The criticism was sparked by the recent death of Zong Qinghou, the founder of the Wahaha Group, one of Nongfu’s biggest competitors.
Netizens took to social media to mourn Wahaha founder Zong Qinghou, a revered nationalist. Wahaha Group (the name means “laughing child” in Chinese) is ostensibly a private enterprise but enjoys heavy state backing.
Praise for the self-made billionaire quickly turned into critical comparisons with his rival at Nongfu Spring. That criticism took on a life of its own as online nationalists accused Mr. Zhong of being pro-Japan, pro-West, and unpatriotic, calling for a boycott of Nongfu Spring’s products.
‘Cultural Revolution Has Returned’
Independent TV producer Li Jun said on the “Pinnacle View” program that when the masses engage in the persecution of the richest man, the Cultural Revolution has indeed returned.
“We often said before that China seemed to be moving toward another Cultural Revolution, becoming more and more like the Cultural Revolution. The case with Nongfu Spring tells us that It’s not just reminiscent of the Cultural Revolution, but practically a reenactment. The Cultural Revolution’s grassroots manifestations were madness and irrationality, with baseless political charges pinned on the target, leading to relentless persecution until you were left in dire straits or even killed,” he said.
China’s ultranationalists’ charge against Nongfu Spring is that its bottles are white with red and white caps, resembling the Japanese flag when looking down from above, hence implying pandering to Japan.
Mr. Li said, “If such an accusation holds, why don’t they also go after Maotai (the most popular liquor in China), which too uses red caps and white bottles if that counts as ‘pandering to Japan for years.’ Additionally, it’s alleged that because Zhong Shanshan’s son lives in the United States, purchasing their beverages is tantamount to supporting America against China. These claims lack any foundation or logic, yet Nongfu Spring’s stock market losses amounted to 30 billion yuan (about $4.17 billion), with sales plummeting by 90 percent in a single day—a disaster for any company. The worst part is the precedent it sets. If this continues, which other companies might be targeted in the future?”
The controversy began with accusations that Mr. Zhong was ungrateful to Wahaha’s founder, Zong Qinghou, including allegations of underhanded tactics. Mr. Zhong later wrote an article clarifying his respect for Mr. Zong, which basically resolved the issue.
“However, the situation grew more bizarre and escalated unpredictably, leading to speculation about Wahaha’s behind-the-scenes involvement,” Mr. Li continued.
The two competing companies are fundamentally different in that Nongfu Spring is a purely private company, while Wahaha’s chairman, Mr. Zong, owns about 20-30 percent of the company’s shares, with the government holding the majority.
“It’s doubtful that an ordinary company could wield such significant influence, including online censorship. The extent of this turmoil certainly suggests the involvement of official institutions or figures behind the scenes,” said Shi Shan, an expert on China issues and senior editor at The Epoch Times.
Zhong’s Wealth Brought Trouble
Hu Liren, a former entrepreneur from Shanghai who currently lives in the United States, said on the “Pinnacle View” that the Nongfu incident shows that it now appears that the wealthier you are in China, the more likely you are to be a target.“Mr. Zhong, owning about 80 percent of his company, had assets worth over 100 billion dollars a few years ago, based on data I found online. The current incident isn’t just about online trends. Think about it, even Jack Ma, who hasn’t betrayed anyone, has been suppressed. He has practically become an exile because of this.”
Mr. Hu pointed out that the incident began during the two sessions when Chinese leaders tried hard to boost the confidence of private enterprises.
“They repeatedly advocated that ‘We need to ensure that private enterprises continue to operate stably, grow larger, and become stronger.’ It was at this time that Mr. Zhong became targeted. This matter is definitely not a coincidence, and the product design is not the real reason. The main reason is that Zhong Shanshan is too rich, this is the real reason. I believe that many other wealthy individuals have also been targeted by those who envy them, and trouble could arise at any moment,” Mr. Hu said.
Guo Jun, president of the Hong Kong edition of The Epoch Times, also shared her view on “Pinnacle View,” saying that analyzing this event involves two levels: official policies and personal vendettas or political infighting.
“The CCP has never ceased appropriating from private entrepreneurs, with its ideology dictating that state-owned enterprises are the mainstay and private enterprises merely supplementary. This has led to numerous instances of private capital being confiscated under various pretexts. The Public-Private Partnership (PPP) model introduced in 2014, meant for private-government partnerships, wasn’t popular due to low returns and high risks of cooperation with the CCP, highlighting the precarious position of private capital in China,” she said.
In China, there is a saying among private enterprises: eliminating us is the lofty ideal of the CCP, supporting us is merely a pragmatic compromise they are compelled to take.
According to Ms. Guo, Mr. Zhong’s mishap appears odd, suggesting he may have offended someone with his absolute control over the company. Bottled water offers high profit margins, even higher than those of the oil industry, which might have attracted unwanted attention.
“There may be some people who wanted to take a stake in the company, or some people, with their eyes on the huge cash flow of Nongfu, wanted to do some operation in the capital market through this company, but their proposal was rejected by Mr. Zhong,” she said.
Ms. Guo recalled that there had been many such incidents before, such as private capital investing in coal mines in northern China. With the rapid economic development at that time and the rising price of coal, the private investors made a great fortune in the mining business. This made the local governments jealous, and they took action, using reasons such as pollution and safety to drive out private capital, resulting in many people losing their fortunes.
“Because the reputation of coal mine owners was so poor in China, their plight did not elicit much public sympathy, but the private investment community was very wary of this,” Ms. Guo said. “Bo Xilai’s actions in Chongqing serve as a prime example. After taking office, he reviewed previous enterprises and, under the guise of cracking down mafia organizations, he arrested hundreds of people and confiscated assets worth over 200 billion yuan (about $27.8 billion).”
“This time around, someone behind the scenes can not only manipulate the Internet Information Office, but also mobilize the whole country to carry out large-scale actions, both online and offline. This level of coordinated action suggests the involvement of powerful entities, possibly indicating internal power struggles within the CCP,” Ms. Guo said.
