Jiang Xipei: Streamline Administration and Institute Decentralization Will Furnish Convenience for Enterprises (CNR.cn)

"World Economic Forum Annual Meeting of the New Champions--2014 Summer Davos Forum" continued its 8th session in Tianjin during September 10 and 12. Amid the session, Jiang Xipei, Party Secretary, Chairman of Board and CEO of Far East Holding Group, was interviewed by financial journalist from CNR. He thought that government's approval reduction on projects would provide developing convenience for enterprises. This is indeed an opportunity for enterprises though present home economic declines. Enterprises with better basic conditions can grab this opportunity for transformation and upgrading to ascend one of the first class enterprises both at home and overseas.

Written records are as follows:

Journalist: hello, Mr. Jiang, what are you major concerns in Premier's masterly speech?

Jiang Xipei: first, Primer mentioned government's self-reform. This is significant. 30-year changes bring us the fact that our government has been taking lots of measures. However, these measures are not all contributions. That is to say, some of them are no longer contributions; some shall be governed while some are not. The second point is streamline administration and institute decentralization. Now we can see the central-to- local project approvals have been reduced by 1/3 or 1/4. These reductions are good for entrepreneurs or ordinary people to start business, to work, etc. However, these are not enough as there are still some reforms to be done. For instance, inter-provinces' barriers and inter-departments' barriers can be broken down. The third point is to build a whole-society credit system, which is an effect method to ensure reform's implementation. The lack of credit means high expenses in transaction and much trouble in international communication. Our company has already experienced this. In addition, we shall find a juncture of environment protection and economy. And make the products and services can meet demands of sustainable development. As we hear in Premier's speech to encourage innovations, and in fact, we have a lot of innovations, however, most of which are duplicated from others. Innovations of our own proprietary intellectual property rights are still in a small amount. Thus, innovations are necessary in politic reforms, economic reforms and financial reforms. Another point is how to vitalize economic and financial stock assets, and make full use of these stock assets. After all, this is a times of economic surplus and over capacity. Several years ago, I expressed that the current stock assets can meet society's demands if investments were waived for 3 or 5 years. Although overage is a feature of market economy, we are encountered with serious overage and economy crises. And, we lack corresponding capacities and experiences, thus, economy is harsh for us presently. However, the upcoming several years may be harder. How to find a solution to such a situation to make economy on its right track again? The current aim of GDP growth of 7.5% is actually a little higher. If the GDP is of high quality, it can be 5% or 3%, whatever. Quality matters. Current GDP is a pressure maker for government. We are clear that, GPD increases while some industries that can reflect economy growth or energy consuming have already turned out to be negative growth, especially export. This shows economy is unoptimistic. How to make entrepreneurs assured to innovate and invest? Government's overall plans are required to provide a solution.

Journalist: as Premier stated in the opening ceremony, we are facing pressures caused by economy declines. And, are you optimistic about our country's economy future?

Jiang Xipei: its future is promising, as we have sound external environments. International environment, ambient environment and domestic environment are good. However, as our economy has been rapidly developing for several decades, there must be ups and downs. Being down for several years is acceptable. The key point is that it must not stagnate or negatively develop. This would affect public confidence and consumers' enthusiasms. So I think the authorities shall attach high attention to current financial & economy environments to make banks and governments continuously support creative and valuable industries for higher efficiency.

Journalist: Far East Holding Group is the bellwether in manufacturing industry. But now, international and domestic environment have changed, and our previous advantages are fading away, is Far East now in a stage of transformation and upgrading? And what are your goals next?

Jiang Xipei: Of course. No one enterprise is exception. All will be influenced by over-all situation and industry environment. Slowdown in economy growth will affect our industry but also present an opportunity and a huge change. If an enterprise owns a certain power and capacity, and it can well control risks in laws, major investment decision and employment, it can enjoy a lot of opportunities in the future. The future competition will be only exclusive to big enterprises, not like present case that bad money drives good money (thousands of enterprises are competing in the same industry). Such situation is not long-lasting. I think, maybe in 5 to 10 year, 80% to 90% companies will no longer exist. In one industry, the top 5 companies may own 2/3 or even 80%-90% of market shares. Such companies can well allocate sources for better values. Of course, peanuts have their own living rules, by which they can gain market share in market segments. Creative peanuts with motivation can also gain market shares. For Far East, we were specified on cables manufacturing and sales, but now we expand our business to smart energy and smart cities. In this market, we aim to be a system service provider of planning, design, smart production construction and energy efficiency management, as the public needs better, clean, safe and high efficiency energy. Meanwhile, we shall build a smart city. Our company, with good foundation, can be the first-class enterprise both at home and overseas, because we are capable of such foundations and conditions.

Journalist: mixed ownership model is a widely discussed topic. As private enterprise, do you really think mixed ownership can provide a solution? What difficulties do you think will be in mixed ownership implementation? And does Far East take this into account?

Jiang Xipei: mixed ownership is an economy model. When the market is in certain developing period, we shall find proper partners. These partners may be investor, or state-owned company, private company or foreign company. Partners that complement each other's advantages, comply with legal system and reasonably run can gain more competitive advantages. Just simply mixing some bodies together makes less sense. The current state-owned enterprises own a lot of resource and capitals. How to make these resource and money to produce better efficiency, return of asset and benefits to citizens? I think we really need some reforms, inclusive of private enterprises. Having been developing for some years, we own a good foundation, but relatively week. We also need a fair legal environment to ensure fair trade, and we need acceptance by society. No doubt many enterprises have such responsibilities and passion. We shall encourage this, as our country need more tax to set job placement. In a word, mixed ownership is an economy model that doesn't fit all bodies.

Journalist: yes, it depends. You and your group have been providing many job opportunities for citizens and contribute lots of tax to our GDP. We really hope Far East Holding Group a better tomorrow. Thanks.

Jiang Xipei: Thanks so much.

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