Commentary / World

For China's billionaires, all that is gold does not glitter

by Philip J. Cunningham

Special To The Japan Times

China’s answer to King Midas has lost the golden touch. Wang Jianlin, head of the Dalian Wanda group, was the richest man in China until his stock shares plummeted and rules on moving cash out of the country tightened. Suddenly, large chunks of his empire are up for sale, including his much-touted film studio and a vast network of cinema-studded shopping malls — the crown jewels of the reigning real estate king.

Wang had a good run for the money, basking in the glow of compliant media coverage in a gilded quest to prove that bigger is better: He poured billions into the world’s biggest theme park, the world’s biggest movie studio, the biggest film distributor and so on. He bought AMC, a movie theater chain with a dominant share of the U.S. market, and paid $3.5 billion for Legendary Pictures in a pricey attempt to acquire some Hollywood creative mojo. He put another billion in play in a luxury condo project with a prestigious Beverly Hills address, all this in addition to strategically located malls and entertainment venues across the length and breadth of China, including theme parks meant to rival, if not destroy, the foreign upstart known as Disneyworld that opened to great fanfare in Shanghai.

It’s probably only human that Wang got hit with hubris as he gobbled up brand-name companies and prestigious real estate holdings, but he also became a victim of his own hype even as he hyped it.

The first sign of trouble was the vanity film project meant to flaunt Wang’s media mojo, “The Great Wall,” a cash guzzler full of marquee talent and impressive special effects but otherwise a money-losing flop. Fittingly for a man who could do no wrong, it was around the time of the film’s much delayed release to mediocre reviews that Wang Jianlin’s fortunes began to turn.

Subsequently, Wang’s attempt to purchase Hollywood’s Dick Clark Productions for a cool billion got nixed by commissars unhappy about all the cash fleeing China.

That’s when the cracks in the Wang Jianlin’s too-big-to-fail scheme started to show. Chinese history is littered with the ruins of too-big-to-fail-projects that failed in a big way. Although the Great Wall (about which visiting U.S. President Richard Nixon remarked, “It really is a great wall”) makes for an excellent tourist venue, the movie was too big, too costly and too poorly thought out to live up to its original pitch.

Modern infrastructure works, such as the gargantuan Three Gorges Dam, likewise extract woeful human costs. The submerging of entire cities and the relocation of millions made way for an earthquake-inducing mega-project that poses an ongoing threat to the environment.

Even the materially poor era of the Cultural Revolution was an exercise in excess; its over-the-top zealotry coming on the heels of the Great Leap Forward, another extreme project that plunged China into the most devastating famine of the modern era.

China is not alone in this tendency to excess; indeed the current age may one day be regarded with bemusement as that crazy time when greedy developers around the globe hijacked national fortune. Yes, I’m talking about you, Donald Trump, but don’t bother to tweet; that’s a topic for another day.

The gross statistics for China’s rise are impressive, but the gains are woefully lopsided. Even with corruption and misallocation of resources, it is an exponentially richer country than it was just a few decades ago. But is it sustainable? China now churns out more billionaires than any place on Earth, but intense poverty lingers and ordinary hard-working citizens despair of ever getting ahead. The system is rigged to favor party insiders, the politically connected and shameless sycophants.

China’s newly minted big money men, many of whom combine hard work with pluck and swagger, cunning and con, project larger-than-life personalities. The confidence they exude, the vision they claim as theirs, the magic touch they purport to possess is real until it isn’t. Good fortune can be rescinded at a moment’s notice if they displease the reigning commissars.

Billionaire wheeler and dealer Guo Wengui flew too close to the sun and got burned in his stratospheric ambition. But he managed to flee to the United States with a portion of his fortune intact. Others, such as Xiao Jianhua, were not so lucky. Xiao, who boasted female bodyguards and camped out in a luxury hotel in Hong Kong, was ensconced in the sort of high life that seemed immune from harm, but he got apprehended and trundled out of the Four Seasons Hotel, abducted back to the mainland by a brazen security team.

Wu Xiaohui, chairman of Anbang Insurance Group, was recently held by police and now Fosun International Chairman Guo Guangchang appears to be in peril as his financial services firm HNA is under fire.

The writing is on the wall. It’s too soon to say how far Wang will fall, but he’s dropped out of the magic circle, if only because his relentless pursuit of over-priced California “soft power” has been superseded by the bigger than big “One Belt, One Road” scheme as the economic marching order of the day.

Philip J. Cunningham is a media researcher and consultant.

Coronavirus banner