Rong Yiren was known as the ‘Red Capitalist’ of China. It was a title well earned, but it can hardly describe the tumultuous journey he had to undergo before becoming chief executive of China’s biggest business organization. The irony was that Rong Yiren was not really a communist, and he never thought of himself as a capitalist. His life was a tribute to the longevity, patience, and resilience of the true entrepreneur.
Background
When Rong Yiren was born in 1916, in Wuxi, Jiangsu Province, his family was already rich. His father and uncle did not start out rich, but they had carved out their little empire in textiles and flour milling through hard work and grit in Shanghai. They established their first bank in 1896, their first flourmill in 1902, and by the time Rong Yiren inherited the business at age 30, there were 24 mills in all. The family were known as ‘cotton tycoons and flour kings.’
Education
Rong Yiren graduated with a history major in 1937 from St John’s University in Shanghai, one of the most prestigious institutions in China at the time. It was a period of turbulence.
Career
There was the war with Japan, and hardly had the guns of the Second World War fallen silent when the civil war erupted. In 1947, Communist armies began their march from the rural hinterland into the big cities; the Communist conquest of Shanghai and the rest of China became a certainty soon after. Many Chinese business- men fled to Hong Kong and Taiwan, including most of Rong’s family. However Rong Yiren chose to stay in Shanghai, putting his faith in the Communist Party’s promises for ‘national capitalists’ and hoping to keep the family enterprises. In later years, he acknowledged that life would have been more comfortable had he also fled, but he was reported also to have said that he wanted to be useful and help overcome China’s poverty.
In 1950, Rong Yiren became the general office manager of Shanghai Shenfang Textile and Printing Company, board director of Hengda Textile Limited and a member of the Shanghai Finance and Economic Committee. During the socialist reform of capitalist industry and commerce, his family’s business became state-owned in 1956 and the state gave Rong’s family $6 million for compensation. His active role in the socialist reform and dedication to the country won him support from the Communist Party. He was appointed vice mayor of Shanghai in 1957 and, after two years, became vice minister of textiles. Vice Premier Chen Yi called him the ‘Red Capitalist’ and the nickname stuck. It seemed then that he would spend the rest of his working life in such mid-level, mildly important jobs. Then came two more upheavals. The social convulsion of Cultural Revolution, from 1966 through 1976, brought reprisals against those people who Mao said were working against the revolution. Rong Yiren, as a denounced capitalist, became the target of the red guards. His home was ransacked, his belongings destroyed or looted, and his property confiscated. He and his wife were reportedly beaten. For a while, he was humiliated and forced to work as a janitor. The intervention of top officials, including then-premier Zhou Enlai, saved him from further abuse or imprisonment.
The modernization of China was started by Deng Xiaoping two years after Mao’s death in 1976. With it, Rong’s fortunes reversed again. Deng’s goal was to make China prosper, and this required a more vigorous free market and a calibrated engagement with world trade. Deng knew that business experience, technology, and financial capital were needed, and he wanted China’s capitalists to help in his program. Deng encouraged Rong, by then a respectable 63 years old, to form China International Trust and Investment Corporation (CITIC), whose role was to initiate reforms in the financial sector, attract foreign direct investment and modern technology to China, and develop China’s capability to conduct international trade. Under Rong’s leadership, the company became the first window of China opening to the outside world. CITIC built the first modern skyscraper in China, and expanded rapidly from finance into other businesses. From the 1980s, CITIC, largely a state-controlled enterprise, started to invest overseas and became the country’s first transnational conglomerate.
Politics
Rong Yiren’s business acumen was undoubtedly a significant factor in CITIC’s success. As its fortunes grew, so did Rong Yiren’s. Forbes magazine named Rong Yiren the richest man in China in 1999. Rong did not like being called a capitalist; he wanted to be called an entrepreneur. He was the exemplar of an entrepreneur, enduring even in the most adverse conditions. And he knew when to make a stand. In 1989, when the pro- democracy movement was at its height, he risked everything he had by issuing an open letter urging Chinese leaders to open talks with the students. After the bloody Tiananmen Square crackdown, it was thought he would be severely punished for this defiance. Perhaps he was, but not for long.
Rong Yiren’s contributions to modern China were acknowledged and honored when he was appointed the state’s vice-president in 1993. This was a ceremonial position which he retained until 1998. It was designed by the party leadership as a safe position. Rong did not much mind, as he never had the inclination to turn these honorary positions into a lever to gain real political power. He never wanted to play politics; all he wanted was to do business. His official obituary states that he had been a member of the Communist Party of China since 1985, but he requested that this be revealed only after his death.