2015.05.06 Zhang Wei Views:
The unique governments’ emphasis on GDP, hard-working Chinese people, and materialism over the spiritual pursuit, perhaps, make the Chinese nation stand out in the global economic stage. European countries are welfare states; Indian philosophy teaches the people to look back. It is nearly impossible for these countries to mobilize resources nation-wide because unlike China, their governments are less powerful and their peoples less hard-working.
The unique governments’ emphasis on GDP, hard-working Chinese people, and materialism over the spiritual pursuit, perhaps, make the Chinese nation stand out in the global economic stage. European countries are welfare states; Indian philosophy teaches the people to look back. It is nearly impossible for these countries to mobilize resources nation-wide because unlike China, their governments are less powerful and their peoples less hard-working.
Then, what distinguishes China from others economically?
First, China’s support to the commercial circle and its GDP-orientation. For the first time in thousands of years, China has started to support businessmen, not despise them.
Second, corner overtaking. China’s economic growth has benefited from the existing production factors like the Internet and drug-making technics.
Third, benefits released by the reform and opening up. SOEs in China remain strong. Financial resources, lands, infrastructure, telecommunication are not in the control of the private sector. SOEs should deepen the reform to increase efficiency and labor productivity, helping the economy to grow further.
Fourth, a complete manufacturing ecology and an emerging pool of talented university graduates. The other four BRICS countries are still unable to compete with China in manufacturing. India’s missile was also restrained by its less complete manufacturing industry.
Chinese’s emphasis on pragmaticism over spiritual pursuit is economically beneficial at least in the short term. In the long term, we need to wait and see what will happen. But, one thing needs to be noted, China’s private sector has wakened up, and Chinese people have wakened up to create values via businesses. This is rare in the world.
To sum up, China’s economic miracle is brought by all these factors together. We expect a more prosperous China in the next decade.
The above is an excerpt by Zhang Wei on the 2015 CoStone LP Annual Meeting under the theme of “Blossom?”, where he shared his view on China’s economic drivers and his confidence in China’s cultural and institutional environment.
Rewritten by Chen Cong, Edited by Li Yunzhen, Du Zhixin
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
