Chinese Character

From bureaucrat to billionaire

Ye Chenghai is arguably the man who best embodies modern China

From bureaucrat to billionaire

Ye Chenghai: left politics for business and never looked back

Born at midnight on August 15, 1947 Saleem Sinai is a living allegory: a man whose life is inextricably entwined with the story of modern India.

Except, of course, Sinai is not real. He’s a fictional character – the protagonist in Salman Rushdie’s Booker Prize winning novel, Midnight’s Children.

But for a genuine living allegory of modern China’s development, look no further than Ye Chenghai.

Born in 1943 – the same year that Mao Zedong was named supreme leader of the Chinese Communist Party – Ye’s career path is extraordinary.

His potted resume would go something like this: party member, bureaucrat, vice-mayor, factory owner, American immigrant, green card holder, China returnee, entrepreneur, and (most recently) billionaire.

Ye’s pharmaceutical firm, Shenzhen Salubris launched an IPO last month which saw his net worth surge to Rmb6.2 billion ($905 million).

His wealth has piqued the interest of local media – in large part because just 24 years ago he was Shenzhen’s vice-mayor.

The story of how a Communist Party cadre rejected a successful political career for the turbulent business world – and became a billionaire in the process – is anything but ordinary.

Ye was born in a small village in Guangdong province’s Meixian County.

At 17 he was judged smart enough to be admitted to the best local school, the Dongshan Middle School, where he served as chairman of the student’s council. He then studied international politics at Renmin University.

In the 1960s the smart career choice for any intelligent graduate was to enter government service.

But by the time Ye became an official, China was caught up in the Cultural Revolution. It was a time when older party officials and intellectuals were being purged – with many sent to the countryside.

In 1968 Ye was transferred to the poverty-stricken county of Bao’an – then little more than a chain of villages, but now the site of Shenzhen, a city of 8.6 million people.

Ye arrived as the editor of a magazine on rural affairs, but quickly won the trust of local farmers and learned about agriculture. He was appointed as a ‘rural work team captain’.

As he tells the Guangzhou Daily, it was a bleak time. Housing was primitive – roofs were made of grass – the economy was on its knees and starvation was rife.

An additional problem was Shenzhen’s proximity to prosperous Hong Kong, which was situated just across the river.

“In some villages, everyone would run away overnight,” he recalls. “That left no one to do the farm work.” The runaways were not always successful. Ye can still picture dead bodies floating in the Sham Chun River.

Ye asked himself why people were so desperate to leave their homes that they would risk drowning. His conclusion: “We needed to address the problem of [lack of] food and clothing, and do everything to increase productivity. Only then could our motherland become prosperous and strong.”

In 1978 Deng Xiaoping launched his programme of reforms. Ye considered them long overdue and threw himself into implementing them.

But it was a transitional era, where hardliners still carried influence, and when he voiced his ideas to allow the farmers “to get rich” it was controversial.

He butted heads with his bureaucratic colleagues on a number of occasions. In 1979, for example, he told them that if they were hoping for foreign investors to come across the border, they would need to build a decent restaurant.

However, his proposal to do this as a joint venture with a Hong Kong eatery raised hackles.

In a particularly volatile meeting he pointed at his sweat-soaked shirt and told the hardliners they should lick it – so they could empathise with the difficulties of foreign investors in finding a decent meal.

He prevailed and the Xinxing joint venture restaurant opened.

In spite of his abrasive style, Ye rose up the ranks – first becoming party secretary of Luohu District, and finally Shenzhen’s Vice Mayor.

It was a time when the city was growing fast. Deng had declared Shenzhen a special economic zone, and it became a test case for China’s early experiments with capitalism. From a commercial perspective it was the most exciting place to be in the country.

Ye saw first hand the changes underway and made a bold personal decision, exchanging the security, perks and privileges of the government bureaucracy for the less certain outlook of business life.

In his hometown there was shock; many thought it career suicide.

But he borrowed money from family and friends and in 1985 rented a modest factory in Huanggang village to make silk garments.

Later, he switched to making machines that could detect fake bank notes (reflecting perhaps how fast Shenzhen was changing).

It was tough. Ye recounts sleepless nights, worrying about how to repay those who had lent him their life savings.

He began to travel abroad on business – becoming familiar with Hong Kong and the US, and dabbling in real estate and a few other sidelines.

Like a lot of Chinese in the 1980s, Ye viewed America as the ‘golden mountain’, an aspirational place where fortunes could be made.

Many with the means to do so were emigrating there. Ye sent his two sons to US universities and through his business interests managed to get himself a green card. He moved to America to set up orchards.

To some it looked like the end of Ye’s links with China. But just as he was winning the envy of his friends and relatives back home, he made another bold decision. He concluded in 1989 that China had the political stability for a new phase of economic growth to begin – hardly the conventional wisdom in that turbulent year. So, he relinquished his green card – to general disbelief – and returned to his native Shenzhen, where he bought some reclaimed land and built a new business, Haibin Pharmaceutical.

Haibin grew profits to Rmb50 million. In 1997 Ye sold his stake, paying “considerable taxes”, the Guangzhou Daily notes approvingly.

He then founded Salubris, with grander ambitions to specialise in high end drugs and focus on winning a reputation for R&D.

The company now primarily sells cardiovascular drugs and cephalosporin antibiotics. Ye wants to position the firm as one of China’s rising biotech stars. Its sales have experienced compound annual growth of 60% in the last three years.

The government shares much of Ye’s vision, saying it will give priority to technology and biotech firms in the queue to list on the Shenzhen exchange. Accordingly, Ye’s was one of the first three firms to get listing approval recently after a year long hiatus in IPO activity.

The investor community shares Ye’s optimism. In the fortnight following its listing the stock has almost doubled – making Ye a multibillionaire. What’s evident: for anyone interested in the ‘China story’, keep watching Ye. He embodies it.

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