[East Asian Economy & Trade News] NPC & CPPCC focus: The Richest Man Fell in Love with Charity, Charity on a National Basis is the Way

East Asian Economy & Trade News 2010-3-11

Special Dispatch Team for NPC & CPPCC in Beijing

Xu Jiayin, the richest man in Mainland China, a real estate giant, and the chairman of Evergrande Group, is a hot figure in this year s NPC & CPPCC. Talking about three controls on house price last year on a high-profile public appearance, the CPPCC Committee member is particularly low-key this year and hard to be traced before his speech time on the Plenary on the March 9. At intervals during the 4^th Plenary of the Third Session of the Eleventh CPPCC yesterday, blocked by our journalist in the resting area in the Great Hall of the People, Xu Jiayin, fearing the journalist would disclose his whereabouts, finally answered our questions on house rate, charity, and football.

Involvement in charity means you do not expect any profit but the idea of virtue is its own reward will certainly boost the enthusiasm for participation of the enterprises

Xu was born in Henan Province in 1958.

Graduated from Wuhan Steel College (i.e., now known as the Wuhan University of Science and Technology) in 1982, he was employed by Henan Wuyang Steel Company upon graduation and had worked there for 10 years. By the age of 30 he was already promoted as the factory director.

Xu Jiayin left the job in 1992 and was later employed as the Acting Director and Director of Shenzhen Zhongda Co., Ltd. and the GM of Shenzhen Quanda Trading Co., Ltd.

In 1994 he became the Chairman and GM of Guangzhou Pengda Co., Ltd.

In 1997 he established Evergrande Company. Evergrande has developed steadily and rapidly since then.

But in March 2008, Evergrande started its initial public offering and ran aground. Evergrande therefore drew close attention from the outside world.

In July 2009 Xu Jiayin announced that Evergrande has survived two extremely tough years.

On House Price

House price are determined by several factors

The central government has recently issued the 11 Provisions on Real Estate Development to better regulate the real estate market after the intensive issuance of a series of control policies on real estate since last December. When asked by the journalist whether this NPC & CPPCC is likely to become the watershed for house price, Xu Jiayin says the 11 Provisions is a good policy and is crucial in stabilizing house price and paving the way for a healthy development of the real estate industry. He believes that China s real estate policy is heading in a healthy and steady direction after the the 11 Provisions was issued and each city will make efforts in stabilizing the house price in China. I think house is a special commodity the price of which is determined by several factors such as the economic development of the country and the flowing demand of the society, which are all very important factors, and of course, supply is also another factor. One of the 11 provisions requires a larger supply. So how to achieve this and balance the relationship between supply and demand is what we should solve at the moment. House price will be stabilized under the influence of a series of factors. Xu Jiayin says.

China is so huge, and each city is unique.

During the NPC & CPPCC sessions, the National Statistic Bureau released data that shows a 1.5% increase in house price in 2009. This has incurred angry comments from the public. Xu Jiayin believes that China is so huge and the house price increase varies very much in different cities. Besides, each city is unique in its own economic and real estate development. Therefore the situation of house price is different in each city. So no one can say this statistical data is wrong.

Evergrande Group has been operating in the real estate business in second-tier cities and focuses mainly on residential houses. When asked whether they intend to develop in the first-tier cities such as Beijing, Xu Jiayin answers that they have no consideration in this aspect. When asked whether high house price is caused by high land price, and who is more to blame among the government and the real estate developers for the high house price, Xu Jiayin answers that he does not understand our question.

When asked what percentage is the value of his real estate project against the house price, he answers, Each city is different. I have been engaged in company listing in Hong Kong in recent years so I don t have the exact information about certain situations in Mainland China.

When asked if there is bubble in mainland house price and if the current vacancy rate in the commercial house market will cause subprime crisis similar to what has happened in the US, Xu Jiayin did not answer with the reasons that I do not understand your question or I don t have enough information about this matter.

On Charity

More Work is Needed from All Sides of the Society for Charity Development

Xu Jiayin, as the only representative of enterprises in China, speaks about Arouse the participation enthusiasm of the enterprises and promote the development of the charity cause on the 3^rd Plenary of the Third Session of the 11^th CPPCC.

We cannot talk about charity without mentioning Xu Jiayin s childhood. Xu Jiayin s mother passed away when he was very little. He relied on his father s hard-earned salary to continue his schooling while constantly facing the fear of losing his chance to continue the education. My days in the primary school were in a grass-roofed house where I crouched near a so-called desk made of mud for six years.

In high school we all slept in the same bedroom. I hang a bamboo basket on the wall. Inside it was my steamed corn bread which would be my food for the whole year. Xu Jiayin says. In 1998 when his career was improved, he couldn t wait to donate 1 million yuan and build a Hope Project primary school, Jiayin Primary School, in his hometown.

Xu Jiayin says that he and some other philanthropic entrepreneurs were sometimes ordered to donate and faced with pressure from relevant administration. This has been known among the entrepreneurs as being stalked and has greatly deterred their intention from making further donations. There are tens of millions of enterprises in China while record shows only several hundreds of thousand of enterprises have made donations.

Therefore, the majority of them are not involved with charity activities. There is a huge need for charity in our country. The annual number of people in need of relief is above 150 million. If charity is a well of a hundred meters deep, we have only drilled three to five meters up to now. Xu Jiayin says.

