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Mark O'Neill

Larry Lang  has had a successful run saying what others dare not say, drawing a wide mainland audience

EVERY FRIDAY EVENING tens of thousands of Shanghai families tune into a 30-minute programme on the city's financial cable channel to listen to a Taiwanese economics professor speak about the stock market, hot money and private entrepreneurs.

'My starting point is the interests of small and medium shareholders,' said Larry Lang Xianping. 'They feel that I am protecting their interests. I am just and independent. I say what others  dare not  say.'

Since April last year, Mr Lang, 48, has become one of the most well-known  economists in the mainland. His articles and comments appear  every week in newspapers, magazines and on the internet.

When he speaks at  universities they are ticket-only events to contain the audiences.  His speaking fee at a company seminar is US$5,000.

Mr Lang is the son of a major-general in the Nationalist army and comes armed with a doctorate from the Wharton School of the University of Pennsylvania. He cleverly exploits the freedom the government allows in the economic sphere to debate the major issues of the day.

While mainland economists are restrained by government policy and salaries they receive from companies or universities, Mr Lang enjoys the liberty of independence as a professor at Chinese University of Hong Kong and the Cheung Kong Graduate School of Management and refuses to accept independent directorships or advisory posts with companies.

He became a national celebrity last July when he accused Gu Chujun, chairman of Greencool Group, a Hong Kong-listed company, of buying  state assets at less than market prices by depressing their value.

It set off a national debate about management buy-outs  of state companies by their  managers that ended in December last year with the State-owned Assets and Supervision Administration banning such buy-outs  of large state firms and restricting those involving small and medium-sized ones.

'The government changed the regulations because of public opinion. My own role was to act as a crater and release the volcano,' he said.

Mr Gu filed a lawsuit for slander against Mr Lang in Hong Kong, which Mr Lang  is fighting with money contributed by shareholders and free advice from  lawyers.

Management buy-outs  are part of a debate on the reform of state companies that has been under way in China for  20 years and in the former Soviet bloc countries since the collapse of Communism.

For Mr Lang, Russia is the example not to follow. '[Russia]  completed the reform in two days, selling the firms to private capitalists. The way it has been done in China is not fair because the price of the sale was decided by private individuals.'

His view is that the state should retain ownership and become a passive shareholder, hiring highly paid professional managers to run its companies and reward them according to their results. 'With such managers, state firms are no less competitive than private ones.'

These managers would no longer be employees of the state and would be hired from the market.

'State companies should remain as the core of the economy and the state keeps its monopoly in key sectors, such as  telecommunications, petrochemicals and aviation. There are many problems in private companies. Foreign companies should not receive preferential treatment. This is gradually being reduced. What we really need is an environment of laws and to use a system to guarantee the security of investment.'

He would retain the planning departments of the central government, which he sees as vital to prevent excess capacity and regulate the economy.

Mr Lang  praises the 'Rothschild' principles used in the privatisation of British state firms - the hiring of professional managers, choosing good companies to sell, and selling their shares to the public while  the government retained a 'golden share'. He  is popular among young people, especially professionals who admire his candour and intelligence and the figures he uses to argue his cases. But he does not advise city departments of government agencies  and remains outside  the establishment.

Mr Lang was born in Taipei in 1956, the third child  of an officer of the Nationalist army, who left Qingdao in 1949 with his wife, three silver dollars and a crate of Tsingtao beer.

With a busy  father  and his mother teaching  chemistry at cram schools, he grew up in a military compound mostly alone.  He was a lazy student, but  at secondary school, his grades began to improve and he qualified for the economics faculty of Tong Hai University in Taichung. After graduation, he went to the economic research institute of National Taiwan University  and wrote articles for the Gung Shang Daily.

Then,  he served two years in the army. In a lottery, he drew the worst card and was sent  to the island of Matsu, a few kilometres off the Fujian coast. It was a dangerous place.

'It was low-level war. Our troops killed PLA soldiers and our soldiers died. We lived in caves. It was very dangerous. Morale was low. At one meeting, 150 officers were asked if they could defeat the PLA and not one raised his hand. We had lost confidence in winning a war.'

Mr Lang went to the United States in 1984 and took a doctorate in finance from the Wharton School and went on to teach at New York University, Ohio State and Michigan until 1994.

'As I approached 40, I realised I had no sense of achievement and had made no contribution to society. When I saw China on television, I felt sad.  I wanted an opportunity to go back.'

In 1993, he travelled  to the mainland for the first time, visiting  Shanghai. 'I had a very good feeling.'

The next year, he took a job at Chinese University of Hong Kong. In 1998, he  went to the University of Chicago, where he taught for one year. He returned to Hong Kong and in 2003 started teaching at the Cheung Kong school.  He now divides his time between it and the Chinese University.

In July last year he started his weekly television programme,  which is broadcast five times a week.  The station plans to carry it on its satellite channel, giving it national coverage.

'I feel at home in Shanghai.  In the street, people stop me and shake my hand and ask for my autograph. The channel says  my show has been  more popular than expected. I speak in ordinary language and my starting point is the viewpoint of small shareholders.'

Biography

Born in 1956 in Taipei, Larry Lang Xianping is the son of a senior officer in the Nationalist army and a chemistry teacher.

He was educated at primary and secondary schools in Taipei and later was an undergraduate at the economics faculty of Tong Hai University in Taichung. He worked in the  economic research department of the National Taiwan University and for a time was a journalist for Gung Shang Daily.

From 1980 to 1982, he  did military service on Matsu, an island  off the coast of Fujian  and at the front line of  the mainland's army.

He undertook  a doctorate in finance at the Wharton School of the University of Pennsylvania in 1984, with later teaching slots at Ohio State, Michigan State and New York universities until 1994.

Mr Lang is  professor of finance at the Chinese University of Hong Kong and has been  professor of finance at the Cheung Kong Graduate School of Business since 2003. He has published three books.



Economics volcano explodes on the scene