Vol. 237: A Conversation with Feng Lun — Be a Useful Old Geezer

Summary

• Shanghai’s lease-renewal policy may shut the door on market-based investment in commercial real estate. Feng Lun says the new policy charges 70% of benchmark land value to renew 40- and 50-year land-use rights. If rolled out nationwide, he says, the investable market for commercial property could look “almost like it did 20 years ago” within five to ten years—and might even cease to exist. His advice to tech companies is straightforward: rent offices and property rather than build. E-commerce companies in Hangzhou that bought land and put up offices 20 years ago may now have to pay the land premium again, handing back what they earned on the land.
• The housing market has completed a full cycle, shrinking from RMB 15T–18T to just over RMB 5T—roughly its size when The Wild Growth Years was published in 2007. Feng sees four defining trends ahead: incremental housing supply will be concentrated among state-owned and central state-owned companies, with perhaps only three to five private developers left; private players will be even scarcer in non-residential property; services will grow, as more than RMB 100T of unprofitable property creates demand for asset-management businesses he likens to “top-tier hospitals for real estate”; and building materials and modular construction exports will be major parts of the property supply chain over the next decade.
• Feng Lun’s answer is to turn real estate into manufacturing and export trade. Factories in China build standardized hotels and apartments as if they were cars, ship them in containers, and assemble them overseas. A project in Thailand can go from construction start to welcoming guests in six months, versus two to three years using conventional methods; the first property is expected to open around May or June next year, to a standard close to China’s Ji Hotel 5.0. Feng says the team has combined Nordic technology with its own development work, producing a lower-cost alternative to traditional construction in Southeast Asia. Target markets include postwar reconstruction and fast-growing economies: he cites a proposed 590-meter mixed-use project in Kyiv, Gaza’s reconstruction needs, and Iraq’s per-capita GDP, which he says is already higher than Vietnam’s.
• “China has no business cycle—only policy, administrative and institutional cycles,” is Feng Lun’s macro view. As an example, he says the number of Marxism academies grew from 100 to more than 2,000 in just over a decade, while the country has 5,000 party schools and fewer than 1,000 law schools. In his view, the intellectual backdrop of policymaking shapes policy cycles. Real estate, private education and auto subsidies all benefited from policy tailwinds; “now it’s happening again, all along the AI supply chain.” Unpredictability, he argues, makes it hard for companies to form expectations, shortens business horizons and pushes entrepreneurs toward arbitrage and political connections.
• Feng Lun sees blurred property rights and uncertain expectations as the core problems facing private businesses today. He says the legal framework has continued to develop, but property rights and expectations remain major obstacles. The uncertainty weighs more heavily on older founders—those over 45 who have spent around 20 years running businesses. Changes to VIE structures, red-chip listings, overseas listing reviews, filing requirements and reporting of offshore income have also left companies feeling less connected to international markets. He groups the property companies that survived the crisis into three camps: those that shifted their business overseas; regional operators with little or no debt; and companies like Wantong, which sold its highly leveraged business early and exited domestic development.
• Feng Lun’s investment rule: a generation, a place and a cultural background each get to make one kind of money. He says windfall “side money” and money made through special connections are unreliable; the durable route is to build the product, service and distribution channel, then keep doing the same thing. Zhong Shanshan’s nearly 40 years in bottled water is one example. Passing on high-debt land purchases back then, he says, does not mean a lack of ambition in hindsight. Asked about investors rushing to capture share in DeepSeek and Kimi, he says he is “not rushing in,” comparing the frenzy to the land-buying boom.
• “On one side is AI, on the other, The Analects”: Feng Lun says the older generation’s edge is experience with human nature, institutions and society—not technical skills. He believes his brain is better trained than AI only in his real-estate niche. Since land and buildings account for only about 20% of total data-center investment in the silicon era, he prefers not to make the call and to leave it to people who know the business. He also agrees with Elon Musk’s projection that AI could create enormous material abundance. Responding to Li Xiang’s account of Liang Jianzhang’s argument about population, Feng says the fixation on population comes from treating people as tools. He acknowledges he has never discussed the issue with Liang, who, he says, would strongly disagree.

Deep dive

1. Setting the tone: AI passes judgment on Feng Lun’s two books

• Li Xiang compares Feng Lun to Naval Ravikant—someone who understands business and human nature, money and the metaphysical meaning of life. Feng’s first reaction is that the outline is “too packed, trying too hard”; he asks for a more relaxed conversation.
• Feng had AI read two of his books, and accepts its verdict: The Wild Growth Years has “fire” and drive; last year’s The Logic of Life is “more perceptive and rounded, but has lost its drive.” His takeaway: “Serious people tend to try too hard.”

