Only through courageous reform can we ’s clear out the obstructions and let private enter- prises develop in a more unfettered way while also protecting the environment. I recently interviewed a number of lead- ers of Chinese State Owned Enterprises (SOEs) Satisfying the Needs of and most of them agreed that the next step of China’s reform is to encourage mixed owner- ship, i.e. incorporating private elements into SOEs in order to enhance their competitive- People and Society ness. Is Wanxiang interested in merging into one of the colossal SOEs? We have already been working with SAIC Motor Corporation, with 51 percent of the hold- ings. Change is always diffi cult, but I always be- An Interview with Lu Guanqiu, lieve there is a way out, no matter what. We are Founder and Chairman of the Board, Wanxiang Group Corporation still actively reaching out with top-tier auto manu- facturers such as General Motors, Ford, and BMW marginalized and vulnerable, to enable them market demand, both in terms of quality and to try to discover more opportunities to cooperate. to make a living with alternative choices. The price. Current policies have been put in place Some say that, among all Chinese pri- change was later widely recognized as the to encourage adjustment and innovation, but it vate entrepreneurs, you are the fi rst one who reform and opening-up policy. Back then, is not easy at all. We need the same time and had a vision for the global market since your under extremely harsh circumstances, I had talent it took for the Germans and Japanese to product, Wanxiang U-Joint, was particularly no choice but to strive to survive and develop achieve their worldwide renowned quality to- made for foreign clients. Is that so? Wanxiang. day. Absurdly high profi t margins and speed I’m afraid we probably can’t put it that way. The change in macroeconomic envi- are not in line with economic rules and cycles. In the early stages of China’s reform and opening How would you evaluate the success of You mentioned reciprocating society, ronment might be the most signifi cant fac- There’s absolutely no way of surviving without up period, some main areas of production were Wanxiang’s global market strategy? so what does money mean to you right now Lu Guanqiu tor contributing to Wanxiang’s success obeying those preestablished laws. dominated by SOEs and we were not allowed to What I feel most proud of is the fact that we given that you started off with only RMB today. In other words, a more diverse and One of Wanxiang’s fundamental values is enter. Quite naturally, we had to turn to the inter- are well received and respected by local govern- 400 and now have hundreds of billions in competitive marketplace allowed more pri- to manufacture products that satisfy the needs national market. Once we really went global, ments wherever we invest, such as Germany, the asset under your name. EDITORS’ NOTE Lu Guanqiu founded vate companies to prosper. However, we still of people and society. The better the quality of the state realized that it was something they also U.S., and Singapore. Another element of pride is They belong to all and will go back to society Wanxiang Group as an auto parts manufac- witnessed a number of entrepreneurs who our product, the more competitive our com- welcomed, so we were very lucky to receive sub- the recognition from our partners, some of whom eventually. turer and has since diversifi ed into sectors such didn’t make it in the end. What do you think pany is going to be. Therefore, we constantly sidies and policy support from the government. we have maintained a cooperative relation with Was that also how you educated your as solar power development and real estate. Lu could be the driving forces for Wanxiang’s update our quality standards and adjust our For example, the State Department gave us 5 mil- for more than 20 years. Though some partners children? started Wanxiang in 1969 with $500 in capital. enduring and robust development? machinery to work in a more effi cient, environ- lion RMB in 1985, which was an incredibly large might have switched to other companies at a cer- Yes, it sure was. No one knows the future. I can’t say that mentally-friendly manner. amount at that time. This really motivated us to tain point, they continued to work with us and to You know in some other countries, many COMPANY BRIEF Headquartered in Wanxiang will carry on the current momentum You mentioned that reconfi guring in- make it on the worldwide stage. expand the scale. Third, our investors and com- wealthy people choose to donate a large por- Hangzhou, Zhejiang province, China, for certain; all I know is that we are still on dustrial structure has been the “new normal.” Second, we had the right person in our petitors have also recognized us, and the media tion of their money to the public. Wanxiang Group Corporation (wanxiang.com) the journey. Many factors affect operating out- What do you see as the trends impacting general manager Pin Ni. He started working has as well. I really