August 11, 2013 7:20 PM
Zhang Xin: China's real estate mogul
The following script is from "China's Real Estate Mogul" which aired on March 3, 2013, and was rebroadcast on Aug. 11, 2013. Lesley Stahl is the correspondent. Shachar Bar-On, producer.
No one symbolizes China's rapid 30-year rise -- from the backwaters of communism to the second largest economy in the world -- better than real estate developer Zhang Xin.
What's interesting about her is that while we think of China as being uncreative, repressive and as far as you can get from the American dream, she breaks every one of those stereotypes.
As we first reported in March, she's a mogul who got her start not in China, but on Wall Street. But she missed the Great Wall, so she went back home, and made it big!
The mogul, Zhang Xin, is the fifth richest self-made billionaire woman in the world.
[Zhang Xin: This is us. The one outside is us.]
She's pointing out her buildings. With her partner husband, she has built more of Beijing than almost any emperor in China's history.
Lesley Stahl: How many buildings have you and your husband built?
Zhang Xin: Oh, a lot!
Lesley Stahl: You can't even count them, right?
Zhang Xin: Yeah.
Wherever you look you see the company logo, SOHO China, on one cutting-edge skyscraper after the next. As a developer, Xin pays special attention to design, which is why she's been called the Steve Jobs of the architecture world. Her buildings are fluid and futuristic - and daring -- and would be at home in New York or London: an expression of China's emergence into the modern world.
Lesley Stahl: I'm wondering when you see these buildings if it ever strikes you: you are designing Beijing. It's a huge responsibility.
Zhang Xin: I feel that. I really feel that.
Lesley Stahl: Do you, you feel it on your shoulders?
Zhang Xin: I feel that. I feel these buildings are forming the face of our city.
Lesley Stahl: And you build huge buildings and huge projects.
Zhang Xin: That's China, you know? China-- if you think about what is the character of China, it's enormous scale. It's bigness. Everything.
She took us to the site of her newest project--
[Lesley Stahl: Do you love to come out-
Zhang Xin: I love coming out here.]
--that's so huge, it's swarming with thousands of workers. These kinds of projects are one reason for China's explosive economic growth. Recently though, there've been fears of overbuilding and a real estate bubble. Xin told us that's why she keeps her focus narrow: only office buildings and only in Beijing and Shanghai.
Zhang Xin: My own view is that residential property development in China has really come into an end.
Lesley Stahl: So you don't feel there's any threat of a bursting bubble in commercial real estate in Beijing and Shanghai?
Zhang Xin: I think in retail like shops, shopping malls, there is oversupply. But office is doing-- is the only property sector that's doing well.
Lesley Stahl: Even though the future may be uncertain?
Zhang Xin: The future may be uncertain in terms of-- well, the future is always uncertain wherever you go--
Lesley Stahl: But more uncertain now?
Zhang Xin: Even if the certainty is not 10 percent growth for China, it goes down to seven percent growth, it's still a better place to put your money--
Lesley Stahl: Than anywhere else. You think?
Zhang Xin: I think so.
.
Lesley Stahl: You have that much faith?
Zhang Xin: Uh-hmm (affirm). That's why we're investing heavily.
Her business instincts are usually right -- they've made her enormously wealthy and a celebrity here: when she opens a new building, it can look like a Hollywood premiere.
Yet at 47 she remains grounded and unpretentious, never forgetting she grew up wretchedly poor. She says her personal story shows that China is the new land of opportunity.
Zhang Xin: China is the place that produced more self-made billionaires than any other country in the world.
Lesley Stahl: Do you know what the American dream is?
Zhang Xin: Uh-huh.
Lesley Stahl: It sounds like the American dream- doesn't it?
Zhang Xin: Uh-huh. Very much so.
How times have changed! Xin was born during the Cultural Revolution, when Mao Zedong brutally purged all the capitalists and intellectuals, whom he derided as "running dogs."
Lesley Stahl: And if you were educated, you were- almost crushed?
Zhang Xin: Uh-huh. My parents were university graduates.
Lesley Stahl: Oh, boy. They were in trouble--
Zhang Xin: They were sent to countryside. I spent years in the countryside-- as part of the re-education camp.
But call it the revenge of the running dogs. Their children are today the country's leading capitalists. For Xin it goes back to when she was 8. Her mother was allowed to return to Beijing where she found work as a translator. But they were destitute and homeless, forced to sleep in an office.