2. Twenty years in three dimensions: the natural, economic and social person

• Feng’s framework divides a person into three dimensions. The natural person inevitably ages; he says he has “basically lived a normal life, without being pulled in different directions.” As an economic person, he has gone from being “an apprentice fresh out of training” in real estate 20 years ago to “a master” today. His book The Real Story of Real Estate: Who Makes Money, and How? is due out next month.
• Li Xiang points out the irony: after 20 years of learning the trade, Feng has become a master just as the industry has gone back to where it started. Feng takes the joke: “The master has to take his handbook and go make money somewhere else.”

3. The social person’s endgame: reducing his ties to the world to zero

• Feng is cutting back in the social dimension. In his forties, he says, “the thing to guard against is greed”—he wanted everything. Now he is “constantly reducing things, clearing away disputes”; his goal is that “when the day comes to say goodbye, my relationship with this world will be zero.” He does not want ceremonies at Babaoshan, but to “leave quietly, without disturbing anyone.”
• He cites Wantong’s 20th-anniversary event: it began without an announcement and ended without a formal declaration. “You don’t need drums and gongs to start, or an official announcement to end.” That, he says, is the social person’s ideal state.

4. Housing completes a cycle: from RMB 15T–18T back to just over RMB 5T

• Two figures frame Feng’s view of the market: housing sales have contracted from RMB 15T or RMB 18T to just over RMB 5T, and incremental growth over the next few years will be limited. In 2007, the market was also below RMB 5T. “We’ve completed a cycle over these 20 years”—back to the starting point, though “we did have some good years in between.”
• Feng believes real estate has largely fulfilled its social role of providing housing: China now has 40 square meters of floor space per capita.

5. Shanghai’s 70% renewal charge could close the commercial property market

• The key policy signal: Shanghai will charge 70% of benchmark land value to renew 40- and 50-year land-use rights. Feng’s logic is that without renewal, nobody will take the land, the project cannot be sold and it cannot issue a REIT. Renewing, meanwhile, “means the gains from 30 years of land appreciation are taken back. You worked for 30 years, and the return is very limited.” If the policy goes nationwide, he says commercial-property investment over the next five to ten years could look “almost like it did 20 years ago”—or “might not exist at all.”
• He traces the issue to the land system: publicly owned land accounts for 40%–60% of building costs, versus 10%–20% in markets with private land ownership. He gives Thailand as a counterexample: “I buy a piece of land; if I don’t develop it for 30 years, nobody cares. Fifty years later it’s worth three or five times as much, and that’s mine, not the government’s. Wouldn’t I have an incentive to protect it and put it to good use?”
• He sees this as a major problem for private companies: property rights and expectations. “You’ll raise your own son, but you won’t raise the neighbor Lao Wang’s. If the land belongs to the neighbor after 40 or 50 years, why would I keep working on it?”

6. The way forward: make property in factories and export it

• Feng’s team is developing a new model: “build houses in domestic factories like cars,” including the shell and interior fit-out—“underwear and outerwear”—then ship them abroad in containers. A local partner supplies the land; the units are assembled and put into rental operation. Property becomes manufacturing, then export trade. Feng says the model is permitted under current policy.
• Speed is the selling point. A project in Thailand can go from local construction start to welcoming guests in six months, compared with two to three years using traditional methods. The time saved means “earning an extra year of income.” The first hotel is expected to open around May or June next year, at a standard close to China’s Ji Hotel 5.0. Feng says it will be a permanent building.

7. Choosing a technology route: standardization, scale and competitive costs

• Feng distinguishes his team’s approach from earlier efforts. Vanke adopted Japan’s precast-concrete model, which is difficult to transport; Broad Group focuses on high-end supertall buildings, but has high costs for low-rise construction; Country Garden used robots to lay bricks, rather than building complete structures. Feng’s team is focused on standardized products such as hotels and apartments, “put together quickly like Lego.”
• Industrialized construction has two prerequisites—“first, standardization; second, scale”—plus the choice of technology. Feng says his team brought in a Nordic approach and combined it with its own R&D and integration work. Costs are low in China, and exports to Southeast Asia are cheaper than conventional construction, allowing the business to stay competitive before it reaches scale.

8. Postwar reconstruction: entrepreneurs see demand, not war headlines

• Feng went to Ukraine in 2024. A peer had set aside about five square kilometers for an industrial park in Odesa; Feng’s team provided services and discussed supporting dormitories, hotels and other facilities. They also hope to build a 590-meter mixed-use project on a site in central Kyiv—“like building an Eiffel Tower”—with the structure made in China and inserted like drawers. Work would continue after the war ends. Gaza needs 30 million square meters of construction for reconstruction, he says; he understands that local reconstruction workers have come to China looking for ways to build quickly. If the situation settles down a little, he may visit next year.
• Feng cites Henry Fok as an example. During the war, Fok secretly did business between Hong Kong and the mainland, moving medicine and supplies. After the new government was established in 1949, Fok and the next generation were treated with respect and support. “That’s what he saw at the time, unlike what some other businessmen saw.” Feng says Iraq’s per-capita GDP is now above Vietnam’s, at more than $5,000, and that photos and videos show postwar reconstruction moving quickly. Other examples include a US mobile-home company with a market value close to $10B, largely based on rentals; a mobile-home company Warren Buffett invested in; and Broad Group’s 16-story building in Abu Dhabi, installed on site in just over 50 hours, versus three to five years using local conventional methods.

