Mou Qizhong At A Glance

  1. Mr. Mou Qizhong was born in 1940 in , China’s Sichuan Province.
  2. He started as a glass factory worker.
  3. During the Cultural Revolution in 1970s, he was once sentenced to death under the name of “counterrevolutionary activities,” but the sentence was commuted.
  4. Imprisoned again in 1983 for ‘illegally profiteering after making money selling cheap consumer goods’, again he was released after one year.
  5. He Founded Land Economic Group.
  6. He was designated China’s “Reform Hero” in 1995.
  7. Imprisoned for the third time from 2000 to 2016
  8. After the release in 2016, he immediately went back to business at the age of 75

The Rises and The Falls

The wealthy Chinese entrepreneur is a legend within his own country for taking to heart Deng Xiaoping’s slogan “To get rich is glorious.”

Mou remains, like many of Asia’s wealthy businessmen, a relative unknown in the West. Until that changed in 1990s.

He is laying the groundwork for an ambitious plan to expand his Beijing-based conglomerate into a global giant, creating at least a dozen new ventures in the United States and recruiting several hundred employees to work at home and abroad. And that’s just for Year 1996.

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He establishes the new companies as joint ventures based in the United States or other countries, repackages them as foreign entities, and utilize them to reinvest in the mainland to fit in China’s tax breaks and other preferential treatment of foreign investors.

“I think to change the ownership of such enterprises using new technology and new management skills is the biggest commercial opportunity in the history of mankind,” Mou said.

Mou agreed that the biggest problem facing state firms is the huge welfare responsibilities they must shoulder in addition to operating a business. Those include providing employee housing, medical care, education and retirement benefits.

But by spinning off the productive part of the state firms and infusing them with capital and technology from the West, Mou believes, he can provide a healthy return for his investors and also help resolve one of China’s most stubborn economic problems. He claims to have turned 38 state firms into stock-ownership companies last year and has plans to privatize 150 more.

Jinshu “John” Zhang, a Los Angeles attorney representing Mou, said Land Economic Group buys a majority interest in the profitable part of the state firm and leaves the social welfare responsibilities to the government. Meanwhile, some shares in the privatized firm are distributed to employees, giving them a personal stake in their firm’s profitability.

Land Economic Group lists the East Sichuan Salt Group, a salt producing company, and the Changzhou Pharmaceutical Co. in Jiangsu province, among its successful privatization cases.

But Chinese observers caution against writing off Mou’s ambitions too quickly, given his record at turning sow’s ears into silk purses–or, more accurately, shoes and clothes into passenger planes.

It was a 1992 barter trade of 500 railroad cars of Chinese goods for four Russian Tu-154 airplanes that provide Mou a profit over RMB 160 million (AU$ 33.66 million). From there, the Sichuan native used his business talent to build Land Economic Group into one of the country’s best-known private enterprises.

Mou built his reputation on what he calls “assembling the market.” He operated as a middleman in barter deals that traded on China’s strengths as a low-cost producer of goods and agricultural products and on its insatiable appetite for capital, technology and high-priced foreign products.

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With the earnings from barter, he expanded into real estate, the stock market, aviation and telecommunications. He was a partner in Sichuan Airlines and formed a joint venture to provide air cargo service in Shenyang. —-edited from Evelyn Iritani, LA Times

Rich to Poor, Hero to Villain.

Mou Qizhong was wealthy, powerful and respected, until he wasn’t. For 16 long years, he sat in a jail cell. Mou was an entrepreneur who made hundreds of millions RMB from his wild ideas.

But then things turned sour and he owed money, lots of it. To solve the problem, he tried to borrow money illegally from the Bank of China and this was to be his downfall.

The Intermediate People’s Court in the central Chinese city of Wuhan  sentenced him to a life imprisonment (later changed to a 16-year sentence), a sentence that was higher than his defence lawyers had expected. Even Mou was confident that he would not be punished having already escaped a death sentence during the Cultural Revolution.

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‘He lost favour.’ said Gordon Chang, a lawyer and specialist on the Chinese legal system.

Mou’s company was believed to have obtained US$75 million (AU$108.94 million) from the Bank of China through another company, the Hubei Light Industry and Export Corp. The latter company had pretended it needed to import goods and so approached the bank’s branch in Hubei.

Mou shared similarities with both Deng Xiaoping and Mao Zedong. His physical appearance was similar to that of Mao and he even referred to himself as ‘Chairman Mou’. Mou was born in Sichuan province, not far from the home of Deng, the man who brought economic reforms to mainland China in the late ’70s.

Mou was to become one of China’s great examples of economic success due to the reforms and was even described by a magazine as China’s richest man. One of his famous deals was swapping a large quantity of socks, jackets and tinned meat for two Russian passenger planes which were then sold to Sichuan Airlines.

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Eventually things turned bad and money ran out fast. His company had large debts and his government friends were not be able to help him as his large collection of cars and office documents were confiscated by the police. —edited from South China Morning Post

The Tycoon Mou’s Back

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After 16 years in prison, at 6am on September 27, 2016, Mou Qizhong, a well-known business tycoon, was freed from Hongshan Prison in Hubei province, quoting Mou’s lawyer—Xia Zongwei.

Later, Land Economic Group, the company Mou founded, also posted a notice of his release. Xia told the paper: “While serving the sentence, Mou did not give up thinking about development paths for the Chinese economy, including improvements in the Three Gorges Dam area,” and he hoped to dig out and develop various cultural features in the area to accelerate local economic development.

Mou, now 78, persisted in physical exercise in the jail, and the latest release was his third release.

His first and second sentences, based on political and commercial charges, were handed down in 1974 and 1983, it said, though it didn’t provide details.

Under Chinese law, inmates can qualify for sentence reductions if they perform well in prison. Typically, a life sentence can be reduced to 20 years if a convict has no more offenses during the first two years in prison. The penalty can be further reduced to 15 years if the convict behaves well.

Xia, the lawyer, told an app based in Sichuan province, that Mou had obtained external information from newspapers, magazines and TV programs provided by the prison, including People’s Daily and CCTV news.

“While reading the newspaper, he made notes. He also learned about the law and public policy in the prison library,” Xia said.

The Lawyer suggests that Mou always kept his eyes on social developments and reforms made by the government in recent years, especially those in judicial and economic fields. — Edited from China Daily

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Mou was something of a legend in Chinese business, his physical health is definitely a part of the legend. In a recently interview, at the age of 78, Mou said, ‘I can work for another 20 years, no problem. He has a plan, a plan he had 25 years ago, to establish the transport hub Manzhouli — an Inner Mongolian city, into a ‘Hong Kong in the North’. As the plan is wilder than anythings else Mou achieved in his business career, he is once again on the way chasing the most impossible dream that ever come to him.

Edited by Joreal Qian