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Li Xin’s Second Run

Volume 4, 2016

By Lei Na

Li Xin was taking in the scenery along the bank of the Yalu River in Dandong, Liaoning Province when she noticed the two brawny men standing beside her. She immediately took off, running fast until she could catch a taxi to the railway station to grab the first train out of town. She didn’t even stop at her hotel to collect her things. In her 20s at that time, she was the only woman lawyer at the first law firm in Henan Province and had been in Dandong on a case. That morning she had helped the police arrest some men suspected of economic crimes – the two men who approached her by the river had been among them.

Once safely back in her Zhengzhou office she told the director of her law firm that from then on she only wanted to do non-litigation business. The firm had no business that fell into that category. Unable to persuade the firm to allow her to pursue this new path, Li and two other young lawyers set out on their own and opened Zhongcheng Law Firm to cater to the needs of non-litigation clients. It was the mid-1990s and, thanks to China’s Reform and Opening-up policy, there was a steady flow of foreign investment into the country. Noticing that most multinational companies had no idea how to register a Sino-foreign enterprise, the new firm began offering business registration services.

Law firms were not allowed to advertise at that time, so they registered as a legal consulting firm. “It took so long, even though we were professionals,” she said. “The process went so slowly that it was easy to see that there would be a big demand for someone who could provide company registration services.”

Finally after three months their application was approved and they were finally able to wear suits, draft documents and visit clients. Eager to build their business, the young lawyers advertised the firm’s services in newspapers. The response was immediate, Li says. Every day they got two or three calls and quickly built a client list. “We were on top of the world, after we survived that first stage, which was so difficult,” she says.

As their clients’ businesses grew, the firm expanded its portfolio to meet their needs, adding tax, accounting, and loan guarantee services. A decade on, a successful client asked if the firm could help with financial advice. Though Li didn’t have much money management knowledge, she wanted to figure out a way to meet their clients’ needs. She tasked a group of employees with contacting the top 30 fund companies in China to explore cooperation opportunities. The response was underwhelming. Even Chen Wei, president of their current partner Oriental Fortune Capital, would only agree to meet her for 15 minutes while he was at an airport waiting for a flight.

She says Chen told her his company never invests in companies from Henan Province, and had never accepted money from Henan investors. He said his company only took on clients who had investment capital of at least RMB100 million. Undaunted, Li returned to Zhengzhou and began preparing to organise a road show to sign other investors to meet this capital requirement. In an event held at a five-star hotel, she gave a two-hour speech, and managed to convince participants to invest in what was to become the first equity fund in Henan Province, Minxiang Wealth. She raised RMB172 million, with each investor putting in a minimum investment of RMB2 million. She gave the funds to two firms, Oriental Fortune Capital and Leading Capital, to invest. Thus began a new chapter in her entrepreneurship journey.

Shift to Wealth Management

The wealth management business grew as the number of high net worth individuals rose in China. Li recalls asking CEIBS Professor of Finance and Accounting Oliver Rui, “Is there any industry with no growth ceiling and remarkable profits that can systematically generate wealth for its clients which they can hand down to the next generation?” She said Prof Rui told her that wealth management is the only industry that fits those criteria.

Oriental Fortune Capital’s Chen Wei began to visit Minxiang Wealth and Li’s company hosted 70 of his firm’s partners for a two-day conference in Zhengzhou. Among the topics discussed at the conference was why clients had initially invested in Minxiang and how to replicate its business model. During a visit to her firm in 2014 she says Chen shared his ideas for a three-year plan for Minxiang. “I didn’t expect you would be able to establish the kind of wealth management firm that I have always dreamed of,” she says he told her. “I want to invest in you and expand across the country.” 

After Oriental Fortune Capital (which reads Dongfang Fuhai when written in Pinyin) became their stockholder, Minxiang Wealth renamed itself Fuhaiminxiang and moved its headquarters to Shenzhen in 2015. Its development strategy focused on equity investment. Usually it takes five to ten years for such investments to turn a profit, and it only accounts for 20 to 30 percent of an investor’s total asset allocation. However the rigour involved with this asset class helps clients better understand the principles of investment. “I wanted to start from the most difficult type of investment, to educate ordinary investors to the highest level,” Li says.

