Escaping Mao Zedong’s China & Weijian Shan’s Private Equity Empire

Escaping Mao Zedong’s China & Weijian Shan’s Private Equity Empire


BRIAN PRICE: Shan, thank you so much for joining
us on Real Vision. WEIJIAN SHAN: Pleasure. BRIAN PRICE: So in studying your life, growing
up in the shadow of Mao’s China, to doing hard labor in the Gobi Desert, to making your
way to the US, earning your masters, your MBA, your PhD, to becoming a managing director
at JPMorgan, to now being CEO of PAG, where you oversee $30 billion, you’ve led an incredible
life. But I want to hear it from you. Talk to me a little bit about how you came
up and how you became the success that you are today. WEIJIAN SHAN: I’m not quite sure if I would
call where I am today as a success. I’m still trying very hard. But I didn’t choose my life. It was chosen for me, especially growing up
in China during that period of time. You know, I wrote this book. It’s a recount of history– the most horrible
part of Chinese history that I lived through. And my story is rather unique, and also very
representative of my generation. And at that time, there was not much choice. You just did whatever you were told to do,
or you were assigned to do. And I was sent to the Gobi Desert. It was not until the end of the so-called
cultural revolution in 1976 when everything came to an end. China, in 1979, opened up, established a relationship–
diplomatic relationship– with America under Jimmy Carter. And the next year, I had an opportunity to
come to America to study. That’s how it happened. After that, I had some choices– choices of
which school to go, choices of what to study. And it was in this country I find choices. BRIAN PRICE: You oversee $30 billion. You’re one of the world’s most respected investors
out of Asia. WEIJIAN SHAN: That’s dwarfed by American private
equity firms like Blackstone. BRIAN PRICE: Fair enough. And they are one of your backers. WEIJIAN SHAN: Yes. BRIAN PRICE: Along with several US pension
funds. WEIJIAN SHAN: We’re grateful to them for their
trust. BRIAN PRICE: So I want to take a step back
and talk about how you got to where you are, success or not. Because I want folks to understand when I
say the Gobi Desert. And your book, Out of the Gobi, discusses,
in large part, leaving Mao’s China to have to do hard labor in the desert. Talk to me about that hard labor. What was that? What was that like? How did that shape you to become the man you
are today? WEIJIAN SHAN: School came to the end for me
when I was 12, when I finished elementary school. The country was in chaos. Schools were shut for about 10 years. And when I was 15, I, together with my friends,
classmates, were sent to the Gobi Desert. We had to do very hard labor. We were told to grow crops in the desert. Now, you can imagine how hard that is. And not surprisingly, we were not too successful,
talking about success. We had to build huts– shelters for ourselves–
because there was no place to live. I made bricks. That was a backbreaking job. We had to work 16, sometimes 18 hours a day. Backbreaking. And some people became sick and permanently
disabled. It was very cold in wintertime– something
like minus 10 in wintertime. The bad part is that that’s the temperature
inside and out. There’s no heating. There is no fuel. The only fuel available was dried cow dung–
cow manure– which we collected and burned for 10, 15 minutes before we got into bed–
if you can call it a bed– every night. That was the only source of heating, and,
otherwise, minus 10 inside and out. If there’s a blizzard, to go out to the outhouse
was life threatening. It was a big risk that you would have to take. And don’t ask me how we coped with that. So when I first came to this country, I hear
people talk about this expression. If they don’t agree with each other, they
say, bullshit. And I would think to myself, that thing used
to be very dear to me. And that was the only source of heating that
we had. So to this day, I like to sit by a fireplace,
because we experienced so much cold. And that life didn’t come to an end until
about six years later. And of course, the worst thing during that
period of time was starvation. There was never enough food to eat. If you looked at me, I’d probably look emaciated
to you. And that was the starvation from that time. BRIAN PRICE: And then you were able to teach
yourself math by candlelight, if I’m not mistaken. WEIJIAN SHAN: I did, in an unsystematic way. I just read whatever books I could lay my
hands on. And there was no school, as I mentioned, for
10 years. So very few people bothered to read, to study. And in fact, all the books were banned. Reading was frowned upon. I got into trouble by doing it. But at the end of it, I was somewhat educated,
because I didn’t give up. And eventually, I was able to obtain a formal
education, including a PhD the from UC Berkeley. So when I look at the kids today, especially
in this country, I think they are so privileged. They have the education. Unfortunately, many people take that for granted. We couldn’t. It was a privilege that we didn’t have. But studying, reading, got me where I am today. Had I given up, like most of my peers at the
time, I would not have had a job at this particular point, as most of my friends have long lost
their jobs. When China opened up, they didn’t have any
