From Tycoon to Pauper: The Impact of Chinese Communist Policies on Banker Kang Xinru (Part 2)

Banker Kang Xinru and his family.

Before 1949, the name Kang Xinru was well-known in China's financial circles, but after the Chinese Communist Party seized power, he was slowly ruined as the CCP embezzled his property by various means. (Image: via Public Domain)

Kang Xinru was a prominent financial tycoon in the Republic of China. However, after 1949, he was gradually destroyed by the Chinese Communist Party (CCP), and in the end, he was left a pauper with only a few items left to his name. How did a prominent banker go from being a millionaire to a pauper?

The fall of the Mei Feng Bank

On November 30, 1949, as communism took over China, the Chinese Communist Army entered Chongqing. At that time, in order for Mei Feng Bank to survive, Kang Xinru held a special family meeting and decided to mobilize all the gold and jewelry they had at home. His son, Kang Guoxiong, said that a total of 2.2 billion in old currency cash was thus raised. People later commented that his was a “righteous act of sacrificing the family’s assets to save the bank.”

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The bank had cash flowing in and out every day. However, due to the tense situation at that time, daily cash withdrawals were huge and the money Kang Xinru had raised was simply not enough. Left with no other recourse, he approached the People’s Bank of China (PBC) to negotiate for a loan.  

Kang Xinru had a commercial building in the most upscale part of Chongqing, worth 2 billion dollars at that time. He proposed using this building as collateral to get a loan of 1 billion dollars, but unfortunately, the negotiation failed. He then proposed using the building of Mei Feng Bank as collateral, but PBC still would not agree.

The bank refused Kang Xinru's attempt to get a loan using his commercial building in Chongqing as collateral.
The bank refused Kang Xinru’s attempt to get a loan using his commercial building in Chongqing as collateral. (Image: via Public Domain)

Kang Xinru pleaded with PBC, saying: “If you don’t give me the money, my bank will have to close down.” The reply from PBC was: “Then close down your bank.”  

On April 4, 1950, the famous Mei Feng Bank, which had been in operation for 28 years, was forced to permanently close.

Destroying a kind-hearted man

After closing down Mei Feng Bank, Kang Xinru did not give up. He sent two more reports to the People’s Bank of China, clearly stating how much debt he had and how much real estate he owned, such as warehouses, homes, and factories. If PBC would agree to a loan, then Mei Feng Bank could continue to operate. However, PBC simply ignored Kang Xinru’s pleas time and again.

Over a period of the next 10 years, the Chinese Communist Party (CCP) then started to “clear up” Kang Xinru’s assets. To put it bluntly, this was the process of the CCP illegally seizing his assets.  

For example, there was the “Yang Sen’s withdrawal incident” mentioned in part 1 of the story. At that time, Kang Xinru was forced to take out 200 gold bars to “buy” Yang Sen’s shares at gunpoint. After 1949, Yang Sen was declared a war criminal by the CCP, and the CCP said that Kang Xinru’s purchase of Yang Sen’s shares was “transferring assets to the enemy.” They demanded that he pay compensation to the CCP, saying: “However much you have given to Yang Sen, that is the sum you must pay us.” 

Another example was the warlord Ma Bufang, who fled from the northwest to Chongqing, bringing with him a batch of gold. Ma Bufang rented a safe at Mei Feng Bank for safe storage of his gold, and when he left, he took the gold away with him. After 1949, Ma Bufang also became classified as a war criminal by the CCP. The CCP then claimed that Kang Xinru asked Ma Bufang to take away the gold stored in the bank, which they also deemed to be a case of “transferring assets to the enemy assets.” The CCP once again demanded Kang Xinru pay them compensation. 

The CCP also sold Kang Xinru’s house in Chongqing for US$170,000. However, the CCP did not give the money from the sale of the house to Kang Xinru who, at that time, was in need of money to buy a house in Beijing. Instead, the CCP gave only US$10,000 to him, and the other US$160,000 was forcibly deposited in the People’s Bank of China, purportedly for buying Mei Feng Bank’s shares.

The irony of it was that Mei Feng Bank had long ceased to do business, so how could it be for buying Mei Feng’s shares? Moreover, the shares could only receive a fixed interest rate, which was not worth a lot of money. Kang Xinru received this small fixed interest payment for two years, after which the payments completely stopped.

A few Chinese yuan coins.
Kang Xinru received a small fixed interest payment for two years, after which the payments completely stopped. (Image: Deaconsdocs via Dreamstime)

In addition, the 14-and-a-half-room detached house that Kang Xinru owned was forcibly taken for “the masses” to live in during the Cultural Revolution. 

Who can withstand such manipulation, cruelty, and heartless treatment by the CCP?   

Before the outbreak of the Cultural Revolution, Kang Xinru’s only source of income was as a member of the Chongqing People’s Political Consultative Conference (CPPCC), with a monthly salary of just US$90. After the outbreak of the Cultural Revolution in 1966, the Chongqing CPPCC stopped paying Kang Xinru even this small salary. They even returned the medical bills sent for reimbursement with a note containing lewd words, saying that Kang Xinru was a rebel! 

After this incident, the Red Guards raided Kang Xinru’s house. According to his son Kang Guoxiong: “The raiding was so thorough, it was as if ‘clearing the walls and clearing the fields’ — even the pots and pans, urinal container, clothes, and quilts in the house were all searched and stolen, leaving only a few empty beds and the clothes that father (Kang Xinru) was wearing!”

In November 1969, Kang Xinru became critically ill and was sent to Peking Union Medical College Hospital. However, the hospital refused to accept him. Later, the family approached the hospital’s military control committee, which, after repeated discussions, finally agreed to treat him. 

For the next five or six days,  Kang Xinru was left lying in the emergency room. Just three days after finally being transferred to the ward, on November 19, 1969, Kang Xinru passed away.

Lesson for today’s China

So what’s the lesson for the entrepreneurs and small business owners in China today?

It is this:  Under the rule of communism, nothing is ever truly yours — not your business, not your home, not your money, not even your family. The Communist Party will take whatever it wants, whenever it wants, and it will use any excuse of its choosing for the reason why it steals from you, abuses you, and treats you cruelly. 

Remember the lesson of Kang Xinru, as well as the many other lessons left from history that the CCP tries to hide from the people of China. When the Communist Party says it supports small business owners and entrepreneurs, beware the Party’s motives, for the only thing the Party truly supports is gaining more wealth and power for itself.

See Part 1 here

Translated by Chua BC

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