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CoStone Annual Meeting 2016

2016.04.14 CoStone Capital Views:


April 14, 2016

Themed with "Leapfrogging", CoStone Annual Meeting 2016 kicked off at Sheraton Dameisha Resort Hotel Shenzhen, Guangdong on April 4. The two-day annual meeting attracted hundreds of investors, scholars and entrepreneurs to discuss the issues of investment opportunities in a downturn, China's middle-income trap, opportunities and challenges faced by the industrial internet, entrepreneurs' responsibilities and the current domestic and international order.

Zhang Wei, Chairman of CoStone Capital, Xu Xiaonian, Professor of Economics and Finance at China Europe International Business School (CEIBS), Peng Jianfeng, Professor and PhD Supervisor at Renmin University of China (RUC), Tai Hongwei, Founder and Executive Dean of Winku Business School, Zhang Ming, Professor and PhD Supervisor at RUC, Xu Jilin, Professor and PhD Supervisor at East China Normal University, and Wang Shi, Founder and Chairman of Vanke, gave wonderful speeches at the meeting.


Vanke Chairman Wang Shi making a speech

Wang Shi's speech was closely related to the theme of "Leapfrogging", which, in his opinion, concerns both individuals and enterprises. For him as an individual, he has leapfrogged himself by doing sports such as mountaineering, rowing and marathon, which get his body and mind to be healthier than before. And for enterprises to get rid of the flaws of family businesses and SOEs and realize a leapfrog development, the only way he believed is to adopt a management model of mixed ownership. "Enterprises in Shenzhen should combine the advantages of state, foreign and private ownership in the future," added Wang Shi.



Wang Shi

Wang Shi is Founder and Honorary Chairman of China Vanke Co., Ltd. He used to serve as Executive Director of the One Foundation and Shenzhen Mangrove Wetlands Conservation Foundation and Chairman of China Entrepreneurs Forum. With a global vision of environmental sustainability, he sits on the World Economic Forum's Global Agenda Council on Governance for Sustainability, with particular focus on forests, biodiversity and climate change. Wang Shi is a visiting fellow at the University of Cambridge, specializing in business values and ethics. He has teaching roles at numerous universities, including Harvard, Peking, Columbia, MIT, HKUST, and the National University of Singapore.

Rewritten by: Jiang Xiaomei, 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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