9. Four features of the property market—and a “top-tier hospital for real estate”

• Feng’s four-part outlook: a small amount of housing growth remains, concentrated mainly among state-owned and central state-owned enterprises, with little from local governments and perhaps only three to five private companies left building homes. Even fewer private firms will operate in non-residential property; Shanghai’s policy also affects private developers such as Longfor. Services will grow substantially, including cleaning, leasing and sales, renovation, smart-building services, and larger businesses in asset management and restructuring.
• Feng calls his own asset-management business “a top-tier hospital for real estate”: “More than RMB 100T worth of properties in China are unprofitable today. They all need doctors; they all need treatment.” His metaphor: “When the whole village is limping, business picks up for prosthetics and massage.”
• The fourth direction is taking home-improvement materials, modular fit-outs and prefabricated construction overseas. Feng sees this as a major model and growth area for the property-related supply chain over the next decade.

10. The private sector’s path: from Cixi’s Company Law to a developing legal framework

• Feng’s history of business law in China: the country’s first Company Law was issued by Cixi in 1905. It was revised repeatedly between 1905 and 1949; after 1949 there was no Company Law, and private businesses gradually disappeared. They began to return after reform and opening, but a Company Law did not arrive until 1994. After China joined the WTO in 2002, the legal system and market institutions began to align with international norms. By 2007, the legal framework was only just taking shape; Feng recalls that there were perhaps 20 or 30 laws. Private companies now operate within a growing body of rules, including 8,000 administrative regulations, rules and standards issued by the State Council.
• His sports analogy: Olympic results keep improving “because the rules are clear, so everyone knows what direction to train in.” He sums up private companies’ contribution with the phrase “five, six, seven, eight, nine.”
• Later, when discussing the number of rules, Feng says China now has nearly 300 laws, more than 12,000 legal provisions and 480 criminal offenses. That history does not mean problems with property rights and expectations have been solved; he still calls them major obstacles for private companies.

11. A zigzag path: blurred focus on property rights and expectations

• Feng describes the development path as “a zigzag”—“many changes move us back toward where we started.” Private companies have been feeling widespread pressure in recent years. The first issue is property-rights protection: “If property rights are unstable, expectations are unclear… This remains the biggest obstacle to the development of private businesses.”
• The generational difference is pronounced. A tech founder born in 1992 who has been in business for six or seven years may feel “it’s probably fine.” The older the entrepreneur, the more acutely they feel uncertainty around property rights and expectations, and the weaker their confidence in the future and their motivation to build. Feng says entrepreneurs over 45 have often spent around 20 years running a business. To the young, he says: “You’re a new bride just climbing onto the kang; you haven’t experienced how hard it is to be a middle-aged or older bride.”
• He contrasts that with the era of The Wild Growth Years: “We worked furiously at night, and furiously at our day jobs. We didn’t know what else to do besides work furiously”—the excitement and optimism of a young bull charging ahead.

12. China’s connections to the world are tightening

• Feng says that after China joined the WTO, companies could take what they did in China to global markets and raise capital or realize value in international markets. Now, VIE structures have to be unwound, red-chip listings have stopped, tech companies face security reviews before overseas listings, and traditional industries must file before going abroad. Both companies and individuals have to file; overseas income must be consolidated and taxed, foreign assets reported, and cross-border travel is more tightly managed. Companies feel less connected to the world than before.
• He says the era of wild growth is over, marked by “complete laws, regulations and rules.” Wild growth, he says, was what happened when the rules were incomplete.

13. Consistent rules: a dispute over a runner’s bathroom break at the Beijing Half Marathon

• Feng uses the case of an Australian woman who relieved herself while running the Beijing Half Marathon and still won to make a point about rules: should the result count? “Nobody in human history has ever relieved themselves while competing in a race. Even tigers and lions can’t do it. It’s a superpower, but it still goes beyond the rules.” He also says she affected other runners’ performances, while the rules had no provision for such a case.
• The broader point for business: “Everyone can compete only when the rules are consistent; without consistency, you can’t compete.” Companies need to operate under the same market rules, whether in China or globally.

14. The secret to staying calm: an explanatory system, like a monk’s

• Feng says he is not anxious about changing conditions because “I have my own explanatory system. I’ve already explained it to myself.” His cancer analogy: the hardest part is “thinking you’ve been careful about everything, then asking how you still got cancer.” If you have been eating and drinking recklessly, getting sick is easier to explain. Once you have an explanation, he says, you feel less pain and urgency.
• The roles are reversed: friends invite him to dinner and ask, “Uncle Feng, tell us what’s going on.” He likens himself to a monk in a temple, offering “release and guidance”: “Once you walk out, your fate is still in your hands.” At least while they are in the temple asking, they get some psychological comfort. Li Xiang sums it up as “we can’t change the world anymore, so we can only explain it”; Feng agrees.

