Suicide Wave Hits China's Tycoons: History's Deadly Cycle Returns | Digging into China

Hi, I am Dong Xiong. Welcome to Digging into China, where we explore China in-depth to reveal unique perspectives. Today I'd like to discuss the historical cycles of Chinese private enterprises. In August, Ant Group announced that as of August 10, 2025, it had completed the process of relinquishing Mr. Jack Ma's control over the company. Ant Group stated that this was a voluntary decision by its founder Jack Ma. When I read the phrase voluntary relinquishment, I couldn't help but laugh. Jack Ma directly and indirectly held over 50% of Ant Group's shares, and with the company's IPO valuation estimated at no less than $70 billion, he effectively gave up control over assets worth more than $35 billion or approximately $250 billion. Prior to this news about Jack Ma, on July 28, Wang Lingpeng, the founder of Easy Home, with a fortune valued at $12.5 billion, tragically fell to his death. This year, there has been a troubling rise in unnatural deaths among Chinese private entrepreneurs. Some notable cases include, on April 16, Bi Guangjun, chairman of Shaoxing Golden Idea, took his own life by jumping. On June 2, Liu Wenchao, chairman of Hangzhou Sheets Elevator, did the same. On July 3, Shen Kangming, chairman of Zhejiang Construction Investment, followed suit. On July 17, Zheng Yuzhou, founder of Guangdong Liang Home, also jumped to his death. And on July 27, Wang Lingpeng of Easy Home met the same fate. These entrepreneurs were all in their 50s, in the prime of their lives, and had built their business over more than two decades. This is an exceptionally rare phenomenon in China's business landscape since the era of reform and opening up. On August 15, Zhang Xin, the wife of Pan Shiyi, the head of the prominent Chinese real estate firm Soho China, shared a YouTube program on her Twitter account. The program featured an interview with renowned Chinese lawyer Wu Lei, titled, Behind the Strain of Private Entrepreneur Suicide. Pan Shiyi and Zhang Xin are among the few top real estate moguls who escaped the catastrophic collapse of China's real estate sector. In June 2022, Pan Shiyi and Zhang Xin sold their stake in Soho China to the American Blackstone Group for $3 billion. While their exit was finalized in 2022, the couple had been divesting their Chinese assets since 2014, selling without acquiring new properties. In 2014, Soho China sold the Shanghai Soho, Jing'an Plaza and Soho Heilong Plaza to financial street holdings for 5.25 billion yuan. In September of that year, Soho China sold 100,000 square meters of property at the Shanghai Lingkong Soho to Ctrip for 3 billion yuan. In 2015, Soho China sold a plot at the Shanghai Bund International Financial Center for 8.5 billion yuan. In 2016, they sold Shanghai Soho Century Plaza to Guohua Life Insurance for 3.22 billion yuan. In 2017, they sold Hongkou Soho to Singapore's Capital Land for 3.57 billion yuan, and Lingkong Soho to Hong Kong's private equity firm Gold Capital for close to 5 billion yuan. In 2019, Soho China divested 13 office property projects worth a total of 7.8 billion yuan, along with 2,583 underground parking spaces valued at 760 million yuan. During the period when China's real estate prices were soaring, Soho China was only major real estate firm that refrained from hoarding land and focused solely on selling. Reflecting on Pan Shiyi and Zhang Xing's 8-year asset liquidation and comparing it to the current struggles of once-dominant real estate giants like Evergrande and Vank, one feels a profound sense of historical change. The series of private entrepreneur suicides this year, coupled with downturn in the private sector, brings to mind the concept of historical cycles. Only by understanding the Chinese Communist Party's historical patterns can we anticipate future trends and foster more success stories like Pan Shiyi and Zhang Xing, rather than tragedies like that of Wang Lingpeng of Easy Home. Let's revisit the Chinese Civil War. After the Xu Beng campaign in 1949, the People's Liberation Army controlled all areas north of the Yangtze River. At that time, some capitalists in Tianjin sought to transfer their assets abroad, even before the People's Republic of China was officially established, risking the loss of assets in controlled regions. In response, Liu Shaoqi hurriedly traveled to Tianjin to reassure the capitalists. During a symposium with Tianjin's capitalists, Liu Shaoqi made numerous statements supporting the development of private capital. He declared, for instance, that capitalist exploitation was meritorious and that China had too little capitalism, not too much. These remarks were even more progressive and supportive of private enterprise than Deng Xiaoping's statements after 1979 regarding reform and opening up. Subsequently, in September, the Chinese People's Political Consultative Conference convened in Beijing and adopted a temporary constitution for the nation's founding, the Common Program of the Chinese People's Political Consultative Conference. This document explicitly stated that the government would protect the interests and private property of workers, peasants, and petty bourgeoisie and the national bourgeoisie. Chinese national capitalists suddenly felt that with the overthrow of Chiang Kai-shek's nationalist government, a new era for private enterprises was dawning. As a result, private enterprises across China were filled with enthusiasm. From 1949 onward, China's private economy expanded rapidly. According to official Chinese historical data, in 1949, there were over 123,000 capitalist