Huaxi Village: Wu’s Family Business?

It has been 52 years since Huaxi Village, which is hailed as the “No.1 Village under the Sky”, was founded in 1961. Wu Renbao has been Party Secretary of Huaxi Village for nearly a half-century, a rather exceptional case in China. Located in the middle and lower reaches of the Yangtze River, Huaxi Village has been renowned as being the most representative village in modern China. It is not until Wu Renbao passed away that his family’s impact on Huaxi Village was totally felt. The mention of Huaxi Village used to conjure up Wu Renbao. Nowadays, it seems that the Wu family’s sway over Huaxi Village has gone beyond what the public used to imagine.

In Huaxi Village, where the collective economy has been practiced for more than five decades, over 60 companies are subsidiaries of Jiangsu Huaxi Group Co., Ltd. (Huaxi Group), with their combined output value exceeding RMB 50 billion. The homepage of the Huaxi Group’s website provides a detailed description of its four major sectors of business operations - Huaxi Village, Paradise, Native Bank and Granary - which include steel and construction material companies, international tourism agencies, institutes of gourmet food and nutrition, financial investment companies, general management companies, architectural decoration and real estate companies, and logistics centers. Like many family businesses, Huaxi Group, which has been around for decades, has recently given much thought to transitioning. Wu Renbao’s youngest son, Wu Xieen, has put a particular emphasis on service sectors, where tourism, finance and transportation have contributed almost one half of Huaxi Village’s profits.

Nearly all subsidiaries of Huaxi Group are headed by an immediate family member of Wu Renbao. Moreover, each of his close relatives is at the helm of the companies engaged in manufacturing, financial, educational and service industries. Huaxi Village’s multi-sector industry reflects well on its huge potential for development. Wu Renbao has four sons and one daughter. A decade ago, he resigned as party secretary and passed the baton to Wu Xieen, who doubled as Chairman and General Manager of Huaxi Group. Following in his father’s steps, Wu Xieen has kept a firm grip on power. In Huaxi Village’s Party Committee consists of none other than Wu Renbao’s 18 relatives hold deputy secretary positions, including his second and third son, son-in-law, nephew, grandson (on the father’s side) and granddaughter-in-law, granddaughter (on the father’s side) and grandson-in-law, granddaughter (on the mother’s side) and granddaughter’s husband, nephew-in-law and niece-in-law, and two remote relatives. Wu Xiedong, Wu Renbao’s eldest son, serves as executive deputy secretary while his only daughter, Wu Fengying, is a member of the village party’s standing committee. On the business front, Wu Renbao’s relatives also hold major positions across Huaxi Village’s industry clusters. Wu Xiedong is Vice Chairman and Deputy General Manager of Huaxi Group; MIAO Hongda, Wu Fengying’s husband and Wu Renbao’s son-in-law, also serves as Vice Chairman of Huaxi Group.

A culture of preference for sons over daughters has pervaded Wu Renbao’s assigning positions to his children - Wu Fengying pales in comparison with her brothers in the political and economic positions she holds. Nevertheless, his grandson and granddaughter as well as grandson-in-law and granddaughter-in-law have been placed on an equal footing in terms of corporate positions. As Deputy Mayor of Jiangyin, Wu Fang, Wu Renbao’s eldest granddaughter, who holds no position at Huaxi Group, has undoubtedly thrown her weight behind Huaxi Village. As General Manager of Huaxi (Mexican) Company, Wu Hao, whose father is Wu Renbao’s second son Wu Xiede, is tasked with making Huaxi Village go global. In this sense, it will not be until Wu’s third generation that the family’s human resource advantage has been brought into full play, contributing significantly to the development of Huaxi Village.

Although nepotism has caused many controversies among the residents of Huaxi Village, the local success of the “Wu Renbao Model” cannot be denied. Huaxi Village distinguishes itself as a corporate group backed by the government’s administrative system. Thus, in comparison with family businesses dominating China’s private economy, Huaxi Group, which enjoys optimum allocation of government resources, holds an enormous edge in terms of policy support and labor cost.

Wu Renbao asserted that Huaxi Village was an enterprise kept under collective ownership rather than a family business as perceived by the public. He believed his offspring were offered many seats within Huaxi Village’s vast hierarchical system so as to live up to their mission to serve the local villagers. Wu Xieen has been on the throne as chief of Huaxi Village for almost a decade, but it remains to be seen what will happen to his business model and managerial concepts now that his father is deceased.