15. No business cycle, only policy cycles: the numbers on Marxism institutes and law schools

• Feng’s central argument is that China is a market economy with a strong government role, so it does not have the textbook business cycle of crisis, depression, recovery and boom, repeating every five to seven years. Instead, it has “policy cycles, administrative cycles and institutional cycles.” That means it is impossible to predict whether the property market has bottomed by applying the business cycle. He says “a small half” of his economist friends agree with him, while he largely disagrees with their explanations of cycles. He says he wrote about certainty and uncertainty in China’s economic reform as early as 1984 or 1985.
• He points to the policy-making environment: over a little more than a decade, Marxism institutes grew from 100 to more than 2,000, across more than 3,000 universities. There are 5,000 party schools and no more than 1,000 law schools. He speculates that if China had 3,000 law schools and 5,000 business schools, the background of policymaking would also be different.
• The business consequences, he says: “When there’s no pattern and nothing is predictable, businesses can’t form expectations. Transactions get shorter-term, and entrepreneurs focus more on arbitrage and political connections.” Clear patterns and expectations, by contrast, direct entrepreneurs toward products, fair competition, service and compliance with the law.

16. Policy tailwinds rotate: from property and tutoring to the AI supply chain

• Feng lists past policy tailwinds: real estate grew rapidly with policy support, benefiting Evergrande and Vanke; private education had its own tailwind; exports and auto subsidies did too, until subsidies ended and the gains disappeared. “Now it’s happening again, all along the AI supply chain.”
• He is blunt about the change in status. Property companies were once “very welcome at local governments”; now they are “yesterday’s flower—not even a middle-aged beauty.” He jokes that it is lucky if people do not treat you as a “gold digger.” Property companies joke about having become “gold diggers” themselves. They “really hope the domineering CEO falls in love with the ‘gold digger’ that is me.”

17. You can’t picture a funeral in the bridal chamber: property developers don’t know how to end the story

• Feng admits that at the time he knew property companies were benefiting from market growth, policy support and policy cycles, but “didn’t know how it would end.” His comparison: “When you’re in the bridal chamber, you can’t imagine your own funeral or burial. You’re thinking only about the happiness of that moment.”
• In recent years, he says, he has spent more time visiting sick people and attending funerals—seeing peers in critical care, in the ICU and undergoing emergency treatment; some did not make it. In the past, companies ignored bankruptcy law and the final two chapters of Company Law, focusing only on how to set up a company. Now they are learning about bankruptcy procedures and restructuring. His personification of policy: when the industry was hot, it was all “restrict, restrict, restrict”; now, with the industry old and faded, it is all “relax, relax, relax.” Li Xiang adds, “Give them a shot.” Feng replies, “Too late.”

18. Why companies couldn’t stop: developers could only tap the brakes; banks slammed them on

• Li Xiang asks why the industry ignored regulators’ longstanding “homes are for living in, not speculation” message. Feng’s explanation is that companies such as Evergrande and Country Garden depended on high leverage: “If they stopped, they would die faster.” They could only brake gradually, like a car with oil brakes. After the three red lines, banks stopped abruptly, “like an electric car—bang, it just stopped.”
• The key distinction: “Policy used to be guidance, a call, a warning, a requirement. It wasn’t as hard as the banks. The banks impose hard constraints. Without the banks, most property policies were soft, and people didn’t feel the pain.” Developers could carry high debt when turnover was fast: “Make one yuan three times, earn 10 or 15 each time, and after three rounds you’ve made 40 or 50 in a year.” Slower turnover calls for lower leverage.

19. Three kinds of survivors: overseas, debt-free and early exits

• When policy and institutional changes caused the market to shrink sharply, Feng says, most companies could not withstand the shock. The property firms that survived tended to fall into three groups: those that moved overseas and barely developed in China; regional operators with good products and almost no debt; and companies like Wantong, which transferred its highly leveraged business a decade ago and exited domestic development.
• Was it foresight or luck? Feng says “there were differences in understanding, and some element of chance.” His sample is four Beijing real-estate companies founded in 1993 or 1994. The owners of two were arrested and later went bankrupt. The owner of Nanyang Tower returned from overseas, rented out office buildings rather than selling them, took on no debt and remained in business after more than 20 years. Feng and his Wantong colleagues worked furiously when young, turning one company into six; the group did about half the projects in Beijing’s CBD, and roughly half of the six companies survived. His analogy to the pandemic: “Some people looked perfectly healthy, but still didn’t make it.”

