“Common prosperity” is the talk of the town in policymaking circles. Although Party officials have been keen to explain that it doesn’t mean preying on the rich, some of China’s wealthiest entrepreneurs may have their doubts. After all, as Alibaba’s founder Jack Ma once remarked, history suggests that “nearly all Chinese entrepreneurs don’t have happy endings” (see WiC536).
One way that wary tycoons have tried to get a portion of their wealth outside China is through overseas M&A deals, cynics say, often via overpriced transactions.
But it was a tycoon’s luxury holiday abroad that grabbed headlines most recently amid talk of its symbolism. In this case the very same Jack Ma was seen on a Mediterranean superyacht – which led Alibaba’s stock to rebound nearly 30% last month. Why? Some of the speculation was that Ma’s foreign break was a positive sign of better times ahead, after a difficult year with domestic regulators.
For tycoons who have already left China for a life elsewhere, why risk the hassle of coming back to your home country? This was the question being asked of Duan Yongping, one of China’s richest men, who might be doing just that.
Chinese media outlets report that the low-profile Duan moved to the United States with his wife in 2001. Since then the 60 year-old hasn’t been spotted too often in his native land. Nevertheless, in news that has intrigued Chinese tech circles, IT Times reported late last month that Duan has returned to China. According to the newspaper, he will be overseeing a new electric carmaking venture launched by phone brands OPPO and Vivo, alongside smart watchmaker OKii (an affiliate of Duan’s parent firm BBK, a contract manufacturer in consumer electronics).
Duan has been widely identified as the major shareholder of both OPPO and Vivo. He has also featured as a major investor and mentor to a number of other high-growth firms, including e-commerce platform Pinduoduo and logistics firm J&T Express (see WiC494).
If the news in IT Times is accurate, the ‘big four’ of China’s smartphone makers – Huawei, Xiaomi, OPPO and Vivo – are all converging on next-generation vehicles. Reports of OPPO’s ambitions in the car market began to do the rounds in June, with company executives revealing that work had started on an automotive venture. Xiaomi founder Lei Jun set similar goals a few weeks earlier, saying that he was willing to bet his “lifelong reputation” on success in electric vehicles (EVs).
The smartphone brands join a cluttered field that has grown far beyond the incumbent car manufacturers, as well as high-profile newcomers like XPENG and NIO. Apple is also said to be working on an EV strategy, while its iPhone assembly partner Foxconn wants to make a similar journey. Foxconn unveiled three prototype electric vehicles (EVs) under a new Foxtron brand last month, The models were “reference designs” to showcase what could be rolled out on an EV platform that it has been developing, it said. Less than 24 hours later Xiaomi announced at its annual investor day that it has been making good progress with its new EV venture, claiming that the first cars will go into mass production in the first half of 2024.
Citing data from the China Association of Automobile Manufacturers, IT Times reported that EVs accounted for 11.6% of car sales in China in the first nine months of this year. The share is expected to rise substantially. “The critical moment for exponential growth in the EV market could be just around the corner,” it predicts.
Duan is an astute investor who has stayed ahead of the crowd in betting on new trends in technology and consumer behaviour. Like Lei Jun at Xiaomi, he may be about to stake his reputation on another fast-emerging sector, with an EV franchise that demands more of his time on the ground in China.
© ChinTell Ltd. All rights reserved.
Sponsored by HSBC.
The Week in China website and the weekly magazine publications are owned and maintained by ChinTell Limited, Hong Kong. Neither HSBC nor any member of the HSBC group of companies ("HSBC") endorses the contents and/or is involved in selecting, creating or editing the contents of the Week in China website or the Week in China magazine. The views expressed in these publications are solely the views of ChinTell Limited and do not necessarily reflect the views or investment ideas of HSBC. No responsibility will therefore be assumed by HSBC for the contents of these publications or for the errors or omissions therein.