China and the World

The Qingtian diaspora

Spotlight on Chinese businessmen after Spanish arrest tycoon

The Qingtian diaspora

Under arrest: Gao Ping

Ever heard of Qingtian? No neither had we. The hillside county is located near Wenzhou and has a population of about 500,000 people. But what makes the place unusual is that half its citizens work abroad and that most of them seem to have chosen one destination in particular to live: Spain.

In fact, Changjiang Daily estimates that 90,000 of the 160,000 Chinese with residency in Spain come from Qingtian. That makes them the largest Chinese community, exceeding those from Fujian province (18% of Chinese immigrants), as well as Wenzhou (15%).

The Qingtianese also made the Spanish news last week when it emerged that the county’s favourite son had been arrested.

The National Business Daily reports that Qingtian-born businessman Gao Ping was arrested by Spanish authorities on 13 charges including tax evasion and involvement in organised crime. Gao is also accused of smuggling Chinese goods into Spain and laundering money – as much as €1.2 billion over the past four years.

Up until his arrest, Gao had been Spain’s most prominent Chinese businessman. The owner of the Spain International Trade Group, which operates a 30,000-square metre facility outside Madrid, Gao had even accompanied King Juan Carlos on a trip to China in 2007. Gao has also been honoured for his contribution to Sino-Spanish ties at home, with his appointment to the Chinese People’s Political Consultative Conference, a political advisory body, as a delegate for Zhejiang.

Gao’s political aspirations might have to be postponed, of course, now that he’s facing charges in Madrid for running the Chinese mafia in Spain. His detention follows a national sweep from Spanish police, which raided 120 warehouses and homes. The authorities claim this was the culmination of a two-year investigation called “Operation Emperor”, which also led to the arrest of a further 58 Chinese suspected of being Gao’s gang members.

Gao arrived in Spain in 1990, aged just 18. Initially he worked as a cook in his aunt’s restaurant. Then he started his own fast-food joint, before burgeoning out into a new business distributing handbags. Soon he had even acquired a Spanish name: Alberto.

As his business blossomed Gao eyed Yiwu’s business model. As WiC has reported previously (see issue 9), the city has made a name for itself as a massive wholesaling centre that attracts buyers from around the world looking to source cheap Chinese goods. His idea was to replicate the same model in Spain. Accordingly in 1995 he built a huge warehouse complex in the Fuenlabrada Industrial Zone, 18 kilometres from Madrid. More than 2,000 enterprises now operate within the district, making it one of Europe’s largest wholesale centres for Chinese products. El Pais, the Spanish newspaper, reports that Gao reportedly also had a complete monopoly on all the supplies to Chinese bargain stores across Spain.

Not surprisingly, his business success made Gao one of the more high-profile Chinese entrepreneurs in Spain. Eight years ago he acted as mediator during a shoe-burning storm, when local businesses torched Chinese footwear in a protest against low-priced imports. He has also presented himself as a philanthropist, especially in sponsoring art. This included opening a gallery for contemporary Spanish art in Beijing in an attempt to promote cross-cultural ties.

More recent coverage of the Gao family in austerity-ravaged Spain has attracted less flattering PR. Changjiang Daily reports on one case in which Gao’s wife annoyed TV viewers with an interview in which she started pulling Hermès bags out from under her bed. Reportedly she explained: “Although I feel miserable working hard, I feel very happy lying every night on these luxuries.”

Now the PR is much worse. If Spanish prosecutors are right, some of those luxuries were purchased on the proceeds of smuggling and money laundering, in an illicit empire protected by a close-knit gang from Gao’s hometown.

According to reports, more than half of the gang members arrested are from Qingtian.

Not surprisingly, this has focused Spanish media attention on Chinese immigration and, particularly, the strong representation of those from Qingtian. In this respect, there are parallels with Prato, an Italian textile town in Tuscany which complains that it has been ‘colonised’ by over 3,000 Chinese factories (see WiC79).

The Spanish newspapers reported last year that an aggregate five million immigrants now had residency status.

Of these, the Chinese made up the seventh biggest group. But their economic influence seems to be disproportionate. While some of this is unquestionably down to hard work (no siestas in Qingtian, we’re sure), others have suggested that the Chinese networks prosper on clannish behaviour and cheap labour, much of which flouts regulations on wages and working conditions.

Prompted by the recent scandal, Global Business published an investigative feature on the Qingtian exodus to Spain, reporting on a concentration of immigrants in the Usera district of Madrid. This it called a “Chinese enclave” with more than 500 Chinese-owned shops and neighbourhoods in which the Qingtian dialect serves as the “official language”. The magazine also found that people from the mountainous county in Zhejiang have been moving to Europe (often via Siberia) for several centuries. But the first major wave of departures came in 1949, when Qingtian-born soldiers fled Mao Zedong’s forces and went to Europe. Around 17,000 made the journey, Global Business reckons, they established “a network of relationships that they could rely on”.

Those that have arrived since tend to fall into a small number of different employment areas: catering (30%), grocery stores (30%), clothing and discount stores (20%) and import-export (20%). By 2009 this overseas population was sending back $200 million in remittances from overseas to Qingtian and the network is now crucial to Qingtian’s economic health. Last year, the county’s GDP was Rmb13.56 billion ($2.17 billion), with almost half of the total derived by 100 companies founded by Qingtianese living in Spain and elsewhere in Europe.

A good example is Zheng Jianmo, Global Business suggests. In 1995 Zheng left Qingtian aged 19 and made his way westward by train through Siberia. A couple of months later he reached Spain, where he worked illegally for six years. Zheng got permanent residency in 2001 and since then has brought six other family members to join him.

While Zheng began in low-paid restaurant jobs, he soon saw the potential for using his connections back in Qingtian to source cheap Chinese goods to sell in Spain. Today he is also a major distributor of Spanish olive oil to affluent consumers in China (especially those worried by gutter oil, see WiC140), which means that he makes regular business trips home. So do many others: in fact, a bus shuttle carries more than 200 passengers between Qingtian and Shanghai’s Pudong airport daily.

Might the flight out of Spain be a little busier in the weeks ahead? A member of the Chinese Chamber of Commerce in Spain told the National Business Daily that rumours of further action had led to panic in parts of the Chinese business community. But Jorge Garcia, who works with investors in both countries, wondered whether Gao was being targeted for tax evasion because of his ethnic background.

“The government doesn’t want to touch the big tax evaders, because they are friends of the state – bankers, politicians, businessmen,” he told AFP. “Blaming the Chinese mafia for the fact there are five million unemployed in Spain is a bit ridiculous.”

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