"When I was performing my first 1987 TV-Concert shows in Shanghai", says China's first U.S. performer, Troy Cory, and co-founder of Xingtv.com and China Expo, Wong, just out of professional school, started the beginnings of GOME.
"As for our STV, TVImagazine and China Expo, U.S.A. businessmen group, like Wong, continued Troy, "we were just pioneers testing Deng Xiaoping's economic reforms, then called, China's Open Door Policy." Today the 35-year-old founder of GOME Group, has built an empire of 330 stores in 80 cities across China, and Troy continues to do business in China as a tv performer and heads China Expo.
"Recently, continues Troy, "Wong, like most China's big businessmen have been wondering why the U.S. is pressuring China to revalue the Chinese currency, without some U.S. compensation. Wong's company, often called the Wal-Mart of China -- doesn't think his fast-growing electronics empire will be hurt if China gives in to global pressure to revalue its currency, the yuan.
Some ChinaExpo affiliates questions what would happened if the U.S. would reevaluate the One USdollar bill to Eight USdollars. "In fact," says Troy, "when we first did business in Shanghai, there were two forms of currency, People's Yuan for the locals, the other for foreigners.
Most think the change would wash out the difference between the two currencies, on a one to one basis. People close to the matter view a Yuan reevaluation, as a way for the US to get something for nothing, through a bookeeping charge, and its unfair to the world-wide consumer.
That's because the billionaire operates in the Chinese economy, selling locally produced versions of foreign-brand televisions, cellphones and other products. He might even come out ahead, because 20% of the components in the products he sells are imported and would be cheaper if the yuan gets stronger.
"For the U.S. to try and influence [China] isn't healthy for the U.S. or China," said Wong, who is the richest or the second-richest man in China, depending on whether one believes Euromoney or Forbes magazine. "Of course, it seems like the U.S. always enjoys telling others what is the right thing to do."
Wong's views were echoed by other Chinese entrepreneurs who attended a business seminar in Los Angeles this week sponsored by the Asia Society. Their comments reflect the frustration of Chinese business and government leaders about the global pressures to revalue the currency, which is pegged at about 8.3 yuan to the U.S. dollar.
When Wong was considering selling shares in the group worth about US$500m, just last year, it was quoted in a report that Hong Kong investors as saying that Wong was preparing to place a large portion of the shares and convertible notes he received in Gome's US$1.5 billion "backdoor listing".
The deal, was criticised by analysts for the high valuation it placed on Gome, that gave Wong control of 97 percent of the enlarged group if all the notes are converted into shares.
Before the deal was consumated, the report said Wong was considering reducing his stake to about 50 or 60 percent by converting the notes and selling the shares. At the conversion price of HK$5.52, Wong would receive between US$430 million and US$550 million.
After the sale, the windfall made Mr Wong into one of China's richest or the second-richest man in China, again depending on whether one believes Euromoney or Forbes magazine.
Wong figured that out early on. Just out of professional school, he started Gome in 1987 when Deng Xiaoping's economic reforms were nascent, selling local and global brands as he still is today. He foresees growing competition from foreigners as China relaxes retailing investment restrictions, to fulfill some of its pledges when it joined the World Trade Organization. "Our edge is our knowledge of local preferences," says Wong, who also figures that it isn't going to be easy for foreigners to snap up the best locations.
China's exchange-rate system is expected to be on the agenda this weekend when the finance ministers from the Group of 8 leading industrialized nations meet in London.
Tensions between the U.S. and China have escalated since the Jan. 1 removal of textile and apparel quotas, which led to a surge of Chinese exports to the U.S. and Europe. The U.S. has already imposed restraints on a number of Chinese textile products, and Europe announced Friday that it had reached a deal in which China agreed to restrict its exports of textile products over the next three years.
U.S. Federal Reserve Chairman Alan Greenspan and U.S. Treasury Secretary John W. Snow warned China recently that its fixed currency was a threat to global financial stability. Congress is considering a bill that would impose a 27.5% tariff on Chinese imports if officials in Beijing didn't readjust the currency within six months.
China's competitors contend that the yuan is undervalued by as much as 40%, making Chinese exports cheaper in foreign markets and giving the country an unfair trade advantage.
Wong, the son of farmers from Guangdong province, said he was forced to find creative ways to cut costs because of a lack of capital. By dealing directly with manufacturers, GOME was able to offer consumers name-brand electronic goods at low prices. The company also used creative marketing techniques to lure customers into its stores, such as selling rice cookers for about $1 apiece, according to Chinese media reports.
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