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In 2023, we have made a heavy harvest, and looking forward to 2024, we have more expectations and are full of confidence in the future. **Stress stability and progress, to promote stability, the two key words are stability and progress. At this welcome moment, I would like to share with entrepreneurs three key words that I have been thinking about recently: mentality, state, and ecology, and discuss with you.
Attitude. The mentality of developing the economy and doing business is very important, and the mentality is not only how to look at the situation, but also the way and method of thinking about the problem of entrepreneurs. In terms of mentality, we need to have three mindsets.
First, we should have a normal heart. Ten years ago, when China entered a new normal, the leaders proposed to look at the problem with a strategic and ordinary mentality, because the new normal is first of all the economic development from high-speed to medium-high-speed, and everyone must adapt to this change. But frankly speaking, many of our entrepreneurs have not done this kind of psychological adjustment for so many years, and they are still nostalgic for the double-digit growth in the past, and they are very anxious about the decline in growth rate. In fact, this problem was also true in Japan at the time. I remember the leader of Mitsubishi Trading Company telling me a few years ago that young people in Japan were very nostalgic for the era of industrialization, when Japan was developing rapidly, but at that time, due to environmental pollution, Japan was full of stinky ditches, there were no fish in Tokyo Bay, and everyone wore masks on the streets of Tokyo. Today, although Japan's economic development has slowed down, the sky is blue, the water is green, the mountains are green, and the quality of people's life and survival has improved. It is also common sense that the economy has cycles, sometimes it will develop faster, and sometimes it will have to be adjusted. The economy can't always go up at 45 degrees, so it's important to have a normal heart.
Second, we should have an enterprising spirit. Enterprising, that is, to do things with a positive and progressive attitude, especially when we encounter some difficulties, we must look more at the bright and more achievements, and boost morale. I don't like those who always talk about the economy, they always like to talk about the right things upside down, listening to their speeches, often scare everyone a lot, in fact, we should look at the economy in the middle of the way. I am neither in favor of pessimism and disappointment, nor in favor of blind optimism, I like to be pragmatic. The so-called pragmatic outlook is to seek truth from facts and be more open-minded. To do business, not a 100-meter sprint but a marathon, is a long-distance run, to do business or to adhere to pragmatism, professionalism, long-termism and humanism. Pessimistic economists say that this year will be the most difficult year, but it will be the best year in the future, and there is no basis for saying that. Blindly optimistic economists say that China's economy will continue to grow at a high rate in the next few years, but in fact, our growth rate has dropped to 5% in the past 10 years. Our economic development, if we can increase our GDP base by 5% today, it is already very good. For the growth of an enterprise, we must set a realistic goal, whether it is from the feasibility of allocating resources or from the perspective of stable expectations, enterprising spirit is crucial.
Third, we should have an empathetic heart. As society becomes more and more diverse, it is necessary to deepen understanding between all levels of society. We should carry out systematic and dialectical thinking, cherish our market, put forward more meaningful and constructive suggestions and opinions, and also pay attention to the overall effect of speaking out, and attach importance to maintaining the stability and development of the overall situation. I'm a middle-of-the-road person, and I like to think about the square side, after all, the Rubik's Cube is six sides. I hope that our self-improvement can be more rational and mature, and I also hope that everyone will take self-improvement as a platform for learning and communication, not to vent emotions and malicious slander, but to do what you do not want to do to others, respect each other, and achieve self-achievement. I call this empathy, that is, to be able to empathize from the other person's point of view, and not to be too extreme.
status. I remember that when the SASAC was first established 20 years ago, the leaders of central enterprises were required to be in the state. The state is the performance of people's dedication to work, and in the state is to devote themselves to work, entrepreneurs still have to focus on their own one-third of an acre, intensively cultivate, and do their main business without distraction. At this time full of challenges and difficulties, only the cadres of the enterprise can tide over the difficulties. In the state, I understand that it is also important in three aspects.
First, we must not lie flat. Lying flat is a state in which people are pessimistic and disappointed and no longer enterprising. Now some people choose to lie flat in the face of difficulties, and some people find a lot of reasons to lie flat. But I strongly disapprove of lying flat, when a society encounters difficulties, it is necessary for elites to lead everyone to charge forward, especially entrepreneurs, it is even more impossible to lie flat, the mission of entrepreneurs is to solve difficulties, not difficult to do entrepreneurs to do, entrepreneurs from the moment they lie flat is no longer entrepreneurs. An entrepreneur is the kind of person who is full of desire for success, the kind of person who perseveres in the face of difficulties, the kind of person who has the feeling of family and country in his chest, and the kind of person who always faces the front. In fact, when it is difficult to do business, it is also the time when entrepreneurs make the fastest progress.
I have been a business leader for 35 years, and I am often asked by everyone, Mr. Song, have you encountered difficulties for so many years, I said that I have come all the way from difficulties, a few small difficulties every year, and a big difficulty in a few years, but I think that being an entrepreneur should be more and more courageous, I have never complained and lying flat. Do business, make more money in good years, earn less in bad years, lose less in very bad years, can't shake off at every turn, can't lie flat at every turn, in fact, if you lie flat, someone will soon cross you and walk over.
