Zhang Xin on China: We Are Only Allowed to Make Money

Last Sunday, I caught an interesting interview with Zhang Xin, the billionaire Chinese developer and CEO of SOHO China.

In the interview, Fareed Zakaria asks a lot of important questions, but what is most striking are Zhang’s opinions about what the Chinese system lacks.

Watch the interview here:

Zhang had very humble beginnings, spending much of her late childhood working in shoe and electronics factories trying to save money for her education. She eventually met her goals.

Here’s a brief bio from Bloomberg:

Zhang, 44, personifies the explosive rise of China, from the poverty of Mao Zedong’s communist rule to the riches of state-controlled capitalism in the world’s third-biggest economy. At age 30, armed with a master’s degree from the University of Cambridge in England and connections from working at Goldman Sachs Group Inc. in New York and Hong Kong, Zhang founded Soho China with her husband, Pan Shiyi. The company became central Beijing’s biggest developer about a decade later in 2005 — and a favorite among investors.

Although Zhang has found a way to benefit from China’s state-controlled capitalism, she is no admirer of centrally planned economies:

I think [state-run capitalism] is actually the single biggest challenge China faces now, because bear in mind, how do we become economically affluent to today’s level? It’s through the market economy, through opening doors, through market reforms…If you take away the market, what are we left [with]? We are left [with] the planning economy.

But although Zhang believes the country could be more economically viable with less government control, she also thinks Chinese society is struggling due to cultural limitations:

…[T]his government has allowed this country’s economy to grow, nearly freely, to where it is now. But in every other area that matters to the human being — in ideology, in education, in healthcare, in spirituality — it’s tightly controlled…

I think if that if the society is more liberalized in all the other areas — culture, politics, ideology — then you will see a very different society than where it is now. We are only allowed to make money, nothing else.

Zhang XinIndeed, the relative liberalization of the Chinese economy has brought countless individuals out of poverty and allowed them to flourish in a way they were unable to before. This could of course be furthered by more liberalization.

However, as Zhang points out, economic pursuits aren’t everything. The Chinese government is still stifling freedom on an individual, cultural level, and until the Chinese people are fully empowered as spiritual beings, the benefits of material wealth will be vastly limited.

With the recent economic crisis, Beijing has wanted to tighten its grip on the Chinese economy. The Chinese people would do well to resist such constraints (a daunting task to be sure), but it seems that lasting and sustainable change will require a bit more.

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