A Princeling, but a Helluva Nice Guy

By Dexter Roberts It was starting to feel like just another frustrating Chinese media event. The Oct. 18 APEC CEO Summit welcoming dinner, held at the Grand Ballroom of Shanghai's luxury Pudong Shangri-La Hotel, was star-studded. Among the guests were big names like Microsoft's Bill Gates, General Motor's Jack Smith, and Hu Maoyuan, president of Shanghai Automotive Industry, one of China's largest auto makers. They had assembled to schmooze with Chinese officials while dining on Mandarin fish filet, stewed sliced abalone, and braised shark's fin soup. The welcoming speech was to be given by President Jiang Zemin.

Alas, most of this was off-limits to the small group of Chinese and foreign journalists. Chinese security officials brought us up the staff staircase to the third floor of the hotel, through the kitchen area past white-smocked cooks and dishwashers, and herded us to a camera platform set up in the back of the vast ballroom. They ordered us to stay put and wait.

We were to be kept at a safe distance with our notebooks and cameras -- where we would quietly observe the mighty but not spoil China's carefully planned big event. When our press handlers momentarily looked the other way, though, I slipped out and made a beeline for the predinner reception, held on the hotel's third-floor balcony overlooking the Shanghai Bund, a strip of the river lined with classic colonial-era buildings. Grabbing a glass of white wine, I hoped to blend in as I surveyed the view across the river.

SON ALSO RISES. I sidled over to a cluster of familiar people that included James R. Sasser, the former U.S. ambassador to China, Vaughn A. Koshkarian, president of Ford's Asia Pacific Operations, and a few of China's top auto executives, including Zhu Yanfeng, the youthful 40-year-old president of First Auto Works, and Shanghai Automotive's Hu Maoyuan. Chairman Liu Chuanzhi of computer powerhouse Legend Holdings was chatting nearby.

Then came one of those moments of pure journalistic chance. Ambassador Sasser introduced me to a Mr. Li, a short, friendly Chinese man who spoke excellent English and had a vaguely familiar look. It was not until he handed me his name card, identifying him as president of one of China's largest power companies, that I realized why.

Mr. Li, it turned out, was Li Xiaopeng, son of one of China's top leaders, Li Peng, who now serves as chairman of the National People's Congress. The 40-something Li bears a striking resemblance to his father, who is perhaps best known for the tragic events of 1989: Many human-rights activists, diplomats, foreign journalists, and Chinese believe he had a direct hand in the crackdown that led to the bloody Tiananmen Square massacre.

CASHING IN. The junior Li is often described as one of China's princelings, the offspring of top leaders who have used their connections to go into business. Jiang Zemin's son is a telecom executive. Premier Zhu Rongji's son works for a partnership involving a major investment bank partnership. The list goes on and on.

Like his sister, Li Xiaolin, Li Xiaopeng has become a powerful figure in the energy sector, the same industry his father worked in for many years before rising to the top of the political structure. But the similarities with his father seem to end there. Li clearly cashed in on his connections in early 2000 when he became chairman of Huaneng Power International, a company with $1.5 billion in revenues. His reputation among foreign executives, though, is that of a down-to-earth and capable Chinese executive.

While many princelings are known to freely exercise their political clout, Li does not. "Other people don't have to carry his luggage," says a Western banker familiar with Li. "He doesn't demand a lot of kowtowing."

UNUSUAL BEHAVIOR. Not only is he rather humble about his official pedigree and connections but Li is also seen as a professional manager in China's corruption-riddled power sector. With his ready smile, Li was downright charming. When I asked him how he had learned to speak such fluent English, he was self-deprecating about his language skills but admitted he had studied at Manitoba University in Canada.

Li also seemed completely unfazed by speaking with a foreign reporter -- unusual in a country where many Chinese immediately assume the foreign correspondent is a tewu, or spy. He was curious about how a magazine like BusinessWeek handles China, asking about what topics are covered and how many reporters work the China beat.

Li became most animated when talking about his own company, where he has banned all smoking at headquarters -- something he adopted from his mother, who was passionate about the hazards of smoking. Li was eager to outline his plans for a domestic listing on Shanghai's stock exchange to complement the company's overseas listings. A listing in Shanghai would allow him to raise more capital and provide his 9,000 employees a way to invest in their own company through stock purchases -- an incentive to work harder, Li says. "It is important to give our employees a chance to own a stake in their company."

SATISFYING SURPRISE. When dinner was served and we headed to the ballroom, Li Xiaopeng finished our conversation by warmly inviting me to visit his company's headquarters in Beijing. By then, I had almost forgotten Li is the son of a man many see as one of China's bad guys. Of course, I'll soon find out whether he'll remain friendly or even answer my phone call when I follow up.

As I headed back to take my sequestered seat among the scribes, still warily eyed by the security guards, I was reminded how regularly the Chinese serve up surprises. Indeed, they even compensate for the regular frustrating fare of reporting in China. Roberts is BusinessWeek's Beijing bureau chief