How miserable the CCP's state-owned sector is under Xi's rule! Former capital tycoon Feng Lun suddenly restricted from high consumption.

This episode, hosted by Hu Liren, explores the current situation of private enterprises and business tycoons in China under the rule of Xi Jinping. The program begins with the recent restriction on high consumption imposed on former business tycoon Feng Lun in Hainan, reviews the history of how Feng Lun, Pan Shiyi, and others made their first pot of gold by speculating on real estate in Hainan in the 1990s, and analyzes the reasons why they rose to wealth by relying on systemic resources only to eventually fall into distress due to their lack of understanding of the Chinese Communist Party (CCP). At the same time, the program compares the high debt of the Liu Yonghao Group with the outcome of Pan Shiyi and his wife successfully transferring their assets to the United States through Zhang Xin's decision-making, and points out the comprehensive crisis currently facing China's manufacturing industry, private hospitals, development zones across the country, and export enterprises under the impact of the economic downturn and tariff policies.

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Hello, audience! I just saw a piece of news that was very shocking, yet also within expectations. It concerns the former Chinese capital tycoon Feng Lun. This person is very famous, extremely famous! Everyone only knows Pan Shiyi, but Feng Lun is Pan Shiyi's big brother. You could say Pan Shiyi's first pot of gold was tied to Feng Lun; Feng Lun helped him make money. Back in the nineties, in the late eighties, '89, '90, they were speculating on real estate in Hainan. At that time, there was a 'Hainan real estate concept.' Around '93, '92, '93, they made a lot of money in just a few short years. There were six of them at the time. Pan Shiyi was probably the third or fourth among those six people in their team. Feng Lun was the leader. I will tell you about this history in the future. I have a friend who was there; at the time, that friend, who is very close to me, also made a fortune there. Back in the early eighties, many people started quite early. At that time in Hainan, there was a very good opportunity. Actually, these people were all 'white-glove' operators (getting something for nothing). In the nineties, you know, they started with only a few tens of thousands of yuan. Just a few tens of thousands, but they had resources. What kind of person is Feng Lun? He is from the Northwest, and he graduated from university in the early eighties. He went to university very early, and people who went to university then were very smart. After graduating, he worked in the government system, it seems in a ministry in Beijing or something like that. He worked for a period of time, and at that time, in the eighties, the Chinese people hadn't 'woken up' yet; people were all quite naive. When everyone else was earning a salary of a few dozen yuan a month, Feng Lun happened to be working in these government ministries. Working in a ministry made him different; he had a very broad vision. At that time, Pan Shiyi was just a kid who had just graduated from college and had no awareness. Feng Lun was definitely a capital tycoon. At the time, they were on good terms, so six of them joined together, known then as the 'Six Gentlemen.' Of course, when they were speculating on houses and land in Hainan, this group of people became very famous later on. When they were speculating on houses in Hainan, there were plenty of others who made real money, much more than they did. I have a friend from Hunan and a friend from Hong Kong; the two of them teamed up and probably made over 100 million yuan in Hainan. Making over 100 million in 1990—that was incredible! Feng Lun and his group made about 30 million or so at the time. Because Feng Lun had worked in a ministry, he was very familiar with how the government worked and had government resources, so it was very convenient for them to handle finance and how to get money from the government; he was very adept at it. He was also well-connected, so they obtained some bridge financing and used financial leverage to speculate on land in Hainan. After speculating on land, it was later halted by Zhu Rongji because it was a malicious situation—everyone was just passing the buck like a game of telephone. Later, Zhu Rongji, who seemed to be the Vice Premier at the time, halted the land speculation in Hainan. After it was halted, these people retreated. After Feng Lun made his money, he took it back to Beijing and developed the Vantone International Plaza, or some real estate project like that. He did this project in the nineties. Land in Beijing was so cheap back then! Construction in Beijing at that time was also very cheap. I estimate that when he built that plaza, his construction cost was probably only a few hundred yuan per square meter; money was also worth more back then. I remember when I bought my first house in Xinzhuang, Shanghai, the price of the house seemed to be around 2,000 yuan. Think about it, the house you sold—when I bought my house in '93, it was around 2,000 yuan, so how much was its cost? Its construction cost was only a few hundred yuan. And this house I bought—I bought it very early, the one in Shanghai, because there were very few houses in the city center at the time. There were only these so-called 'foreign exchange houses,' which meant you had to use foreign currency to buy them. That was one thing, and the price was very high. At that time, very few Chinese people had money. I also spent several hundred thousand yuan back then.

