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It Helps to `Be Rich Silently' in Polarized China

The top billionaire lives frugally in a society where many view the wealthy with suspicion.

The World

April 29, 2006|Don Lee, Times Staff Writer

Huang makes no apologies for his success but concedes that Gome's development has attracted a lot of attention. Many analysts say Huang clawed to the top without special help from government officials.

When Gome opened its largest Beijing outlet in July, more than 100,000 people jammed into the store as big as a Wal-Mart Supercenter, snapping up 21-inch color television sets for $79 and microwave ovens for $36.


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It was so packed "you couldn't move inside," said store manager Wang Liqun. Despite her closet-size office, the 37-year-old says her pay has risen sevenfold from the $170 a month she was earning 10 years ago as a Gome salesclerk.

Huang's rivals, though, claim that he uses his market power and influence with manufacturers to squeeze out the competition. Some call him a "price butcher." Manufacturers complain that Huang can be overbearing, although they say he pays his bills.

Analysts and others familiar with the company say Huang micromanages and often shakes up his senior staff, creating an atmosphere of fear. Gome executives would not comment.

On the backs of Wang's business cards and those of all Gome employees are Huang's three cardinal rules: Do not accept gifts from customers. Do not take kickbacks. Do not use your position for personal gain.

Printed at the very bottom is a hotline number for people to report employee misdeeds.

Huang said the rules reflected his religious upbringing.

"The church discipline is quite strict," said Huang, who has donated money to build a church, kindergarten and senior home in his village. "It's been very useful in helping me to deal with people."

Lu Renbo, an analyst affiliated with the State Council, the highest agency of China's administrative government, said Huang worried his employees would "form their own relationship circles, or as the Chinese say, occupy their own hills."

Lu attributes Huang's success partly to good timing. A few years ago, Huang found that he could delay payments to manufacturers, allowing him to take the massive cash his stores generated and invest in real estate. Analysts say Huang, who also controls Eagle Investments, has reaped hefty profit from the booming real estate market by buying and developing office buildings and homes.

By the Beijing Olympics in 2008, Huang hopes to more than double the number of appliance stores to 1,000 and boost annual sales to $15 billion from about $6 billion in 2005. But he faces regulatory constraints and political uncertainty.

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