Far East Smarter Energy : Jiang Xipei Attended the 2014 Summer Summit of Yabuli Chinese Entrepreneur Forum

During August 22 to 24, the 2014 Summer Summit of Yabuli Chinese Entrepreneur Forum was held in Zhengzhou, Henan Province. Jiang Xipei, Chairman of the Board and CEO of Far East Holding Group Co., Ltd., showed up on invitation, accompanied by Cai Hao, Director Assistant of President Work Department of Far East Holding Group, and Shi Linjun, Marketing Director Assistant and an Investor of Far East Smarter Energy Co., Ltd. (Stock Code: 600869).

Jiang Xipei was addressing the subforum of "where is the road ahead of Chinese manufacturing industry"

Jiang Xipei, at the subforum of "where is the road ahead of Chinese Manufacturing Industry", had broad and in-depth discussions on a series of challenges facing Chinese manufacturing industry with Li Dongsheng, Chairman and CEO of TCL Group Co., Ltd., Zhang Jie, Chairman of China Hengtian Group Co., Ltd., He Qiqiang, Chairman of Guangdong Chant Group Co., Ltd., Yang Yuanqing, Chairman and CEO of Lenovo Group., Jing Zhu, Chairman of Haima Investment Group Co., Ltd., and Zhong Yu, Chairman of Kangde Investment Group Co., Ltd. The subforum was held by He Zhenhong, who is director of China's Entrepreneur, a magazine. When talking about the changes of current structure of Chinese manufacturing industry, Jiang Xipei pointed out three major aspects of changes:

First, changes in market structure. Jiang Xipei said that mergers and acquisitions (M&A) between homogeneous firms would be a trend, as the small and fragmenting market sections are changing, which imposes shock on every industry. With clear market competition, firms should get listed and become bigger and stronger, or risk being acquired by its peers. At the same time, there must be some value attached to an acquired firm. M&A within the same industry will mostly cost less than the net worth of the acquired. It used to be that firms hated to be acquired. Now they ask to be purchased by others, evidently showing changes within industries. Jiang Xipei predicted that nine out of ten firms in all industries would disappear in next 5 to 10 years.

Second, changes in regional structure. Chinese manufacturing industry used to take the mode of "imitating before surpassing" industry paradigms, earning the title of "Manufacturing Power Country" rather than the "Wisdom Power Country". Now the era of imitation has passed and China will be the incubator for more and more world-class enterprises, with its adequate resources, opening-up capital market, and increasing cooperation between its companies. Jiang Xipei noted that manufacturing should not be limited to product-making anymore, but rather should rely on the current terminal customers and provide a set of terminal-based services. Take Far East Group for example, for consecutive 17 years, the company had been the national top in terms of production and sales scale in cables, basing on which the Group built its initial wealth. But later the company changed its business positioning and transformed into a supplier of smart energies that include design and planning, products services, installation and construction, energy management, and systematic services. Market was opened and Far East got business growth beyond expectations.

Third, changes in environment. "It used to be that low prices were favored and supervision was lacking. But the situation is no longer the same," said Jiang Xipei. Now it's the era of honest dividends. Firms and government choose suppliers with good brand, quality, services and good cost performance. Forgery and faking, or lack of credibility will definitely spare a company no standpoint by greatly raising its production and operation cost. However, companies in era of honest dividends also face many challenges, mostly from the environment of law, consensus and government policies. To maintain competitive advantage in a phase of rapid development, on the one hand, government should conduct top-level design, establish the honesty system as soon as possible, and step up efforts on many dimensions and in many areas. On the other hand, enterprises should keep a sense of quality, brand and environmental protection, and never sacrifice its own future and the interests of the nation and individuals, when providing products, services and projects.

When talking about the current situation of Chinese manufacturing industry, Jiang Xipei said that the industry is faced with resource crisis. Some enterprises have good ideas and programs but they cannot turn them into reality, because of lack of capital. But the majority of companies are having problems with talent. A firm is unlikely to be world-class and thus unable to compete in the international stage, if it cannot employ, deploy and retain top-ranking talents. The future of Chinese manufacturing industry is about the competition between core technologies, which comes down to talents. A company not valuing talents will soon be eliminated from the market.

"There is always a reason for any industry to exist and survive, and they all have futures," said Jiang Xipei confidently about the future, "What an entrepreneur is best capable of is concentrating many resources and making them happily at his service. The key is to develop high competitiveness and s good business mode." He also added that Far East Holding Group would be a top company in the global industry of smart energies, with its market value of over a hundred of billions of Chinese yuan by 2020.

The theme of this summit was "Momentum for sustainable growth", and "growth view" was a hot topic that aroused heated discussions. The Chinese economy has transformed from rapid growth to a relatively lower growth rate. Behaviors, habits, knowledge and ideologies that worked fine in the era of ultra-high growth may not get along well with the new period of lower growth rate. A new growth outline should be developed to foster patience and wipe out restlessness. The valuable time for economic transformation and deepening reform will be gained when patience outruns pressure in a period of lowering growth. The new growth outline should at least include three dimensions: the source of growth, the relationship between short-term economic downturn and growth-model transformation, and the composure to ask for growth during reforms.

Gathering at Zhengzhou, the Green City, and discussing about hot spots of Chinese economy were political leaders in Henan Province such as Xie Fuzhan, Provincial Governor of People's Government of Henan Province, Deng Kai, Deputy Secretary of Provincial Party Committee, Zhao Jiancai, vice Provincial Governor, and Zhang Weining, who is also vice Provincial Governor of Henan Province, famous entrepreneurs and economists at home and from abroad, including Tian Yuan, the founder of the Yabuli Forum, Liu Mingkang, Honorary Chairman of the Yabuli Forum, Li Dongsheng, (Chairman and CEO of TCL Group Co., Ltd). and also the rotating chairman of Yabuli China Entrepreneurs Forum, Zong Qinghou, Chairman of Wahaha Group Co., Ltd., Yang Yuanqing, Chairman and CEO of Lenovo Group, Zhang Lei, Chairman of Hillhouse Capital Group, Wang Shi, Chairman of China Vanke Co., Ltd., and Chen Dongsheng, Chairman and CEO of Taikang Life Insurance Co., Ltd,. With more than 500 participants, this summit is the largest ever in the ten-year history of Yabuli Forum, which is credited as "China's Davos".