appreciate all of that. From a Yes, they set good examples for me. is a Chinese multinational automotive compo- comes, such as capability, decision-making, and China’s economy? How will those trends in- at Wanxiang after he graduated from college numerical perspective, our returns from foreign Then what legacy will you leave for your nents manufacturing company and is the larg- the social environment. The key is the third one, fl uence the development of Chinese private and, during that time, he developed a good investments have almost caught up with domestic children? est China-based automotive components environment. enterprises? understanding of the company. He then went numbers. Given this, we estimate that the overseas How to be a decent person. They have to company measured by revenues. The company First of all, Wanxiang got an early start. I As for the trends of our economy, I believe to America to study. Later, we desperately market will soon account for roughly 75 percent know what it means to live their lives to the full- employs more than 40,000 people. Lu’s son-in- started my own business in 1962, and changed the fi rst thing is to fortify laws and regulations. needed someone to run our international divi- of our annual income. est and to be worthy before focusing on making law, Ping Ni, heads Wanxiang’s Chicago-based seven locations within six years because of Every business must operate in accordance with sion, so he rejoined the team. He worked unbe- Wanxiang has grown into a widely re- money or accumulating a fortune. The sequence U.S. operations and, in 2013, it bought bank- private ownership. Worse still, the country laws and regulations. The second is the need lievably hard and did an incredible job. spected and acknowledged company. What can’t be reversed. rupt A123, a maker of lithium batteries for was devastated by three years of natural di- to find ways to motivate and excite people do you think might be the main reasons lying I also heard that you once dreamt of be- electric vehicles. In China, Wanxiang Group sasters. During that time, I lived in the city as to be creative. Wanxiang has more than 40,000 behind this recognition? coming a city dweller. What’s your goal now? announced plans in June 2014 to set up a an apprentice but got laid off. Fortunately, I employees; to operate well, we need to fi nd I’d rather say that we are still trying to be- Yes, I longed for an urban lifestyle very much grid energy-storage business with Japan’s NEC. was able to learn some core skills and was ways to let our employees take ownership of come a widely acknowledged enterprise but when I was young. However, ever since I was laid determined to begin my own practices back their work. Meanwhile, we need to rely on the we aren’t there yet. The reason why we can off from my job in the city and got back to my vil- Many people say that one of the greatest in my hometown. state to provide favorable policies for private develop many long-term clients and partners is lage, I cast that idea aside because I felt unneeded miracles under China’s reform and open- The second factor was my determination enterprises and to mobilize people’s enthusiasm because we hold tight to our principle of getting there. If there was no room for me in the city, I had ing-up policy over the past few decades is and persistence. I can still recall several of my towards building a better community. to know their real needs. Once a cooperative to stand up on my own and do something for the letting grassroots population, such as farm- colleagues who quit their jobs when frustrated Our country has entered a crucial and relationship is established, we prioritize clients’ rural population. If anyone asked what identity I ers, grow into world-class entrepreneurs. by various obstacles or interpersonal confl icts. more challenging period of reform in which demands before our own revenue concerns, consider for myself, it would be a country person. Some media consider you as an important For me, I never thought of giving up, not once, more complicated images will unfold. We shall and treat them with credibility and sincerity. In fact, if all the Chinese farmers get richer, our witness, representative, or even creator because I believe that I have to do the work to continue to bring in advanced technology, man- I heard that you allocate a lot of energy in country will really thrive. of this miracle. Do you agree with people benefi t myself, instead of looking at it as doing agement, and other good practices from other fulfi lling corporate social responsibility and There’s a well-known saying from calling the phenomenon a “miracle”? If it for someone else. Each time we have new em- countries because we are still far behind. How never consider yourself an “outsider” or Confucius: “At seventy, you can follow your so, then how do you explain the reasons ployee training sessions, I always tell them the so? It is defi nitely not because our people are “guest” in other countries. How do you view heart, as