HOWZAT

In the mid-Nineties, like other expatriate Chinese fascinated by the economic change, she wanted to move back to China. A friend suggested she check out a property company called Beijing Vantone, where Pan was a partner. They met and four days later he proposed; a year later they started a company called Hongshi, renamed SOHO China in 2002.

“I’m a person with a strong concept of family,” Pan tells me through an interpreter at his office. He was born in Gansu Province to a family stricken by poverty during the Cultural Revolution – his father a thwarted teacher, his mother an invalid. “My father is the one who has influenced me the most,” says Pan. “He taught me how to live and survive in the worst environment. During my childhood [in the early Seventies] in my village many children died of disease and starvation. In my family, no one died.”

He went to college at the Beijing Petroleum Institute in 1982, and worked in property, before co-founding Vantone. He sums up the extraordinary developments Beijing has been through: “Twenty years ago, the average living space was 7 to 8sq m. Now, the average living space is almost 30sq m – that’s a big change.”

Of meeting Zhang he says, “At different stages you have different needs, and our needs coincided” – and arguably marrying her may have been the best business decision Pan made. They complement each other perfectly: Zhang is in charge of aesthetics and design; Pan is the dealmaker. “How we divide work is just semantics,” he says. “Both of us have mutual respect and understanding and even if there is conflict, we can overcome it.”

With the Olympics looming – the opening ceremony is on August 8 – China’s major cities, in particular Beijing, are gripped by the building boom, which even warnings of a downturn cannot quell. It is a period of consolidation for the property market, where the big players swallow smaller companies. Indeed, SOHO China spent about $300 million of its raised money buying two high-end properties in Beijing – and the companies that owned them.

“In China there is a saying that the economists are never right; businessmen have always been right; and the government is sometimes right,” Pan says. “The reason that economists haven’t got it right is because China has been static for hundreds of years – the Tang Dynasty is the only one which has interacted with the West. But now the Chinese deep down are really interested in the outside world.”

SOHO China is currently building in Beijing only, but Zhang says this may change in the future. A city with an official population of 12.04 million, it has a migrant population of 5.1 million more. Rural workers are making their way to the city and the middle class is expanding fast, creating extraordinary demand. There are various estimates on billionaires, but China is closing in on the US’s No 1 spot. A year ago, there were 15 billionaires in China; Forbes has now documented 66, many of them property barons like Zhang and Pan.

When I ask them about the future, Zhang mentions their foundation, launched two years ago, which focuses on an educational strategy adapted to today’s needs: “Education is stuck in the Seventies and Eighties, as if China still had a communist ideology.”

But it sounds as if, in the longer term, they are also intent on developing SOHO China into a world-class company. “The world is becoming one,” Pan said at dinner – and perhaps what this means is that it will be more Chinese. “I want to see what a company will look like in ten years’ time,” Zhang says. “It will not be like a US company. There will be a dominant company in China then, which will be very different. Ultimately, US companies are the result of capitalism, but China is neither communist nor capitalist. Each has pros and cons – clearly, the world is moving ahead.” Tellingly, the invitation to their party at the Commune by the Great Wall, in honour of the Olympic Games, reads: “The 8th day of the 8th month of the 8th year of the millennium is proclaimed the official start of the new China Century.” And they are setting the pace.

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