20. Thieves and police: markets teach everyone through feedback

• Why did so many companies rush in despite knowing the risks of high leverage? Feng’s thief analogy: “A thief steals once and isn’t caught. His friends think most people are stupid and the thief is clever, so they copy him—until the police arrive and catch him.” When high turnover, high returns and high risk do not bring companies down right away, more people imitate the model.
• Only after companies such as Evergrande ran into trouble did people start saying not to borrow and to keep asset-light. “The market teaches everyone.” At the individual level, the pattern is hard to avoid: “Individual experience and the experience of the species are completely different… A single person will still make mistakes. You can’t stop them.”

21. The transformation window: 15 to 20 years, and it has to happen in a boom

• Feng says it generally takes 15 to 20 years for real estate companies around the world to move from development alone to a mix of development, commercial operations and asset management, with sales revenue, sales profit and rental profit each accounting for about half. The shift also needs a rising market, because surplus cash from fast-turnover development can fund the transition. “You can’t transform in a crisis.”
• His scorecard: Longfor and China Resources began building businesses such as Paradise Walk and MixC about 20 years ago and stuck with the transition. Vanke stopped after less than 10 years of trying. Wanda remains focused mainly on development.
• He describes three levels of transition. A minor shift means changing the mix within residential products, such as women’s apartments or blue-collar housing. A small transition means changing the business, not the industry: moving from residential development into rentals, commercial property or logistics. A major transition means changing industries. He compares it to “Jinxing going from the young man of yesterday to Big Sister Jinxing.” Changing industries means building a new company and resetting its capital structure and team. If the founder stays, it often cannot happen: “The founder has to ‘die’ for the son to make the transition.”

22. “Most founders become an obstacle to company growth in the middle and later stages”—AI exposes the gaps

• Feng says founders are often trapped by the way they have always thought. Someone who has spent a lifetime developing property may not understand a business that no longer develops property, or may not be able to judge it. AI has made him reflect: “Whenever I talk to AI, I find it thinks faster than I do.” He is now cautious, believing his brain is better trained than AI only in his real-estate specialty.
• He says he has tested the point. He has hands-on experience; Chinese-language AI training data already contains more than 100 real-estate business models, but they have not been collected and organized in one place. He believes he is better than Doubao at making judgments in this niche, and says that once his book is published, AI will be better able to find the material.
• The real-world test is property in the silicon era: buildings and land make up only 20% of total data-center investment. Out of RMB 1B, “RMB 200M is what I understand; I don’t understand the other RMB 800M.” His conclusion: “Don’t make the decision.” Bring in people who have built data centers, compute businesses and token factories. “Without AI, I wouldn’t have known I had so many blind spots.”
• He uses Doubao, Qwen and DeepSeek. The only area where he does not ask them questions is real estate; in other fields, he asks often and finds that they answer better than he does.

23. AI on one side, The Analects on the other: the older generation’s contribution

• Young AI founders ask Feng a basic question: “Can we still buy property?” He advises them to rent offices and other real estate rather than own it, and walks them through recent policy. He sees his role as part of the supply side. Why read Confucius today? “Human nature doesn’t change; skills do.” His mother was once an excellent abacus accountant; when she retired, she started using financial software. AI has arrived today, and the older generation has no advantage with tools, but does have an advantage in understanding people. “You can ask me—as if I were Confucius, just a little worse than Confucius.”
• His advice to young business owners in Zhejiang: “For human nature, political and business relationships, the world of the jianghu and social matters, ask your dad. Don’t ask him about technology, business models, finance, making money or customers—you can handle those yourself. You’re better at them than your dad.” AI may not be able to decide what to do when partners fall out or a marriage is breaking up; older people may have relevant experience.
• His guiding idea: “On one side is AI, on the other, The Analects.” The older generation should play the role of The Analects and Tao Te Ching, not AI. Human nature is unchanged; the people in Records of the Grand Historian resemble people around us today. Feng says he still enjoys reading Dream of the Red Chamber and Water Margin.

24. Old, middle-aged and young “deng”: each generation is better at skills; the old are better at human nature

• Feng agrees with half of the anti-“old geezer” sentiment: “Young people look down on older people mainly when it comes to skills, and I think they’re right. It’s reasonable.” Tools evolve so quickly that people born in the 2010s may think those born in the 1990s are old. On his team, people born in the 2000s are more efficient than those born in the 1990s, who are in turn more efficient than those born in the 1980s—mainly because of their familiarity with tools.
• But the other half comes from a different source of ability: “This doesn’t come with puberty; it comes with menopause. Only after menopause do you really see through human nature and understand institutions.” So “each generation is better than the last at skills”; when it comes to human nature, institutions and society, “the old beat the middle-aged, and the middle-aged beat the young.”
• His aspiration for later life: “After you’ve lived past 50 or 60, what matters most is becoming like Zhuangzi, Confucius or Laozi.” The “old geezer vibe” should be the feel of The Analects and the Tao Te Ching: be “an old geezer who is useful to the people.” Young entrepreneurs rarely talk technology with him; they like to talk about human nature, institutions, policy, society and the jianghu.

