Inside China’s business and journalism circles, Wu Xiaobo has been a household name for nearly two decades. Long considered the best business writer in China, he is the author of some of the country’s best-selling books on business and economics. In 2009, Wu Xiaobo was named “China’s Annual Young Leader” by Southern People Weekly. The title came as the latest addition to his pile of labels already given by friends and readers – “talented”, “humble”, “optimistic” and “handsome”, to name a few.
Born in 1968 in Ningbo, Zhejiang province, Wu Xiaobo loved reading from a young
age and completed his bachelor degree in Journalism at Fudan University, one of China’s top institutions. Further down his career as a journalist and writer, Wu Xiaobo also occasionally took on other academic roles, including visiting scholar at Harvard and EMBA professor at Shanghai Jiaotong University.
Looking at his success over the years, Wu Xiaobo was most grateful for the experience at Xinhua News Agency, where he started his ﬁ rst job as a business journalist for 13 years. Xinhua provided Wu with top-quality professional training in journalism as well as a powerful platform connecting him to all types of interviewees with big names.
Looking back at those years as a journalist, Wu recalled having a particular preference for writing analyses and drawing constructive hindsight on economic events. As such, when he reached the “ceiling” as a journalist and had to decide between entering management or becoming a columnist or writer, Wu chose the latter. “I did it because I love writing. That’s where my passion lies.”
It proved to be the right decision. As a business writer, Wu Xiaobo’s works gained wide popularity across the nation, as his insightful and humorous writing captured millions of readers, who later formed over 80 readers clubs in China. In particular, they love his detailed observations of the Chinese market’s transformations through different eras and his clear logic followed by well-reasoned conclusions.
In 2002, Wu Xiaobo founded Blue Lion Publishing, one of China’s leading publishers for books on business and economics. As social media gradually became the major source of information for today’s Chinese, Wu also opened his ofﬁ cial account on WeChat, where he posts weekly articles and interacts with over 1 million subscribers. Inevitably, writing on social media platforms draws greater attention from the public and several of Wu’s articles have been controversial in the past. While Wu admitted that he now feels more pressure when writing online, he still welcomes constructive and reasonable advice and criticisms.
Some of Wu Xiaobo’s masterpieces include “The Great Defeat” (2001), “Storming 30 Years: Chinese Enterprises 1978-2008” (2007) and “The Verse of Us” (2017). While the ﬁ rst two best-selling books examine the rise and fall of Chinese companies and the nation’s turbulent market throughout its economic reform, the latter was an award-winning documentary about the blue-collar workers behind the “Chinese economic miracle”.
Below are some of Wu Xiaobo’s recent articles discussing the latest issues and phenomena in the Chinese economy:
The Fall and Rise of the Rentier Class
A reﬂ ection by Wu Xiaobo on the current boom in China’s rentier class, which he deﬁ nes as people in possession of various assets for investment, and who, “simply through the accumulation of interest, dividends, and rent, can generate a stable or even expanding stream of revenue.”
China’s rentier class went through a trough from mid- to end-20th century. In the 1990s, families began to invest in the stock market and real estate again. However, the Chinese rentier class only began to expand exponentially in the last ﬁ ve years and currently it is the second largest group of rentiers in the world.
While Wu warns that a growing rentier class signals increasing wealth inequality in society, he acknowledges, however, the multiple social beneﬁ ts brought about by the phenomenon.
“Looking on the bright side of things, a massive rentier class will give rise to a new business philosophy. Rentiers will ﬁ nd more enjoyment in “intellectual consumption,” promoting literature, sports, tourism, and other industries. Well-educated rentiers will bring about a brand-new aesthetic of consumption, and more and more people will devote themselves to social charity and public welfare projects. Because of this,
China will leave behind the barbaric age of unfettered materialism, and its abundance of human potential will be put to new use.”
(Image source: Tomohiro Ohsumi/Bloomberg via Getty Images/VCG. Feb. 2, 2013.)
Why Bike-Sharing in China Is a Myth
Sharing is the last priority of companies like Mobike and Ofo, which are driven solely by amassing vast customer deposits.
“China’s bike-sharing services are currently in the midst of an all-out war for market share. Even as pictures of abandoned, destroyed, and dismembered bikes have ﬂ ooded Chinese social media, the two best-known bike-sharing services, Mobike and Ofo, are putting their reserves of
capital to use by offering users free rides.”
“When Mobike and Ofo ﬁ rst burst onto the scene, they seemed to herald a bike- sharing revolution.
As it turned out, however, their business model has nothing to do with the concept of sharing. Not only do these services fail to properly
reallocate resources across society, but they’ve also failed to capitalize on social media sites — an essential step in maximizing value in the sharing economy. Rather than allow users to connect with one another and share their own bikes, they burn money to produce their own bikes in an attempt to dominate the market.”
