August 03, 2006

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Money, not brains

Oil and water don't mix. It's handy to remember that before throwing your fortune at trying to prove the saying wrong. From the SCMP, China's Don Quixote:

Chen Jinyi, once China's 35th richest man, is facing court action over unpaid debts after spending his entire fortune on a project to turn water into fuel oil. Hoping the modern version of medieval alchemy would work, Mr Chen and his company, Jinyi Group, spent more than 100 million yuan on research and development into an unproven technology that would dilute oil with water to produce cheaper and more efficient fuel.

That investment may have put Mr Chen into financial trouble. A district court in Hangzhou has publicly identified him for not paying debts totalling 678,000 yuan and the Hangzhou Intermediate People's court initiated proceedings against Jinyi Group for unpaid bank loans of 36 million yuan. Mr Chen insists his "milky oil" project, as it is known in Chinese, has been a success and that all he needs is time to get the product to market.

"The milky oil project is ready and is scientific, legal, authoritative and practical, all it needs now is to be popularised and commercialised," he said in an interview yesterday. "This [legal] problem has arisen because we have invested in this project continuously for three years but now it is ready, there are lots of people who want to co-operate with us and this difficulty will soon be resolved."

[Chen's] personal worth was estimated at 800 million yuan in 2001...The supposed inventor of the new technology, Wang Xianlun, is no longer working or co-operating with Jinyi Group but Mr Chen insists the project will be a success.

"The masses don't understand this technology so I will have to do a lot of scientific education work," he said.

Certainly somone needs scientific education work. At least it's only Chen's money, not shareholders.

Given that bottled water costs more than petrol, I'm not sure this would be an improvement even if it worked.

posted by Simon on 08.03.06 at 10:40 PM in the China economy category.




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