From large-scale real estate developments to large-scale donations

Waiting in a luxurious conference room in the five-star Century Golden Resources Grand Hotel, part of the Century Golden Resources Group, the eye wanders in the direction of close-by Century City, Beijing's largest commercial and residential development. Started at the turn of the century, the Century City development complex is 3.7 million square meters and puts Century Golden Resources Group at the helm of China's property boom.

Huang Rulun, chairman and founder of Century Golden Resources, gives off the impression of being southern Chinese. Dressed in a casual white suit with white leather shoes, the only indications of Huang's wealth are a gold watch and eye-catching diamond ring. The 30-year-old John Huang, a VP in the family business, accompanies his father, interjecting with comments from time to time.

Since April, Century Golden Resources has donated a further US$3.5 million, a third going to Peking University, another third towards poverty relief in Yunnan Province and the remaining third allocated to his home province for the building of a Women and Children Centre and a fireworks party. What stimulated Huang Senior to donate so much in such a short period of time? Was it because of outside pressure after the Euromoney China Philanthropy List was made public? “No. I never donate due to outside pressure,” emphasizes Huang. “I donate because I like giving. It is often a spontaneous reaction.” He adds that he is off to Chongqing in July to donate a further US$1.5 million, initiated after watching a television program on the poor quality of the school buildings, shabbily dressed students and hearing that some teachers were unpaid.

All of this generous giving begs one question: What stimulated Huang's philanthropy? Born into abject poverty, Huang had to leave school early to make ends meet, the result of which has been his empathy with those who have little and also his determination to help with education programs.

Huang puts the same amount of effort into philanthropy as he does for his large-scale developments. Last year, he pledged US$22 million to develop the Jiangxia College in his hometown and has built the Huang Rulun Middle School in his birthplace. According to Century Golden Resources Group's records, Huang Rulun's total philanthropic donations amount to US$35 million, on top of taxes paid of US$600 million.

“He has a deep affection for his hometown, supporting whatever they need,” comments an old friend of Huang's, Cao Dewang, chairman of Fuyao Glass and himself ranking 35th on the Euromoney China 2004 Philanthropy List. “It is not easy to be an entrepreneur in China. Huang is very successful at business, but does not forget to repay his debts to society.”

The path to philanthropy

Huang Rulun was born into a farming family in Lianjiang county in Fujian province. His family's claim to fame was ancestry: one their ancestors, Huang Gan, was the student and son-in-law of the well-known Neo-Confucianist philosopher Zhu Xi, living one thousand years ago in the Southern Song dynasty. Brought up in a close-knit family, Huang was influenced by the Confucianist ideal that “Successful people should give”. “My parents and grandparents loved me very dearly, and my relatives and friends also took good care of me. When I was little, I had a dream that I would one day be able to repay my parents and all the people that helped me,” remembers Huang.

Huang started out with various small businesses when he was 15 years old. His break came at the age of 35 when, like many from Fujian, he immigrated to the Philippines. Thereafter, with Hong Kong as his base, he started investing in projects in Singapore, Malaysia and Spain.

 
Huang returned home in 1991 choosing real estate as his new industry. His vision and energy quickly helped him become the largest private real estate developer in Fuzhou, allowing him to expand into construction, interior decoration and other related industries.

In 1999, Huang turned his hand to the much bigger market of Beijing. His first project was the Century Jiayuan in Beijing's Olympic Village before starting on the 3.7 million square meter Century City development. Despite being a newcomer to the Beijing market, Century City broke records selling US$27 million of residential real estate a day at its peak. The crucial difference, though, was that most of these sales were made prior to the completion of the properties, giving Huang the cash flow lifeline essential to real estate developers.

Last year, Century City achieved the top position in sales of real estate in Beijing. Pan Shiyi, chairman of SOHO China, took the second slot, noting that SOHO China had actually sold more last year but did not achieve the top place due to a quirk in the system. “Their speed of construction and sales achievements has had an impact on real estate developments in western Beijing,” admits Pan.

An anomaly in the industry, Century Golden Resources does not rely on bank financing. Instead, it has generated cash flows strong enough to finance its own operations. Apart from the initial investment by a handful of overseas Chinese friends, Huang is proud to say that the rest has been generated by his own business. His secret, Huang explains, is the speed of development. “What might take others two or three years to develop,” says Huang, “will only take us a year. With my background in construction and a very experienced team today, we don't waste time.” In addition, with many of the add-ons also owned by Huang, such as construction and decoration, “Nobody can cheat us or waste money”.

Huang's most recent badge, Century Golden Resources' US$1billion development in Yunnan province, proves Huang's successful formula. However, Huang believes that large-scale residential developments are becoming saturated. Instead, his focus has turned to commercial real estate and hotels. Golden Resources Times Shopping Mall Century, said to be the largest shopping mall in Asia, is due to open on October 1st in Beijing.

But Huang seems to have his finger in many different pies. “Century Golden Resources is going to become more and more involved in energy resources in the future,” hints Huang, adding that he “hates” the idea of getting a listing. “Never!” Huang exclaims. “I come from farming stock, which prides itself on hard work and honesty.” Huang repeats this phrase several times throughout the interview for emphasis.

Facing his own ethics and conscience

Huang and his investors started out as a group of friends. “Over the past decade, we have invested in each others' businesses, but have never taken an active management role in each other's business,” he says with a touch of pride. “Our relationships are built on trust.”

That he is hands-on in his business is easy to see: “I go to the construction site three times a day, wearing through the soles of my shoes all the time.” Huang takes an active part in many of the details of the business, especially in the design and architecture plans.

Outside of the office, Huang loves to play golf but complains that he has not had time to play once in the last four years. On the subject of retiring, a time that would afford many an hour for the golf course, Huang surprises by saying that he expects to retire “next year”. Justifying this with a smile, he adds, “I like to live from one extreme to another.”

On the subject of inheritance, Huang is more traditional: “I will leave my business to my son and split my wealth amongst my son, employees and society.” Unlike well-known philanthropist Andrew Carnegie, Huang has not composed an essay equivalent to the Gospel of Wealth. Rather, he prefers to face up to his own conscience.

As a successful entrepreneur, Huang applies his business skills to his philanthropy. Huang is meticulous about ensuring his donations are well managed, sending people out to ensure the monies are being used appropriately – or going himself. Recently, after donating just over US$1 million to an education project in rural Yunnan, Huang traveled there to review the progress the school had made and to ensure that all the monies had made it to the right place.

Ma Zhongqi, secretary general of the Shanghai Charity Foundation, expresses his respect for Huang's responsible attitude to giving, saying that “Society really needs entrepreneurs like Huang”. But, Ma suggests that Huang should consider two options that would help sustainable giving: “Huang should either establish a private foundation managed by experts or partner with a public foundation, which is held in high regard.”