Tại sao nước mạnh là...nước mạnh?

Trung Quốc đã qua mặt Nhật để trở thành nền kinh tế lớn thứ hai sau Mỹ hôm nay sau ba thập niên liền với tăng trưởng hai con số theo bản tin dưới đây.  Chỉ khoảng năm năm trước GDP Trung Quốc chỉ bằng nửa của Nhật. Bản tin này còn nói rằng ảnh hưởng kinh tế của Trung Quốc ở vùng Á châu đã qua mặt Mỹ.  Trung Quốc là bạn hàng lớn nhất của tất cả những quốc gia trong vùng chứ không phải Mỹ.  Trung Quốc có ảnh hưởng lớn nhất trên giá cả hàng tiêu dùng ở Nga, Ấn Độ, Úc và Nam Mỹ.

Chỉ khoảng hai tuần trước lại có tin Li Lu, người đứng thứ hai trong vụ nổi dậy ở Thiên An Môn, được đồn đoán sẽ là ứng cử viên số một thay thế vị trí của Warren Buffett (tỉ phú giàu nhất thế giới năm 2009 và giàu thứ ba thế giới năm nay), trên cương vị lãnh đạo tập đoàn đầu tư Berkshire Hathaway.  Cương vị này có trách nhiệm cai quản một tài sản đầu tư trị giá $100 tỉ.

Mèo tìm được một bài báo khác năm 1998, lúc Li Lu mới 32 tuổi, sang Mỹ được 9 năm, lấy được bằng B.A., M.B.A, và J.D. ở Đại Học Columbia.  Trong thời gian đi học đó đã kiếm được $125.000 bằng đầu tư chứng khoán và dùng tiền đó để trả những khoản nợ học không được học bổng trả.

Chín năm sau khi đến Mỹ và lúc chỉ có 32 tuổi, người này đã là người cai quản một hedge fund (một loại quĩ đầu tư lời nhiều, nhanh, nhưng rủi ro cao) với số vốn đầu tư tối thiểu là một triệu cho một người.

Li Lu chỉ là một trong nhiều người Trung Quốc làm giàu lớn hoặc giữ những vị trí quan trọng trong những tập đoàn, hay công ty lớn thỉnh thoảng lên báo.

Điều này chứng tỏ rằng không cần biết là người ở xứ độc tài độc đảng Trung Quốc hay người lãnh đạo 'dân chủ' Trung Quốc, người Trung Quốc đều có khả năng làm giàu lớn.

Nếu nói về độc tài thì nôm na có thể nói Trung Quốc độc tài gấp muời mấy lần Việt Nam vì dân số Trung Quốc gấp mười mấy lần Việt Nam nhưng họ cũng chỉ có một đảng cầm quyền thôi ạ. 

Người Trung Quốc đều có thể làm giàu lớn trong một nước cực kỳ độc tài như Trung Quốc hay cực kỳ 'dân chủ' 'tự do' như Mỹ.  Trong khi người Việt Nam thì không có khả năng làm giàu lớn như vậy bất kể là ở Việt Nam hay ở Mỹ.

Gần đây nhất là vụ Vinashin.  Vụ này chứng tỏ kinh nghiệm và khả năng quản lý của người Việt Nam chỉ lớn đến đó là hết, cho nên làm sao Việt Nam có thể mạnh được? Có người nói rằng đây là công ty nhà nước nên mới vỡ nợ thế, nhưng nếu Việt Nam thật sự có người quản lý tài hơn thế thì chế độ hiện nay cũng đâu có cấm họ tự mình mở tập đoàn lớn hơn Vinashin mà không bị vỡ nợ phải không ạ? 

Có người chống chế nói rằng người tài ở Việt Nam khó ngoi lên nhưng cái này là nói chung chung có thể có ở những mức độ tài thường thường.  Nếu là tài lớn thực sự thì rất khó dìm.  Hơn nữa, không có ai dìm tài những người chống cộng ở Mỹ nhưng không thấy ai trong số họ hay bất cứ người Việt Nam nào khác leo lên đến những vị trí cỡ Li Lu ở trên cả, ngay cả còn cách hai ba bậc mới tới cỡ vị trí đó Mèo cũng chưa từng nghe qua!

