China’s King Edward VIII

By George Chen
May 18, 2011

By George Chen
The opinions expressed are the author’s own.

Did you miss the biggest breaking news item in China’s investment circle yesterday? I am not talking about another big IPO or M&A deal. I’m talking about Wang Gongquan, an influential veteran private equity investor in Beijing.

Wang was a co-founder and senior partner of CDH Venture Partners, a leading investment firm headquartered in Beijing. Considered one of the early birds in China’s venture capital world, Wang was a general partner with U.S. technology investment heavyweight IDG before he established CDH Venture Partners in 2005.

In March, Qihoo 360 Technology, one of Wang’s investment portfolio companies, went public on the New York stock exchange. As one of the early investors in Qihoo, the maker of the second most popular web browser in China, behind Microsoft’s Internet Explorer, the successful IPO made Wang more famous in China. And of course, the billionaire is getting even richer.

Yesterday, he became a newsmaker in China again, but not for anything related to his investment matters. Wang wrote a brief post on his personal micro-blogging site, to officially announce that he had decided to quit all posts and escape the public eye to enjoy a private life with his significant other.

Given Wang’s high professional reputation and background, his decision quickly drew massive public comments from ordinary people to tycoons such as Pan Shiyi, the top boss of SOHO China and one of China’s leading property developers. By Wednesday Wang’s personal announcement became one of the most actively discussed topics with almost 1 million reposts of it and comments on Sina.com, China’s No.1 portal.

Most sent congratulations, with some even describing Wang as China’s King Edward VIII, who gave up the British throne for his romance. You may not agree with Wang, and you might not even agree with me and wonder why I think such a personal story is worth mentioning.

Please think twice; don’t you think the reason that some businessmen occasionally lack ethics and investors care more for short-term profit than long-term value is because they put too much emphasis on money? This is exactly a key issue that challenges the long-term and sustainable development of China’s economy.

People close to Wang describe him as a maverick. Wang cares about citizen’s rights in China, a rare commitment that few Chinese institutional investors publicly comment on or show support for. He has sponsored non-government organisations to support low-income groups. When someone like Wang decides to give it all up for the sake of his private life, I wonder if this says something about the society that we are living in.

Chinese Premier Wen Jiabao recently called on businessmen to be more socially responsible when he commented on the country’s widespread food safety problems. Some local private equity investors told me they felt less confident about the consumer industry, which some foreign investors had been keen on for years.

“It’s like a time bomb. You just don’t know who’s next,” said one investor friend.

He’s right. This week, local media reported that even famous hot pot restaurant chain operator Little Sheep, which U.S. restaurant giant Yum! plans to acquire, allegedly had issues with pork balls sold at some of its outlets in the wealthy southern Chinese city of Guangzhou.

Again, think twice. When a well-respected veteran investor like Wang suddenly takes early retirement, do you feel a twinge of concern about the market and society to some extent?

There’s a simple question we should regularly ask ourselves: what do I really want?

George Chen is a Reuters editor and columnist based in Hong Kong.

Photo: Wang Gongquan’s popular Sina Weibo (micro-blogging) page seen on May 18, 2011

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