“More important to the current development of the industry, however, are external factors such as overproduction, low barriers to market entry, and the lack of any shared code of ethics among competitors. Bike-sharing services have proven they are unable to control uncertainty, which has left them trapped in an industrial quagmire from which they are unable to escape.”
Chinese Enterprises Plagued by Succession Dilemma
Currently, around 90% of China’s private enterprises are family businesses established by grassroots entrepreneurs who emerged in the 80’s. While most of these entrepreneurs expect their children to one day take over the family companies, increasingly the second-generation entrepreneurs are unwilling to do so, creating a “succession dilemma”.
A 2015 survey found that only 40% of second-generation participants indicated a willingness to inherit their parents’ business. Within the next decade, it is predicted that over 3 million private entrepreneurs in China will face a succession crisis.
Wu Xiaobo points out that even for those young entrepreneurs who decide to inherit family businesses, their idea of succession can be very different from their parents’. As the majority of this younger generation has studied abroad, the experience would have given them different attitudes toward life, careers and wealth. As a result, they may inherit in capital form rather than machinery, or they may decide to adopt new approaches to managing their parents’ companies.
Overall, Wu declares this good news for the economy, creating a fairer system for long-term employees and beneﬁ cial to managerial growth.
“To me, the fact that more than half of China’s family businesses face succession dilemmas seems like good news. In an era of boundless
possibilities, changing attitudes toward inheriting the family business should go hand in hand with new business ideas that spur continued growth and innovation. If this can be achieved, these issues will become mere footnotes in the broader story of China’s economic success.”
The Quandary Facing China’s Second-Generation Entrepreneurs
China’s second-generation entrepreneurs are generally expected to take over their family businesses from their parents, but the handover process isn’t always smooth. In this article, Wu Xiaobo tells the story of young Ke, whose father continued to interfere with his management after he had taken over the family restaurant chain; as well as the story of Li, who, after working at his family factory for a decade, realised that his father still refused to retire and handover the company.
Wu observes that successful family business handovers primarily occur in two scenarios: when the handover takes place during a period of sustained growth, or when the second-generation entrepreneurs have already had management experience prior to taking over the family business.
However, familial conﬂ icts will likely become a common issue as a result of older generation’s unrealistic expectations and misunderstandings due to age gap. China’s previous one-child policy would play a role in placing greater pressure on the single offspring to successfully manage the family business.
“How things will turn out is unclear as of yet. But how the second generation responds to the quandaries facing them will have a decided
inﬂ uence on China’s future.”
Where are China’s Business Ethics?
The evolution of morality in Chinese industry and commerce has been stiﬂ ed throughout history by war and Confucian ideology.
“In 1905 the German political economist and philosopher Max Weber analyzed humanity’s latest revolution, modern capitalism, in his
book “The Protestant Ethic and the Spirit of Capitalism.” In it he argued that capitalism had been formed through Protestant work ethic.”
“The business ethics put forth by Weber in the early 20th century have been steadily evolving over the last century. Many of Weber’s ideas
formed a universal consensus, which continue to persist to this day. …Yet these same ethics are noticeably absent in modern China.”
“The rise of New Confucianism in the 1980s saw scholars of Chinese ancestry — like Yu Ying-shih and Tu Weiming — resolve to ﬁ nd an alternative route in the Weberian- dominated battleground of business ethics by attempting to establish a point of congruence between the millennia-old Confucian ethical tradition and the modern spirit of industry and commerce in China. But if their reasoning is sound, then why does the process of modernization in China continue to prove so arduous?”
Chinese Tycoons Who Won the 90s Change Course for 21st Century
First-generation businessmen are trying to adapt their companies to today’s market.
In this article, Wu Xiaobo shares the story of two friends. Zhao Zhirong is the chairman of the world’s largest retailer of men’s socks, Top Circle Hosiery Mills Co. Despite having been in the sock business for over 20 years, he gradually “struggled to make socks that have personality and appeal to the younger generation”. The other main character, Zeng Dejun, runs the company AirSmart System Co. Ltd., which makes retro-style radios under the brand “Mao Wang”. A childhood obsession with radios drove him toward a career in making the objects, but recent years saw a sharp decline in the radio industry.
How did they resolve the problems? Zhao made proactive changes to his management strategy. He recruited a team of millennial and travelled around China and the world to visit international boutique stores and meet with designers. Zeng, on the other hand, seized the opportunity to re-introduce his radio business as the size of China’s middle class quickly expanded. As a “master craftsman to his core”, Zeng’s high-quality products gained great popularity among the younger consumers.
“Any artisans seeking to make a name for themselves in today’s market will need two things to be successful: artistic ﬂ air and internet savvy.” Wu Xiaobo commented.
“I would wager that in the niches of trendy men’s socks and novelty radios, Zhao and Zeng are here to stay. Any budding entrepreneurs from
the 1980s and 1990s seeking to seize a slice of the market will have to make sure to avoid being undercut by these two industry experts.”