Zhang Xin: I remember we would sleep on her desk.We will use her dictionaries, 'cause my mother was a translator, as the pillow.
Lesley Stahl: You slept on the desktop, dictionary as your pillow?
Zhang Xin: Pillow.
Lesley Stahl: Oh, my goodness.
Zhang Xin: Yeah, for months we did that.
When Xin was 14, she moved to Hong Kong in search of work, but life there was just as hard. She was forced to slave away on assembly-lines as a sweat shop girl.
Zhang Xin: On my table, there are like five different chips you need to put on the board, boom, boom, boom, boom, boom. Then you put on the belt. And then the belt goes down to the next one. So we all become like machine doing that.
Lesley Stahl: So this is how you spent your teenage years?
Zhang Xin: Uh-huh (affirm). Five years doing that.
Lesley Stahl: Five years? So-- Do you look as that-- look upon that as lost years?
Zhang Xin: No, I look at those as a different chapter in life. I knew that's not a life I wanted to have.
Lesley Stahl: Did you have a dream?
Zhang Xin: No. I wanted to just escape.
So when she'd saved enough money, she bought a one way ticket to London - packed up her bags, and left.
Zhang Xin: I thought I'd need to cook for myself so I carried a wok, a Chinese wok, you know..
Lesley Stahl: In your suitcase?
Zhang Xin: Yeah.
But forget Chinese food. With no money, she ended up working at a fish and chips stand. Her Dickensian journey wasn't over.
Zhang Xin: I think I was very afraid in England// only because I had never seen so many Caucasians.
Lesley Stahl: Funny looking people!
Zhang Xin: Funny looking-- language I didn't understand, nothing familiar.
Lesley Stahl: You didn't know anybody?
Zhang Xin: Didn't know anybody. I sat on my suitcase, started crying.
Lesley Stahl: You end up - no one's gonna believe this - you end up working at Goldman Sachs!
What a tale! From crying and alone to school to learn English, which led to a scholarship to the University of Sussex and then a masters in economics - from Cambridge! It was 1992. And Xin's timing was perfect. China was opening its markets to foreign investors. Goldman Sachs sent the sweatshop girl to the mainland to look for opportunities. But she was unhappy in the world of investment banking.
Lesley Stahl: I'll give you some of the quotes that you've said. "People spoke crassly, treated others badly, looked down on the poor and adored the rich." Those are your quotes.
Zhang Xin: That's pretty much true. I think investment banking environment was very competitive and cutthroat. I was always looking for opportunities to leave.
Lesley Stahl: You wanted to come back to China.
Zhang Xin: I think I was just missing the idealism which was how we grew up in the Communist Socialist China when everyone was encouraged and brought up to be idealist. And I guess I was missing what I was brought up with.
That's when she met the man she would marry, Pan Shiyi. He was part of a wave of young idealists, committed to liberalizing China through business, in his case through a new industry: real estate.
Zhang Xin: And I remember he took me to see a construction site. It was evening, it was late at night. He took me-- he said, "You have to come and see what I do." And I went, "Wow. I had never seen a hole that big on earth." And he told me, "This is a place will be the Manhattan of Beijing." And I laugh. I thought-- because he hasn't been to Manhattan. He has no idea what Manhattan means, right? The whole bunch of factories in the area, big hole on the ground. This is not going to be a Manhattan of Beijing. This is where we are now.
[Zhang Xin: All this area used to be factories.]
We stood at that spot, in a sea of offices they built: it's not Manhattan. It's bigger! Building after building, some projects the size of entire neighborhoods and all built in the 19 years...going back to the night Xin and Pan first met.
Lesley Stahl: Did you really decide to get married in four days?
Zhang Xin: Yeah, we did. And I left my bank and we joined together, formed the company, with no money, no backing. We're-- no relationship. None of us is the sons or the daughters of anybody in China--
Lesley Stahl: He wasn't a princeling.
Zhang Xin: No. No, in fact just the opposite. He came from one of the poorest provinces in China, the most impoverished place.
But she and Pan were finding out that mixing how East and West did business was not easy. They fought constantly. And so one day she packed her bags and went back to England. But then she changed her mind.
Zhang Xin: I thought I just cannot give up like this. I called him up. I said, "You know what? I decided to stay in China. Stay in this marriage, I'll quit the job. I will step aside, I stay at home."
In her time off, she got pregnant with the first of their two sons, while Pan was making a success of the company.
