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Liu Chuanzhi: review of the CEC UK Visit

Source: China Entrepreneur Club | Date: 12-08-02  

The first stop of our visit to the U.K. is Goodwood, home of Rolls-Royce Motor Cars. At the Goodwood plant, we were invited to take a drive or ride in the cars, which reminded me of my earliest memory of Rolls-Royce cars. It was in 1985, when China was still closed to the outside world, and it’s the first time I’ve been to Hong Kong. Astonished by the skyscrapers in the Central Plaza, I saw a luxury limousine elegantly driving by. The driver, wearing uniform and a proud, solemn expression, left a deep impression on me. My friend, who was standing beside me, said that is the world’s most luxurious car - Rolls-Royce. Maybe we could be lucky enough to take a ride in it some day. I replied with a bitter smile, wondering how much the driver was paid. At that time, my salary was only RMB 200 per month. Later I learnt that a driver of that kind earned over RMB 4,000 per month. My host  in Hong Kong promised to cover my accommodation for only three days. If the deal wasn’t done within three days, I would have to find another place to spend the nights from the fourth day. You can see how desperate we were at the beginning of our career. But however poor we were, we still have the confidence and perseverance to keep the business going and getting better.

We started with acting as an agent for IBM and then created our own brand, at certain risks of course. In the early 1990s, the Chinese Government gave permit for importing computers to promote the informationisation of domestic industries. However, the policy dealt a heavy blow on domestic computer brands. Within a year, "Great Wall”, the largest state-owned computer company ended up in bankruptcy. However, Lenovo (The English name was changed from “Legend” to “Lenovo” in 2003) a company then far weaker than  IBM, HP and Compaq in terms of capital strength, technology and management level, instead of being discouraged, went into competition with these foreign brands through adjustment of company structure and strategy. As a result, Lenovo occupied 27% of the PC market by 2000, becoming the top one domestic PC brand. More importantly, our success had nothing to do with the preferential policy of the government. At this time, Dell entered the Chinese market. Owning to its new business mode, Dell was almost undefeatable in the United States and Europe. We lost some market share in the first two years. But after an in-depth research on Dell’s developing strategy, we fought back by establishing a new business mode of our own. We outdid Dell in 2004. Since then, Dell has never caught up with Lenovo in the Chinese market. In 2005, we made another daring move - acquiring IBM’s PC division. All of our Chinese friends applauded the decision. It is worth the risk, they said. However few expected we would succeed. In the end we completed the acquisition despite the formidable difficulties. Before the acquisition, Lenovo had a turnover of USD 2.9 billion. By 2011, it reached to USD 29.6 billion, making it the 370th in the Global 500 ranking. Before the acquisition, we had a global market share of 2.2%. Now the figure is 14.7%, which makes us only second to HP PC business with a disparity of 0.2%.

With these facts I am not only talking about myself or Lenovo. I can raise another example, one that all CEC members are familiar with. Most of the enterprises run by CEC members are private enterprises with annual turnover of tens and hundreds of billion yuan. Like me, they started from scratch and achieved success with extraordinary dreams, determination, compassion and social responsibilities. The total turnover of our member companies adds up to RMB 2 trillion.

I’m not just talking about the China Entrepreneur Club. We represent China’s private sector, which contributes 60% of the nation’s GDP and provides 80% of job opportunities.

Among the numerous private enterprises, there are few which don’t abide by the regulations driven by greed for profits, thus leaving great damage to China’s economy and people’s lives. It is unavoidable that such enterprises may exit in a young market economy that has run for only 30 years. But we won’t let it continue rotting the whole system. That’s why we founded CEC. 

As the leaders of China’s private enterprises, we advocate responsible and integrity-based business modes. We desire for  better lives, so do our employees. Therefore we have to work hard, keep innovating and create new values for a better world.

We have come in hope of cooperation, as it enables us to achieve greater goals so that everyone can share the benefits. We have come all the way to the U.K. to make our voice heard and to seek business cooperation between the two countries.

To date, we have spent four busy yet enjoyable days in the U.K., paying rewarding visits to the Rolls-Royce Goodwood plant, the University of Cambridge, ARM Holdings, The Needham Research Institute, Premier League Headquarters and NET-A-PORTER, and having meetings with the Rothschild Family, Virgin Group, Walpole Group, the City of London, the China-Britain Business Council and many more institutions.

We were received and treated with special respect and hospitality. The British Prime Minister David Cameron took time from his busy schedule to meet us. We have achieved more than expected. What’s more, the weather has been exceptionally nice to us during the visit. The weather forecast warned it would be rainy, so we have brought many heavy clothes. But since our arrival, we have been lucky to see the sunny days. Lord Green joked that he had made a pact with the weather to make sure we have a pleasant trip. For this, I give my special thanks to him.

I believe the coming days of our UK visit will be even more wonderful.

Liu Chuanzhi
Chairman, China Entrepreneur Club
Chairman, Legend Holdings Ltd.
On the night of 26 July 2012

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