skills to obtain any decent jobs. Because for 10 years, there was no education. So education, to me, is the most important
thing. It gets you to where you need to be, or where
you want to be, especially in this country. BRIAN PRICE: So teaching yourself math, teaching
yourself English, to then getting your education in the US and eventually becoming a professor
at Wharton. In your wildest dreams, did you ever think
that such things could be possible? And do you think, outside of America, that
type of dream is possible? Or is this something that, only in America,
could happen? WEIJIAN SHAN: At that time, I didn’t have
any dreams. Because we were told to take root in the Gobi
Desert. So I was prepared to spend the rest of my
life in that place. But I also told myself, I have to prepare
myself. My philosophy in life is to be always prepared. I believe that, sometimes, you just don’t
have opportunity to get anywhere. But when the opportunity comes, if you’re
not prepared to grasp it, it’s your fault. If opportunity never comes your way, then
it’s not your fault. So America is where, as long as you want to
get to some place, I think the opportunities are more or less equal. It’s not completely equal, to be honest. But it’s more or less equal. I came to this country without money, without
money to pay for tuition. A professor donated money to cover my tuition. And eventually, many kind people helped me
to get a formal education. So I’m very fortunate to benefit from the
generosity of ordinary people in this country and from America itself. Now, China has opened up. So there’s more equal opportunities for ordinary
people to get to some place. But that was not the case 40 years ago, when
China was still very much closed under a different system. BRIAN PRICE: You studied under Janet Yellen
almost four decades ago. WEIJIAN SHAN: I did, 36 years ago, when I
first met with her. BRIAN PRICE: And she, in fact, wrote the foreword
to your new book. WEIJIAN SHAN: She was very kind to have done
so. BRIAN PRICE: What did you learn from her,
both as a student, and then through your career? WEIJIAN SHAN: Well, she was a very meticulous
scholar. And she was very careful. And she guided me through my PhD program and
provided a lot of counsel. And I wouldn’t have done as well as I did
without her guidance. And one thing I learned from her is to be
very considerate when it comes to decision making. BRIAN PRICE: As far as what you see today
with the Fed, what would your advice be to them, if Jay Powell was to call you, in terms
of their approach for 2019? What’s your outside observation? WEIJIAN SHAN: I am a very strong believer
that the Fed should be independent, should be kept independent. And if you look at the Central Bank in China,
it is not so independent. It is very much under the central government’s
control, which I don’t think is good, especially for a market economy. So I wouldn’t second guess what Jay Powell
will do. But obviously, the market is quite concerned
about the interest rate and whether or not it’s going to go up too quickly. And I think, looking at what the Fed has done
in the past year, it has done a pretty good job. But I think, instead of blaming Jay Powell
for rising interest rates in America, which probably is necessary over a period of time,
given all the QEs in the past almost decade., I think America could thank China for a low
interest rate. BRIAN PRICE: Thank China for a low interest
rate? WEIJIAN SHAN: Yes. BRIAN PRICE: Drill down on that for me a little
bit. WEIJIAN SHAN: Well, see, the federal government
debt today is about $20 trillion. That’s about one times GDP. Who buys that debt? Who is the biggest holder of US government
bonds? It’s China. Is $1.1 trillion. If China doesn’t buy US debt, then the interest
rate would be a lot higher in this country. That’s what I mean. BRIAN PRICE: With that in mind, I’ve spoken
to some investors in the past– names like Carson Block– who are highly skeptical of
the business practices of China, both in public and private markets. What would your message be to folks like those
who doubt the credibility of China? What would you say to them? WEIJIAN SHAN: There is a good reason to be
skeptical. The Chinese economy is a very complicated
one. I think of the Chinese economy as having two
parts– one bad economy and one good economy. If you look at the problems that China has,
it’s a massive amount of overcapacity. And so much, in fact, China operates with
about 78%– at this particular point, probably 76%– capacity utilization rate. In the United States, in 2008, in the middle
of a financial crisis, when the employment rate was more than 10%, the capacity utilization
rate was 78%– higher than China today. That’s how much overcapacity there is in China. And that’s why Chinese goods are so cheap. Because there is overcompetition. And that’s the bad economy. And manufacturing is very much part of it. But there is also a good economy. And that is the consumption part. Those are the businesses which cater to private
consumption, which has been rising at a pace faster than economic growth rate. Even at a slowed down rate, China grew 6.5%
a year. And private consumption has grown at a higher
rate than that. So that’s where you need to focus your investment
attention to, not the bad economy. [INAUDIBLE], by the way, is part of the bad
economy. BRIAN PRICE: You’ve invested in everything