Zhang Xin: He did so well that there was too much work. He couldn't handle. So then he said, "You better come back to work. Really, I need you to work."
Lesley Stahl: Oh my goodness.
Zhang Xin: Everything changed from fighting, wanted to get divorced, to starting a family with a baby and the business is going well and I'm back to work.
Now they split their duties. He focuses on everything inside China. She uses her Wall Street know-how to raise money abroad, and hires the world's top architects. Together they have built SOHO China into a company with $10 billion dollars in assets.
Lesley Stahl: What about corruption, though?
Zhang Xin: Corruption is everywhere in China. It's really quite widespread. You pretty much whoever has power is in the position to be corrupt.
Lesley Stahl: So they expect you to pay them off-
Zhang Xin: --to pay them off.
Lesley Stahl: So how do you operate in this environment?
Zhang Xin: For instance, if we buy a piece of land, if we buy it in auction, then that's very transparent.
Lesley Stahl: Openness.
Zhang Xin: Openness, yeah. The more openness it is, the better it is. We don't need to know anybody, we don't need to be the daughters and sons of anybody, we can just buy with money on an open market.
[Zhang Xin: That building will stay, and the rest is all landscape.]
She believes open market tools like public auctions and transparent accounting will lessen the corruption and the cronyism. The woman who once slept on a dictionary, and now has about $3 billion in her bank account, may tout China as the new land of opportunity, but she knows it's still not the land of the free.
Zhang Xin: You know, I hear a lot in the U.S., people praise Wall Street, people praise state capitalism in China, "Look at how efficient things get done. Decisions get made so quick and so effective. It can roll over a policy overnight nationwide. And here in the U.S., we need to go through Congress, Senate, and debate." And you know, I have to say, for a Chinese living in China, Chinese-- if you ask one thing, everyone craves for is what? It's not food. It's not homes. Everyone crave for democracy. I know there's a lot of negativities in the U.S. about the political system, but don't forget, you know, 8,000 miles away, people in China are looking at it, longing for it.
Lesley Stahl: Do you think there will be democracy here? Let's say, I'll put a time frame on it, in 20 years?
Zhang Xin: Sooner.
Lesley Stahl: You're an optimist.
Zhang Xin: I am.
A bold statement in a country with heavy government censorship and limited freedom of speech. And while she's thriving, China's residential real estate is in trouble. That part of the story, when we return.
© 2013 CBS Interactive Inc. All Rights Reserved.No one symbolizes China's rapid 30-year rise -- from the backwaters of communism to the second largest economy in the world -- better than real estate developer Zhang Xin.
What's interesting about her is that while we think of China as being uncreative, repressive and as far as you can get from the American dream, she breaks every one of those stereotypes.
As we first reported in March, she's a mogul who got her start not in China, but on Wall Street. But she missed the Great Wall, so she went back home, and made it big!
The mogul, Zhang Xin, is the fifth richest self-made billionaire woman in the world.
[Zhang Xin: This is us. The one outside is us.]
She's pointing out her buildings. With her partner husband, she has built more of Beijing than almost any emperor in China's history.
Lesley Stahl: How many buildings have you and your husband built?
Zhang Xin: Oh, a lot!
Lesley Stahl: You can't even count them, right?
Zhang Xin: Yeah.
Wherever you look you see the company logo, SOHO China, on one cutting-edge skyscraper after the next. As a developer, Xin pays special attention to design, which is why she's been called the Steve Jobs of the architecture world. Her buildings are fluid and futuristic - and daring -- and would be at home in New York or London: an expression of China's emergence into the modern world.
Lesley Stahl: I'm wondering when you see these buildings if it ever strikes you: you are designing Beijing. It's a huge responsibility.
Zhang Xin: I feel that. I really feel that.
Lesley Stahl: Do you, you feel it on your shoulders?
Zhang Xin: I feel that. I feel these buildings are forming the face of our city.
Lesley Stahl: And you build huge buildings and huge projects.
Zhang Xin: That's China, you know? China-- if you think about what is the character of China, it's enormous scale. It's bigness. Everything.
She took us to the site of her newest project--
[Lesley Stahl: Do you love to come out-
Zhang Xin: I love coming out here.]
--that's so huge, it's swarming with thousands of workers. These kinds of projects are one reason for China's explosive economic growth. Recently though, there've been fears of overbuilding and a real estate bubble. Xin told us that's why she keeps her focus narrow: only office buildings and only in Beijing and Shanghai.