President of Shenzhen Fuhaiminxiang Wealth Management Li Xin invested RMB8 million in CEIBS on behalf of the company on August 10, 2016. The investment will support the research and programmes offered by CEIBS China Entrepreneurial Leadership Camp and CEIBS Centre for Wealth Management. This is Li’s second investment in CEIBS. The first was a RMB100 million investment in CEIBS Entrepreneurship camp in March 2015.


Looking to build further trust with their clients led the firm to create its Edward Yun Club, which it is trying out in high-income areas of Zhengzhou. Each ‘chapter’ of the club has a senior-level manager and an administrative supervisor who are responsible for consulting with clients and handling their investment transactions. The managers all have securities practice certification. Besides financial services, the club also offers various cultural and healthy lifestyle activities such as tea and incense ceremonies, cooking, yoga and wellness classes, as well as wine tasting. The chapters also invite experts from different fields to give lectures to help broaden members’ finance and investment knowledge.

The inspiration for starting the Edward Yun club came from the community marketing model of US-based broker-dealer Edward Jones which is detailed in a case study done by Harvard Business School. The name came in part from the name of its project leader, Yunkuan. Edward Yun club members must have a minimum of RMB1 million to invest. So far Li says that most clients have seen their investments grow to RMB3 million and even RMB10 million within half a year.

Though Li enjoys leading her company, it can often be difficult to find the right work-life balance. Her children have had to learn to be independent. “Once we were together in Shanghai and I had some urgent business to deal with,” she recalls. “I had to put them on a plane by themselves – my son was eight and by daughter was six. When my son told me he was a little afraid to fly without me, his sister told him, ‘Don’t be afraid, you still have your sister here’.”

Her children went to the US for university and her husband moved there as well. She joined them in 2011 but, unable to let go of her business, she returned to China two days before receiving US permanent residency status. Shortly after her return she sought guidance from the living Buddha Zongkang at the Ta’er Temple in Qinghai. She says the living Buddha asked her, “Is there any difference between your children and husband and your staff?” After some reflection, she came to realise she cherishes both. She told her children, “We are destined to be mother and children, while my staff and I are destined to be together too. I cannot leave them. ”

She is also revered by her employees. A strategy consultant once asked long-term staff why they have remained at the company. Everyone had the same response – all had seen their lives change and their incomes grow while working with Li. Some who came from humble backgrounds are now among the country’s high-income population.

Li also has some unique management strategies. In a meeting with CEIBS Honorary President Liu Ji he asked her to introduce her company in only once sentence. After a few moments of thought she replied, “We are a company where everyone played a role in a performance of the musical Cats”. What began as an idea for a different kind of performance at Fuhaiminxiang’s annual party ended up featuring more than 200 employees. The director thought it was an impossible mission but Li prevailed, assigning one of the musical’s 12 acts to each of the company’s 12 departments. 

The Cats performance illustrates the company culture she advocates: give others what you want. “I wanted to give them the best. Many employees didn’t have the chance to learn music or dance while growing up, and I wanted to make up the missed lessons for them.” She recalls with a smile, “Actually the staff faces great pressure to perform, and I thought this kind of activity might give them a chance to be distracted from their work.”

Her maternal feeling towards her staff can also be seen in some of the performance evaluations she does with executives. Occasionally she will add special terms, for example she will ask an overweight employee to lose 10 kilograms or urge male employees to exercise more. She once agreed with her managers that the one who lost the most points in their monthly evaluation should have to run one kilometer for every point deducted. The loser was an accountant who began working with Li 20 years ago. Her success with the company meant she could afford to buy a Porsche. Her parents are proud of her and her success is well known in the neighborhood where she grew up.

The accountant lost 29 points in her evaluation and Li Xin decided to join her on her 29-kilometre run. It had been more than 20 years since Li had run for her life that day from the men at the Yalu River. But now she was no longer alone, and no longer scared. The pair was joined by other members of the Fuhaiminxiang staff. As she heard the footfalls of her team running alongside her, Li felt warm and calm and she recalled a conversation she had 20 years earlier with the hiring manager of the Henan law firm when he was trying to persuade her to leave her job as an assistant to the manager of a biscuit factory. She says he told her, “My gut feeling is that you can accomplish something. I am not expecting you to be a famous lawyer, but a noble woman.”