Where exactly is the money for the new, enormous business deal between Yorkshire’s former steel center Sheffield and Chinese tycoon Wang Chunming coming from? It is hard to say.
As China takes increasingly strict measures to keep its own citizens from moving their capital offshore, as well as crack down on wealthy officials, Wang’s high-profile but light on details deal with Sheffield is something of an anomaly.
The Sichuan Guodong Construction Group, a Chinese private company headed by Wang, 63, a businessman that has built a real-estate empire in his native Sichuan, will soon start pouring £200 million pounds into five real estate projects there, Sheffield’s City Council said in late July. Wang is also politically connected—he is the head of the Chinese Communist Party Committee of the Angang Steel Company Limited, and pictures of President Xi Jinping’s visit to his company’s headquarters in Chengdu adorn his office walls.
The total deal signed with Sheffield is a described as a “60-year partnership agreement,” worth “over 1 billion pounds” in total, Sheffield said. Wang is the director of the Shanghai-listed Sichuan Guodong Construction Group, Ltd (link in Chinese), active in a wide-ranging array of businesses, including potato chips, construction materials, soda water, real estate and hotels.
But he told the BBC last month that the funds for the investment in Sheffield will not be coming from the Shanghai-listed company (which appears to be in the red, and paid no taxes in 2014 due to debts of $110 million) but from the parent company, which is privately owned by Wang.
“Our publicly listed company is not involved in this any more,” Wang said. “The investment is coming from our parent investment company, and those finances are not public. … If we had used our publicly invested company to invest, the red tape would have been too complicated and time consuming. Not every share holder understands every decision we have made, and the board might not have voted for all of our decisions.”
He mentioned equities and bank loans, but again, the parts of the deal announced so far are short on details.
The whole idea, which the Sheffield City Council says took 18 months, may have come about thanks to Wang’s friendship with Kevin McCabe, co-owner of the Sheffield United football club. McCabe is also the founder and chairman of the Scarborough Group, a major international real estate developer, and played a formative role in former UK chancellor George Osborne’s visit to China last year.
Sheffield, whose citizens voted in favor of leaving the European Union on June 23, is former industrial city where stainless steel was invented. The city is also home to a university which hosts one of the largest Chinese students populations in the UK, with 4,000 enrolled students, and a very deep relationship with China. The university hosts a Confucius Institute, the Vice-Chancellor has visted China to deepen “a golden age of collaboration”, and it has a GREAT Ambassadors Scheme meant to facilitate jobs for those who speak Mandarin.
Wang himself first got interested in Sheffield after his daughter, Emily Wang, went to study there. At university she met her future husband, Dylan Liu. The Sheffield deal will keep him busy—he is now the Director for UK Investment and Development for Guodong Group.