25. One generation, one kind of money: immune to every new trend

• Li Xiang asks whether Feng has been tempted by the internet, O2O, blockchain and now AI. “No,” Feng says. “A generation, a place and a cultural background can make only one kind of money. The causal relationship between you and money is fixed.” He cannot make money from the AI-native, fundraising and IPO playbook; he can only make money where AI meets real estate—and that is still real-estate money.
• The same logic applies geographically: it would be “not very likely” to start an AI-native company in Xinxiang, Henan, but you could sell sweet drinks, as Mixue Bingcheng does. Feng says he was also lured by hot sectors when he was young and tried cars, banks, insurance, credit cooperatives and pawnshops, “but didn’t make that much money.” Only later did he realize that “being committed to one thing is the source of happiness.”
• Li Xiang compares today’s wealthy investors scrambling for DeepSeek and Kimi stakes to the rush to invest in Minsheng Bank and buy land. Feng agrees—“Exactly, like buying land”—and says he is not rushing in.

26. Two kinds of money you can’t make—and the value of doing the same thing over and over

• Feng’s two rules: “There are two kinds of money you can’t make. The first is money you make on the side.” If someone else spends their whole life doing something, how can you make money from it as a side project? “The second is money made through special connections,” because those relationships are fragile and not a core strength.
• The reliable way to make money is to “make a good product, provide good service, keep distribution costs low and take care of the customer—then do the same thing hundreds of millions of times.” Examples include Nongfu Spring and Wahaha selling water, and Alibaba serving users on Tmall. Feng’s own modular-construction business plans to keep building hotels; over 10 or 20 years, it may sell hundreds or even thousands.
• Asked whether he will become the richest person in the world, he says such outcomes are accidents: “Did Elon Musk know as a child that he’d become the richest person in the world?”

27. Three things you can’t calculate—and Laozi’s version of ambition

• Feng’s anti-anxiety formula is “three things you can’t calculate”: how much money you will make; how much pain and happiness you will experience; and when and how you will die. Since you cannot calculate gains and losses, joy and suffering, or life and death, “calculating every day just makes you anxious, so don’t calculate.” He describes two approaches: religion makes more and less, pain and pleasure, life and death equivalent; philosophy keeps abstracting and explaining.
• Asked whether being at peace with himself means sacrificing ambition, he points to the results. Twenty years ago, “ambition” meant buying land with high leverage; Wantong passed. In hindsight, Wantong survived and is now worth more than some highly leveraged companies from that era. There is no simple distinction between ambition and a lack of ambition; what matters is sticking with what you believe is right over the long term. His ambition now is “Laozi’s ambition”: not to compete in development, but in asset restructuring and modular-construction exports.
• Zhong Shanshan is his example: he has sold water for nearly 40 years and stayed out of real estate during the boom. In hindsight, Feng says, he was more ambitious than the developers and became the richest person in China. His message to young entrepreneurs is “simple, focused and persistent”—what he has learned about the odds of survival. Zhu Bingren’s family has practiced copper art for three generations; Feng says that in their respective fields, they can be on the same level as Moonshot AI and DEEPTHINK. There is no need to chase the buzz; do your own work well.

28. The jianghu never says goodbye: three definitions and a moral code of loyalty

• The era of wild growth is over, but the jianghu remains. Feng gives three definitions: life outside the formal system is the jianghu; the gray area between legal and illegal is the jianghu; and the corners and back alleys are the jianghu. In short, it is social life outside the formal system and orderly operations. More deeply, “the jianghu is a moral world, not a legal one.” Trying to hold people to moral obligations can take you into the jianghu.
• His breakdown of “loyalty” is: “Helping you unconditionally, even if it means breaking the law, is loyalty. Helping you only when it’s legal isn’t loyalty.” People in the jianghu argue that they themselves are loyal and others are not. When the law gets involved, someone backs away or adds conditions, and is then called disloyal. Feng praises Wang Shi’s handling of a case involving a runaway borrower: “To handle loyalty and the law without putting them in conflict—that’s what makes someone a master.”

29. Martial arts and science fiction: two cultural codes for entrepreneurs

• Chinese entrepreneurs like martial-arts fiction; Elon Musk and others like science fiction. Feng’s explanation: the hero in martial arts stories imagines a superpower that transcends laws and institutions. Since real life offers no such powers, watching wuxia is psychological compensation. Science fiction likewise imagines a world beyond current constraints. Both appeal to entrepreneurs’ desire for freedom and creation.
• He also unpacks the term “retroactive investigation”: many places in Africa have spoken languages but no written records; investigating the past requires written records. Chinese has a well-developed vocabulary and experience around special investigations, retroactive reviews and anti-corruption. He says the Three Kingdoms story is part of the Chinese identity code. He once set up a table and drank at Dingjun Mountain, and booked an evening at Xunyang Tower to experience the place where Song Jiang wrote his rebellious poem: “Read history at the historical site.”
• Feng has never finished The Three-Body Problem. He admits, “I didn’t believe Chinese people could write science fiction well. Of course, after everyone read it, they proved it really was well written.” He still cannot figure out how Liu Cixin, in a small county in Shanxi, came up with those ideas.

