FEER(8/7) Media Giants Chase Huge Intl Chinese-Language Mkt
EVERY DAY, more than 2.5 million Overseas Chinese from Kuala Lumpur to New York pick up a newspaper or go on-line to read news published by a publicity-shy timber tycoon from a remote river town in Malaysian Borneo.
Tiong Hiew King , the self-educated son of a rubber farmer, is an unlikely aspiring media mogul. But that's exactly what he is. Over the past decade, Tiong has quietly become the world's largest Chinese-language publisher outside China and Taiwan, selling newspapers and magazines in Hong Kong, New York, Vancouver, Toronto and Southeast Asia. Tiong's executives claim their publications have a global circulation of almost 1 million and a readership of more than 2.5 million and generate more than $130 million in revenue.
And he's not done yet. The 68-year-old Tiong, an admirer of Western media barons Ted Turner and Rupert Murdoch, wants to expand his empire to include Sydney and San Francisco -- home to at least 300,000 ethnic Chinese -- and, eventually, to China itself.
What's driving Tiong and fierce rivals like Hong Kong-based Global China Group and Taiwan's World Journal is a potentially lucrative global media market: The roughly 34-million-strong Chinese diaspora scattered around the world (excluding Taiwan). Their wealth is estimated at $1.1 trillion by George Haley, a professor of international business at the University of New Haven in Connecticut, and growing.
"It's a very good business strategy," says Michael Yeoh, the chief executive of the Asian Strategy and Leadership Institute, a Malaysian think-tank. "If you look at the United States, Australia and the Western markets, there's still a lack of quality Chinese publications. These are hugely growing markets where people are very interested in getting news in Chinese."
Others concur. "Given China's economic prospects, its allure for the overseas Chinese and their wealth, a global network of papers may be the future," says a senior editor of a Malaysian Chinese daily newspaper. "It certainly works as a stand-alone business plan."
More is at stake than just money in the battle for Overseas Chinese readers: For publishers like Tiong, there's political influence with China itself and possible entree to an even bigger market. Though unknown to most of his readers, Tiong's media reach has won him powerful friends in the Beijing government.
For example, when the Malaysian business community feted China's then-Premier Zhu Rongji at a gathering in Kuala Lumpur in 1999, Zhu impressed the attendees by inviting his "good friend Tiong" to join him on stage.
If the diaspora is potentially lucrative, there's no denying the mainland market is worth chasing. Tiong has expanded his investments in China after buying the Hong Kong-based Ming Pao publishing group in 1995, adding printing, travel and fibre-optics ventures to his portfolio.
Rival Global China has taken a more direct route into the media market by setting up a joint venture with the Communist Party mouthpiece, the People's Daily. Global China won't be able to circulate its own publications, but the group says the venture will give it first-hand knowledge of a market it hopes to enter eventually. For now, foreign-owned publications, particularly Chinese-language ones, are strictly regulated.
While Global China may have a leg-up on the mainland, Ming Pao is focusing on the growing U.S. and Canadian markets. About 83% of the 2.4 million-strong Chinese-American population speak Mandarin or other Chinese dialects at home. According to recent U.S. surveys, at least 60% of these Overseas Chinese say their English skills are limited. Ming Pao executives say that circulation of its newspaper Ming Pao is increasing 7% to 10% a year in the U.S. and Canada, where the paper reportedly sells 115,000 copies daily.
In the U.S, Tiong has to take on Taiwan's World Journal, which says it has a circulation of almost 300,000 in the U.S. and Canada -- making it the biggest Chinese-language publication in North America. But globally Tiong's publications are still in front because they also circulate in Southeast Asia and Hong Kong.
Back in the U.S., Tiong has ambitious plans. A senior Ming Pao executive says that the paper hopes to expand to the west coast in the near future -- "San Francisco or Los Angeles, we're not sure, but we will do so soon." According to him, the paper is already profitable in Canada and close to break-even point in New York, "so there is a lot of potential in these markets."
Ming Pao is counting on its 45-year-old brand name to do the trick in the U.S. and Canada. In addition, the paper plans to invest $10 million-$15 million in each centre -- New York, Toronto and Vancouver -- to achieve "double-digit growth," according to the executive.
Tiong could also have an edge in the media battle because he came to the business with a fortune already secured. His father, a farmer from the Fuzhou area in southern China, settled in the Borneo river town of Sibu in the early 1900s, one of several thousand Fuzhou immigrants to do so. Young Tiong left school early to work in the tropical forests of what is today Malaysia's Sarawak state.
Tiong learned the logging business from an uncle who was a timber pioneer in Sibu before branching out in 1975 to create his own company, Rimbunan Hijau, or "Green Lushness". He quickly proved adept at forging business alliances with Sarawak political leaders and amassed a fortune exploiting huge state-granted logging concessions. By 1990, Tiong's family-held empire consisted of more than 200 companies worldwide with combined revenues of more than $1 billion. Malaysian business analysts estimate Tiong's personal wealth at $250 million to $550 million.
At Rimbunan Hijau's 25th anniversary celebrations in Kuala Lumpur in 2000, Tiong's global reach was revealed publicly for the first time, illustrated by lights on a huge world map. According to a businessman who was present, the lights began flashing -- each one indicating a separate Tiong business -- beginning at the International Date Line in the mid-Pacific and spreading around the globe.
Guests learned that Tiong controlled 80% of New Zealand's salmon and prawn farms as well as a radio station and a listed timber and reforestation company. In Australia, he owned shopping malls in Brisbane, property, cattle ranches and the world's biggest mango farm. But timber was the empire's mainstay: Tiong controlled more than 3 million hectares in concessions and numerous plywood and veneer plants in places ranging from Malaysia, Papua New Guinea and Russia to South America, China and Africa.
