Rong Yiren

Chinese industrialist and politician

• Born: May 1, 1916
• Birthplace: Wuxi, Jiangsu province, China
• Died: October 26, 2005
• Place of death: Beijing, China

Rong, China’s famed “Red Capitalist,” showed great entrepreneurial ability when he was entrusted by Communist Party leader Deng Xiaoping to move China toward a new age of foreign investment and market-oriented commerce.

Sources of wealth: Inheritance; trade; manufacturing

Bequeathal of wealth: Children

Early Life

Rong Yiren (rahng ee-rehn) was born in Wuxi, a town in Jiangshu Province near Shanghai. At the time of his birth, the Rong family was the most established family of industrialists in China. They were also the richest, and their wealth surpassed that of the more famous capitalists of the Chinese republican era, such as T. V. Soong and H. H. Kung, whose prominence arose as much from their political connections to the Kuomintang Party as from their fortunes.

Rong’s father, Rong Desheng, and his uncle, Rong Zongjing, opened their first bank in 1896 and their first flour mill in 1902. The Rongs eventually operated flour mills in Wuxi and expanded operations throughout China and internationally, with business ventures in cotton, milling, banking, and other commercial enterprises. In the 1930’s, the Rongs operated thirty of Shanghai’s roughly one hundred textile mills. Their companies helped to make Shanghai the industrial powerhouse of twentieth century China. Rong Desheng and Rong Zongjing became so wealthy that they were called the “Rockefellers of China.” The Rongs lived in mansions containing ballrooms with parquet floors and mirrored banquet rooms. After Rong Yiren graduated from St. John’s University in Shanghai, he took over management of twenty-four of the family’s flour and cotton mills.

First Ventures

In October 1949, the Chinese Communists were victorious in their revolution, taking control of the nation. The wealthiest citizens of China, including members of the Rong family, fled the country, finding refuge with former Chinese leader Chiang Kai-shek on the island of Taiwan or in the British colony of Hong Kong, as well in Western havens such as San Francisco and London. Although probably the wealthiest person in China, Rong Yiren did not flee. The Communist government was desperate for capital and eager to showcase Rong’s decision to remain in China as both patriotic and prudent. However, it probably was uncomfortable for Rong to be a famous capitalist in the world’s most rabidly Marxist state, and his position in the People’s Republic of China was precarious. In later interviews, Rong stated that he remained in China because he believed that he could help alleviate the nation’s poverty. The leader of the People’s Republic of China, Mao Zedong, labeled wealthy industrialists and bankers who remained “national capitalists” and promised them a place in the “new” China, even while remnants of the aristocratic and landholding elite were being liquidated. Rong was allowed to continue operating his businesses, but he submitted a large portion of his profits to the state.

In 1950, Rong became a member of the Shanghai Finance and Economic Committee and a general adviser to the Communist Party on economic matters. Vice Premier Chen Yi labeled Rong the “Red Capitalist.” Even when Rong’s industries were nationalized in 1956, along with other privately held companies, he was treated with courtesy. Rong was paid more than $6 million in compensation, given charge of the Maoxin flour mill, and appointed vice mayor of Shanghai, China’s most industrial city. When he moved to Beijing in 1959, he became vice minister of the textile industry.

However, these privileges were not enough to enable Rong to escape the ravages of China’s Cultural Revolution, which threw the nation into tumult from 1966 to 1969 and resulted in the deaths of millions of people. Rong and his wife were abused by the Red Guards, Mao’s ideological fanatics. His wealth was confiscated, his home looted, his artworks smashed. He was compelled to work as a janitor.

Mature Wealth

With the death of Mao and the arrest of his widow, Jiang Qing, and the “Gang of Four” in 1976, China entered a new stage. Deng Xiaoping took the reins of government, determined to make China an economic power. In 1978, Deng launched his reform campaign, looking to replace China’s moribund state economy with a modern, global economy fueled by private capital and entrepreneurial initiative. Deng’s motto, “To be rich is glorious,” was printed on posters hung throughout China. It was a moment in Chinese history tailor-made for Rong, who had abided thirty years of Mao’s ideological upheavals.