Xu Jiayin hopes that the Charity Law could be passed and issued as soon as possible so as to clarify the nature, mission, and the basic principle of management and operation for charity organizations, as well as to clarify the relationship between the governmental supervising body and the social charity organizations, so that a regular legal environment is established for the enterprises to make contributions for the development of the charity cause in China.

Involvement in charity means you do not expect any profit but the idea of virtue is its own reward will certainly boost the enthusiasm for participation of the enterprises . Xu Jiayin believes it is time to establish a tax system integrating the donation-encouraging mechanism. He suggests three measures.

1. To implement GSP, that is, any enterprise making donations to any legal charity organization shall be rewarded with tax preference so as to increase the total donation amount. 2. To establish an easy-to-operate, quick and convenient tax exemption procedure. 3. To levy inheritance tax and gift tax, and increase the tax rate on luxuries, thus guiding the entrepreneurs to put more fund into the social public welfare cause.

About Football

The Best Time that an Enterprise Gets Involved

The journalists begin to pay close attention to Evergrande Group because Lang Ping comes back to the country as the coach of Evergrande Women Volleyball Team. Evergrande Volleyball Club is the first domestic volleyball club completely independently operated by an enterprise in the country, and the boss is Xu Jiayin.

Now, Xu Jiayin is extremely busy. He has invested 100 million yuan for totally taking over Guangzhou Pharmaceutical Football Club. Moreover, it is after Guangzhou Pharmaceutical Football Club was punished and degraded to Chinese series A league because of involvement in football fraud. Yesterday, the journalists asked Xu why he purchased Guangzhou Pharmaceutical Football Club at this time and why he got involved in this muddy water .

Xu Jiayin said that he was confident in Chinese football. He said he knew well the crackdown against football fraud in the football circle before the purchase, and it was the best time for a private enterprise to become the owner of Guangzhou football team.

Large Amount of Input for Buying Players

As the deadline for changing a club in the new competition season is coming and many famous domestic players have already renewed the contract with the team or have found a new boss, Evergrande Club pays its attention to the players of Shenhua team who have not found the new boss. Zhu Jun, boss of Shenhua, reveals that Gao Lin has already formally signed a contract with Evergrande Club.

Although he did not reveal the due for changing the club of Gao Lin, there is news revealing that the price is higher than 5 million yuan that the football association has stipulated as the top price, and Gao Lin has obtained the annual pay up to 5 million yuan. Evergrande Club also offered Du Wei with a contract at sky-high price.

As to this, the explanation of Xu Jiayin is: "I have not planned to earn money in this respect at all. Guangzhou Football Team meets difficulty. Evergrande has the responsibility and obligation to support the development of Guangzhou Football Team." Xu Jiayin said that "I also have an opinion that Evergrande personnel have a characteristic that they do their best in everything they do.

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Notes of Journalists

Female journalists act like pampered children, and male journalists block the passageways

Xu, the richest man in Mainland China, was pressed against the wall

Xu Jiayin was sitting in a relatively remote corner chatting with a committee member also from Guangdong when seen in the rest area yesterday. It is estimated that it was out of most journalists expectation that the richest man in Mainland China who was the focus of the media was just before their eyes. The sharp-eyed cameraman of this newspaper saw him earlier than others and said Big fish. Come on! So we two moved slowly and quietly towards him.

After he basically finished answering the question which the journalist of our newspaper put forward, two or three journalists slowly gathered around him slowly. Soon afterwards, a reporter of a network medium took pictures of Xu Jiayin ceaselessly. When he was asked who the subject was, he answered Xu Jiayin! But the guy is really too excited. He shouted to the journalist beside him that Come on, Xu Jiayin!

By then, all reporters rushed around Xu Jiayin, making him very upset. But he was always talking and smiling. He was eager to leave for two times with the reason that some friends called him, but he was surrounded by the reporters. But the reporters were not easy to deal with. The female reporters asked with a tone like a pampered child, Mr. Xu, please talk about the house price! Mr. Xu, you were in high profile last year. Why don t you say something this year? Is there anything that cannot be spoken out? and the sturdy male reporters took the role of blocking his passageway.

During that time, a camera was knocked on the head of a reported. Although the camera owner said sorry to the knocked person, he just took the head as the camera holder. When Xu Jiayin left, reporters just followed him, until he was pressed against the wall.

Why is the richest man unwilling to discuss more about house prices

Why does Xu Jiayin put forward the proposal of adjusting and controlling the house price in March 2009 but refuses to talk more about it when the high house price has become the target of public criticism?

An insider of the industry analyzed that the proposals about the high house price account for about half of the proposals of the two Conferences in this year, but almost all of them come from the deputies to the National People s Congress and members of the CPPCC National Committee outside the real estate industry.

Through the reversal of the real estate market in 2009, the developers have got profits, so they prefer to be in low profile. If they talk about the issue in high profile again, maybe the outstanding usually bears the brunt of attack . Xu Jiayin talked about the issue in high profile last year because he needed to show that Evergrande did not lack money when people question the capital chain of Evergrande; when Evergrande holds tens of billions of cash in this year, it is smart and even wise to talk about the issue in low profile.

He said.