from gas production to a dating service. WEIJIAN SHAN: You have done your homework. BRIAN PRICE: Thank you. WEIJIAN SHAN: But not gas production, industrial
gas. BRIAN PRICE: Industrial gas. WEIJIAN SHAN: Which means oxygen, nitrogen,
carbon. Not natural gas. BRIAN PRICE: I see. Important to make that distinction. WEIJIAN SHAN: So if we make semiconductors,
we need specialty gas. BRIAN PRICE: Interesting. WEIJIAN SHAN: If you make steel, for example,
you will need oxygen. And there are nitrogen cars. So we need specialty gas. BRIAN PRICE: So it’s a wide spectrum of things
that you’ve invested in in China. Where’s the opportunity right now? Where are you putting part of that $6 billion
fund that you just got up and running? WEIJIAN SHAN: I just mentioned the good economy. And that is businesses which cater to private
consumption. I would say, by and large, that’s where you
should put your money into. But China is where there’s a lot of capital. There’s too much money. China has grown in the past 20 years by investing
a lot– about 50% of GDP. No other country at any time in history at
any stage in its industrialization process has invested even close to 35% of GDP. And China has been doing so at 50% of GDP. So there’s a lot of capital, because China
also uniquely has the highest savings rate in the world– about 50% GDP. Savings rate roughly equals to investment
rate. And given so much capital, there’s always
too much competition. So if you make money, everybody else would
want to do the same thing. And the only way for you to sustain profitability
to protect your business is to invest in businesses which have some meaningful entry barriers,
such as brand name technology and market share. If it’s just a very hot sector, then it may
look hot today, but you may not make money tomorrow. Because all the money will flood in and it
will bring that profitability down. BRIAN PRICE: You recently wrote an op-ed in
“The New York Times” discussing Apple’s recent earnings. WEIJIAN SHAN: Yes. It was printed, in fact, only yesterday. BRIAN PRICE: And one of the things you point
to is perhaps a misguided view of China’s relationship with US companies, not just in
tech, but with autos, box office. And that stems from film. Talk to me a little bit about what you believe
to be misconceptions when it comes to China’s relationship with US businesses, and why,
perhaps, that relationship needs to be reset, in a sense. WEIJIAN SHAN: Yeah. I think China, for the past two decades, has
been perceived as the factory of the world, justifiably. For a long time, that was what China was doing–
making products, selling to the world market. But that has changed dramatically, especially
in the past 10 years. In 2006, exports as a percentage of GDP peaked
in China to about 36%. And today, it’s only about 19%. What has happened is that China is shifting
away from this investment-driven growth model to more private consumption driven growth. And today, consumption accounts for about
80% of China’s economic growth. Last year, it was 6.5%. 80% of that comes from private consumption. So China now is very much a big market for
everyone– for Apple, which sells 20% of its sales– about $50 billion– in China. For Qualcomm, 65% of its sales. Skyworks, 80% of its sales is in China. Corning, 20%. Starbucks, 20% in China. So it has become almost like a market of the
world, as opposed to being factory of the world. That’s a fundamental shift. China’s consumption today– private consumption–
is about $5 trillion. So every company will have to look at that
market not as a source of manufacturing, but more as a market where you can sell your products
to. BRIAN PRICE: With the progress that’s been
made in China, what’s the future hold, in your opinion, for the relationship between
the US and China? What do you think is to come between these
two economies, five years down the road, 10 years down the road? What are you looking at? WEIJIAN SHAN: I think that since Nixon visited
China, especially since the formal diplomatic relationship in 1979– this year– this month,
in fact– is the 40th anniversary of that relationship– both countries have benefited
greatly from each other politically, geopolitically, and economically. There are frictions, as always happens in
between two friends, between two people, between two countries. I think what is important is what has held
the relationship together. And that is the common ground. What is common between the two countries? What is the common interest? What is the mutual benefit? I think that the two countries, in spite of
their differences, will find a common ground to keep a strong relationship going forward. And there are too many common grounds to cover–
trade, economic relationship, China market, US market. You name it. BRIAN PRICE: What about competition? Because one of the things you note in your
analysis of the situation right now, specifically when it comes to Apple, is that market share
is shrinking for Apple. There are so many providers and competitors
that are based in China, grown in China right now. Amid that competition, how can the two worlds
work together? Or is that even possible? WEIJIAN SHAN: Well, we’re talking about market
economy. So there’s always competition. Competition is good. Sometimes, a company comes on top. Sometimes, another company comes on top. If you look at Fortune 500 today, comparing
