Sowing Capitalist Seeds

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For Jing Huang, politics wasn't just dinner-table-discussion fodder. It was a family tradition. As the grandson of one of the founders of China's communist movement and the son of a leading leftist writer, Huang imbibed the virtues of Marxist thought early. But because of his family's privileged status in Beijing circles during the 1960s and '70s, he also read the uncensored news reports sent to his father before they were fed into the propaganda machine. During heated mealtime debates, Huang was soon taking the knowledge gleaned from those papers—and from hours spent listening to the forbidden Voice of America—to challenge his father's political beliefs. "My father thought that by exposing me to the world, I would eventually figure out that the communist way was right," says Huang. "Unfortunately for him, I learned the opposite lesson."

A master's degree from Stanford and a Harvard M.B.A. didn't help return Huang to the Marxist fold. Nor did an exercise in entrepreneurship when he co-founded General Wireless (now known as MTone), one of the first mainland-owned companies to receive venture-capital funding in the mid-'90s. Now Huang is sowing the seeds of capitalism as China managing director of Softbank Asia Infrastructure Fund, a $400 million venture fund. "There's a tendency for foreigners to look at [Chinese] companies run by English-speaking CEOs because they feel they can trust them and talk directly to them," he says. "But there's a much deeper market of successful businesses run by people who have big aspirations but don't have fancy English presentations or Western-style business plans."

Case in point: Shanda Interactive Entertainment, China's largest online game provider. Huang's fund injected $40 million into the business and helped its young, Chinese-educated chairman hone the company's international image by hiring a proper financial comptroller and relieving family members of top-level jobs to avoid nepotism charges. After going public last May, Shanda saw its stock price more than double in just six months; one of Shanda's co-founders, Chen Tianqiao, is one of China's richest men.

Still, Huang cautions that investing in China is perilous. "I've undergone re-education three times," he says—during the Cultural Revolution (when he was sent to farm peanuts in the countryside), when he went to the U.S. to study and when he returned to China and realized that all his American M.B.A. lessons couldn't be applied back home. "There's a belief vacuum in China, which means that many people only believe in money," Huang says. "That means there are con artists everywhere. They will cook their books. They will lie during presentations." As China's experiment in what he calls "raw capitalism" carries on, the re-education of Comrade Huang no doubt will continue.

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