On 13th, July, Chinese Enterprises Go out Policy Fifty People Forum in the year 2017 was held in Beijing, Which was under the sponsor of the Counsellor Office of the State Council, being undertaken by CCG. The president of Lifan Group—Mu Gang attended the forum on behalf of private enterprises representatives. The Counsellor Office of the State Council ,being an institution mainly being in charge of Government counselling work, is directly subordinate to State Office. It is an organization providing the intellectual support for government decision making, and all the counsellors are the genuine master from various fields.
This annual meeting themed on “co-consulting, co- construction and sharing ------the Go out policy of Chinese Enterprise under the Proposal of The Belt and Road“. Experts and scholars being present extended an impassioned discussion and statement on the topics like the challenges and prospects of manufacturing going out. How should financial industry assist Chinese enterprise “go out “, the methods and challenges of private enterprises going out and so on.
• Many Chinese top economists, scholars financial masters and enterprises senior managers were present and made keynote statements, among which include Wang Zhongwei, party committee director of Counsellor Office of the State Council; Chen Jian, the former deputy minister of the Ministry of Commerce; Lin Yifu, consultant of the State Council, vice chairman of the National Federation of Industry and Commerce, director of the Center for New Structural Economics at Peking University; Zhou Xiaofei, deputy secretary general of the National Development and Reform Commission.
Mu Gang shared Lifan’s overseas marketing experience with the experts, expressing that The Belt and Road is an important national event, and going out should be under the leadership of the country, being practiced by its people. Only with the specialization and cooperation, can the policy be carried out perfectly.
Lifan’s stable overseas marketing
As the representative of the first enterprise laying out The Belt and Road, Mu Gang shared Lifan’s overseas marketing experience with the experts present at the meeting.
“I have just attended the forum of the Russian Innovation and Industry exhibition, which is a high-end forum , in which President Putin was present and made a speech. I made the report “Extraordinary Chinese Enterprise Made Extraordinary Achievements Abroad “, Mu Gang said, “China emitted a signal of surpassing to the developed countries on the basis of ‘Made in China 2025 national strategy “.
Straightly after the words above, Mu Gang illustrated Chinese enterprise’s ambition abroad based on the example of Lifan.
He said that Lifan’s products had exported to 117 countries and areas throughout the world so far, having invested and set up 10 factories abroad, 9 direct-selling and direct-service companies, 30 representative offices, possessing 4000 foreign employees. The exporting sales volume of Lifan covers almost 40% to 60% of the total sales volume, possessing 7% of Chinese brand auto export, and the exporting profit is three times as that in China.
The coexistence of challenge and opportunity in “go-out”
In the opinion of Mu Gang, in the process of going out, private enterprises have more advantages over state-owned enterprises in terms of dealing with the marketing. In his words, “Private enterprises have the sensitive smell like a wolf, which will assist us seizing the opportunities in market. Although our main exporting objectives are middle and low-end market, but still have great potency. According to experts’ prediction, the total marketing capability will reach 50 million units, among which 40 million are in domestic and 10 million exported, just a great vast in Chinese auto market.
In his speech, Mu Gang pointed out that foreign countries experienced a cognitive change to Chinese enterprises’ go-out policy from “unknown”to “doubting”,while ,based on the experience of Lifan, they had seen and used more and more products made in China, which confused them a lot. Apparently, this kind of confusion is out of surprise, while it is actually caused by their heart unconvinced. In fact, we hold the deep confidence that our cars can absolutely compete with those of Iran, India and Russia, or even South Korea.
This view of Mu Gang happens to be perfectly harmony with that of Wang Zhongwei, secretary of Party Committee of Counsellor Office of the State Council.
Mu Gang also indicated that for going out, the enterprises had to stick to four phases, including trading--direct selling --investing--running. In other words, exploring--stationing--immigrating--settling, which also means go out, surviving and running in the aspect of director Wang.
“For going out, we have to depend on products, techniques and capital; for surviving we need the support of finance, system and culture”,Mu Gang said, “Lifan will go out with Chinese model and innovative achievements like intellectual network, AI, sharing economy and so on.”
In the meantime, Mu Gang reminded about the proper avoidance of risk of exchanging rate during the process of “introducing and going out”, trying to establish the prevention mechanism like“traffic lights ”.
Overseas market is risky and we need to be cautious. In the aspect of Mu Gang, there are also many challenges for Made in China abroad.
Firstly, the Made in China anxiety has been prevailing among overseas markets, they worry about “poor quality, low price, low-end service”of Chinese products. While actually, Lifan takes quality as our first priority and service as the running foundation, believing that high-class services make a qualified and good brand and pushing the upgrading of Made in China image. Lifan has always been regarding quality as the supply-side reform, taking service as a significantly strategic arrangement. To be honest, we earned money by satisfactory service in many countries.
Secondly, for auto enterprises, long supplying chain makes great capital needs. Especially for those go-out private enterprises, the shortage of good financing channels intensifies the pressure of capital.
“Exchange rate is a great risk “,Mu Gang said, ‘it fluctuates every day abroad, and the only way for us to avoid the loss caused by it is to enlarge import. ’
Leaded by the nation, practiced by the people, duties’ division promotes excellent achievements
In face of the challenge caused by go-out policy, Mu Gang showed considerable confidence.
He expressed that “the richest financial institution around the world is in China, we cordially invited their assistance for private enterprises’ going out , being the strong backing of us private companies. In return, we will spare no effort to enhance our performance.”
We private enterprises are tenacious, secular and stubborn, being not able to afford loss but will recover from any setback soon, therefore, we made victories one after another. This view happens to coincide with that of economist Zuo Xiaolei.”
To Mu Gang’s mind, the state-owned enterprises have advantages over experience, team cooperation, capital and talents, while, we private enterprises still have the potency for marketing. So, only when these two join hands, can all the enterprises go out better. They are in the leadership and we are generals practicing.
“China has always been putting the emphasis on those big deals, so we hold the confidence that there will be powerful strategy guiding the export, supporting the auto innovation, raising the status of auto industry. ”Mu Gang said, “we also hope that the government permit financial companies of enterprises to go out, carrying out financial business like consumer finance or supply chain. ”
“Running the industry is laborious and painstaking, going out is labor and capital demanding , while we are still willing to practice. ”These words, are actually the innermost thoughts of all the private enterprises.