"He is, without question, the biggest global merchant of tropical timber and its by-products," says a Malaysian banker who knows the businessman.
Tiong seems to have ventured into the media business almost by accident. In 1987, the Malaysian government closed down Sin Chew Jit Poh for reporting and commentary that allegedly stoked racial tensions between Malaysia's politically privileged Malay majority and its ethnic Chinese minority, which makes up 26% of the population. The paper was losing money and insolvent at the time. By the time Sin Chew was allowed to reopen, it was in receivership and nobody wanted it.
"We went to every single Chinese tycoon in Malaysia and no one was interested," says C. C. Liew, Sin Chew's executive director. Finally, Tiong agreed to take over the paper, persuaded by prominent members of the Malaysian Chinese community. "With timber booming, he was cash-flush then," says Sandra Wong, who serves as a consultant to Tiong. "But I think he did it more out of obligation then any sense of opportunity."
Tiong eventually bought Sin Chew's assets for 20 million ringgit ($5.26 million). Overhauling management and investing another 40 million ringgit to buy new equipment and a printing plant, he turned the paper around. According to documents filed with Malaysia's Registrar of Companies, as of the year ended March 2002, Sin Chew has amassed 127 million ringgit in retained profit since Tiong bought it.
Meanwhile, Sin Chew's circulation has more than quadrupled to 330,000 a day. According to a February 2003 survey by Neilsen Media Index, the readership of Tiong-owned papers in Malaysia -- he also owns Guang Ming, a daily circulated only in northern Penang state -- is 1.4 million a day. That means one out of four Malaysian Chinese reads a Tiong paper.
Tiong's next media foray was in Papua New Guinea, where he was already the country's biggest logger. In 1991, Pius Wingti, the then-premier of Papua New Guinea, visited Kuala Lumpur, where, according to Tiong associates, he told Prime Minister Mahathir Mohamad that he wanted a newspaper to get his government's views across. Mahathir passed the word to Tiong, who created the English-language The Nation in 1993 to compete with a then-dominant Murdoch-owned paper that frequently criticized the Papua New Guinea government. The Nation has since become the country's biggest paper. It isn't clear if it makes money, though, and the publication has been criticized for being an apologist for Tiong's logging activities.
His initial media ventures seemed to have whetted Tiong's appetite for the business. A Hong Kong-based acquaintance says Tiong viewed publishing as an excellent way to recycle the large revenues flowing from his timber operations. In 1995, he made his most ambitious investment yet, buying the Hong Kong-based Ming Pao from businessman P.H. Yu for HK$1 billion ($128.2 million). At around the same time, he bought Yazhou Zhoukan, a regional Chinese news magazine from Time Warner for an undisclosed sum.
In the mid-1990s, Ming Pao was a must-read paper for Hong Kong intellectuals because of its scepticism toward Beijing. But it was also losing money. Tiong quickly reoriented the paper to a broader market and took a less critical stance toward China. Critics called the moves a sell-out to Beijing, but the new Malaysian owner soon turned the paper around.
Since 1996 Ming Pao, which is listed on the Hong Kong Stock Exchange, has been generally profitable. Although the paper, which is Hong Kong's third-largest daily with a circulation of about 100,000, made a loss of HK$7 million in the financial year ended March 31, 2002, Ming Pao executives say it will return to the black in the current financial year. Ying Chan, a journalism professor at Hong Kong University, says that Tiong, like most Hong Kong media entrepreneurs, is positively inclined toward Beijing: "With these tycoons there is a patriotic element towards China."
Indeed, Tiong's media executives say he's often crusaded in defence of Chinese interests. In 1998, for example, Tiong's global media group ran numerous editorials urging Beijing to protest against Indonesia's failure to check alleged mistreatment of its ethnic Chinese minority during the chaotic final weeks of then-President Suharto's rule. Soon after, Beijing reacted with an official diplomatic rebuke to Jakarta. "It was one of the old man's proudest moments," says one of Tiong's Hong Kong-based lieutenants.
Still, Tiong's newspapers haven't always been slavishly pro-Beijing. Editors at Malaysia's Sin Chew recall that Tiong was "appalled" by the Tiananmen massacre in 1989 when Beijing cracked down on pro-democracy dissidents. According to the editors, Tiong wrote three sharply critical pieces, only two of which Sin Chew ran. "Even [the Malaysian government] hadn't really condemned the killings," says one of the editors. "And I didn't run the third piece because it was too strong. Even so, the Chinese embassy [in Kuala Lumpur] protested."
Tiong says that media is now a "core business" in his empire. It's driven, in part, by the opportunity to tap into the business opportunities offered by a global Chinese community and, in part, by a crusading commitment to promote Chinese language and culture.
"Now it's become a passion," says a former business associate. "I also think he's reached the stage where money doesn't mean everything any more and he wants to give something back to the [Chinese] community."
Tiong himself is more circumspect. "We hope that it [his media group] will serve as a convenient and reliable source of information, and a means of connecting and networking for the people of Chinese descent," he said in a written reply to questions posed by the REVIEW.
While Ming Pao isn't sold in China, mainland readers can still view the paper's popular on-line version, MingPao.com. And even though Ming Pao executives say that "unless political conditions in China change drastically" they don't expect to make any headway toward publishing the paper in China some day, Tiong is optimistic. "It's the biggest market and we hope to have a presence there," he says.
华语媒体演义全球竞争
从吉隆坡到纽约
