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CoStone Capital Zhang Wei: China, Where Everyone Can Make A Fortune

2019.08.29 CoStone Capital Views:


 "China possesses a huge market and much leeway with substantial opportunities. China, where you can definitely make a fortune.”

CoStone Capital Zhang Wei: China, Where Everyone Can Make A Fortune

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“China possesses a huge market and much leeway with substantial opportunities. China, where you can definitely make a fortune.”

Zhang Wei, chairman of CoStone, said in an interview with Shanghai Securities News, that investment should not prioritize neither the industry landscape or the macro economy. Every detail counted in investment. The entrepreneurship and growth of a company should be highly valued. Yet, be vigilant about the popular enterprises with the greatest investment potential.

Here are the takeaways from Zhang Wei:

1.     China possesses an enormous market. A bag of ChaCheer seeds, Huang Fei Hong Spicy Crispy Peanut or Wuqiong salt baked chicken can yield billions of revenues in the domestic market. Even selling spiced boiled duck neck or spiced shrimps enables several companies to go public.

2.     A huge market and much leeway in China still provide tons of opportunities for investment even if China’s economy is slowing down.

3.     China has distinct regional distributions. Some regions are in the post-industrial stage. Some have been industrialized and some are still agricultural.

4.     New industrial ecology and consumption modes are emerging in large numbers. On one hand, some industries are coming to an end. On the other hand, numerous opportunities are proliferating when the start-ups like the SenseTime and Royole, founded by Chinese graduates from foreign universities, pop up.

Above: Excerpt of the special interview with Zhang Wei from Shanghai Securities News. Please refer to the link below to view the interview in full:

Rewritten by: Luo Xinying, Edited by: Du Zhixin, Wei Yiyi

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


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