The Darling

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The story of a powerful real estate company, its founder, and the daughter who protects his fortune

The years 1990 to 2007—quite a stretch—bookended the greatest wealth transfer in the world. For some, this transfer is still ongoing.

Much of it happened in Guangdong, southern China’s industrial heartland, where boomtowns like Shenzhen and Guangzhou produced the highest GDP growth in the world at the time.

It was in the Shunde district of nearby Foshan city where Country Garden was founded 17 years ago by an enterprising real estate developer named Yeung Kwok Keung, also known as Yang Guoqiang, who hails from the sleepy town of Guangjie in nearby Yunnan.

A farmer who grew up amid the convulsions of the late Mao era, by the 1990s Yang numbered among the countless entrepreneurs who profited from China’s economic resurgence, where a combination of FDI and outsourced factories lifted 500 million people from grim poverty. Thanks to connections and years of experience, his firm Country Garden found a niche selling residential units for the emerging middle class. Country Garden soon diversified and its portfolio now spans high-end mansions, hotels, and hospitals.

By 2007 Country Garden was ready for its IPO in Hong Kong and Yang promoted himself to chairman, the same year when a US housing bubble burst.

Then he did something very clever. Shortly after Country Garden’s IPO in April that year, he announced a controlling stake of stock worth US$7 billion would be transferred to his second daughter, Yang Huiyan. At least this is what the newspapers revealed at the time. Just like that, the photogenic 26-year-old Huiyan then, now 32, was catapulted to the top of the Hurun Rich List and crowned China’s wealthiest woman.

Attaining newly minted billionaire status was soon followed by unsubstantiated reports that she married the son of a local government official, then 2008 rolled in and by mid-year the world economy tanked.

Between the inconvenient fact that the International Consortium of Investigative Journalists (ICIJ) published the name of an offshore company owned by Yang Huiyan in the Virgin Islands, the favorite tax shelter for China’s elite, and Country Garden Holdings Company Limited having been incorporated in the Cayman Islands, it occurs to the observer that the Yang family are preserving their fortune.

Coddled Generation
The consulting firm Bain and Company concurs. In their Wealth Study Report last year, their survey pointed out that China’s rich families are very much attuned to politics and financial markets more than ever. Hence, they find it more important to manage their wealth in the long term with strategies that involve their foreign-educated and cosmopolitan heirs.

Although scrutinizing the lifestyles of mainland China’s super- rich is impossible, if forbidden, there are familiar patterns regarding their upbringing based on JP Morgan’s controversial ‘Sons and Daughters’ program and broad reading on the subject.

Like many of her peers, Yang Huiyan is a millennial educated abroad. In her case, she’s an alumnus of Ohio State University. As in most family businesses, her formative years were spent observing her father cutting deals and managing profits.

Today, Yang Huiyan, the second of three daughters with a public profile that is close to nonexistent, reigns as China’s leading woman billionaire. The Hurun Rich List confirmed this and her wealth, estimated more than US$8 billion, does not mean she is a mere shareholder.

According Country Garden’s website, Yang Huiyan is currently recognized as the vice chairman and a director in the Corporate Governance Committee, while her father remains the chairman.

Based on its annual reports, Country Garden ended 2013 with 148 ongoing projects and sales in the US$10 billion range. Based on Country Garden’s calculations, 41% of its developments are in Guangdong, which is among the world’s most highly urbanized regions and the Pearl River Delta megacity cluster. Country Garden even broken new ground with a venture in Malaysia.

Since the Chinese government is nursing both an infrastructure glut and property prices, as well as shifting the economy away from exports, Country Garden’s future prospects are optimistic.

As for Yang Huiyan, she’s on her way to joining the latter half of the world’s 20 richest women.

Print ed: 03/14

 

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