it with 20 years ago, I would guess probably 2/3 of the companies on the list 20 years
ago are no longer on the list today. So competition is normal. But if you look at Apple, for example, back
in 2015, Samsung was the indisputable market leader in smartphones in China, with 27% market
share. And Apple, the next year, in the first quarter
of 2016, became the market leader, with about 14.5% market share. And then, in the second quarter of last year,
Apple’s market share came down to 7%. In the third quarter, it went up to 9%. So the competition is very intense. And I think the name of the game is innovation,
technology, and a lot of hard work. Because it’s a very big market. And if a model is successful, then China is
a very big market. I can give you a example of it if you’d like
to hear it. BRIAN PRICE: Sure. WEIJIAN SHAN: We just brought public a company
by the name of Tencent Music Entertainment. It used to be called CMC, China Music Corporation. We invested in that company about, by now,
five years ago, when it didn’t have anything, other than license to copyrights for music,
for scores, for record label, for lyrics– currently, about 70% of China’s digital music
market. So we invested about $60 million, became a
majority shareholder of that company. And the company got into a business very similar
to Spotify, but just for China, because the copyrights just covered China market. We brought that company public last month
in December on the New York Stock Exchange. You know where the market cap is today? $20 billion. If the same business model is used in a country
like Singapore, with about 6, 7 million people, you wouldn’t get anywhere. But in China, we have 800 million unique monthly
active users. Where do you get that kind of customer base? 800 million. The country is just very big, like the United
States. If the business model is successful, you can
scale up, almost infinitely. And that’s where you get your scale. That’s where you get your value. And Tencent Music Corporation is a very good
example of it. And you mentioned, earlier, I think before
we started, we’ve also invested in a company called zhenai.com, which is a dating, matchmaking
business. And that business is also doing very well,
making about $50 million in EBITDA last year, and probably more than that. I was using somewhat dated data. Because last year’s data is yet to be completed,
finalized. It’s a growing business, a very strong business. Because there are just too many people looking
for mates. And with 1.4 billion in population, the market
is just huge. BRIAN PRICE: You don’t fear the repercussions
of a trade war. You don’t seem to fear the notion that China
is among some of the worst performing markets recently. Your bullishness has not been affected. For folks that maybe are bearish on China,
what would you tell them? How would you reassure them that this is a
good investment for the long-term? WEIJIAN SHAN: In fact, I am probably the most
risk-averse investor in the world. I’m very conservative. And my belief is, if you have now figured
out the risk, then you shouldn’t even think about the upside. And there is a risk with a trade war. I think every economist will say that trade
is good. More trade is better than less trade. And trade war hurts everybody. But eventually, I think the countries will
figure out a solution. And eventually, there will be an outcome,
which I think will be even better than before the trade war, when both countries probably
will open up more. Especially China will open up more to, let’s
say, American imports, which is not only good for America, but will also be good for China. Because China has developed not by being closed,
as it was 40 years ago, when I was in the Gobi– that’s what I described in my book,
Out of the Gobi– but by opening up. So in a way, Chinese coming out of the Gobi
to become a more open economy. But it’s not open enough. In comparison with America, it has a long
way to go. And if China can open up more for investments,
for trade, that’s good for China. That’s good for America. That’s good for the rest of the world. BRIAN PRICE: Up until this point– and if
you disagree with me or you disagree with the way I characterize this, obviously, feel
free to correct me– but has China, in any way, taken advantage of the US, whether through
trade, whether through intellectual property, whether through something else altogether? Is that part of what’s at the core of this
issue that we’re dealing with right now? WEIJIAN SHAN: There is no question that China
has benefited tremendously from the open door policy from the entry into WTO from being
able to have trade with the United States to be able to sell to American market. So that was a milestone. I remember, when the WTO deal was first signed,
there was a lot of opposition within China against it. Many people thought that China was opening
up too quickly and too much. But it turned out to be beneficial for China. And China, under WTO, was treated as a developing
country. And therefore, there were certain preferential
policies accorded to developing countries. But China now has become the second largest
economy in the world. And therefore, the US has a point. They need to open their market more. And I think China should. BRIAN PRICE: You think China should. WEIJIAN SHAN: Yes. BRIAN PRICE: Interesting. Broadening out, because you obviously focus