industrial enterprises, accounting for 63% of total industrial output. Within just three years, by 1952, the share of private capital in national income surged from 63% to 80%, establishing a dominant position. This made a significant contribution to China's economic recovery and development following the Civil War. That 80% share was far more substantial than the role private enterprises play in China's economy today. Indeed, from 1949 to 1953, it was the golden age for private capital in the history of the People's Republic of China. However, as private capital grew stronger and the proverbial sheep were fattened, the time for slaughter arrived. On June 6, 1952, Mao Zedong commented on a document from the Communist Party's United Front Work Department, stating that after defeating the landlord class and the bureaucratic bourgeoisie, the primary contradiction in China was between the working class and the national bourgeoisie, which should no longer be considered an intermediate class. Three months later, on September 24, Mao Zedong proposed at a Central Secretariat meeting that China should begin transitioning to socialism within 10 to 15 years, rather than delaying the transition further. The following June, at an expanded political bureau meeting, Mao Zedong introduced the general line for the transition period, overturning the earlier decision to postpone the socialist transition for a decade. Starting in 1953, the Chinese government began forcibly acquiring shares in some private enterprises, injecting public shares, and appointing government officials to manage and operate these companies as public representatives. Although private entrepreneurs retained the majority of shares, they were required to relinquish operational and managerial control to these public representatives. By 1955, Mao Zedong deemed the pace of public-private partnerships too slow, and altered the policy once more. In December of that year, he proposed that the socialist transformation of Chinese handicrafts and the capitalist industry and commerce should be completed ahead of schedule, triggering a massive public-private partnership movement across China. On February 24, 1956, the Chinese government passed the Resolution on the Transformation of the Capitalist Industry and Commerce. Within a month, 99% of private industries and 85% of private commerce had been converted to public-private partnerships. By the end of that year, the public economy accounted for 93% of national income, and private industrial enterprises had all but vanished. In just 10 months, the Chinese government had confiscated nearly all the wealth of private entrepreneurs. From the Common Program of September 1949, which protected private property, to 1956, when the private property of China's 8 million entrepreneurs was entirely stripped away. Only 7 years had elapsed. The Chinese government seized 3.3 billion yuan in private property across society with astonishing speed. To put this in perspective, in 1955, China's total national income was only 30.36 billion yuan. The 33 billion yuan in private property accounted for almost 11% of national income, equivalent to over 14.5 trillion yuan in today's terms. Thus, the 250 billion yuan that Jack Ma voluntarily relinquished represents less than 2% of the private wealth seized by the Chinese government back then. Following the reform and opening up in 2004, 55 years after the Common Program, China's National People's Congress passed a constitutional amendment declaring that citizens' lawful private property is inviolable and that the state protects private property rights and inheritance rights in accordance with the law. This marked the second time private property protection was enshrined in the constitution. Yet 20 years later, the Chinese government's actions such as deep sea fishing, coastal fishing, and voluntary relinquishment, various extraordinary methods of seizing private property have once again rendered the 2004 constitutional amendment meaningless. This historical cycle underscores that the reform and opening up of 1978, much like the New Democracy period of 1949, was merely a government deception. Regrettably, most Chinese private entrepreneurs have failed to heed this lesson. In 1952, private capital accounted for 80% of national income, an extraordinarily high proportion and a critical economic share. Four years later, in 1956, it was entirely eradicated by the government. Today, private capital constitutes roughly half of society's total wealth. Eliminating it would be a trivial task for a Chinese government that has done it once before. On August 15, Xinhua News Agency reported that the Qiushi magazine published an important article by China's top leader, titled, Promoting the Healthy and High-Quality Development of the Private Economy. It emphasized the need to diligently implement policies to support the private economy, stating that decisions made by party central committees must be executed resolutely without ambiguity, delay, or compromise. This stance is a stark contrast to Liu Shaoqi's remarks to Tianjin's capitalist when he declared that capitalist exploitation was meritorious and that China had too little capitalism, not too much. Would today's Chinese leader dare to make such statements? It took only seven years for capitalists to go from being praised to being condemned. How long will it take today? Thank you so much for watching. If you find this video helpful, please like it, drop a comment below, and hit the subscribe button right here. It really helps YouTube suggest my video to others. I'll be back with more content soon. Until then, be well.