Zhang Xin: My own view is that residential property development in China has really come into an end.
Lesley Stahl: So you don't feel there's any threat of a bursting bubble in commercial real estate in Beijing and Shanghai?
Zhang Xin: I think in retail like shops, shopping malls, there is oversupply. But office is doing-- is the only property sector that's doing well.
Lesley Stahl: Even though the future may be uncertain?
Zhang Xin: The future may be uncertain in terms of-- well, the future is always uncertain wherever you go--
Lesley Stahl: But more uncertain now?
Zhang Xin: Even if the certainty is not 10 percent growth for China, it goes down to seven percent growth, it's still a better place to put your money--
Lesley Stahl: Than anywhere else. You think?
Zhang Xin: I think so.
.
Lesley Stahl: You have that much faith?
Zhang Xin: Uh-hmm (affirm). That's why we're investing heavily.
Her business instincts are usually right -- they've made her enormously wealthy and a celebrity here: when she opens a new building, it can look like a Hollywood premiere.
Yet at 47 she remains grounded and unpretentious, never forgetting she grew up wretchedly poor. She says her personal story shows that China is the new land of opportunity.
Zhang Xin: China is the place that produced more self-made billionaires than any other country in the world.
Lesley Stahl: Do you know what the American dream is?
Zhang Xin: Uh-huh.
Lesley Stahl: It sounds like the American dream- doesn't it?
Zhang Xin: Uh-huh. Very much so.
How times have changed! Xin was born during the Cultural Revolution, when Mao Zedong brutally purged all the capitalists and intellectuals, whom he derided as "running dogs."
Lesley Stahl: And if you were educated, you were- almost crushed?
Zhang Xin: Uh-huh. My parents were university graduates.
Lesley Stahl: Oh, boy. They were in trouble--
Zhang Xin: They were sent to countryside. I spent years in the countryside-- as part of the re-education camp.
But call it the revenge of the running dogs. Their children are today the country's leading capitalists. For Xin it goes back to when she was 8. Her mother was allowed to return to Beijing where she found work as a translator. But they were destitute and homeless, forced to sleep in an office.
Zhang Xin: I remember we would sleep on her desk.We will use her dictionaries, 'cause my mother was a translator, as the pillow.
Lesley Stahl: You slept on the desktop, dictionary as your pillow?
Zhang Xin: Pillow.
Lesley Stahl: Oh, my goodness.
Zhang Xin: Yeah, for months we did that.
When Xin was 14, she moved to Hong Kong in search of work, but life there was just as hard. She was forced to slave away on assembly-lines as a sweat shop girl.
Zhang Xin: On my table, there are like five different chips you need to put on the board, boom, boom, boom, boom, boom. Then you put on the belt. And then the belt goes down to the next one. So we all become like machine doing that.
Lesley Stahl: So this is how you spent your teenage years?
Zhang Xin: Uh-huh (affirm). Five years doing that.
Lesley Stahl: Five years? So-- Do you look as that-- look upon that as lost years?
Zhang Xin: No, I look at those as a different chapter in life. I knew that's not a life I wanted to have.
Lesley Stahl: Did you have a dream?
Zhang Xin: No. I wanted to just escape.
So when she'd saved enough money, she bought a one way ticket to London - packed up her bags, and left.
Zhang Xin: I thought I'd need to cook for myself so I carried a wok, a Chinese wok, you know..
Lesley Stahl: In your suitcase?
Zhang Xin: Yeah.
But forget Chinese food. With no money, she ended up working at a fish and chips stand. Her Dickensian journey wasn't over.
Zhang Xin: I think I was very afraid in England// only because I had never seen so many Caucasians.
Lesley Stahl: Funny looking people!
Zhang Xin: Funny looking-- language I didn't understand, nothing familiar.
Lesley Stahl: You didn't know anybody?
Zhang Xin: Didn't know anybody. I sat on my suitcase, started crying.
Lesley Stahl: You end up - no one's gonna believe this - you end up working at Goldman Sachs!
What a tale! From crying and alone to school to learn English, which led to a scholarship to the University of Sussex and then a masters in economics - from Cambridge! It was 1992. And Xin's timing was perfect. China was opening its markets to foreign investors. Goldman Sachs sent the sweatshop girl to the mainland to look for opportunities. But she was unhappy in the world of investment banking.
Lesley Stahl: I'll give you some of the quotes that you've said. "People spoke crassly, treated others badly, looked down on the poor and adored the rich." Those are your quotes.