on China in your investing, but you look at all of Asia. Where else is there opportunity within Asia,
outside of China, right now, in your opinion? WEIJIAN SHAN: Many Asian countries now have
so much trade and business with China that, almost everywhere you turn, investment opportunities
will have something to do with China. For example, Japan is a major economy– third
largest in the world. Now, probably about one third of China’s size. 20 years ago, by the way, Japan was four times
the size of the Chinese economy. Japan has been stagnant for probably about
two decades by now. But Japan has very good products, very good
technologies. And their products are household names in
this country. Faced with a stagnant market, and the growth
is from China. So the good products, good technology from
Japan, tapping into the growth market in China is a very good play. And that’s what we do. We invest in Japanese companies, help them
sell their products in China, grow their business in China. And therefore, if you look at the entire Asia,
whether it’s Korea, Japan, Indonesia, Thailand, Malaysia, there are growth opportunities domestically. But they’re also tied to the Chinese economy
to some extent. BRIAN PRICE: Japan has also been a hard hit
market. Is it fair to say that, as bullish as you
are on China, you’re equally as bullish on Japan, given how they intersect, in terms
of their relationship with each other? WEIJIAN SHAN: Not so much. Not so much. PAG, as a private equity investor, is very
interested in Japan. Because the Japanese businesses are world
class businesses. They have good products and good technology. And Japan is also a very mature and very strong
big market. But there’s no growth over there. And the population is aging– aging precipitously. And that’s the problem for Japan. And the new policies– when I say new– when
Shinzo Abe came to office and started structural reforms, really helping the Japanese economy,
we have seen some modest growth coming out of Japan. But I think Japan needs to do more. And I think economic integration with China
would help it. BRIAN PRICE: There’s been a pretty well accepted
notion for quite some time that the US president is the most powerful man in the world, as
the leader of the free world. I spoke with Harald Malmgren recently who
served as a senior advisor to four US presidents. And his notion is that that’s no longer the
case, that, given the current status of global economies, President Xi is, in fact, the most
powerful man in the world. How would you approach a similar question,
in that, who is the leader right now, in terms of being the most powerful? WEIJIAN SHAN: I would say that China’s influence
has increased. Especially economically, influence has increased. But when it comes to being the leader of the
world, America remains the leader of the world. Presidential power is a different thing. You can’t even get a wall built here in the
United States. But on the world stage, of course , America
remains the leader in many different ways, especially when it comes to the economy. BRIAN PRICE: Bringing it back to the US, we’re
obviously in the midst of a government shutdown that has 800,000 workers without a paycheck. We were talking before this interview about
what your solution would be if one of the major Wall Street firms called you– if Wells
Fargo called you, if JPMorgan called you, if Bank of America called you and said, what
should we do, or what could we do to help with this issue? What would you tell them? WEIJIAN SHAN: You know, when I first came
to this country, the first business class I took, taught by a finance professor by the
name of Bill Murray– it’s a different Bill Murray than the actor. He took out a dollar bill. BRIAN PRICE: That’d be an interesting business
class, though. WEIJIAN SHAN: Right. Exactly. BRIAN PRICE: A little Caddyshack in there,
yeah. WEIJIAN SHAN: Right. And he took out the dollar bill. And he says, you know it says, “In God, we
trust.” In America, in money we trust. And that was the first lesson I learned. Now, if you think about it, the US dollar,
why it is worth more than the paper it is printed on, it is the full faith of the US
government. It’s the credit of the US government. So federal workers today are not paid. And they’re owed by the US government– the
full credit of the US government. If I were a bank here, if I were JP Morgan,
who, by the way, very nicely sponsored a dinner to introduce my book– if I were Wells Fargo,
if I were Bank of America, I would be very happy to lend to federal workers for owed
pay by the federal government. Because ultimately, that’s the credit of the
US government. The full faith and credit of the US government–
that’s promptly the best credit in the world. And there’s no risk. And I will lend it to them at a very low interest
rate. And you don’t have to worry about how long
the government is shut down– for another three months or six months. Eventually, the US government will come through
with the payment. So I wouldn’t worry about that credit at all. And I think that’s a good business to be in. If I were a bank here, I would offer that
business right away. BRIAN PRICE: Because we are hearing the stories
of folks that are living paycheck to paycheck already that are now going to be behind on