long as you’re not breaking the for it? same thing – work hard for yourself, not for me. intelligently inferior; the key is that foreigners this sense of ownership and Wanxiang’s so- rules.” Since you just turned 70 this year, Our country made a few detours after 1949 Likewise, as an entrepreneur, if your company follow the rules and can be meticulous about cial accountability performance? what do you want to celebrate most? when land became farmers’ only income source didn’t end up doing as well as you expected, implementation. Populous and complex, China We have a saying in Wanxiang: “People unite It is still too early to celebrate. The average since they were completely tied to it. Later on, identify your own problems before blaming indeed needs further reform and opening up when money is dispersed while they separate life expectancy in China is 73 now so I’ve still got the government realized that China would only policy, the industry, or your competitors. as well as improvements in the legislative sys- when money gathers. Earn it in proper ways and several years to work. Actually, I’m going to work be worse off if things continued that way and That said, I don’t think I’m in possession tem. As the second largest economy worldwide, spend it delightfully.” In other words, generating for another 20 years and save the celebration for that satisfying people’s basic human needs (e.g. of any special secrets. The universal principle we’ve written a success story only in terms of revenues is only one part of our managing phi- my 90th birthday. food, clothing, housing etc.) should be abso- is to set a goal, then to work diligently and the aggregated numbers. More efforts should be losophy; taking good care of employees is another What’s your objective then? lutely prioritized. Therefore, the policy changed patiently towards it. For instance, the greatest put in our economy’s quality, net worth, and essential element. In the end, everything will fl ow To grow Wanxiang into a globally respected towards an idea of incentivizing people, espe- diffi culty for China’s economy now is the in- income per capita etc. Therefore, we must be back to society and that’s why I made up my mind and renowned company, and we are still work- cially those in rural areas, who were especially dustrial structure. Our products can’t meet the humble. to participate in philanthropic endeavors. ing hard to realize that.• 20 LEADERS POSTED WITH PERMISSION. COPYRIGHT © 2015 LEADERS MAGAZINE, INC. VOLUME 38, NUMBER 4 Only through courageous reform can we ’s clear out the obstructions and let private enter- prises develop in a more unfettered way while also protecting the environment. I recently interviewed a number of lead- ers of Chinese State Owned Enterprises (SOEs) Satisfying the Needs of and most of them agreed that the next step of China’s reform is to encourage mixed owner- ship, i.e. incorporating private elements into SOEs in order to enhance their competitive- People and Society ness. Is Wanxiang interested in merging into one of the colossal SOEs? We have already been working with SAIC Motor Corporation, with 51 percent of the hold- ings. Change is always diffi cult, but I always be- An Interview with Lu Guanqiu, lieve there is a way out, no matter what. We are Founder and Chairman of the Board, Wanxiang Group Corporation still actively reaching out with top-tier auto manu- facturers such as General Motors, Ford, and BMW marginalized and vulnerable, to enable them market demand, both in terms of quality and to try to discover more opportunities to cooperate. to make a living with alternative choices. The price. Current policies have been put in place Some say that, among all Chinese pri- change was later widely recognized as the to encourage adjustment and innovation, but it vate entrepreneurs, you are the fi rst one who reform and opening-up policy. Back then, is not easy at all. We need the same time and had a vision for the global market since your under extremely harsh circumstances, I had talent it took for the Germans and Japanese to product, Wanxiang U-Joint, was particularly no choice but to strive to survive and develop achieve their worldwide renowned quality to- made for foreign clients. Is that so? Wanxiang. day. Absurdly high profi t margins and speed I’m afraid we probably can’t put it that way. The change in macroeconomic envi- are not in line with economic rules and cycles. In the early stages of China’s reform and opening How would you evaluate the success of You mentioned reciprocating society, ronment might be the most signifi cant fac- There’s absolutely no way of surviving without up period, some main areas of production were Wanxiang’s global market strategy? so what does money mean to you right now Lu Guanqiu tor contributing to Wanxiang’s success obeying those preestablished laws. dominated by SOEs and we were not allowed to What I feel most proud of is the fact that we given that you started off with only RMB today. In other words, a more diverse and One of