What is Zong Qinghou's Net Worth?
Zong Qinghou is a Chinese billionaire businessman who has a net worth of $6 billion. When his fortune was $12 billion in 2013, Zong Qinghou was the richest person in China.
Zong Qinghou earned his fortune as the chairman and CEO of China's leading beverage company, Hangzhou Wahaha Group. Elsewhere, he serves as a delegate to the Chinese National People's Congress. Like many other billionaires, Zong has allegedly evaded millions in taxes.
Early Life and Education
Zong Qinghou was born in October 1945 in Hangzhou, China to a poor family. Due to the family's poverty, Zong had little formal education and had to drop out of middle school. He subsequently became a sent-down youth, leaving the city to work at a salt farm in Zhoushan. In his spare time, Zong read communist texts, including Nikolai Ostrovsky's "How the Steel was Tempered."
Hangzhou Wahaha Group
Zong began his business career in the late 1980s by selling milk at Shangcheng District School. He headed the nascent Wahaha business, which sold liquid nutrients to children. The business was a huge success thanks to its warm reception by single-child Chinese parents, and in 1991, its main factory merged with the floundering Hangzhou Canned Food Factory. After that, Wahaha shifted from making exclusively health drinks to producing other products, such as a sour plum drink and alcoholic beverages. In 1994, the company acquired three insolvent groups in Sichuan and established a factory in Chongqing. Meanwhile, Zong was able to make Wahaha independent from the government by stressing his ties with the French food company Danone. Wahaha went on to release its pure water brand, which was a massive success. Over the subsequent three years, Wahaha purchased 40 companies in 22 different provincial Chinese cities, making it one of the largest beverage companies in China. Its branded products include milk drinks, soft drinks, bottled water, bottled tea, and fruit juice.
In 1996, Wahaha entered into a joint venture with the French multinational food company Danone. Five new joint venture companies were subsequently formed, including Hangzhou Wahaha Health Foods and Hangzhou Wahaha Quick Frozen Foods. As the businesses expanded, Danone made a number of attempts to buy out Wahaha, but failed. The company accused Wahaha of "secretly operating a set of parallel companies that mirrored the joint venture's operation with virtually identical products," leading to an estimated $100 million siphoned off from the partnership. In a trademark dispute, Danone filed for arbitration in Stockholm in 2007. The company took additional legal action by filing a suit in the Los Angeles Superior Court against Hangzhou Hongsheng Beverage Co. and Ever Maple Trading, companies controlled by Zong's wife and daughter. In late 2007, Danone and Wahaha agreed to end their legal battle and resume negotiations. A couple years later, Danone left the joint venture by selling its 51% share to Wahaha Group for an estimated $500 million.
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Chinese National People's Congress
Among his other activities, Zong became a delegate to the Chinese National People's Congress in 2002. He was reelected in 2007.
Tax Evasion Allegations
In 2008, Zong was reportedly being investigated for tax evasion amounting to around ¥300 million. An investigator stated that Zong had earned "far more than this and hasn't fully reported the tax for years." Reportedly, he paid over ¥200 million in back taxes in 2007 following the start of the investigation. However, Caijing magazine speculated that he still owed millions more.
Personal Life
With his wife Shi Youzhen, who serves as purchasing manager at Wahaha, Zong has a daughter named Fuli, who goes by Kelly. She attended Pepperdine University in California and became a naturalized US citizen, but eventually moved back to China and renounced her US citizenship. Zong previously held permanent resident status in the US, but stated in 2013 that his status was suspended due to his lack of travel to the country.
Zong alleges that he lives on less than $6,000 a year, claiming that his frugality is owed to the teaching of Mao Zedong. He has reportedly extended his cost-cutting measures to his businesses, saying that cost control is a critical component in the operations of Wahaha.