rent, that are unable to get the medical services they were relying on. They’re at risk. WEIJIAN SHAN: All you have to do– banks will
have to offer this– is for the federal worker to assign the backed up pay to the bank, against
which the banks will lend money to the borrower. And it’s very good for the worker, for the
borrower. It’s very good for the bank. It’s very good business. BRIAN PRICE: Well, we’ll see what occurs in
the next week or so, obviously, when this airs. But at the time of this conversation, we still
have 800,000 folks who don’t have the money that they need to get by. WEIJIAN SHAN: The government has never said
that the money will not be paid. Eventually, it will be paid. And this country is very entrepreneurial. And I don’t understand why nobody will step
up to say, I will lend against the US government’s credit. BRIAN PRICE: Have you had any conversations
with executives at banks? WEIJIAN SHAN: No, but I led a number of transactions
to buy banks back in 2000, when I was working at TPG. At that time, our franchise in Asia called
Newbridge Capital. We bought control of Korea First Bank, which
was the largest banking career. Failed in the financial crisis of ’97-’98
in Asia. Nationalized by the government. We bought it from the government. And then, five years later, we bought control
of Nationwide Bank in China. We made very good money out of them. And we bought some other banks as well. So we know banking very well. And this is the kind of credit we would be
very happy to lend to if I owned a bank in this country. BRIAN PRICE: With that in mind, we’ve covered
a lot of ground so far. We’ve covered the government shutdown, trade
war, markets in Japan and China. Overall, in the global economy, where do you
see the biggest red flags? Where is the biggest concern for you right
now, in terms of what could disrupt the current market? WEIJIAN SHAN: In the market economy, as we
all know– and I don’t have to say this– we go through cycles. And China probably is the only country which
has not gone into a recession in the past 40 years, and for peculiar reasons, only peculiar
to China. In every other country in the market economy,
like the United States, we go through cycles. And we have been on an up cycle for 10 years,
since 2008. How much further can we go? My view is that the market and the economy
probably have peaked. And therefore, there’s a risk. You have seen that General Motors is shutting
down seven factories. I think five of them are in the United States. So they see some hard time is coming. And I’ll be prepared. BRIAN PRICE: So you think, as far as the auto
industry is concerned– we’ve heard rumblings about issues with GM, obviously. But you think the worst could be yet to come. WEIJIAN SHAN: I think you just have to think
about the fact that the next phase of the cycle is going to be down cycle. And therefore, I think it’s worth it to be
a little bit more defensive when it comes to the investment. That’s how we think about things. BRIAN PRICE: How would you approach taking
a defensive stance? WEIJIAN SHAN: Well, I’m not a stock market
investor. I’m a private equity investor. And in fact, the down cycle is good for us. Because valuation comes down and things get
cheaper. For the stock market, you can hedge. You can buy defensive stocks. You can buy stocks which are not cyclical–
food, beverage. Health care would be another one. And you just have to be prepared. Because the up market doesn’t go on forever. BRIAN PRICE: What are your ultimate goals
for PAG, a year from now, five years from now? We discussed overseeing 30 billion. Do your goals pertain to, in terms of PE,
what you’re going to be overseeing in time to come, broadening out, looking beyond China
and Asia? What are you looking at right now? WEIJIAN SHAN: We at PAG never think in those
terms. We focus only on one thing. BRIAN PRICE: Tell me. WEIJIAN SHAN: And that is to make money for
our LPs– limited partners. The largest component of our LPs are from
the United States– state pension funds, corporate pension funds, from Canada, also large pension
funds. And if you make money for your LPs, then the
capital you manage, the money they gave you to manage will increase by itself. That’s the after effect. If you think in terms of capital to grow your
capital, then you wouldn’t get anywhere. All you have to do is to focus on making good
money, good returns for your LPs, for your investors. If you are able to do it, everything else
follows. BRIAN PRICE: Well, we’ve covered the whole
world. China– WEIJIAN SHAN: We seem to have. BRIAN PRICE: –Japan, the Gobi Desert, the
US, the government shutdown, the Fed, Janet Yellen, Trump, President Xi. What else is there left to say? WEIJIAN SHAN: I think we have covered a lot
of ground. BRIAN PRICE: Well, Shan, I just want to thank
you for joining us on Real Vision. It’s been a fascinating journey. And I hope you’ll join us again in the near
future. WEIJIAN SHAN: Thank you very much. The pleasure’s all mine. BRIAN PRICE: Well, where else could we have
traveled from Mao’s China to the Gobi Desert to the US and then back to China amid a trade
war? And amid the challenges presented, where else
could we find the optimism that Shan has when it comes to global markets in the future? Whether you agree with his views or not, the
journey was fascinating. Thank you so much for watching. For Real Vision, I’m Brian Price.