Deng asked Rong to create the China International Trust and Investment Corporation in 1978, with Deng pouring billions of dollars into this enterprise. The company’s mission was to reform China’s state economy by attracting foreign investment and technology. Under Rong’s leadership, the corporation grew rapidly and became a transnational conglomerate. It bought land in Hong Kong and invested in companies in North America. Rong was allowed to retain a share of the company’s profits. In 1987, he held a Rong family reunion in Beijing, with Deng in attendance, to celebrate the turn of events. Rong was also made a director of the Bank of China and a member of the Standing Committee of the People’s National Congress. He dressed handsomely in the garb of a Chinese professional, accented with fine Western accessories. Rong’s only son, Rong Zhijian, known in the West as Larry Yung, assisted his father in the activities of the China International Trust and Investment Corporation. As proof of their success, the heads of China’s Communist Party vied to have their sons and daughters placed in key posts in this corporation.

The brutal massacre of students in Tiananmen Square in 1989 was a setback to Deng’s economic reforms, as China faced boycotts and economic sanctions from other nations. Rong is alleged to have written a letter to the Communist Party, in which he urged peaceful negotiations with student demonstrators. Nevertheless, after Deng’s crackdown on protest, Rong was allowed to continue as president of the China International Trust and Investment Corporation and worked to attract investment, particularly from South Korea and Taiwan. In 1993, he was appointed vice president of China. He retired in 1998. At his death in 2005, Rong’s fortune was estimated at almost $2 billion. His son Larry Yung inherited his father’s fortune and his role in assisting China in the world of international finance and enterprise.

Legacy

Few people have straddled two worlds as dramatically or successfully as Rong Yiren. Heir to the greatest fortune of pre-Communist China, he made the shocking decision to remain on the mainland after the Communists seized power. Alternately praised and abused in China’s ideological windstorms, his time came in what can be called the second revolution of Communist China—the market reforms of Communist Party leader Deng Xiaoping. Deng successfully called upon Rong’s expertise, and Rong took the lead in attracting foreign investment to China and aggressively investing China’s reserves in overseas industries. Although considered China’s richest citizen at his death, his true legacy is having helped usher in a new world of international finance and market reform in what had once been the world’s most ideologically driven and relentless Marxist state.

Bibliography

Becker, Jasper. The Chinese. New York: Oxford University Press, 2002. Recounts the lives of several Chinese in order to illustrate recent reforms and describes the importance of Rong Yiren in helping to dismantle the “iron rice bowl.”

Bergère, Marie-Claire. The Golden Age of the Chinese Bourgeoisie, 1911-1937. Translated by Janet Lloyd. Cambridge, England: Cambridge University Press, 1990. A study of the rapid rise of China’s industrial class, beginning with a dramatic account of the author’s meeting with Rong Yiren in 1979.

Coble, Parks. Chinese Capitalists in Japan’s New Order: The Occupied Lower Yangzi, 1937-1945. Berkeley: University of California Press, 2003. An account of the relations between the Japanese occupiers and Chinese industrialists, particularly the Rong family, during the Japanese invasion of China in World War II.

Cochran, Sherman. Encountering Chinese Networks: Western, Japanese, and Chinese Corporations in China, 1880-1937. Berkeley: University of California Press, 2000. Focuses on early Chinese corporate history and the industries of the Rong family, with some attention to Rong Yiren’s activities with the China International Trust and Investment Corporation.

Salisbury, Harrison. The New Emperors: China in the Era of Mao and Deng. Boston: Little, Brown, 1992. Written by a Pulitzer Prize-winning, longtime observer of China. Describes the changes wrought by China’s modernizations, with Rong playing an important role as a “patriotic capitalist.”