--- title: "The Lost Nanjie Village" description: "During the era of material scarcity, Beijing Instant Noodles accompanied my childhood, and Nande seasoning was my mother's favorite. Nanjie Village, once a model economic village, faced decline due to mismanagement and debt, and now struggles with reform controversies." author: "徐霁" publisher: "New Distribution" email: "zhaobo258@gmail.com" telephone: "+8615854817671" published: "2017-08-28" language: "en" canonical: "https://xinjignxiao.com/en/articles/the-lost-nanjie-village-9b6df8e6/" markdown: "https://xinjignxiao.com/en/articles/the-lost-nanjie-village-9b6df8e6.md" original_source: "https://mp.weixin.qq.com/s/oKlE_LP8nOEFrhOj6pd1Xg" translation: "https://xinjignxiao.com/zh/articles/%E5%A4%B1%E8%90%BD%E7%9A%84%E5%8D%97%E8%A1%97%E6%9D%91-9b6df8e6.md" attribution: "New Distribution — https://xinjignxiao.com/en/articles/the-lost-nanjie-village-9b6df8e6/" usage_policy: "https://xinjignxiao.com/ai-policy.txt" --- # The Lost Nanjie Village > During the era of material scarcity, Beijing Instant Noodles accompanied my childhood, and Nande seasoning was my mother's favorite. Nanjie Village, once a model economic village, faced decline due to mismanagement and debt, and now struggles with reform controversies. Click the image for details During the era of material scarcity, Beijing Instant Noodles accompanied my childhood. Crushing the noodles and adding the seasoning was both delicious and gave a sense of participation. My mother's favorite seasoning for cooking was Nande, whose taste has remained unchanged for decades. When my grandfather retired, his first stop for "red tourism" was Nanjie Village. He told us that Beijing Instant Noodles and Nande seasoning were made there. Nanjie Village, which "started with mud and prospered with dough," became a "100-million-yuan village" in the 1990s, expanding into FMCG, pharmaceuticals, crafts, and other fields, earning fame alongside Huaxi Village as an "economic model village." However, due to poor management and insolvency, Nanjie Village became controversial and was once dethroned from its pedestal. What is Nanjie Village like now? Beyond running the business in a more market-oriented environment, for "squad leader" Wang Hongbin, the greater pressure lies in resolving controversies in the reform process. **The Billion-Yuan Village and the Unreliable Perpetual Motion Machine** Nanjie Village is located in Linying County, Luohe City, Henan Province. Unlike other "economic model villages" mostly in eastern developed areas like Jiangyin, Zhangjiagang, and Longkou, Linying is in an ordinary county in central China. In 1980, under the leadership of 29-year-old "squad leader" Wang Hongbin, Nanjie Village set up a brick factory and a flour mill. This is the origin of Nanjie Village's "started with mud and prospered with dough." At that time, the leadership's business thinking was quite advanced. To expand production, they sold the "quotas" for bricks not yet fired, used the money to build kilns, and after the bricks were fired, buyers would pick them up with the quotas. Isn't this what people later called "futures"? That year, Nanjie Village achieved 400,000 yuan in revenue, which was a miracle at the time. Data shows that in 1990, Nanjie Village's output value reached 1.4 billion yuan, first winning the "crown" of Henan's "billion-yuan village." For a time, Nanjie Village was widely sought after: the Nanjie Village Group had 26 enterprises, including 3 joint ventures with Japan and 2 with Hong Kong. However, Nanjie Village's irrational development planted the seeds for the later "crisis." At its peak, Nanjie Village made numerous non-productive investments, such as 50 million yuan for Nanjie School in 1993, 15 million yuan for a kindergarten in 1995, and 50 million yuan for city walls in 1998. Nanjie Village "blindly" launched some investment projects, but due to poor management, suffered heavy losses. The most typical was the Nanjie Village Brewery, which may have lost up to nine figures within a few years. If these projects were just "decision errors" or "untimely," then some other projects were purely whimsical: perpetual motion machines, space seeds, and a foliar fertilizer called "Fengzhilu" that claimed to increase sweet potato yields by 100%. Under the