty Associates and law firm Kirkland & Ellis also were contracted.
Canal feasibility study
As many as 400 engineers and technicians of different nationalities are working on a canal feasibility study, Nicaragua’s Canal Authority head Manuel Coronel Kautz said. There are 600 to 700 people working on the project, Wang said.
Financing is a thornier issue.
Wang, who may be prepared to spend as much as $300 million of his own cash, said that he will use cross-shareholding, bank lending and debt issuance to raise the $50 billion needed to finance the project.
Five international groups have already agreed to invest in the project, he added.
On April 23, Xugong Group Construction Machinery Co., one of China’s biggest construction equipment manufacturers, announced it had reached a framework agreement to take a 1.5 to 3 percent stake in Wang’s development company. The investment will make Xugong the sole supplier of engineering equipment to the canal project.
Other companies that may participate in an international consortium include state conglomerate China Railway Construction Corp., China’s biggest overseas engineering contractor, which is one of Wang’s strategic partners brought in to help with feasibility studies. Wang said he has spoken with Chinese state-owned banks but would not say whether any will provide financing.
“I want to point out that it isn’t going to take $50 billion in cash to do this,” Wang said.
Ukraine port plan
Wang’s other big infrastructure project, a $3 billion plan to build a deepwater port on the Black Sea about 60 km (35 miles) north of Sevastopol, is facing greater uncertainty.
In December, Wang announced the agreement between HKND and an unknown Ukrainian firm during a visit to Beijing by Ukrainian President Viktor Yanukovych, who was ousted two months later.
A photograph captures Wang at the time talking about the port project with Yanukovych and Chinese Vice Premier Ma Kai. The port site is located in the middle of the Crimean Peninsula, which has been annexed by Russia.
By February, 20 HKND workers had completed their site inspection work and were forced to return to China.
“We’re still confident, but given the current complexity of the Ukraine situation . . . we will need to replan,” Wang said.
Wang looks flush with cash — at least on paper. His main asset is a 36.9 percent stake in Beijing Xinwei, the government-backed developer of China’s wireless communications standard. It now specializes in mobile network development and products. In March, it estimated its assets at 26.89 billion yuan ($4.3 billion). He controls Hong Kong Nicaragua Development Co. through mainland-registered Beijing Interoceanic Canal Investment Management Co., according to filings with the Shanghai Stock Exchange and Hong Kong Companies Registry.
Wang also reports full ownership of several offshore subsidiaries, including seven Netherlands firms related to the Nicaragua project; a British Virgin Islands-registered aircraft investment company and media and sports entities, all of which were registered within the last year.
He owns Southeast Asia (Cambodia) Agriculture Development Group, which was registered in Cambodia in September 2009.
Less is known about his path to success.
He refused to discuss his family background, saying only that his father was an ordinary office worker and died in 2010 following an 11-year illness; that his mother, who is about 70 years old, is retired; and that he has a daughter.
Wang says he studied at Jiangxi University of Traditional Chinese Medicine but left before graduation, returning years later to organize Beijing Changping Traditional Health and Culture School.
In the late 1990s, Wang said he traveled to Hong Kong to learn about international finance and investment. He returned to Beijing in 1998 and founded Dingfu Investment Consulting Co. In Hong Kong, Wang also established Hong Kong Divine (Dingfu) Investment Group Ltd. in 2001.
He later mined gold and precious stones in Cambodia and opened Yingxi Construction and Engineering Co., a small contractor. Information about these firms is scarce.
Wang declined to elaborate on the source of his wealth. “China has an expression, ‘The finest fragments of fox fur, sewn together, will make a robe,’ the meaning of which is, ‘A fortune is accumulated over time,” he said.