Vấn đề làm giàu lớn trăm tỉ (USD chứ không phải VND) được hay không không có quan hệ gì đến độc tài hay 'dân chủ', mà thậm chí trên thực tế trong tình trạng phản dân chủ, làm giàu lớn và nhanh còn có khi dễ hơn.  Ví dụ như thời thực dân và đế quốc lộng hành, cả thế giới là nô lệ của một nhóm nước nhỏ ở Âu Mỹ thì những nước này mặc tình vơ vét, không gặp những rào cản dân chủ, nên họ giàu lên rất nhanh.

Bây giờ trong những nước Tây Âu có dân chủ, có công đoàn mạnh, thì kinh tế trì trệ và thậm chí có nước đã bị phá sản vì lợi nhuận của các công ty bị hệ thống lương bổng, hưu trí, trợ cấp xã hội lấy đi hơi nhiều.  Họ lại phải cạnh tranh với nhân công, có lương bổng thấp, hưu trí thấp hoặc không có, từ những nước độc tài độc đảng phản dân chủ như Trung Quốc, nên từ từ đều đã bị cái nước độc đảng và độc tài phản dân chủ nhất thế giới này qua mặt!

Trong ba thập niên liền cái nước độc đảng, độc tài phản dân chủ nhất thế giới này đã tăng trưởng với tốc độ hai con số gần như liên tục.  Mèo chưa từng nghe qua có nước 'dân chủ' đa đảng, kém phát triển hay phát triển, ngày xưa hay ngày nay, có tốc độ phát triển như vậy cả.  Nếu thực sự không có thì đó là bằng chứng phát triển cực nhanh chỉ có thể xảy ra được ở một nước cực kỳ độc tài!

Định bệnh mà không đúng và chữa bậy bạ bằng thuốc của người khác không chừng bệnh sẽ nặng thêm!  Bệnh của Việt Nam và các nước Đông Nam Á khác là không có truyền thống về quản lý lớn, buôn bán lớn và kỹ thuật cao, đã thế còn vô kỷ luật nữa! cho nên muôn đời cứ lẽo đẽo đi theo những cường quốc có những truyền thống trên.  Khi thì dựa cường quốc này khi thì dựa cường quốc khác để mà tồn tại. 

Cho dù độc tài độc đảng như VN hay là 'dân chủ' như hầu hết các nước Đông Nam Á khác, các nước này vẫn yếu cỡ cỡ nhau.  Có nhiều người sẽ nhảy lên nói rằng: "Còn Singapore thì sao?" Dạ Mèo xin thưa Singapore có khoảng 74% là người Trung Quốc ạ! Cho nên câu hỏi này lại chứng minh một lần nữa là Mèo đúng ạ!

Đông Nam Á không những là 'vùng trũng của bóng đá' mà còn là vùng trũng của kinh tế không phải vì thể chế chính trị mà là vì khả năng về kinh doanh, quản lý lớn, và kỹ thuật cao của con người Đông Nam Á, giống như thể hình của người Đông Nam Á là nhỏ yếu quá thì làm sao có cửa với loại thể thao cần cả sức mạnh, sức bền và sự khéo léo như bóng đá được ạ? Cho nên đá hoài mà không có cách nào cải thiện thể hình của cầu thủ thì nó chỉ đến thế thôi ạ!

Nhưng có hy vọng không? Dĩ nhiên là có, khi nào có người Việt Nam nào đó nghĩ ra được cách chữa được những căn bệnh truyền thống trên.  Nhưng điều này là cực kỳ khó vì phương pháp để giải quyết vấn đề lớn tầm cỡ quốc gia dân tộc thành công thường bắt nguồn từ một lý thuyết, chủ thuyết do người quốc gia đó nghĩ ra để áp dụng một cách cụ thể cho quốc gia hay dân tộc đó,  mà xưa nay người Đông Nam Á nói chung và Việt Nam nói riêng đều không nghĩ ra được mà phải đi vay mượn lý thuyết, chủ thuyết, thuốc của người khác để chữa bệnh cho mình cho nên chữa hoài mà vẫn không khỏi bệnh.  Và cứ thế cái vòng lẩn quẩn lại tiếp tục xoay vòng theo thời gian...

