Chinese magnate donates $750m to foundation for senior citizens
A CHINESE shipbuilder who grew his group’s turnover by more than 250 per cent in the years since 2008, to $2.5 billion last year, has given away his $750 million shareholding in the business to a foundation that helps Chinese senior citizens.
Ren Yuanlin’s donation to the Yuanlin Charity Foundation was made in March, and is believed to be one of the largest made to date by China’s new generation of business magnates. He donated his 27.83 per cent shareholding in Yangzijiang Shipbuilding Group Ltd, which is quoted on the Singapore Stock Exchange. The group was the first privately-owned Chinese enterprise to list on the Singapore exchange and was the first mainland Chinese stock to be offered internationally on the exchange.
The container ship building group employs more than 3,500 people and grew its turnover to $2.5 billion last year from $1 billion in 2008. Net profits grew to $627 million from $238 million in 2008. In an interview with The Irish Times in Monaco last weekend, where Mr Yuanlin was attending the Ernst Young Entrepreneur of the Year awards as the Chinese winner, he explained why he had made the donation. “If you have a glass of water, you can drink it by yourself. If you have a barrel of water you can share it with your family. But if your wealth has become a river, if you don’t share it with society you will be drowned in the river.”
He said making money was a different skill to deciding what to do with the money you earn.
“If you don’t distribute your money properly it becomes a burden.” He said wealth can become a burden not just on the person who owns it but also on their children.
He also said that the current situation in China, where there is such a huge gap between the rich and the poor, was another reason for his decision. He wanted to set an example and show that it was important to share.
The foundation concentrates on providing education and healthcare support to senior citizens.
“In China there is the one-child policy. All the babies are much loved by their parents. But eventually society will become old and there will be a lot of problems because [each of] those one child children will have to look after two old people.”
Mr Yuanlin said his father had run a small business selling umbrellas but had been labelled a capitalist during the Cultural Revolution and his sole trader business closed down. His own childhood had been poor but he had been a good student. He was assigned to working in the shipyard in 1972 and was not happy. The work was hard and dirty but he said he worked hard and studied part-time and was identified by those who ran the then state-run operation as a likely candidate for a future management position.
When he eventually came to manage the ship yard he steered it towards building larger container ships for the European market. He said building such large ships was a difficult task but the profit margins were higher. He used China’s lower costs and other strategies to undercut European ship builders and build market share.
He said he spotted the downturn coming and shifted focus from profit margins to giving priority to orders from ship owners who had the capacity to pay for what they ordered. Also he said he worked with his customers when the downturn arrived. He facilitated requests for delays in orders and used the capacity this freed up to accommodate fresh orders.
“The company has 50 years of history and the management has experienced ups and downs. When the market is up the management is more prudent, and builds preventive measures in to cushion for downturn that [they know] is coming.”
The downturn was not a crisis, it was an opportunity, he said.
Asked about the phenomenon of manufacturing moving from European economies to countries such as China, he said this was not sustainable in his view if Europeans wanted to maintain their standard of living. He pointed to Greece, which he said did not produce much but whose citizens still expected a good standard of living. A better example for Europe was Germany, where there was a tradition of innovation, hard work, and productivity.