Back in 1993, when I bought my first property, the price was 2,000 yuan per square meter. At that price, the construction cost was only a few hundred yuan, plus land costs, other development costs, and profit margins. At the time, the project they were working on in Beijing, called Vantone International Plaza, also had a construction cost of only a few hundred yuan per square meter. Back then, 30 million yuan was an incredible amount of money. Later, it became several thousand, which is equivalent to several hundred million today. But think about how much Beijing property prices rose later on. Vantone International Plaza was in a prime location, and later those properties reached over 100,000 yuan per square meter. Think about how many times it increased; it was staggering. Later, they found ways to manage that money. Eventually, they all split up; a dozen or so people went their separate ways. Later, Pan Shiyi started SOHO China. He used the first pot of gold they had acquired back in Hainan. Feng Lun is an absolutely iconic figure. So, what did Feng Lun do later? He went into real estate, and in the end, he got into the medical industry. He was very familiar with the Putian-affiliated people—that is, China's private hospitals. He dove right in, took his money, and invested it. He believed that China's state-run medical system would eventually have to be privatized. Feng Lun's failure—and it was a failure—was that he made his money by relying on the CCP's bureaucratic system. His downfall was actually at the hands of the Communist Party. These people are too deeply poisoned; they don't understand the CCP at all. They thought the CCP would always remain open and that private enterprises would continue to grow larger; that was their constant mindset. In reality, they had no idea how evil the CCP is, and they never imagined that Xi Jinping would come to power today and drag everything back to the era of Mao. These people—these Chinese business owners—in the end, many of them actually died because of this. A couple of days ago, I was talking about Liu Yonghao. I said I had met his older brother and second brother, right? Liu Yongxing is the second brother; I met him and talked to him for about half an hour. I remember it was in Shanghai, at their New Hope building, which had just been completed at the time. That was about twenty years ago. What has become of Liu Yonghao now? You see, he believed in the Communist Party. These people were all mixed up with the CCP. But Liu Yonghao's way of mixing with them was different from Feng Lun's. Feng Lun dealt directly with high-ranking government officials. Feng Lun was someone who had entered the system back in the 80s; he was a very seasoned operator. He was likely very familiar with people like Wang Qishan, as they had all worked in the ministries before; he was a veteran. People who had once operated within the government system were able to command wind and rain in China at that time. So, he didn't come from a grassroots background; he came from a bureaucratic one. Liu Yonghao was different; he was from a grassroots background. His family couldn't even afford to eat back in the day. The four Liu brothers started out making animal feed; they came from hardship. Later, as their feed business grew larger, they started to rely on the Communist Party, packaging themselves as deputies to the National People's Congress or members of the CPPCC, thinking that because they were from a grassroots background, they were safe. They didn't understand the Communist Party at all. In the end, look at what happened: the total debt of Liu Yonghao's group reached over 80 billion yuan, over 82 billion yuan. That is why I have been saying—I said it years ago—you need to run, run fast!

Pan Shiyi is different; he has a wise and supportive wife named Zhang Xin. This woman had previously spent time in the United States and was an overseas returnee. Her understanding of the Chinese Communist Party (CCP) and her family background were likely quite substantial, which is different from Pan Shiyi. Pan Shiyi also came from a grassroots background, but he has a very good wife who has been his pillar of support. I anticipate that it was Zhang Xin who made the final decision for their family's assets to be moved to the United States. As for Zhang Xin, I have seen an interview of hers, an interview conducted in English, and her thinking was absolutely superior. Pan Shiyi followed his wife's lead; therefore, finding a good and wise wife truly saved his entire family. Now, Pan Shiyi and Zhang Xin live in the United States and are very successful. They retreated at the height of their success, having truly earned money from the CCP and profited from all the benefits of the CCP's reform and opening-up era. Then, at the peak, they cashed out all their capital and, through various capital operation methods, moved this money to the United States. Now they have many properties in New York as investments, for example, long-term fixed investments. Just think about how impressive that is! He is very capable. Feng Lun is different. They all started in the 1990s, and Feng Lun was actually the leader, the boss. So, the split between Pan Shiyi and Feng Lun back then, the parting of ways, was destined. It was destined that everyone's final outcome would be different. Do you know that Feng Lun is currently subject to high-consumption restrictions? Everyone should know what high-consumption restrictions mean. Just in the last two days, he was restricted from high consumption by a court in Hainan. The amount involved is also quite ridiculous; he was restricted from high consumption over a few hundred thousand RMB. I don't know the exact details of this matter, but I believe he must have encountered some financial problems; that is one thing. Secondly, it shouldn't be that he is restricted from high consumption over just a few hundred thousand; I suspect the government is targeting him. The government is targeting him. So, the current situation is very clear to everyone. He invested in hospitals, and these hospitals—you have to realize that the hospital industry is actually monopolized by the government. The government previously left a little bit of money for private hospitals to make, but it was actually like fishing; in the end, it intended to swallow up the private hospitals. What are private hospitals? They are a product of the era, a product of the entire reform and opening-up. Today, it is very simple for the government to make private hospitals die; it just needs to cut off the medical insurance coverage. All the energy—because almost everyone in China has medical insurance—if you cut off medical insurance for private hospitals, you don't allow people to go to private hospitals for treatment. If you go to a private hospital, the government won't provide you with the reimbursement quota, and then you are finished. Moreover, the reputation of private hospitals is currently very poor. The Putian network has had many incidents. Feng Lun later got mixed up with people from the Putian network, and they worked together to run these private hospitals. In the end, now that the private hospitals are just sitting there—look, the land, real estate, property, equipment, and all those private hospitals—they need doctors, they need good doctors to come in, and those doctors all need to be supported. If you don't support them, no one will come for treatment. If you really support them, those who come for treatment are just people with low consumption power. People with high consumption power, for instance, those who are truly wealthy, if they want to see a doctor, they would rather go overseas, go abroad, go to Hong Kong, or go to other countries. So, my former boss also invested in a private hospital. It was a very excellent private hospital, and he spent hundreds of millions. He spent hundreds of millions in Hongqiao; I have forgotten the specific name. He invested hundreds of millions. Later, this hospital also just fizzled out and died; it couldn't survive at all. At that time, our hospital seemed to be targeting some high-end individuals in Hongqiao, with a registration fee of several hundred or even a thousand yuan. With a registration fee of a thousand yuan, the doctors invited were all retired senior doctors. My boss at the time treated it like a game; he invested hundreds of millions, just like playing a game, to set up a medical facility there. Every time he came to Shanghai from Hong Kong, he would go to the hospital to take a look. My former colleague was there helping him manage the finances.

