Chinese property tycoon Zhang Xin is making a play for the historic General Motors building in New York, just as she’s coming under scrutiny at home and makes at least one brazen call for China to embrace democracy.
Zhang and her family are reportedly in discussions to buy a 40% stake in the marble-faced 705-foot (215 meters) trophy building, home to FAO Schwartz and a flagship Apple Store. The tycoon, CEO of the largest commercial property developer in Beijing and Shanghai, joins a long line of Chinese investors queuing up for US real estate—a trend reminiscent of the Japanese investors in the late 1980s and 1990s who bought iconic American commercial properties like Rockefeller Center and the Pebble Beach golf resort.
The price under discussion, according to the Wall Street Journal, would value the GM building at $3.4 billion—by far the most expensive in the United States. Who is Zhang, and why is her family making such a major play for the GM building?
Zhang posts daily, mostly from her iPad on China’s Twitter-like microblogging platform Sina Weibo, where she has over 5 million followers. Her posts range from photos of Beijing’s pollution to musings on global news events, including the Newtown shooting (“Honestly, can’t the politicians set aside politics and ban guns? There are always mental patients in the crowd and we can’t give guns to them.”), Mitt Romney (After he promised to bring jobs back to the US from China: “Don’t talk nonsense. Would Americans really do the work Chinese people do?”), and Oscar Pistorius (“Terrible. A Valentines Day tragedy.”)
Zhang is part of a class of Chinese business people who moved back home after working in the West and are known as hai gui, ”sea turtles,” a pun on a similar-sounding phrase for “returning from the sea.” After moving to Hong Kong as a teenager, where she worked in a garment factory, Zhang studied at the University of Sussex and Cambridge University and then found work with Goldman Sachs. When she returned to China and married her husband, Pan Shiyi (He reportedly proposed to her within four days of their meeting; she took three days before saying yes) she was known among their coworkers as “Pan’s foreign wife.”
In 1995, the two set up a real estate company; within 10 years SOHO China became the country’s largest property developer. They became some of China’s wealthiest and most flamboyant property couples, entertaining the likes of Rupert Murdoch and his wife during the Olympics in Beijing in 2008. Pan is the company’s chairman and Zhang is the chief executive.
Zhang has become increasingly outspoken in politics. As recently as 2011, she claimed to be apolitical, but she regularly posts about Chinese reforms and the need to clean up pollution. Last year she said the reason why China has no one like Steve Jobs is because the political system squashes creativity. In an interview last week with 60 Minutes, she said: “If you ask one thing, everyone craves for is what? It’s not food. It’s not homes. Everyone craves 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.” Asked if she believed democracy would come to China in 20 years, Zhang said, “sooner.”
SOHO China’s 2012 profits more than doubled, to 3.34 billion yuan ($537 million) from 1.42 billion yuan. The company is transitioning from a “build-and-sell” to “buy-and-hold” strategy, with rental income set to become its main source of profits within three years. Its also known for its dramatically modern retail and office properties, designed by the likes of Kengo Kuma and Zaha Hadid.
In a country and region with few women in executive roles, Zhang is something of an anomaly, but she doesn’t think it needs to stay that way.
Ahead of International Women’s Day, she posted on Weibo: ”Looking at the status of women in China, we still see a bias towards boys in the countryside, most abandoned children are girls; We have few women ministers. But women dominate in school and the Olympics, and there are more and more self-made women entrepreneurs.” She told the Financial Times (paywall) in a recent interview: “China has, as a business community, more women like me than elsewhere … There are more Chinese women in senior positions in business than outside China. When I go to the World Economic Forum in Davos, like this year, there were hardly any women.”
Still, a less feminist side of Zhang occasionally comes out. Posting an article on Weibo on whether South Korean media were too critical of the country’s new female president’s looks, she said, “A female president should be pretty.” After posting a photo of her husband taking a question at a talk about marriage, she wrote “happy wife, happy life!” a reference to the old maxim that men should keep their wives happy to keep them off their backs.
Zhang and her husband own an apartment near Central Park in Manhattan. In Beijing, they live in a 32nd floor penthouse in the Jianwai Soho tower in central Beijing.
A year ago, Zhang’s husband Pan Shiyi downplayed the appeal of New York real estate, noting that its rental yields trailed those of the best Chinese real estate. So what changed? Perhaps a recent string of negative press reports that tied SOHO China to money laundering, claiming that the company helped a local banker, the “older house sister,” illegally acquire 41 houses, many of them in SOHO China’s complexes. In China, such attention can be a sign that someone in the political elite has an axe to grind, allowing media to go after an individual or company.
A more vanilla reason may be the couple’s desire to find another way park their money outside of China. Wealthy Chinese have already become some of the top buyers for wildly expensive trophy apartments in US cities, allowing their children can attend schools in the area or as a way to invest outside of China’s overheated property market. Diversifying the family business outside of China is a hedge against falling into disfavor with its government; a large proportion of China’s wealthiest citizens are making similar moves.
Zhang adopted the religion of Baha’i in 2005, which is not one of China’s officially sanctioned religions. She says her faith “transformed” her, so she’s no longer driven to pursue profit at any cost. Her husband is a Taoist. She regularly posts Baha’i scriptures on her blog,even using it as a defense against accusations that the company was involved in the older house sister scandal. She wrote, “In my faith there’s a belief that honesty is human kind’s moral foundation, which I hold to every day.” She added, “My husband and I live in the ups and downs of public opinion… which is sad, but we believe that our society is progressing day by day.”