China Emerging_ 1978-2008 - Xiao-bo , Wu [17]
China’s early entrepreneurs were destined to follow a circuitous path; however, in the end, the most important among them survived and prospered.InQingdaoCityofShandongProvince,thirty-five-year-oldZhang Rui-min was sent by the authorities to take charge of an electronics factory that was on the verge of collapse. He later recalled, “Greeting me on my first day in the factory were fifty-three requests from employees to be transferred tosomeotherplace.Workstartedateighto’clockinthemorning,butpeople would start leaving by nine, and by ten o’clock, you could have thrown a hand grenade into the factory yard and not hurt anyone. Inside the factory yard, the ground was so muddy that after a shower of rain, you had to tie your shoes with ropes. Otherwise your boots would have been sucked off in the mud.” The first step Zhang Rui-mintooktorestorediscipline was posting notices on the walls, “It is forbidden to urinate or defecateinsidethefactory.”Once, he personally destroyed seventysix sub-standard refrigerators, to the dismay of the employees. Ten years later, the Haier Group founded by him became China’s largest manufacturer of white goods. Not only had it won a top placeinthedomesticmarket,but alsoithadbeenabletobreakinto international markets.
Zhang Rui-min of the Haier Company using a hammer to smash substandard refrigerators, 1984. In an age of scarcity, substandard goods were allowed to be sold. “Smashing the refrigerators” raised awareness about quality control among Chinese enterprises.
In the northern district of Zhongguancun in Beijing, an engineer named Liu Chuan-zhi went to work every day in 1984 at the very prestigious Computer Research Institute. However, there was not much work to do there, and out of sheer frustration, he finally founded a company and secured permission to turn the tiny guard’s room at the entrance to the compound into the company office. With great confidence, he said to his superiors, “In future, our company is going to become so large that it will be doing
On November 1, 1984, eleven scientists “jumped into the ocean” with RMB 200,000 and founded an enterprise now known as Lenovo. The office was located in an abandoned guard’s room at the entrance to the Chinese Academy of Science.
two million renminbi of business each year.” That sum was equal to around one million US dollars at that time, while the annual turnover of Lenovo is in the billions today. Initially, Liu Chuan-zhi ran around like a blind ant, cycling up and down alleys to get things done. He set up a little stand outside the front gate and sold watches and sandals. Later, he set up a wholesale business in gym pants and refrigerators. He himself had no idea that the company founded by him would lead the IT industry one day and become one of China’s reigning brands. He could not have imagined that Lenovo would be purchasing IBM’s PC business and entering the global competition against the world’s IT giants.
The founding ceremony of Volkswagen in Shanghai, October 1984.
Cars, bicycles, and horse-drawn carts shared the road on the outskirts of Beijing in 1984. This scene was to continue until the mid-1990s.
Meanwhile, in the hot climate of Shenzhen in the south, a young man named Wang Shi spent all his days in 1984 buying and reselling corn. From this business, he progressed to founding a trading company. The secret of his success was his ability to obtain foreign exchange quota, as allocated to the Special Economic Zone by advantageous government policies. He used the foreign exchange to import products into the zone during a period when there was a ferocious appetite in China for goods and there existed only one channel through which those goods could be imported. He quickly made enough money to serve as the “initial capital” for Vanke, a company he later founded. Vanke has since become the largest urban real estate developer in China,