Politics, business ought to be separated

Interviews

 

At a time of leadership change in China, The Nikkei caught up with Zhang Ruimin, the CEO of appliance giant Haier Group Co., and Liang Wengen, the CEO of construction machinery leader Sany Group Co., at the CPC's congress in Beijing and asked about the future of Chinese business.

Haier Group CEO Zhang Ruimin

Q:
Have the tensions between Japan and China over the Senkaku Islands in Okinawa Prefecture affected your partnerships with Japanese firms?

A:
We keep politics and business separate, and have no intention of delaying partnerships or joint efforts with Japanese firms. But on the other hand, Japanese firms seem overly cautious.

With Sony Corp., for example, we've been cooperating for about four years on common sales channels in certain districts. We want to expand the areas in which we cooperate, but Sony is concerned about the tensions between the two governments.

We've also been negotiating a partnership with another Japanese firm. Although we wanted to continue the discussions, the Japanese side suggested we take a brief break.

Japanese firms are slow to make decisions. We've discussed a partnership with Panasonic Corp., too, but it's been put on hold at the consideration stage.

Q:
What is the status of the basic home-appliance operations of Sanyo Electric Co., which your firm recently took over?

A:
Sanyo was about $20 million in the red last year, but the company has since April turned a profit of $8.5 million.

The problem with Japanese firms is sectionalism. We introduced a system for across-the-board earnings management that runs through the entire company, from design to production and sales, all of which were managed independently before.

Every employee now assumes a part of the responsibility for profit.

Sany Group CEO Liang Wengen

Q:
As a private firm, what do you expect from China's new leaders?

A:
The Communist Party will continue to support the development of the private sector. I hope there will be progress with market opening and reform policies to expand the economy and allow more private firm activity.

Q:
China and Japan are in a dispute over the Senkaku Islands.

A:
Relations with neighboring countries are important to China's development and prosperity. Japan is no exception. We are a private firm, but through our commercial activities we promote exchange between China and Japan.

After the Great East Japan Earthquake (in 2011) we provided pumping vehicles, and we'll continue to help if something like that disaster happens again.

Q:
Is the construction-machinery industry in a slump?

A:
The industry took a significant hit this year with the Chinese government's initiative to adjust economic development.

That said, I think the future of the Chinese economy is bright, because there is plenty of demand for infrastructure.

Q:
What is your overseas strategy?

A:
We will enhance research and development and make our products more competitive. Our overseas sales stood at 10 billion yuan this year. That is just 15% of total sales. We want to raise that to 40-50% in five years.

Resource：The Nikkei Weekly