Chinese business leaders, characterized by the common thread of having built first-generation fortunes through massive economic success within their own lifetimes, are analyzed to be largely mired in severe moral hazard. Unless this entirely counterproductive phenomenon is resolved, sustained, high-quality economic growth will likely remain an elusive goal for China as it seeks to eventually surpass the U.S. to become the world's leading superpower.

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Former China Evergrande Group Chairman Hui Ka Yan, who was widely rumored to have kept as many as 200 mistresses, pictured alongside an unidentified woman. The photo seems to suggest that such rumors were not entirely unfounded. / The Beijing News

According to Beijing sources well-versed in global industry information on the 8th, it is generally difficult to evaluate the transparency of Chinese companies positively. If rated, their average standing would undoubtedly languish near the bottom of global rankings. The moral hazard among Chinese business leaders is not an issue that emerged in a vacuum—it points to deep-seated governance and ethical shortcomings from the outset.

Concrete examples clearly illustrate the pattern. Foremost among them is Hui Ka Yan (68), founder of China Evergrande Group, which collapsed into bankruptcy in the second half of 2021 carrying a staggering 2.4 trillion yuan (approximately 482.4 trillion won) in liabilities. While mismanaging what was once the nation's leading property developer into insolvency warrants strong criticism on its own, he has faced widespread condemnation for falling into severe moral hazard.

A closer look reveals why he has drawn such sharp reprobation. Rumors suggest he maintained liaisons with as many as 200 mistresses. Furthermore, he reportedly treated corporate funds as his personal treasury, purchasing three private jets. When he received a life sentence late last month on charges spanning tax evasion and sweeping financial corruption, observers regarded the ruling as well-deserved, with little sympathy offered by peers or industry insiders.

Zong Qinghou, the late former chairman of food and beverage giant Wahaha Group who passed away in February 2024 at age 79, also warrants mention. Widely respected as an entrepreneur during his lifetime, he was thought to have only one child, a daughter. Now, however, accounts suggest it is difficult to determine the exact number of his children, with industry estimates putting the count at five or more—all born outside of marriage during his lifetime.

Wang Shi (78), former chairman of property developer China Vanke, who was regarded as a successful businessman prior to the real estate bubble bursting in the second half of 2021, is another case in point. He was known for publicly conducting an extramarital affair with an actress young enough to be his daughter while still married to his wife. Today, even after bringing the developer to the brink of collapse, he lives comfortably with his partner while disregarding the fallout.

Beyond these figures, many prominent Chinese business executives have succumbed to similar ethical lapses, to the point where naming those with clean track records would be a far quicker exercise. It is hardly a coincidence that Chinese corporate transparency remains ranked among the lowest in the world.

                                                                                                          Hong Soon-do