The second is steady growth. A few days ago, I took Peking University Guanghua DBA to Japan for a study visit, during which I held an exchange meeting with Japanese entrepreneurs, mainly to discuss the lessons of Japan in the past 30 years. Among them, Japanese enterprises said that after Japan's bubble economy, Japanese enterprises were too cautious, unwilling to take any risks, did not lend or invest, and repaid bank loans when they made profits, which made Japanese banks only have deposits but no loans, which directly led to the negative interest rate on Japanese deposits, and people under the age of 40 in Japan have not seen bank interest, and Japan's price index has also been depressed for a long time. The Bank of Japan hopes that the CPI can reach the ideal state of 2%, but this year it has only begun to reach 3%, prices have risen, companies have profits, employment has improved, and the employment rate of new graduates in Japan has reached 975 per cent, but this is a change that has only been achieved after 30 years of loss.
When I talk about this, I also hope that my country's entrepreneurs will still carry forward the entrepreneurial spirit, dare to go against the trend, and put high-quality development in the first place, and high-quality development is the last word. In fact, enterprises are always in the dilemma of risk and development, not paying attention to risk and only focusing on development may collapse, but only focusing on risk and ignoring development will stop. In the past, when we were engaged in leapfrog and rapid development, we reminded everyone to pay attention to risks, but today when we are too cautious and cautious, we want to encourage everyone and be bolder. Inflation in the United States is high, but bank interest rates are also high, sucking hot money all over the world. I often think that we have two mirrors, the United States and Japan, and it is good for us to look at each other often.
Ecology. Objectively speaking, China's industry has the advantages of complete supporting facilities and good cost performance, and has two major advantages of the dual circulation market. However, China's industries have produced serious involution in terms of market organization and competition concepts, and the chaotic market order and vicious competition among enterprises in some industries have led to a serious surplus in many industries in China, and the efficiency of industries and enterprises has been low, and it has also intensified the international antidumping efforts against us. Therefore, we must change this industry ecology.
Like in the past, our cement, steel and other traditional industries were in surplus and vicious competition, and now even the new three, new energy vehicles, power batteries, and photovoltaic modules have also joined the industry with serious surplus and war. Like photovoltaic modules, from 1 at the beginning of 20238 yuan 1 watt, the price is reduced to 1 yuan 1 watt, and we have lost 300 billion yuan of profit only for the export part. Actually, 18 yuan ** is also the lowest in the world, our own enterprises and involution, a large-scale price reduction, but the United States and Europe do not appreciate it, but add 40% anti-dumping duty, which greatly affects the profits of China's photovoltaic enterprises, so that the stock price of the original excellent photovoltaic listed companies has also fallen sharply. Photovoltaic modules are only the tip of the iceberg of China's industrial involution. Therefore, we must make great efforts to change the ecological problems of serious involution in some industries in our country.
The first is to formulate a good industrial policy. On the one hand, on the supply side, the duplication of homogenization is strictly restricted. LONGi's policy is not to innovate or expand production, especially to prevent local governments from participating in investment in excess industries in the name of attracting investment and developing strategic emerging industries. On the other hand, it is to increase the demand side and increase the consumption of excess capacity. In terms of industrial policy, it is necessary to block the demand side on the supply side.
The second is to increase the joint reorganization of the industry and increase the degree of concentration. Most of China's industries are in a disorderly state of many, scattered, and chaotic, and in the future we will carry out joint reorganization of industries to form healthy competition among large enterprises. In the competition of enterprises, it is necessary to carry out healthy competition, that is, to change the unfair competition of winning bids at low prices and lower than costs, so as to make competition orderly and healthy. At the same time, guide enterprises to take the road of high-end and branding, from low-quality and low-price to high-quality.
The third is to carry out production capacity cooperation and make the world a factory in China. We must increase the development of domestic and international dual circulation markets, take the responsibility for overseas markets, and maintain our export volume to ensure our foreign exchange reserves and balance of payments. Whether it is an enterprise from domestic to global, or from global to regional, we must firmly go out. There are two modes of going out, one is to carry out production capacity cooperation in Southeast Asia, the Middle East and Africa, Mexico and other places. On the one hand, we can benefit from these growth markets, and on the other hand, we can enter the US and European markets from these bases, because they often have zero tariffs when they enter the US and Europe, and they can pull our domestic industrial chain and ** chain. For example, Apple has built a factory in Vietnam, surrounded by Chinese supporting enterprises, and Tesla has built a factory in Mexico, surrounded by China's top businessmen. The second is to directly enter the United States and Europe for investment. The United States is engaged in "returning to industry" and Europe is engaged in "re-industrialization", which will pose challenges to us in the long run, but we can also take advantage of the situation to build factories directly at their doorstep, so that we can not only keep our local customers, but also expand our market. For example, Fuyao built a glass factory in the United States, Jushi built a glass fiber factory in the United States, Wanhua built a chemical plant in Hungary, and CATL built a power battery factory in Europe. The problem is that if you don't go, businesses in Japan and South Korea will. When Japan was in a bubble economy, Japanese companies came to China one after another to develop, and it should be said that the Chinese market saved Japanese companies. It will also be a good thing in the long run for us to go out today, and in 10 or 20 years, we will complete the transformation from "China is the world's factory" to "the world is China's factory", and we will also change from valuing GDP (gross domestic product) to attaching importance to GNP (gross national product).
2024, full of hope and expectation, is coming, let us have a good attitude, a good state, and build a good ecology together!
*: China Entrepreneur Magazine*** January 1, 2024.
Edit: Ruyue.
*: "New Wealth Management" WeChat official account.