Câu trả lời cho tựa bài này thật ra rất đơn giản.  Nước mạnh là nước mạnh là vì con người và truyền thống của nước đó chứ không phải do chế độ ạ, vì nói cho cùng chế độ và xã hội giàu hay nghèo, tốt hay xấu, độc tài hay dân chủ, trật tự hay hỗn loạn, thật sự cũng chỉ là do con ngừ và truyền thống của nước đó đẻ ra thôi ạ.  Bằng chứng là những dân tộc và quốc gia mạnh cả mấy ngàn năm nay họ vẫn mạnh dù có trải qua bao nhiêu loại chế độ khác nhau ạ.

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China passes Japan as second-largest economy

Experts say milestone underscores the country's growing clout

http://www.nytimes.com/2010/08/16/business/global/16yuan.html?hp

By DAVID BARBOZA

Published: August 15, 201

SHANGHAI — After three decades of spectacular growth, China passed Japan in the second quarter to become the world’s second-largest economy behind the United States, according to government figures released early Monday.

The milestone, though anticipated for some time, is the most striking evidence yet that China’s ascendance is for real and that the rest of the world will have to reckon with a new economic superpower.

The recognition came early Monday, when Tokyo said that Japan’s economy was valued at about $1.28 trillion in the second quarter, slightly below China’s $1.33 trillion. Japan’s economy grew 0.4 percent in the quarter, Tokyo said, substantially less than forecast. That weakness suggests that China’s economy will race past Japan’s for the full year.

Experts say unseating Japan — and in recent years passing Germany, France and Great Britain — underscores China’s growing clout and bolsters forecasts that China will pass the United States as the world’s biggest economy as early as 2030. America’s gross domestic product was about $14 trillion in 2009.

“This has enormous significance,” said Nicholas R. Lardy, an economist at the Peterson Institute for International Economics. “It reconfirms what’s been happening for the better part of a decade: China has been eclipsing Japan economically. For everyone in China’s region, they’re now the biggest trading partner rather than the U.S. or Japan.”

For Japan, whose economy has been stagnating for more than a decade, the figures reflect a decline in economic and political power. Japan has had the world’s second-largest economy for much of the last four decades, according to the World Bank. And during the 1980s, there was even talk about Japan’s economy some day overtaking that of the United States.

But while Japan’s economy is mature and its population quickly aging, China is in the throes of urbanization and is far from developed, analysts say, meaning it has a much lower standard of living, as well as a lot more room to grow. Just five years ago, China’s gross domestic product was about $2.3 trillion, about half of Japan’s.

This country has roughly the same land mass as the United States, but it is burdened with a fifth of the world’s population and insufficient resources.

Its per capita income is more on a par with those of impoverished nations like Algeria, El Salvador and Albania — which, along with China, are close to $3,600 — than that of the United States, where it is about $46,000.

Yet there is little disputing that under the direction of the Communist Party, China has begun to reshape the way the global economy functions by virtue of its growing dominance of trade, its huge hoard of foreign exchange reserves and United States government debt and its voracious appetite for oil, coal, iron ore and other natural resources.

China is already a major driver of global growth. The country’s leaders have grown more confident on the international stage and have begun to assert greater influence in Asia, Africa and Latin America, with things like special trade agreements and multibillion dollar resource deals.

“They’re exerting a lot of influence on the global economy and becoming dominant in Asia,” said Eswar S. Prasad, a professor of trade policy at Cornell and former head of theInternational Monetary Fund’s China division. “A lot of other economies in the region are essentially riding on China’s coat tails, and this is remarkable for an economy with a low per capita income.”

In Japan, the mood was one of resignation. Though increasingly eclipsed by Beijing on the world stage, Japan has benefited from a booming China, initially by businesses moving production there to take advantage of lower wages and, as local incomes have risen, by tapping a large and increasingly lucrative market for Japanese goods.

Beijing is also beginning to shape global dialogues on a range of issues, analysts said; for instance, last year it asserted that the dollar must be phased out as the world’s primary reserve currency.

And while the United States and the European Union are struggling to grow in the wake of the worst economic crisis in decades, China has continued to climb up the economic league tables by investing heavily in infrastructure and backing a $586 billion stimulus plan.

This year, although growth has begun to moderate a bit, China’s economy is forecast to expand about 10 percent — continuing a remarkable three-decade streak of double-digit growth.

