Zhang Ruimin, CEO of Haier Group, receives an interview with People.com.cn. [Photo/People.com.cn]

In a recent interview with People.com.cn, Zhang Ruimin, CEO of Haier Group and currently a delegate attending the on-going 18th National Congress of the Communist Party of China (CPC), highlighted the progress of China’s industrial sector over the past few decades, and discussed the future of the world’s number one home appliance brand.

Q: First, I would like to extend my congratulations to you on having been selected on five successive occasions as one of the delegates to the CPC National Congress since 1992, when the 14th CPC National Congress was held. As an entrepreneur, could you tell us what changes have occurred in Chinese companies over the past 20 years?

Zhang: I have attended the CPC National Congress five times, and significant changes have taken place in China. People around the world always take China’s achievements for granted, but China has actually made great efforts to improve and perfect its institutions. I was really worried when I attended the 14th CPC National Congress in 1992, when two major problems hindered my desire to build an industrial estate--the only one for home appliances industry at that time.

First, national administrative examination and approval were required to launch a new business, which made it fairly difficult to increase the size of a company. For example, I was not able to engage in business related to washing machines if I only passed the administrative examination and approval of refrigerators. Any new business item needed to be examined and approved during that time. Second, the capital issue could not be solved effectively. The industrial estate would cost roughly 1.5 billion yuan, while I only had 80 million yuan, and it was difficult to receive bank loans because I didn’t have any pledges. Consequently, being short on capital greatly hindered the on-going construction.

The 14th CPC National Congress confirmed that China should develop into a socialist market economy, cancel unnecessary administrative examination and approval, and permit companies to go public. That was really great progress.

After that, all CPC Congresses made new targets and took new developmental directions. I think every CPC Congress brought positive change and helped China step onto the international stage.

Q: You have said that no business can be described as successful but belonging to a specific era. Could you explain your statement? Why would you say that?

Zhang: I believe a successful business means that it keeps up with developmental trends of the country. There would be neither Haier Group nor a successful Zhang Ruimin without the reform and opening-up policy. Haier Group is successful because it has followed the trends of China. Entrepreneurs must always pay attention to policies,which means you must challenge yourself. There is a popular saying in Haier Group “Never to be self-righteous but always be ‘self-wrongful’. Customers’ demands are always right and we are always wrong. It is necessary for Haier’s employees to meet customers’ needs.

Q: 28 years have passed since Haier Group was first established in 1984. Haier Group always changes its development strategy every seven years. Now Haier is making efforts to globalize its brand, and what will be the target in Haier’s next strategic development phase?

Zhang: First is a new management model, which we have explored over a long period of time. I hope staff and business orders can be integrated in this new “win-win” model. Each staff will have their own clients. It looks like every employee in Haier has a company of his or her own, so they will make profits more actively. Haier Group ranks No. 1 in global home appliances due to its exploration of management models.

Next, I am trying to change Haier Group into a “Platform Company”, which means more resources could be integrated on the platform provided by Haier. In the past, I had to try in every possible way to attract appliance industry talent, but now Haier has five research and development centers in America, Germany and other countries around the world, where more resources can be utilized in this open system.

Q: As a delegate, do you have any expectations for the 18th CPC National Congress?

Zhang: Well, I have two. First, I hope to build a platform that guarantees fair competition. I think it is a very important issue. Numerous inequities may stifle talent and depress innovation. Second, I sincerely hope to improve our innovation mechanism. Perfect innovation mechanisms will bring vigor and vitality to the development of China and Chinese companies.

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