Wanxiang’s fundamental values is enter. Quite naturally, we had to turn to the inter- are well received and respected by local govern- 400 and now have hundreds of billions in competitive marketplace allowed more pri- to manufacture products that satisfy the needs national market. Once we really went global, ments wherever we invest, such as Germany, the asset under your name. EDITORS’ NOTE Lu Guanqiu founded vate companies to prosper. However, we still of people and society. The better the quality of the state realized that it was something they also U.S., and Singapore. Another element of pride is They belong to all and will go back to society Wanxiang Group as an auto parts manufac- witnessed a number of entrepreneurs who our product, the more competitive our com- welcomed, so we were very lucky to receive sub- the recognition from our partners, some of whom eventually. turer and has since diversifi ed into sectors such didn’t make it in the end. What do you think pany is going to be. Therefore, we constantly sidies and policy support from the government. we have maintained a cooperative relation with Was that also how you educated your as solar power development and real estate. Lu could be the driving forces for Wanxiang’s update our quality standards and adjust our For example, the State Department gave us 5 mil- for more than 20 years. Though some partners children? started Wanxiang in 1969 with $500 in capital. enduring and robust development? machinery to work in a more effi cient, environ- lion RMB in 1985, which was an incredibly large might have switched to other companies at a cer- Yes, it sure was. No one knows the future. I can’t say that mentally-friendly manner. amount at that time. This really motivated us to tain point, they continued to work with us and to You know in some other countries, many COMPANY BRIEF Headquartered in Wanxiang will carry on the current momentum You mentioned that reconfi guring in- make it on the worldwide stage. expand the scale. Third, our investors and com- wealthy people choose to donate a large por- Hangzhou, Zhejiang province, China, for certain; all I know is that we are still on dustrial structure has been the “new normal.” Second, we had the right person in our petitors have also recognized us, and the media tion of their money to the public. Wanxiang Group Corporation (wanxiang.com) the journey. Many factors affect operating out- What do you see as the trends impacting general manager Pin Ni. He started working has as well. I really appreciate all of that. From a Yes, they set good examples for me. is a Chinese multinational automotive compo- comes, such as capability, decision-making, and China’s economy? How will those trends in- at Wanxiang after he graduated from college numerical perspective, our returns from foreign Then what legacy will you leave for your nents manufacturing company and is the larg- the social environment. The key is the third one, fl uence the development of Chinese private and, during that time, he developed a good investments have almost caught up with domestic children? est China-based automotive components environment. enterprises? understanding of the company. He then went numbers. Given this, we estimate that the overseas How to be a decent person. They have to company measured by revenues. The company First of all, Wanxiang got an early start. I As for the trends of our economy, I believe to America to study. Later, we desperately market will soon account for roughly 75 percent know what it means to live their lives to the full- employs more than 40,000 people. Lu’s son-in- started my own business in 1962, and changed the fi rst thing is to fortify laws and regulations. needed someone to run our international divi- of our annual income. est and to be worthy before focusing on making law, Ping Ni, heads Wanxiang’s Chicago-based seven locations within six years because of Every business must operate in accordance with sion, so he rejoined the team. He worked unbe- Wanxiang has grown into a widely re- money or accumulating a fortune. The sequence U.S. operations and, in 2013, it bought bank- private ownership. Worse still, the country laws and regulations. The second is the need lievably hard and did an incredible job. spected and acknowledged company. What can’t be reversed. rupt A123, a maker of lithium batteries for was devastated by three years of natural di- to find ways to motivate and excite people do you think might be the main reasons lying I also heard that you once dreamt of be- electric vehicles. In China, Wanxiang Group sasters. During that time, I lived in the city as to be creative. Wanxiang has more than 40,000 behind this recognition? coming a city dweller. What’s your goal now? announced plans in June 2014 to set up a an apprentice but got laid off. Fortunately, I employees; to operate well, we need to fi nd I’d rather say that we are still trying to be- Yes, I longed for an urban lifestyle very much grid energy-storage business with Japan’s NEC. was able to learn