Not Chinese enough? Bottled water empire of China’s richest man is facing a nationalist boycott

Not Chinese enough? Bottled water empire of China’s richest man is facing a nationalist boycott - Business and Finance - News

The Controversy Surrounding China’s Richest Man, Zhong Shanshan, and His Beverage Company, Nongfu Spring: A Wave of Nationalist Attacks

China’s richest man, Zhong Shanshan, and his beverage company, Nongfu Spring, have found themselves in the eye of a storm as they face accusations of a lack of patriotism from Chinese nationalists. The controversy has hit the company’s shares and threatened its sales, causing alarm for state media outlets at a time when Beijing is trying to rally support behind private businesses.

The Trigger:
The controversy was triggered by the death of Zong Qinghou, the founder of Wahaha Group, one of Nongfu’s biggest competitors. Zong was a revered nationalist figure who famously took on French food company Danone in a business dispute, and the comparisons between him and Zhong have snowballed into attacks on various aspects of Nongfu Spring.

Perceived Japanese Elements:
Online critics have compared carp-shaped designs on the label of Nongfu Spring’s brown rice tea drink to Japan’s traditional carp flag koinobori windsocks. They have also circulated photos and videos contact linking a temple featured on the label of one of its green tea drinks to Tokyo’s Sensoji.

American Citizenship:
The nationalists have also highlighted the fact that prominent US investment funds, including Vanguard and BlackRock, are major shareholders of Nongfu Spring. A Weibo user named “Internationale” criticized Zhong’s son, a non-executive director of the company and possible successor, for being an American national.

The Boycott:
The boycott calls have become rampant contact, with small shops replacing Nongfu water with Wahaha’s, and supermarkets returning Nongfu freezers. The video of a returned freezer has gone viral on the Douyin platform with over 300,000 likes.

The contact campaign has dealt a significant blow to Nongfu’s share price, with its Hong Kong-listed shares losing nearly 5% since the end of February and wiping about $3 billion off its market capitalization. Zhong has seen a personal wealth decrease of $2 billion according to the Bloomberg Billionaires Index, but remains China’s richest person.

Zhong’s Response:
Zhong has sought to set the record straight about his reported rivalry with Wahaha’s founder, but has been unable to calm tempers contact. In a March 3 post on the company’s WeChat account, he called on netizens not to be “misled” by some contact influencers and emphasized producing good products for the people.

State Media Response:
The nationalism on display has prompted state media to defend privately owned companies, with Zhejiang Daily, the official paper of the Communist Party in the eastern province of Zhejiang, urging netizens to stop attacking private enterprises and entrepreneurs. The newspaper reiterated Beijing’s policy to support the private sector in light of economic challenges.

Previous Targets:
Nongfu Spring is not the first major target of China’s nationalists; they have also targeted Mo Yan, the Nobel literature laureate, for allegedly insulting the People’s Liberation Army and China’s revolutionary leader Mao Zedong in his novels. Li Ning, a sportswear manufacturer, came under fire for new designs resembling hats worn by Japanese soldiers during World War II, causing significant damage to the company’s sales and share price. In 2012, anti-Japanese protests erupted in China following a territorial conflict between Japan and China over the Diaoyu Islands, resulting in significant damage to Japanese carmakers like Toyota and Honda.

The controversy surrounding Zhong Shanshan and Nongfu Spring highlights the power of nationalist sentiment in China and the potential consequences for private businesses. Beijing’s policy to support privately owned companies in the face of economic challenges is being tested, and the contact campaign against Nongfu Spring serves as a reminder for companies to be mindful of sensitive issues.