56 thoughts on “Escaping Mao Zedong’s China & Weijian Shan’s Private Equity Empire

  1. We are covering China all week on our premium service, and we will be posting some of the best China videos from our archives here to give a taste of the great content you're missing on realvision.com. Get RV Premium for the incredible price of $1 for 3 Months here: https://rvtv.io/YTPin

  2. One of the CCP's tongue. Maybe it's time for Wall Street to fix itself up before it becomes CCP's laundry room, what? it is already?

  3. Maybe listen to Kyle bass latest interview
    China wants the world. Citizens of the US have not benefited. Our standard of living has dropped

  4. His talk is the talking point of CCP. Nothing new. The real GDP of CCP might be 2% or less. Not mention the country can accept money from outsiders but not release the money when it needs out.

  5. Who should interview him is Kyle Bass . If you seen him you would know why. He would asked him all hard questions not as this guy. His criticism is not there and we can imagine why because he has vested interest in China and so anything he says bad would cost him and he knows better than that. Not a real inside information from the man you would think would tell us more than what we already know. Sometimes smart is not always the representation of truth especially when put under the radar as this interview is.

  6. China doesn't have the demographics for a massive consumption led econony. Maybe in 20-30 years the people will exist but a consumption led china in it's current state has far less potential than the manufacturing china of yesterday.

  7. George Galloway in one of his latest video stated that the US wanted to use Al Qaeda to attack China, especially in Xinjiang. But instead, Al Qaeda turned on the US. And 9/11 happened. The US reaped what it sowed. The US plays a dangerous game and makes insidious plans using Islamic Terrorism to undermine other countries making it a state sponsor of terrorism, so the Almighty turns His wrath on this country with false democracy and false Gods. Like 9/11, we wonder what the Almighty will have in store for the US abomination? It wouldn't be pretty. LOL

  8. There is great leaps missing in this guy's early story… such as his personal economy during his break out from poverty in the gobi

  9. Whatever communists did in China it worked. They are No.2 (more like No.1) in the world. If the USA wants to talk about negativity … where are the Indians? Who built the White House?

  10. When the truth becomes the enemy of system, Americans and citizens of whatever country you are from must either leave ,fight ,or die fighting!

  11. Worked for Yellen, huh? A guy with a background like his might be open to doing anything to get ahead. So Yellen and her husband now collect about six government pensions. I'm sure he learned a lot about market manipulation and other things under Yellen. The whole intro seems to try to legitimatize the guy.

  12. Mao's Cultural Revolution caused 50 to 60 million deaths but I believe it is even more. The amazing thing is that Ted Turner openly admitted that he thought Mao was "F…ing" brilliant ! Why ,because he believes ( if he's still alive), in UN Agenda 21, of reducing the world population down to 95% of what it is now!!! Weijian Shan was not sent to grow crops people! He was sent to the Gobi dessert to die! He failed Mao's ,Ted Turner and the UN Agenda 21 mission by surviving and defying all the rules that scared his fellow laborer's!

  13. The video is really about the same Socialism that Democrats and the 'New World order" insist on shoving down our throats! Trump 2020 !!!

  14. This guy is saying nothing relevant to what needs to be know now about NOW sorry for the hard times dude strong amazing person but I don't trust him cause he isn't putting any damaging info out that needs to be known thumbs down on this one.

  15. I'm half way through it, and eagerly awaiting the answer to questions that touch upon intellectual theft, currency manipulation, or even forced technological transfer, as precondition to operate in China…but I don't believe these questions will be asked, too much of a soft-ball interview. Also, pardon my skepticism, but learning math, reading books by candle light, will destroy your eyes in a few short years, breathing in emanations from cow dung pastilles will hurt your pulmonary system permanently over those same years, so not that I don't believe this chap, but his meteoric rise, academically, and professionally, also he speaks with very little accent, (I mean this guy is luckier than Warren Buffet statistically speaking) you sure he's not second generation Chinese???….I think he may be exaggerating, and perhaps delivering a myth building operation, but what do I know….haven't read his books, which must be accurate and true right?

  16. As published by the Congressional Research Service August 19, 2013 China held 3.341 Trillion of U.S. debt. Japan at that time held 1.227 Trillion in U.S. debt. As of May 2019 China's held U.S. debt was only 1.11 Trillion $. Japan comes in second again at $1.10 Trillion. Now total foreign debt is $4.1 trillion. The rest of the $22 Trillion national debt is owned by either the American people or by the U.S. government itself. ( Which I include the Federal Reserve and Intragovernmental Holdings which held 47% or 4.693 Trillion in Sept 2008 and today Intragovernmental holdings is $5.86 trillion which is only 26.6% of today's U.S. ).
    Should we praise China's lowering their holdings of U.S. debt by 67% in the last 6 years?