“This is just the beginning,” said Wang Tao, an economist at UBS in Beijing. “China is still a developing country. So it has a lot of room to grow. And China has the biggest impact on commodity prices — in Russia, India, Australia and Latin America.”

There are huge challenges ahead, though. Economists say that China’s economy is too heavily dependent on exports and investment and that it needs to encourage greater domestic consumption — something China has struggled to do.

The country’s largely state-run banks have recently been criticized for lending far too aggressively in the last year while shifting some loans off their balance sheet to disguise lending and evade rules meant to curtail lending growth.

China is also locked in a fierce debate over its currency policy, with the United States, European Union and others accusing Beijing of keeping the Chinese currency, the renminbi, artificially low to bolster exports — leading to huge trade surpluses for China but major bilateral trade deficits for the United States and the European Union. China says that its currency is not substantially undervalued and that it is moving ahead with currency reform.

Regardless, China’s rapid growth suggests that it will continue to compete fiercely with the United States and Europe for natural resources but also offer big opportunities for companies eager to tap its market.

Although its economy is still only one-third the size of the American economy, China passed the United States last year to become the world’s largest market for passenger vehicles. China also passed Germany last year to become the world’s biggest exporter.

Global companies like Caterpillar, General Electric, General Motors and Siemens — as well as scores of others — are making a more aggressive push into China, in some cases moving research and development centers here.

Some analysts, though, say that while China is eager to assert itself as a financial and economic power — and to push its state companies to “go global” — it is reluctant to play a greater role in the debate over climate change or how to slow the growth of greenhouse gases.

China passed the United States in 2006 to become the world’s largest emitter of greenhouse gases, which scientists link to global warming. But China also has an ambitious program to cut the energy it uses for each unit of economic output by 20 percent by the end of 2010, compared to 2006.

Assessing what China’s newfound clout means, though, is complicated. While the country is still relatively poor per capita, it has an authoritarian government that is capable of taking decisive action — to stimulate the economy, build new projects and invest in specific industries.

That, Mr. Lardy at the Peterson Institute said, gives the country unusual power. “China is already the primary determiner of the price of virtually every major commodity,” he said. “And the Chinese government can be much more decisive in allocating resources in a way that other governments of this level of per capita income cannot.”

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From Tiananmen Square to Possible Buffett Successor

By SUSAN PULLIAM

Twenty-one years ago, Li Lu was a student leader of the Tiananmen Square protests. Now a hedge-fund manager, he is in line to become a successor to Warren Buffett at Berkshire Hathaway Inc.

Mr. Li, 44 years old, has emerged as a leading candidate to run a chunk of Berkshire's $100 billion portfolio, stemming from a close friendship with Charlie Munger, Berkshire's 86-year-old vice chairman. In an interview, Mr. Munger revealed that Mr. Li was likely to become one of the top Berkshire investment officials. "In my mind, it's a foregone conclusion," Mr. Munger said.

The job of filling Mr. Buffett's shoes is among the most high-profile succession stories in modern corporate history. Mr. Buffett, who will turn 80 in a month, says he has no current plans to step down and will likely split his job after he leaves the company into separate CEO and investing functions. Mr. Li's emergence as a contender to oversee Berkshire investments is the first time a name has been identified to fill the investment part of Mr. Buffett's legendary role.

The development illustrates that Berkshire is moving toward putting in place—possibly sooner than investors anticipated—certain aspects of its succession plan.

The Chinese-American investor already has made money for Berkshire: He introduced Mr. Munger to BYD Co., a Chinese battery and auto maker, and Berkshire invested. Since 2008, Berkshire's BYD stake has surged more than six-fold, generating profit of about $1.2 billion, Mr. Buffett says. Mr. Li's hedge funds have garnered an annualized compound return of 26.4% since 1998, compared to 2.25% for the Standard & Poor's 500 stock index during the same period.

Mr. Li's ascent on Wall Street has been no less dramatic. He spent his childhood shuttling between foster families after his mother and father were sent to labor camps during the Cultural Revolution. After the Tiananmen Square protest, he escaped to France and came to the U.S. Investors in his hedge fund have included a group of senior U.S. business executives and the musician Sting, who calls Mr. Li "hardworking and clever."

