China: Chinese Billionaire

(a rich Chinese who wants to avoid the spotlight)

One of ten-known billionaires in China

Xu (pronounced "Shew") is the chairman of the Shimao Group and controls much more land than any private developer in the United States and builds luxury real estate projects that put Donald Trump to shame for their sheer scale and flamboyance.

Xu almost never grants interviews and is highly secretive about his operations.

For all of his reserve, Xu, a former textile factory worker, is one of China's wealthiest entrepreneurs and a prime example of the mainland's first generation of real estate tycoons.

In a country that started allowing people to buy homes only in the 1980s, developers like Xu found a way to acquire rights to prime land in the country's biggest cities. Now they are reaping huge profits by building large residential projects, often mixed with hotels and other commercial buildings.

An industry that emerged only a decade ago suddenly has annual sales of $130 billion, making real estate one of the biggest engines in the Chinese economy.

Xu is said to be a pioneer, willing to take big gambles. Through his Shimao Group, he created one of the country's first luxury real estate brands. He bought prime land in Shanghai in the late 1990s when others, fearing that the city was becoming over built, were fleeing the market.

Wealthy Chinese do not want to talk about their wealth because it could result in getting "hammered"!

Xu, and other major Chinese developers, do not give interviews because they simply do not want publicity and scrutiny in a country that is still officially communist and the party is still uneasy about the creation of individual wealth.

There is a Chinese saying that is also popular in Japan and elsewhere in Asia: "The nail that sticks up gets hammered." No one wants to be that nail by talking about this kind of business.

There is a good reason for keeping quiet about the Chinese real estate industry because it has been bothered by scandal, with tales of illegal land grabs, corruption, government bribery, shoddy construction, and the forced relocation of millions of peasants and urban poor.

Yet, almost everyone with enough wealth in China, these days, seems to want to play the real estate game. Of the 50 richest Chinese, according to Forbes's rankings in 2005, it says that half of them rely on real estate as one of their primary businesses.

After graduating from secondary school during the Cultu4ral Revolution, he was sent to the countryside to work as a laborer. In the late 1970s, he went to Hong Kong and worked in a textile factory.

He told friends that he got lucky and made a fortune trading stocks. By the mid 1980s, he was investing in textile factories in western Gansu Province. Xu then plowed millions into developing residential complexes and resorts in Fuijan.

During his career, he made money the same way other developers have: He negotiated with government officials to acquire cheap land, often with a small down payment, by limiting their commitment to a small, initial construction phase.

The system in China favors developers. Home buyers pay far in advance of their move-in dates, often more than a year before construction. Developers often use that pre-sale money to build the project or to buy additional land elsewhere.

—Adapted from "A Trump? Not his style, Chinese billionaire avoids the spotlight"
by David Barboza of the New York Times, December 29, 2005