  17. Hare Krishna.
    His humility shines,
    Suffering somehow causes appreciation and sacrifice brings.
    Achievements… lessons I still have to implement. However it is still beautiful to see.
    Hare Krishna

  18. Most of the profit goes to the communist party own pocket. That is why most Chinese save so much because their life is so bad that they have to save for rainy days. The savings are used by the communist to enrich themselves.

  19. He can’t even have food on the table in Gobi desert. How did he make it to the US soil ? If he landed as an student exchange funded by CCP why didn’t he return to China to serve his country? It is the fact, during the Chinese civil war after Japanese surrendered, both party has secret agents committed their service and life to their leader. They had secret code name….

  20. Watch out for this guy. He's either a China mole or he's got serious skin in the game on China trade (or both). Nothing he says is supported by anyone else. He doesn't talk about huge China debt, IP theft, massive vulnerability to US trade tariffs, sovereign risk, Chinese entrepreneurs getting whacked…

  21. 2806/5000

    Honestly, I believe that Real Vision Finance is very positive to learn to look at the world from a different platform but that does not mean that we go over the principles, one of the most difficult things to digest from my political condition, is to pass "X" issues of understanding with the enemy, to making money… this is something I can never overcome. When I came to this country, this country was overcoming a very bad financial phenomenon, I think you remember because of the Jimmy Carter administration, but hey…. That is not the case here! This man, reminds me of something, in a conversation that I heard with a communist when he talked to another who was head of jail and prisons and member of the central committee of the Cuban communist party called by his subordinates, First Captain Torrientes, he said in front of me that: _A member of the communist party can be sent to a forced labor farm as a prisoner and take part in the treatment to which normal prisoners are subjected, to attract some sympathy to the future of his cellmates. When this Captain said that I was a political prisoner of the prison of San Severino Castle (Matanzas) Cuba, who knows this prison, knows beforehand, that the Cuban communists sent the men there to die…

    I would never have the idea, to think about defending anything, in the least in what someone does with their money to favor a criminal dictatorship that only what they have done is to change the clothes of their slaves and make them CIO of some company, creator of cheap labor for some businessman of thirst for money, or what someone thinks of something positive… of that communist criminal dictatorship… would not give me personally, nor the idea, of presenting anyone to the public view of a person who has some type of business with these dogs, or of doing… some type of business with anyone of that communist system, and this is … in every form and modality, because they are worth of all kinds of social order to destroy ideals through ideological divisionism, they … even using third parties, so as not to appear in public view.

    I do not care so coldly, until if these, who try to negotiate, with my country, (United States) are even my family… because they are enemies of everything, and hate everything that is not of the communist party…

    In a cold words: "This man is a communist hidden in his money to destroy the United States, this man is our enemy." I don't care what anyone says about this guy… or if this guy… has some holiness halo that I doubt very much…

    I came to this country in a treaty for the exchange of political prisoners and I continue to remain an eternal enemy of the communists without any kind of mercy for these dogs.

  22. @ 11:04 U.S. should thank China for its low interest rate? So wait, you're making us a favor? There's a monthly deficit of 25-35 billion dollars and the purchasing of these US treasuries are the only viable option for China to remained competitive in the international market, which in turn expands China's money supply and international credit status. And the selling or unwinding of the these treasuries will be a major problem for China's local economy, as it is an export driven economy. Furthermore, the PBOC keeps interfering only because YOU need your currency 'Renminbi' weak to keep your exports strong. And who's doing MOST of your buying off from your exports? USA. And yes if you ever decided to stop purchasing U.S. treasuries, your local economy will be at risk. Do your homework before coming on youtube babbling about economics 101 Mr. Shan.

  23. what percentage of the 80% private consumption growth ( 6.5% growth) is down to the property market and the high property prices in china.cnat figure this out if the chinese very high savers is it the fact more are entering the labour market rather than the ones already working spending more.

  24. I just watched the Real Vision interview with Chris Balding where they go over the 40-50% savings rate being total BS but then this guy seems to think it's legit. Why not get this guy and Chris Balding talking to each other?

  25. This guy spent 40 minutes talking without saying anything. This was not one of Real Vision's best. A very skippable interview.

  26. knowledge IS incredibly important….but education in the US universities is something to avoid.
    They are Marxist bastions of lower learning. If you must go to one of these life warping colleges..get what you need and get out!

  27. I want to know how Mr. Shen came to US without China CCP help. Many other smart common Chinese in your age did not have this opportunity. If Mr. Shan is truly from the bottom of the China society, he would hate China CCP now.

  28. Shan, shame on you , now HK people and Chinese people are oppressed by CCP, you are singing praise songs for CCP dictator.

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