Mr. Li's investing strategy represents a significant shift for Mr. Buffett: Mr. Li invests chiefly in high-technology companies in Asia. Mr. Buffett typically has ignored investments in industries he says he doesn't understand.

Mr. Buffett says Berkshire's top investing job could be filled by two or more managers who would be on equal footing and divide up responsibility for managing Berkshire's $100 billion portfolio. David Sokol, chairman of Berkshire unit MidAmerican Energy Holdings, is considered top contender for CEO. Mr. Sokol, 53, joined MidAmerican in 1991 and is known for his tireless work ethic.

In an interview, Mr. Buffett declines to comment directly on succession plans. But he doesn't rule out bringing in an investment manager such as Mr. Li while still at Berkshire's helm.

"I like the idea of bringing on other investment managers while I'm still here," Mr. Buffett says. He says he doesn't preclude making a move this year, though he adds that there is no "goal" to bring on an additional manager that quickly either. Mr. Buffett says he envisions a team approach in which the Berkshire investment officials would be "paid as a group" from one pot, he says. "I don't want them to compete."

Mr. Li fits the bill in some important ways, Mr. Buffett says. "You want someone" who "can think about problems that haven't yet existed before," he says. Mr. Li is a contrarian investor, loading up on BYD shares when they were beaten down. And he's a big fan of Berkshire, which may also help his cause. "We don't want them unless they have special feelings about Berkshire," Mr. Buffett says.

But hiring Mr. Li could be risky. His big bet on BYD is his only large-scale investing home run. Without the BYD profits, his performance as a hedge-fund manager is unremarkable.

Li Lu (far right) with Chinese student leaders at Tiananmen Square in June 1989.

It's unclear whether he could rack up such profits if managing a large portfolio of Berkshire's.

What's more, his strategy of "backing up the truck," to make large investments and not wavering when the markets turn down could backfire in a prolonged bear market. Despite a 200% return in 2009, he was down 13% at the end of June this year, nearly double the 6.6% drop in the S&P-500 during the period.

Mr. Li declines to discuss a potential Berkshire position, saying only that he feels fortunate to be a member of the Berkshire inner circle. "This is the stuff you can't conjure in dreams," he says.

Mr. Li was born in 1966, the year Mao Zedong's Cultural Revolution began. When he was nine months old, he says, his father, an engineer, was sent to a coal mine to be "re-educated." His mother was sent to a labor camp. Mr. Li's parents paid various families to take him in. He was shuttled from family to family for several years until moving in with an illiterate coal miner, with whom he developed a close bond, in his hometown of Tangshan. Living apart from his family as a child taught him survival skills, Mr. Li says.

He was reunited with his family, including two brothers, by age 10, when a massive earthquake hit his hometown, killing an estimated 242,000 people in the area, including the coal miner and his family. His nuclear family was spared, he says, but "most of the people I knew were killed."

At the time, he says he had no direction and was fighting in the streets. Mr. Li says his grandmother, who was among the first women in her city to attend college, inspired him to begin reading and studying. He later attended Nanjing University, majoring in physics.

In April 1989, he traveled to Tiananmen Square in Beijing to meet with students who were gathering to mourn the death of Secretary General Hu Yaobang, who was viewed as a supporter of democracy and reforms.

The students protested against corruption, among other things, and Mr. Li helped organize the students and participated in a hunger strike.

He and other students fled to France. Later in 1989, he traveled to the U.S. to speak at Columbia University, where human-rights activists embraced him as a hero. He spoke little English but landed an advance to write a book about his experiences.

Helped by financial scholarships at Columbia, Mr. Li quickly learned English. He simultaneously earned three degrees: an economics degree, a law degree and a graduate degree in business, according to Columbia.

With his student loans piling up, Mr. Li attended a lecture by Mr. Buffett at Columbia in 1993. At the time, the 1990s bull market was in full swing, and hedge funds were on the rise. Mr. Li says in China he didn't trust financial markets but hearing Mr. Buffett helped him overcome skepticism about stock investing.

He began dabbling in stocks using money from his book advance. By his graduation in 1996, he had built a sizable nest egg and says he thought he could retire. Instead he took a job at securities firm Donaldson Lufkin & Jenrette and then left to set up his own hedge fund. In 1997, he had set up Himalaya Partners, a hedge fund. Later he started a venture-capital fund to invest in U.S. technology companies.

