2013.08.02 Zhang Wei Views:
Zhang Wei believes that in order to promote the future structural transformation of manufacturing enterprises, the definition of the industry should be broadened. In the past, manufacturing industry was regarded as a simple process of turning raw materials into products, while the truly advanced manufacturing industry is a complex process of combining various production factors into a solution to continuously solve customer needs.
Zhang Wei, chairman of CoStone Capital, shared his thoughts on China's manufacturing investment trends at a recent forum. He believes that industrialization, along with urbanization, has been the most important driver of China's economic development over the past three decades.
In this process, a large number of leading manufacturers were born, such as Foxconn, Huawei and Midea. These companies have also produced handsome paybacks for investors. However, with the structural transformation of China's economy and the gradual disappearance of demographic dividend, Chinese industrial enterprises started to decline and was even abandoned by VC/PE investment.
Zhang Wei believes that in order to promote the future structural transformation of manufacturing enterprises, the definition of the industry should be broadened. In the past, manufacturing industry was regarded as a simple process of turning raw materials into products, while the truly advanced manufacturing industry is a complex process of combining various production factors into a solution to continuously solve customer needs. China's manufacturers need to shift from assembly and OEM manufacturing to R&D and services-driven industry before they can move from being backward to being advanced. That is to achieve the perfect integration of products and services and improve the industrial chain.
Zhang Wei pointed out that manufacturing is an indispensable component of any industry. As long as we adhere to the "new four modernization of industry", traditional industries can also be endowed with new connotation and glow new charm.
Rewritten by Jiang Qinyu, Edited by Du Zhixin,Li Yunzhen
The year 2019 marks the fortieth anniversary of China’s Reform &Opening-Up, once again, we meet at the turning point of history. What’s the next step for the game, is there any clear guidance? The answer is affirmative.
Our country is enjoying a good momentum of development, which does not come from the Washington Consensus nor the Beijing Consensus. China’s experience has proved that both the visible hand and the invisible hand are crucial: the visible hand, stands for the government-led reform, and would yield benefits for reform and opening up; the invisible hand, stands for the Marginal Power represented by the private sector, and would improve economic efficiency and tax collection, create jobs and employment opportunities.
Provided that we want to protect and expand the benefits form reform, three simple but mandatory agreements are to be made and followed: No.1 Private ownership must be recognized, protected and treated equally with public ownership constitutionally, both ownerships are scared and inviolable;No.2 Make further clarification of the principal position of market economy, “deepen economic system reform by centering on the decisive role of the market in allocating resources”, as President Xi addressed in the third Plenary Session of the 18th CPC Central Committee;No.3 Implement the guiding principles of “comprehensively promoting law-based governance” of the fourth plenum. The rule of law is essential for economic growth, irreplaceable to protect private ownership, and necessary to encourage innovation and entrepreneurship.
Above are three rules for us to avoid falling into the Middle-income Trap. Assuming that we are breaking systematic barriers to private enterprises’ participation in market economy, and boosting innovation and entrepreneurship of our society, then we are heading towards a promoting direction. We are marching in the path of light, regardless of the ups and downs of Sino-US relationship, the drop in GDP growth rate, or the monetary policy.
These principals also apply on knowing how better to run a business: don’t be hedged by rules and regulations at the beginning, pay more attention to your survival, and you’ll learn more when you start your second business.
For many years, Huawei has been the only Chinese company on the list of the Top 50 R&D Spenders. Regardless of the economy and its income, what Huawei has been doing is investing in its future, dedicated to R&D, continuously and resolutely. This provisional work underscores Huawei’s accomplishments, making Huawei anindustry leader.
So, there are standard answers on how to run a company,which could be summarized as concentration and professional dedication, continuous investment on innovation and trying harder in R&D. Entrepreneurship is also important, every single company needs entrepreneurs to push aside all obstacles and difficulties, to implement strategies and ideas. We, as investors, are destined to look for such outstanding entrepreneurs and their companies, invest in them and partner with them.
At this key point of history, a country, a company, or asingle individual, will all need to find the right path. Four decades after the Reform and Opening-up, it’s time to learn from our experience and stop “wadding across