decision of "squad leader" Wang Hongbin, Nanjie Village launched a perpetual motion machine project in 1999, even buying three Audis for experiments. The project failed as expected, wasting 20 million yuan in investment, with even greater indirect losses. After years of "tinkering," Nanjie Village finally couldn't pay wages in 2004. Despite support from "bailout" funds, Nanjie Village was already heavily in debt and insolvent. Feng Shizheng, an associate professor at Renmin University of China, studied bank loans to Nanjie Village and pointed out that Nanjie Village's rapid economic growth was not based on its own accumulation but on bank loans. This differs from Jiangyin Huaxi Village (Huaxi Co., 000936.SZ), Longkou Nanshan Village (Nanshan Aluminum, 600219.SH), and Zouping Xiwang Village (Xiwang Food, 000639.SZ), which accumulated tens of billions in assets through business operations. Therefore, in recent years, when "economic model villages" hold meetings, they no longer include Nanjie Village. **Controversies in the Reform Process** Beijing Instant Noodles and Nande seasoning are probably Nanjie Village's most well-known products nationwide, and Nanjie Village even opened factories outside the province. Beijing Instant Noodles were popular in the 1990s. Today, the snack noodle category has almost disappeared, but Beijing Instant Noodles remain relatively active, which is not easy. Consumption upgrades have significantly impacted the instant noodle industry. The current popular and most profitable products are high-end ones priced above 5 yuan. Beijing Instant Noodles have risen from 0.5 yuan to 1 yuan, mainly catering to "nostalgic consumption." With declining instant noodle consumption and poor performance of leading companies, although Nanjie Village instant noodles still rank among the top ten nationally, it's hard to say they are very profitable given the industry downturn. In recent years, Nanjie Village launched fresh wet noodles, but the market response is unknown to outsiders. It's certain that fresh wet noodles are limited by distribution range and shelf life, so their scale is generally hard to grow large. In fact, noodles and seasonings are just the "tip of the iceberg" of Nanjie Village Group's industries. According to the official website, Nanjie Village is involved in seasonings, FMCG, crafts, packaging, ink, pharmaceuticals, and more. Since Nanjie Village has no listed companies, the group has not publicly disclosed its operations in recent years, so the performance of these enterprises is unknown. However, frequent quality issues have negatively impacted the brand of Nanjie Village Group. In recent years, exposed issues include: in 2012, the packaging of mixed noodles had excessive residual acetic acid; in 2015, chicken essence was substandard; in April 2017, sweet rice crackers were found to contain carcinogens. However, the public's greater skepticism about Nanjie Village lies in its corporate reform process and results. Nanjie Village Group, the main enterprise under Nanjie Village, underwent an equity change in 2014. Before the change, Henan Zhongyuan Industry and Trade held 40%, and 12 natural persons including Wang Hongbin held 3%-9% each. After the change, the group is 100% owned by Henan Zhongyuan Industry and Trade. What is the equity relationship behind Henan Zhongyuan Industry and Trade? Public business registration information cannot be queried. But it is verifiable that in the pharmaceutical sector, Luohe Nanjie Village Quanwei Pharmaceutical Co., Ltd. has 23 natural person shareholders, with Wang Hongbin holding 25% as the largest shareholder. In fact, "family-ization" of economic model villages is not uncommon. The Song Zuowen family in Nanshan Village and the Yu Quanhe family in Changjiang Village have become actual controllers of enterprises, but there is not much controversy about this. If the village collective economy develops well and villagers are wealthy, it's acceptable for management to hold more shares. But if the economy is poor and villagers' lives are not decent, controversy will persist. Source: Zebra Consumption (banmaxiaofei) Click the image for details **The 3rd (CFIC) China FMCG + Internet Conference** will be held in Chongqing in October 2017. 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