30. Couples in business: competition doesn’t work; complementarity can

• Feng’s test is how the two people relate to each other: “If it’s a competitive dynamic, they shouldn’t be together.” He cites Li Guoqing and Yu Yu. A complementary pairing can work—for example, one person is good at finance or customer service, while the other is outgoing and more controlling.
• He mentions a pharmaceutical company where a married couple started in the same company and later split into two parallel businesses, both of which went public, avoiding a competitive dynamic between them. In most cases, he says, separation is simpler. For couples building a business together, “only one person can be out in front”; complementarity works better.

31. Big words and small words: a reassessment of “taking the world as your responsibility”

• When Wantong was founded in 1991, its four phrases included “take the world as your responsibility, develop the company, create wealth and improve yourself.” Feng now reinterprets the first. The “world” in the traditional scholar-official’s mind was often the emperor’s business; Xin Qiji’s line about “settling the affairs of the king and the world” is one example. He would not say that today. “When we were young, the words were big and the deeds small; now, as much as possible, the deeds should be big and the words small.” Musk’s talk of the stars and the sea reflects genuine research into the future, he says, while their own idea of “the world” came from the traditional scholar-official’s worldview.
• He recalls reading an essay by a writer he knew more than 20 years ago about the use of language under different systems. He later noticed that Chinese businesspeople like to use big words when traveling abroad, while foreign businesspeople tend to talk about the matter at hand.
• His methodological takeaway: “The real value of thought and reflection is often in small words. Making complex things simple, abstract things concrete and big words small—that’s what thoughtful people do.” Big words are ready-made answers; small words require you to think them through. Even “love” gets called out: “The word ‘love’ didn’t exist in Chinese 200 years ago, but marriage has been around for thousands of years.” There’s no need to describe getting married as “striving for human civilization.”

32. Musk’s AI communism and the population debate with Liang Jianzhang

• Feng lays out Musk’s logic and says it makes sense: “In about 15 to 20 years, there could be 20 billion robots on Earth, creating several times the material wealth we have today.” There would be no shortage, money or exchange; AI would distribute goods through logistics, and whatever people wanted to eat could be delivered. That leads him to ask, “If that’s the case, why go to work?” He connects it to communism: it was once thought to be achieved through class struggle, while Musk sees AI as the path. Marx talked about a great abundance of material wealth; Musk talks about how it will flow.
• Li Xiang raises Liang Jianzhang’s argument that a falling population could slow technological innovation. Feng replies that population in general and China’s population are two different questions. If there is a labor shortage, a country can bring people in; he also mentions IVF, surrogacy and artificial wombs. “You want more people only if you treat them as tools. If you treat people as the subjects of life, living and consumption, then whatever the number, it’s just right.” He acknowledges that he has never discussed it with Liang, and predicts that Liang would strongly disagree.

33. The Great Business Chronicle: two centuries of private-sector life and death, with institutional change a major cause

• Feng’s book was originally called Halfway Through Life; he is now leaning toward The Great Business Chronicle: The Life and Death of Private Companies. Across two volumes, it covers the Thirteen Hongs through 1949, then 1949 to the present. Each chapter uses stories of individuals to trace business life and death: “How the Thirteen Hongs were born and died; how Sheng Xuanhuai was born and died; how the Rong family was born and died.” Without private companies, he says, these big words would never become real.
• Common causes of failure include political and business relationships, high leverage, and clashes between companies and an uncertain institutional environment. Feng believes institutional change has been a major reason private businesses have died over the past 200 years, with more impact than companies’ own mistakes. The Thirteen Hongs disappeared because the system changed; later social and institutional changes affected companies in wave after wave.
• Rong Yiren’s story is one example. In 1949, he was arrested by the Shanghai garrison and named in the papers as a man to be tried for supplying cotton yarn and grain to the Nationalist army. Feng recalls that it was around July 20-something, while stressing that the date is not exact. On the day of the trial, Chen Yi and the People’s Liberation Army entered Shanghai. The Nationalists saw the supplies as damaging to the army’s health and morale; the new government might have seen them as a contribution. The company’s fate turned with the change in political system.
• Hu Xueyan’s story involved bureaucracy, cash-flow problems and competition with foreign merchants. He thought foreigners wanted to buy his yarn and raised the price; they instead negotiated with someone else. When Japanese technology produced a cheaper alternative in larger volumes, he failed to recognize the change in time and eventually collapsed.