It was a heady time on Wall Street. The Internet boom was beginning. Investors were clamoring to find hot stocks.

Through his human-rights contacts, Mr. Li quickly attracted well-heeled clients including Bob Bernstein, former chairman of Random House and founder of Human Rights Watch as well as the musician Sting. Other investors included financier Jerome Kohlberg, News Corp. director emeritus and Allen & Co. executive Stanley Shuman and hedge fund manager Jack Nash, Mr. Li says.

But Mr. Li bombed out in 1998, his first year as a hedge fund manager. His fund, which was invested chiefly in Asian stocks, was hammered by the Asian debt crisis, and lost 19%.

"I felt bad that people had trusted me," he says. "All they knew was I was a student activist and all they saw was losses."

His fortunes rebounded as the Asian crisis quickly faded. As 1998 began, so did a huge new bull market. By now, the hedge-fund industry was growing gangbusters, and by the end of 1999, Mr. Li's fund had regained its losses.

In 2002, hedge-fund giant Julian Robertson gave Mr. Li money to invest in his fund on the condition that the fund would make bearish as well as bullish bets on companies.

It wasn't a good fit. Mr. Li says he "hated" betting against stocks, complaining that he had to "trade all the time" to adjust his portfolio. (The remaining parts of the fund now are being unwound.) Mr. Robertson declined to comment on the business relationship.

One of Mr. Li's human-rights contacts was Jane Olson, the wife of Ronald Olson, a Berkshire director and early partner at a Los Angeles law firm Mr. Munger helped found. Mr. Li began spending time at the Olsons' weekend home in Santa Barbara, Calif., and on Thanksgiving 2003 met Mr. Munger, whose home is nearby.

Mr. Munger says Mr. Li made an immediate impression. The two shared a "suspicion of reported earnings of finance companies," Mr. Munger says. "We don't like the bull—."

Mr. Munger gave Mr. Li some of his family's nest egg to invest to open a "value" fund betting on beaten-down stocks.

Two weeks later, Mr. Li says he met again with Mr. Munger to make certain he had heard right. In early 2004, Mr. Li opened a fund, putting in $4 million of his own money and raising an additional $50 million from other investors. Mr. Munger's family put in $50 million, followed by another $38 million. Part of Mr. Li's agreement with Mr. Munger was that the fund would be closed to new investors.

Mr. Li's big hit began in 2002 when he first invested in BYD, then a fledgling Chinese battery company. Its founder came from humble beginnings and started the company in 1995 with $300,000 of borrowed money.

Mr. Li made an initial investment in BYD soon after its initial public offering on the Hong Kong stock exchange. (BYD trades in the U.S. on the Pink Sheets and was recently quoted at $6.90 a share.)

When he opened the fund, he loaded up again on BYD shares, eventually investing a significant share of the $150 million fund with Mr. Munger in BYD, which already was growing quickly and had bought a bankrupt Chinese automaker. "He bought a little early and more later when the stock fell, which is his nature," Mr. Munger says.

In 2008, Mr. Munger persuaded Mr. Sokol to investigate BYD for Berkshire as well. Mr. Sokol went to China and when he returned, he and Mr. Munger convinced Mr. Buffett to load up on BYD. In September, Berkshire invested $230 million in BYD for a 10% stake in the company.

BYD's business has been on fire. It now has close to one-third of the global market for lithium-ion batteries, used in cell phones. Its bigger plans involve the electric and hybrid-vehicle business.

The test for BYD, one of the largest Chinese car makers, will be whether it can deliver on plans to develop the most effective lithium battery on the market that could become an even bigger source of power in the future. Even more promising is the potential to use the lithium battery to store power from other energy sources like solar and wind.

Says Mr. Munger: "The big lithium battery is a game-changer."

BYD is a big roll of the dice for Mr. Li. He is an informal adviser to the company and owns about 2.5% of the company.

Mr. Li's fund's $40 million investment in BYD is now worth about $400 million. Berkshire's $230 million investment in 2008 now is worth about $1.5 billion. Messrs. Buffett, Munger, Sokol, Li and Microsoft founder and Berkshire Director Bill Gates plan to visit China and BYD in September.

Mr. Li is able to travel in China on a limited basis today, but he hopes to regain full travel privileges soon. It isn't clear how he is viewed by the Chinese government.

