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Self-made beverage entrepreneur Zong Qinghou, as soon as China's richest man, died on Sunday.
His loss of life was introduced by his firm, Wahaha Group, which mentioned Mr. Zong died of an unspecified sickness and gave his age as 79. The corporate's assertion didn’t present any additional particulars.
Mr Zong's rags-to-riches story made him outstanding in China, even earlier than a public feud along with his overseas enterprise accomplice considerably raised his profile and his wealth. He based a beverage firm within the Eighties and within the Nineties he partnered with French meals large Danone to launch one of the well-known meals and beverage manufacturers in China.
However tensions arose in 2007 when Danone accused Mr. Zong of operating secret corporations promoting almost an identical merchandise, embezzling greater than $100 million from the three way partnership.
Mr Zong hit again, saying Danone knew concerning the corporations. Vowing to punish Danone for its “dangerous deeds”, he mobilized public opinion in China in opposition to the overseas firm.
The controversy escalated a lot that French President Nicolas Sarkozy raised the matter in a gathering with Chinese language chief Hu Jintao. In 2009, Danone offered its 51 p.c stake, giving full management to Mr. Zong's firm.
The next 12 months, Forbes named Mr. Zong China's richest man, with a fortune of $8 billion. He achieved this distinction once more in 2012 with $10 billion. Forbes estimates his wealth has since dropped to $5.9 billion, leaving him 53rd on final 12 months's checklist of China's billionaires.
Survivors embrace his spouse, Shi Yuzhen, and his daughter, Zong Fuli, (also referred to as Kelly Zong), the chairman of Hangzhou Wahaha Group and Mr. Zong's successor.
Mr. Zong, who grew up in poverty, was recognized for his spartan life-style. Within the interview, he mentioned that he arrived on the firm headquarters earlier than 7 am and labored till 11 pm. He mentioned that he has no hobbies besides smoking and ingesting Lipton tea.
In keeping with various accounts, he was born in October or December of 1945 (his firm might have used the standard Chinese language methodology for calculating age wherein an individual is taken into account to be 1 12 months previous at delivery) in Shanghai. In or close to close by metropolis Hangzhou. He was among the many many youth despatched to the countryside in the course of the Cultural Revolution, and spent a number of years working in an agricultural commune.
He grew to become a touring salesman in 1978, the identical 12 months the nation's new chief Deng Xiaoping ushered within the period of capitalism. A few decade later, Mr. Zong opened a stall close to a major faculty, promoting comfortable drinks and iced dishes.
Seeing hungry kids passing by impressed him to invent a vitamin drink, which he known as Wahaha Oral Liquid. “It solved the issue of kids not desirous to eat and affected by malnutrition,” he mentioned in a BBC interview.
The Hangzhou Wahaha Group – “Wahaha” interprets to “laughing youngster” – was born quickly after, promoting bottled water, comfortable drinks and tea. It later expanded into toddler components and kids's clothes.
In 1996, it fashioned Wahaha Joint Enterprise Firm with Danone, the French meals firm well-known for its yogurt. Promoting yogurt drinks, carbonated drinks and meals merchandise, it had captured 15 p.c of China's beverage market by 2012, trailing solely Coca-Cola and Tingyi Holdings.
After Danone accused Mr. Zong of misconduct, he fought again with an open letter, accusing Danone of spreading lies about his firm's enterprise practices and defaming his household. Wahaha officers held rallies and held information conferences, denouncing Danone executives as “rogue”.
Danone offered its stake for about $500 million, far beneath analysts' estimates.
The breakup unfold worry amongst multinationals, particularly in sectors like automobile manufacturing, wherein the Chinese language authorities required joint ventures and restricted overseas corporations' stakes to 50 p.c.
However it proved to be extra of an remoted episode than a bellwether, and looking back, a mere blemish in an in any other case serene period. Lately, multinationals have confronted different, far more difficult obstacles.
Rising geopolitical tensions have led to a wave of sanctions between China and the USA. Practically three years of “COVID zero” lockdowns and different measures severely affected the manufacturing and gross sales of many corporations. And China's state safety businesses have been swift to close down overseas companies which have ties to them, particularly corporations that lack due diligence.
Kerr Gibbs, former president of the American Chamber of Commerce in Shanghai, mentioned of the Danone affair, “It was a high-profile case that attracted individuals's consideration.” “However wanting again on it now, it’s clear that the general atmosphere at the moment was fairly secure and favorable for overseas companies.”