2009 2015 2019
0
1
2
3
4
5
$6 trillion
CHINA RETAIL SALES
U.S. RETAIL SALES $6.2
TRILLION
SOURCES: PAG; U.S. CENSUS BUREAU; NATIONAL BUREAU OF STATISTICS OF
CHINA. 2019 DATA ANNUALIZED BASED ON JAN.-JULY 2019 GROWTH RATE
173
FORTUNE.COM // DECEMBER 2019
In the wilds, Shan relentlessly sought knowledge about the
wider world. He secretly listened to Voice of America broadcasts
in English while studying a dictionary that matched English words
with pictures. Later, when China began building ties to America
under Deng Xiaoping, Shan seized his opportunity. In 1980, he
won a scholarship to attend a U.S. university. Shan chose the
University of San Francisco over Stanford and UC Berkeley, in part
because the Chinese name for San Francisco had a prestigious ring.
“It means ‘Old Gold Mountain,’ as it was called by the immigrants
who joined the 19th-century gold rush,” he explains. After earning
an MBA, Shan enrolled in 1982 as a doctoral student at Berkeley,
where his advisers included Janet Yellen, the future chair of the
Federal Reserve, who in Shan’s book recalls “a charming young
man in need of a good meal and a new haircut.”
Upon graduating, Shan worked briefly at the World Bank,
then taught at the Wharton School. But the chance to capitalize
on China’s shift to a market-driven economy proved irresistible.
In 1993, he joined J.P. Morgan as an investment banker in Hong
Kong, switching five years later to Newbridge Capital, then the
Asian arm of private equity firm TPG. Shan worked with legend-
ary dealmaker David Bonderman to revive two banks felled by the
Asian debt crisis. TPG invested $500 million in Korea First Bank
and $150 million in Shenzhen Development Bank. As the lend-
ers rebounded, TPG sold its shares in Korea First for $1.65 billion
and in Shenzhen for $2.2 billion. Shan, meanwhile, was typically
dogged in unearthing other opportunities. “He told me that he’d
traveled 36 hours on a unheated train in China’s interior to visit a
factory,” recalls Aliber, the professor.
In 2010, Shan left TPG and quickly raised $2.5 billion to start
his own fund at an existing firm called PAG. His contacts in top
echelons of the Chinese and American financial worlds proved
Shan describes in his memoir, Out of the Gobi:
My Story of China and America, that painful
period, in which China’s planned economy
created scarcity from plenty, made him recog-
nize what a market-driven system could mean
to his homeland.
In 1969, China’s government transplanted
16 million urban teenagers to the countryside.
Shan’s destination was the Gobi Desert in In-
ner Mongolia, as part of a corps of farmers. His
unit was tasked with growing wheat and corn
in the barren soil. Shan also served as a “bare-
foot doctor,” supplying basic medical treatment
to other soldiers. In the frigid winters, the only
source of heat was burning frozen cow dung.
“I was surprised that when people disagree in
the U.S., one person calls the other’s argument
‘bullshit,’ ” Shan told me. “You can’t believe how
precious that stuff was to me!”
Even amid hardship, Shan showed a knack
for efficiencies. Assigned to a team of three to
make bricks, Shan found that specialization
hiked their output. He gave each teammate
one task—mixing clay and sand, packing the
compound into molds, or transporting bricks
to the drying area—and the process nearly
doubled their production.
WEIJIAN SHAN
REIN MAKER
Shan during his
stint as a farmer
in the Gobi Desert,
which helped shape
his belief in free
markets.
Consumers Take a Great Leap
This summer, retail spending in China
surpassed that in the U.S. for the first time.
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