some core skills and was ways to let our employees take ownership of come a widely acknowledged enterprise but when I was young. However, ever since I was laid determined to begin my own practices back their work. Meanwhile, we need to rely on the we aren’t there yet. The reason why we can off from my job in the city and got back to my vil- Many people say that one of the greatest in my hometown. state to provide favorable policies for private develop many long-term clients and partners is lage, I cast that idea aside because I felt unneeded miracles under China’s reform and open- The second factor was my determination enterprises and to mobilize people’s enthusiasm because we hold tight to our principle of getting there. If there was no room for me in the city, I had ing-up policy over the past few decades is and persistence. I can still recall several of my towards building a better community. to know their real needs. Once a cooperative to stand up on my own and do something for the letting grassroots population, such as farm- colleagues who quit their jobs when frustrated Our country has entered a crucial and relationship is established, we prioritize clients’ rural population. If anyone asked what identity I ers, grow into world-class entrepreneurs. by various obstacles or interpersonal confl icts. more challenging period of reform in which demands before our own revenue concerns, consider for myself, it would be a country person. Some media consider you as an important For me, I never thought of giving up, not once, more complicated images will unfold. We shall and treat them with credibility and sincerity. In fact, if all the Chinese farmers get richer, our witness, representative, or even creator because I believe that I have to do the work to continue to bring in advanced technology, man- I heard that you allocate a lot of energy in country will really thrive. of this miracle. Do you agree with people benefi t myself, instead of looking at it as doing agement, and other good practices from other fulfi lling corporate social responsibility and There’s a well-known saying from calling the phenomenon a “miracle”? If it for someone else. Each time we have new em- countries because we are still far behind. How never consider yourself an “outsider” or Confucius: “At seventy, you can follow your so, then how do you explain the reasons ployee training sessions, I always tell them the so? It is defi nitely not because our people are “guest” in other countries. How do you view heart, as long as you’re not breaking the for it? same thing – work hard for yourself, not for me. intelligently inferior; the key is that foreigners this sense of ownership and Wanxiang’s so- rules.” Since you just turned 70 this year, Our country made a few detours after 1949 Likewise, as an entrepreneur, if your company follow the rules and can be meticulous about cial accountability performance? what do you want to celebrate most? when land became farmers’ only income source didn’t end up doing as well as you expected, implementation. Populous and complex, China We have a saying in Wanxiang: “People unite It is still too early to celebrate. The average since they were completely tied to it. Later on, identify your own problems before blaming indeed needs further reform and opening up when money is dispersed while they separate life expectancy in China is 73 now so I’ve still got the government realized that China would only policy, the industry, or your competitors. as well as improvements in the legislative sys- when money gathers. Earn it in proper ways and several years to work. Actually, I’m going to work be worse off if things continued that way and That said, I don’t think I’m in possession tem. As the second largest economy worldwide, spend it delightfully.” In other words, generating for another 20 years and save the celebration for that satisfying people’s basic human needs (e.g. of any special secrets. The universal principle we’ve written a success story only in terms of revenues is only one part of our managing phi- my 90th birthday. food, clothing, housing etc.) should be abso- is to set a goal, then to work diligently and the aggregated numbers. More efforts should be losophy; taking good care of employees is another What’s your objective then? lutely prioritized. Therefore, the policy changed patiently towards it. For instance, the greatest put in our economy’s quality, net worth, and essential element. In the end, everything will fl ow To grow Wanxiang into a globally respected towards an idea of incentivizing people, espe- diffi culty for China’s economy now is the in- income per capita etc. Therefore, we must be back to society and that’s why I made up my mind and renowned company, and we are still work- cially those in rural areas, who were especially dustrial structure. Our products can’t meet the humble. to participate in philanthropic endeavors. ing hard to realize that.• VOLUME 38, NUMBER 4 POSTED WITH PERMISSION. COPYRIGHT © 2015 LEADERS MAGAZINE, INC. LEADERS 21