This is China under the rule of the Chinese Communist Party (CCP), specifically under Xi Jinping. It is not just that ordinary people have no food to eat—there are far too many people in that situation now—but businesses as well. People are posting about it now; businesses in Guangdong and Zhejiang are failing. About 30% to 40% of businesses in Zhejiang have already shut down. There are many development zones in Zhejiang now that are completely deserted. Previously, these zones were established to attract investment. Once they managed to bring companies in, what did many of these Chinese private enterprises actually rely on? In reality, many relied on large foreign corporations operating in China. Once those large companies were operating, they needed various parts and components. So, these private enterprises started making components, perhaps relying on one major company to survive, and then they would supply various parts to other large companies as well. Later, when those major companies left, the others followed suit. Consequently, these private enterprises had almost no buyers left; their supply of business was cut off. After their supply was cut off, some companies moved elsewhere and were still able to do business. But then Trump imposed tariffs, and once they were raised, these companies—which could still make some money and maintain a certain market share even with the tariffs—were finished. Once the tariffs were added, they were done for. I have some friends in the United States who deal in Chinese products and have warehouses there. Back in 2018, when they first started, they would have Chinese products entering the U.S. every year. Five containers would arrive today, a few more tomorrow. After they arrived, they would pick them up and use forklifts to move massive amounts of Chinese products into their warehouses. The warehouses were huge; I have visited them. But later, when the tariffs were added—increasing by 10% or more—these business owners could no longer hold on. You see, once the tariffs were raised so high, there was simply no profit margin; the products couldn't be sold at those prices. Products made in China were selling at too high a price in the U.S. compared to products from other countries, which were cheaper. So, these businesses in the U.S. could still survive because they had been in the industry for decades; they could find ways to source goods from other countries, such as Mexico, Vietnam, or India. But the companies in China were finished. Previously, a business would typically operate like this: if I did 1 billion in business a year, I could maintain an annual profit of around 10%. In traditional manufacturing, profit margins are very low. Now, if costs suddenly jump by 50% and they can only do 500 million in business a year, there is no profit. What can they do? These companies have liabilities; their debt-to-asset ratios are quite high because, in the past, Chinese companies often felt that the market belonged to China. We thought China was so great, and indeed, at that time, market share was very high. There were many products where Chinese goods accounted for 70%, 80%, or 90% of the global market, and in some cases even 100%. Many countries stopped making those products because you simply couldn't compete with China. Now, look again; as it drops bit by bit to 50% or 60%, these companies will eventually be finished, and they won't even have time to escape. Look at how Xi Jinping is tearing everything down. Look at people like Liu Yonghao and Feng Lun; they have already lost everything. Under these circumstances, you can imagine that even these people cannot survive. It seems my internet connection is having problems today. Alright, I cannot chat with you all anymore. Thank you for watching, and we will see you next time.