34. Writing a book like building a product: dictation, AI editing and a Chinese Godfather

• Feng’s writing process involves shutting himself in a room and “giving a passionate speech, waving his arms around.” He starts with a detailed outline, then speaks for about an hour, producing 5,000 to 7,000 words. Software organizes the material; he edits it himself. He aims for conversational language and a structure of “stories plus lessons.” He notes that The Analects and Records of the Grand Historian also use stories and lessons. AI tells him his work is humorous, readable and engaging, but sometimes repetitive and too colloquial.
• His approach is product-minded: “A book is my product; readers are my customers.” If you take up people’s time, you cannot give them a pile of material that leaves them with nothing. He says his publisher is willing to keep working with him and the books have not lost money. He describes himself as a “non-professional writer.”
• He plans to write a four-volume novel, with two possible titles: Freedom Tower, about freedom and the alienation that can come with pursuing it; or One of Us, because private businesses are “one of us.” His goal is to write a Chinese version of The Godfather.

35. Why are businessmen always the villains in fiction?

• Feng offers two explanations. Creatively, “it’s less risky to write a villain; a good person can easily become generic.” Good people are standardized, while villains have more distinctive personalities. There is also less risk in writing negative characters from private companies than from state-owned or central state-owned enterprises. He recently read Zou Meisen’s The Weather’s Turning Cool, a book he found uncomfortable. He says it focuses on debt resolution, debt collection and human nature after a private company goes bankrupt—a relatively low-risk subject.
• His own connections to film and television also run through human nature. Before Wong Kar-wai made Blossoms Shanghai, he spoke with Feng in Beijing and Shanghai about the commercial jianghu before 1993, and used some lines and ideas from The Wild Growth Years. Feng made a cameo in American Dreams in China after an invitation from his alumnus, producer Huang Jianxin. He sees it as a positive portrayal of private businesses during the mass-entrepreneurship era, based on New Oriental.

36. The entrepreneur is the middle-sized word: problem-solvers versus arbitrageurs

• Feng draws a distinction: “A businessman arbitrages; an entrepreneur solves problems. If you don’t have a machine, I make one—that’s entrepreneurship. Buying a machine cheap and selling it dear is business.” He puts Musk and his own modular-building business in the problem-solving camp: taking a project that would otherwise take two or three years and completing it in six months.
• Feng thinks China has had many businessmen but few entrepreneurs over the past 200 years. He names Chen Guangfu, the Rong family and Fan Xudong as entrepreneurs. As for “improve yourself,” the phrase means continuing to learn and raising your standards. It took him 35 years to go from knowing nothing about real estate to being able to write a book about it; that, he says, is the process of improving yourself.

37. He has never lost faith in entrepreneurs—and young tech founders have a different relationship with the state

• Asked whether he has ever lost faith in the business or entrepreneur class, Feng says: “Never.” He believes political civilization is created by politicians and material civilization by entrepreneurs. He compares fraudsters and failures among entrepreneurs to corrupt officials: a few bad actors do not invalidate an entire group.
• Feng attributes younger tech entrepreneurs’ relative lack of concern about institutional change to their different business models. His generation, he says, consists of “old-school entrepreneurs”: many businesses involved resource swaps and arbitrage, with close ties to land, planning and political power, so they had to care about the system. The new generation builds technology and products and sells directly to customers. If they do not go public or enter the defense-industrial complex, they often have less contact with the state. They are also less familiar with business dinners, drinking toasts and formalities, but their strength is focus on technology and product.
• He sees a historical echo in their support for industrial policy: “It’s just like how strongly we supported real estate more than a decade ago.” Young AI entrepreneurs now receive a lot of attention and support; they are “the apple of everyone’s eye.”

38. “Passing through the spring flowers, not a leaf clings to me”—and why he isn’t happy

• Feng attributes his relatively low level of controversy to the principle of “staying upright while being unconventional”—not bending the rules on compliance. He also focused on real estate, shut down complicated businesses after 1999, took on no debt and owed banks nothing; he says his personality is not prone to conflict. He also talks about “profit after profit, cost before cost,” meaning repeated negotiation rather than trying to extract every last yuan in one go. Close relationships can carry risks, he says: “The most reliable people can also be the most dangerous.” Drivers, domestic workers, lovers, children, wives, bodyguards and secretaries can all cause problems. Li Xiang compares the point to something Charlie Munger said; Feng replies, “We just avoid those situations.” He considers himself lucky.
• But he refuses to celebrate having survived: “When everyone in the village is sick, people are dying, and you’re still alive, you can’t be happy either.” His peers and friends are in a difficult position, and he cannot help much. “What can you do alive? You can’t carry the coffin; you’re not allowed to cry too loudly; and there’s nowhere to move to.” All he can do is quietly hope things get a little better for everyone.
• His closing thought: “How do you preserve everything without compromising yourself? That’s the question. For now, I’ve preserved things: the company can operate normally and steadily, and nothing goes wrong—but I also can’t compromise myself.” He says he has spoken so much today because “if I don’t say anything, I feel a little aggrieved. So I’ll say a little.”