Mr. Li declined to name his fund's other holdings. Despite this year's losses, the $600 million fund is up 338% since its late 2004 launch, an annualized return of around 30%, compared to less than 1% for the S&P 500 index.

Mr. Li told investors he took a lesson from watching the World Cup, comparing his investment style to soccer. "You may very well work extremely hard and seldom score," he says. "But occasionally—very occasionally—you get one or two great chances and you make decisive strikes that really matter."

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Tiananmen Square to Wall Street: Li Lu Hits the New York Jackpot

By Carrie Cunningham

May 17, 1998 | 8:00 p.m

Li Lu, a student leader in the Tiananmen Square uprising, has jumped headlong into the bull market. In January, he rented two rooms of office space on the 15th floor of 660 Madison Avenue, and, equipped with a phone, a computer and a Bloomberg machine, he got to work investing other people's money, running a high-risk hedge fund called Himalaya Capital Partners L.P. The minimum investment is $1 million.

In setting up the fund, Mr. Li said he's experiencing firsthand the capitalism and democracy he was fighting for in his homeland. "Free man, free market," is a phrase he invokes often.

Mr. Li is 32 years old. He wears Armani suits that he buys at a factory outlet; he lives in one of those bland modern towers on the East Side. While other Wall Street hotshots his age may have endured the trauma of not getting into the business schools or investment banks of their choice, Mr. Li has survived poverty, separation from his family (his parents were forced into labor camps) and a devastating earthquake. When he escaped to America after hundreds of his fellow protestors were killed in Beijing, he was one of the most wanted dissidents in China.

His clients hope they'll see big profits, but they also seem to be investing in the future of Mr. Li himself. Jerome Kohlberg Jr., a founder of the leverage buyout monolith Kohlberg, Kravis, Roberts & Company, said his decision to invest with Mr. Li "wasn't my usual cautionary thing, but my admiration prevailed … I don't know about others, but I would like to see him succeed and eventually help bring China into the 21st century and be a democracy, and I think he, by then, will be uniquely qualified."

Others who have invested in Mr. Li's new hedge fund include: Stanley Shuman, executive vice president at Rupert Murdoch's deal maker, Allen & Company; Jack Nash, co-founder of Odyssey Partners L.P.; Robert Shaye, chief executive of New Line Cinema Corporation; Robert Bernstein, former chief executive of Random House Inc. and a founding chairman of Human Rights Watch; and his son, Tom Bernstein, president of Chelsea Piers Management Inc. And proving that it's a chic investment, there is also Sting, the sensitive rock star and rain forest activist, who has kicked in with at least a million of his own.

The glittering client roster seems not to intimidate Mr. Li. "You prove to them you're good, people trust you," he said over iced tea at Sofia's Fabulous Grill on the Upper East Side. "They don't ask how many years I've managed a fund. The question is, Can you make me money? Show me the money! This is one area where, if you really believe you're smart and you're unique and you're different, this can be challenging-this is it. Because if you're right, you make a lot. If you're wrong, you lose a bundle."

With the Dow Jones average rising above 9,000, the latest financial district jokes and clichés liken good investing to good sex. Mr. Li considered the comparison. "This market is not a man's sex drive," he said. "If you had to compare it, this market is a woman's sex drive. It is really experiencing a multiple climax, but even the woman has downtime. The traditional Chinese sentiment is that the woman has the capacity to climax 15 times. The market is turning into the traditional description of the woman's sex drive. My girlfriend is around that number."

So how long can it last? "Nothing goes forever," Mr. Li said. "As I say, even if you compare it with the woman's sexual capability, it has an end. This market is capable of multiple climaxes, but there is a recession."

Born in 1966, the year Mao Zedong initiated the Cultural Revolution, Mr. Li was separated from his parents when he was less than a year old. He passed through half a dozen adoptive families during the first decade of his life. Mao's regime condemned his mother, a botanist and the daughter of a wealthy landowner, and his father, an engineer, as bourgeois intellectuals-and therefore enemies of the state. They were sent to separate labor re-engineering camps. Facing a life of hard labor, Mr. Li's mother was forced into having to choose one of her children to keep with her. She kept Mr. Li's older brother.