Zhang Xin: That's pretty much true. I think investment banking environment was very competitive and cutthroat. I was always looking for opportunities to leave.
Lesley Stahl: You wanted to come back to China.
Zhang Xin: I think I was just missing the idealism which was how we grew up in the Communist Socialist China when everyone was encouraged and brought up to be idealist. And I guess I was missing what I was brought up with.
That's when she met the man she would marry, Pan Shiyi. He was part of a wave of young idealists, committed to liberalizing China through business, in his case through a new industry: real estate.
Zhang Xin: And I remember he took me to see a construction site. It was evening, it was late at night. He took me-- he said, "You have to come and see what I do." And I went, "Wow. I had never seen a hole that big on earth." And he told me, "This is a place will be the Manhattan of Beijing." And I laugh. I thought-- because he hasn't been to Manhattan. He has no idea what Manhattan means, right? The whole bunch of factories in the area, big hole on the ground. This is not going to be a Manhattan of Beijing. This is where we are now.
[Zhang Xin: All this area used to be factories.]
We stood at that spot, in a sea of offices they built: it's not Manhattan. It's bigger! Building after building, some projects the size of entire neighborhoods and all built in the 19 years...going back to the night Xin and Pan first met.
Lesley Stahl: Did you really decide to get married in four days?
Zhang Xin: Yeah, we did. And I left my bank and we joined together, formed the company, with no money, no backing. We're-- no relationship. None of us is the sons or the daughters of anybody in China--
Lesley Stahl: He wasn't a princeling.
Zhang Xin: No. No, in fact just the opposite. He came from one of the poorest provinces in China, the most impoverished place.
But she and Pan were finding out that mixing how East and West did business was not easy. They fought constantly. And so one day she packed her bags and went back to England. But then she changed her mind.
Zhang Xin: I thought I just cannot give up like this. I called him up. I said, "You know what? I decided to stay in China. Stay in this marriage, I'll quit the job. I will step aside, I stay at home."
In her time off, she got pregnant with the first of their two sons, while Pan was making a success of the company.
Zhang Xin: He did so well that there was too much work. He couldn't handle. So then he said, "You better come back to work. Really, I need you to work."
Lesley Stahl: Oh my goodness.
Zhang Xin: Everything changed from fighting, wanted to get divorced, to starting a family with a baby and the business is going well and I'm back to work.
Now they split their duties. He focuses on everything inside China. She uses her Wall Street know-how to raise money abroad, and hires the world's top architects. Together they have built SOHO China into a company with $10 billion dollars in assets.
Lesley Stahl: What about corruption, though?
Zhang Xin: Corruption is everywhere in China. It's really quite widespread. You pretty much whoever has power is in the position to be corrupt.
Lesley Stahl: So they expect you to pay them off-
Zhang Xin: --to pay them off.
Lesley Stahl: So how do you operate in this environment?
Zhang Xin: For instance, if we buy a piece of land, if we buy it in auction, then that's very transparent.
Lesley Stahl: Openness.
Zhang Xin: Openness, yeah. The more openness it is, the better it is. We don't need to know anybody, we don't need to be the daughters and sons of anybody, we can just buy with money on an open market.
[Zhang Xin: That building will stay, and the rest is all landscape.]
She believes open market tools like public auctions and transparent accounting will lessen the corruption and the cronyism. The woman who once slept on a dictionary, and now has about $3 billion in her bank account, may tout China as the new land of opportunity, but she knows it's still not the land of the free.
Zhang Xin: You know, I hear a lot in the U.S., people praise Wall Street, people praise state capitalism in China, "Look at how efficient things get done. Decisions get made so quick and so effective. It can roll over a policy overnight nationwide. And here in the U.S., we need to go through Congress, Senate, and debate." And you know, I have to say, for a Chinese living in China, Chinese-- if you ask one thing, everyone craves for is what? It's not food. It's not homes. Everyone crave for democracy. I know there's a lot of negativities in the U.S. about the political system, but don't forget, you know, 8,000 miles away, people in China are looking at it, longing for it.
Lesley Stahl: Do you think there will be democracy here? Let's say, I'll put a time frame on it, in 20 years?
Zhang Xin: Sooner.
Lesley Stahl: You're an optimist.
Zhang Xin: I am.
A bold statement in a country with heavy government censorship and limited freedom of speech. And while she's thriving, China's residential real estate is in trouble. That part of the story, when we return.
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