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Obituary: Rong Yiren, the ‘Red Capitalist’
By Mure Dickie
Published: October 28 2005 18:09 | Last updated: October 28 2005 18:09
Few men better embodied the paradoxes and ironies of modern China than Rong Yiren, the “Red Capitalist” whose death this week ended an 89-year odyssey that spanned a privileged youth, submission to communist conquerors and eventual rebirth as the country’s biggest businessman.

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Mr Rong lost his first fortune, a share in the business empire created by his father and uncle, to a Communist party committed to public ownership. He won his second by smoothing the party’s embrace of capitalism with a state-controlled conglomerate that generated huge wealth for him and his family.
Mr Rong, the state news agency Xinhua said in its obituary, was a “leading representative of modern Chinese national industrialists, an outstanding national leader, a great patriot and a communist champion”. The glowing eulogy reflected the skill with which Mr Rong learned to bow to political realities and to accommodate the party bosses who swept to power in Mao Zedong’s 1949 revolution.
Born to wealthy parents in 1916 and educated at St John’s University in Shanghai where he read history, Mr Rong took over the family’s successful textile and flour business. In 1936 he married Yang Jinaqing and the couple had five children.
Unusually, when the communists came to power Mr Rong stayed with his family in “liberated” China, even as fellow capitalists fled. It was not an easy decision. An official biographer quoted him as confessing to early doubts. “I kept up a calm appearance to avoid upsetting colleagues in the factory, but inside I was like an ant on a hot pan. I didn’t know what to do,” he was quoted as saying.
In the early years of the revolution, Mao and his comrades sought to ease such fears by moving only gradually against private business and property. Indeed, Mr Rong seems to have thought he could stand apart from the country’s new rulers.
“I only raise one hand in approval of the Communist party. If I raised two hands, that would be surrender,” his biography quoted him as saying then. But he soon realised conditional support would not satisfy the party for long. “I was wrong to raise only one hand,” he said. “Now I hold up both in support of the party.”
Such submission did not mean Mr Rong could keep his businesses, but by handing them to the state voluntarily he won the status of political ally rather than class enemy. He established himself in the new roles of party-approved manager, policy adviser and later official. By 1957, the newly dubbed “Red Capitalist” was a Shanghai deputy mayor and two years later a vice-minister for the textile industry.
In 1966, however, Mr Rong’s past caught up with him. Red Guards, inspired by Mao Zedong’s “Great Proletarian Cultural Revolution”, broke into his home to denounce him for his class background, beating his wife and using his own camera to record his humiliation.
But then-premier Zhou Enlai shielded Mr Rong from further Red Guard wrath. “He is a representative of the Chinese national capitalists and influential at home and abroad. He must be protected,” Zhou said.
By 1979, Maoism was defeated and the pragmatic new leader Deng Xiaoping was keen to tap capitalist expertise to revive China’s battered economy. Mr Rong was the perfect man for the job. He set up China International Trust and Investment Corp, better known as Citic, and turned it into a conglomerate spanning property, finance and industry. Citic also became the essential partner and guide to foreign businesses who cautiously ventured into China in the 1980s and early ‘90s. Mr Rong, friendly and always impeccably dressed, was a reassuring presence.
Citic’s success made him rich – with a fortune estimated at US$2bn in 2000 and a billionaire son as head of Citic’s international arm. It also led to his appointment in 1993 as China’s vice president. The post was mainly ceremonial, but it sent a clear message: China’s new blend of communist politics and market economics was here to stay. And it was the “Red Capitalist” who had shown the way.

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