"Mao Zedong's way was to make people crazy," Mr. Li said. "It was like a religious cult. You cut all the culture, you kill or jail all the people with learned minds who think independently. Anything that remotely reminded you of humanity was destroyed."

On the eve of Mao Zedong's death in 1976, Mr. Li survived an earthquake in Tangshan, China, that killed the adoptive family whom he had grown to love. In the earthquake's rubble, the 10-year-old boy ran through the city; the dead bodies overwhelmed him and he blacked out. When he came to, he saw a woman giving birth and heard her cries.

Days after the earthquake, radio propaganda claimed that Mao Zedong's administration was helping his ravaged town-something that ran counter to what he saw. "The soldiers and party officials are grabbing all the things available for relief for themselves or their family," he recalled. "Older people just don't get anything. So I developed a tremendous aversion, you know, hatred toward those people."

He was living with his blood family again and came under the guidance of his grandmother, a founder of elementary schools in the 1930's. She told him the only way he could beat the government and help people was, first of all, to educate himself. Mr. Li immersed himself in books, which gave him the idea that "other people have lived a different life, a better life, so should I-so should everybody."

His convictions led him to Nanjing University and Tiananmen Square. He was deputy commander of the student movement, second to Chai Ling, who is now at Harvard Business School. He saw many of his fellow student protesters shattered by the massacres. "They couldn't get over this sense of loss and failure and guilt," he said. "It was terrible and I had some of it."

He arrived in Manhattan in December 1989. By 1996, he had earned a B.A., M.B.A. and J.D. from Columbia University, and written a memoir of his experiences in China ( Moving the Mountain , Macmillan London). With royalties from the book, as well as fees earned from giving lectures, he made investments and rode the bull market to the $125,000 he needed to pay his living costs and the tuition not covered by his scholarship.

"Early on," he said, "I know I gotta make money work. The whole thing is, really, money makes money. That's the whole thing about capitalism. Without the capital, there is no -ism."

His early success in investing, linked with his abysmal experience with communism, made him a true believer in the free market. "But the precondition of capitalism is a free man," he said. "With free market and free man, if you remove one of them, it is not called capitalism in my dictionary. Without a free man, there is no free market. That's called exploitation. In China, there's not capitalism. It's official corruption, that's what it is."

Before striking out on his own, Mr. Li worked for a summer at the white-shoe law firm Simpson, Thacher & Bartlett, put in four months at the media investment-banking firm Allen & Company and spent two years as a corporate finance associate at another investment banking firm, Donaldson, Lufkin & Jenrette. The chores that go with pleasing clients didn't sit well with him. "It's very hard for me in the service business," he said. "I want to make up a decision and do it. I'm a doer rather than just giving ideas."

Mr. Li's liberation from corporate hell came on the red-eye from San Francisco to New York last year. On the flight, he saw Rena Shulsky, a Manhattan real estate magnate whom he had met while giving a lecture. She encouraged him to start a fund. "I thought he could do better than working at D.L.J.," she said. She also, according to Mr. Li, gave him something better than advice-namely, $2 million in seed money. (Ms. Shulsky would not comment on how much she invested with him.)

Tom Bernstein, who helped Mr. Li gain asylum in the United States in his role as board president of the Lawyers Committee for Human Rights, was another early investor. "We kid about Li Lu," Mr. Bernstein said. "If you said that someone was going to make a billion dollars and be the head of the largest country in the world, all in one lifetime, he could be the guy."

Two investors said John Kluge, chairman of Metromedia Company, had invested in Mr. Li's fund this past January. Which seemed odd, given Mr. Kluge's recent meeting with Chinese President Jiang Zemin concerning the possibility of expanding his company into China. (Mr. Li at first would not comment on Mr. Kluge; in a later interview, he said Mr. Kluge was not one of his clients. Mr. Kluge did not return calls seeking comment on the matter.)

Mr. Li said he likes to buy stocks that are undervalued, in his estimation. That goes against the currently fashionable "momentum" theory used by investors who believe they can ride an overvalued stock that is still soaring in price, and then jump out before the stock comes crashing back down.

"If you're right, ultimately it will prove you're right, but you look stupid for a long time," he said of his own gambits. "It is what I'm all about. It's revolutionary. It is about trusting yourself. It's about challenging the conventional wisdom. That's what we did in Tiananmen."