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The “Stupid” Way of Liu Yongxing: Prosperous in Ov

Published:2016/7/29 11:49:40

What is the conversion rate of saccharic acid?


What is the standard of industry?


You must make it 69% or 70%, otherwise there is no need to do it.

What’s the capacity of a 8400-sqm warehouse?

5000 tons

Make it more. At least 1 ton per square meter. If possible, make it 10 thousand tons. Do not blindly expand, which is a waste of funds and stupid. Try to tap into the potential; therefore I reject your proposal of adding more warehouses.  

This conversion happened at 9 p.m. on 22nd of August, and one speaker is Liu Yongxing, the founder of EASTHOPE BAOTOU BIOLOGY ENGINEERING CO.,LTD

Liu Yongxing just arrived at Baotou at 7 p.m., and went directly to the plant that produced lysine without having dinner. He asked the plant manager for all kinds of manufacturing data, checked the raw material bags, and even tasted some small materials himself to know the ingredient. After that, conferences and reports occupy his time until midnight.  

The next day, Liu checked 5 to 6 local plants where feed, electrolytic aluminium, cement, PVC, etc. are produced.

30 years since he started his business has passed. Liu keeps this sense of urgency, which cools his mind and contributes to his success.  

East Hope group manages 156 enterprises which involve in 9 industries such as electrolytic aluminum, feed, power generation, alumina, cement, petrochemical industry, coal chemical industry, chlorina alkali chemical industry, and biochemical industry, with the annual production value of 70 billion RMB.

Since 2002 when the first integration project launched, East Hope has accumulated 90% of its assets by developing chemical industry. Among all the businesses, electrolytic aluminum and alumina are the major driving force.

The situation is that the whole aluminum industry has undergone a depression for 6 years, and suffered from the overcapacity and low price. In the first half of this year, the international price of aluminum kept falling, and the price decline of alumina and electrolytic aluminum surpassed 7%.

In May, the joint notification released by the national development and reform commission and the ministry of industry and information technology of China said the weight of the governments’ work lay on the overcapacity of industries like electrolytic aluminum. Based on this notification, dozens of aluminum enterprises reached an agreement of reducing production that totaled 1.3 million tons.

The main enterprises in the globe like UC Rusal, Alcoa, and Rio Tinto have to reduce the production. It is estimated that this depression of aluminum industry will last 3 to 5 years.  

Last year, the whole industry of electrolytic aluminum and alumina achieved the revenue of over 600 billion RMB but just 900 million RMB profits, Liu told Talents Magazine. In 2012, East Hope realized 1 billion profits by the business of aluminum, and may profit more this year.  

What do we pursue in a gloomy industry that requires large amount of capital and slowly makes profits? This is the question that the outside world wants to ask Liu. Liu Yonghao, the fourth younger brother of Liu Yongxing, has done outstanding in finance industry, but Liu Yongxing himself determined to enter this chemical industry instead of finance or real estate. His answer is like this: there are no bad industries but bad enterprises.

Somebody said something ironic describing the low profits rate of industrial enterprises like this: the profit of producing 2 tons of steel cannot afford a piece of Popsicle. Liu Yongxing added that the steel industry was better than aluminum industry. The loss of steel was 3% to 5%, but the loss of electrolytic aluminum was 10%.

Therefore, Liu kept his eyes on every screw in the manufacturing process.  

In 2002 when East Hope initially built the plant in Baotou, the per capita capacity of electrolytic aluminum was 30 tons. All staff was willing to raise the index to 60 tons, but Liu Yongxing insisted 300 tons. All staff considered this number incredible.  

Nowadays, the per capita capacity has passed 300 tons, reached 420 tons and will reach 500 tons by the end of this year. The production efficiency ranks top 5% of the globe, is 4 times of the average level of China and twice of the international level.  

But Liu Yongxing is still not satisfied and states that East Hope also has the space of 30% to 40% to improve when comparing with Alouette which he thinks is the best.  

Actually, before last year, Rio Tinto ranked No.1 in Liu’s mind, and realized the per capita production capacity of 570 tons, the top 1 in the world.  

Many years age, Liu Yongxing wanted to visit Rio Tinto, but Rio Tinto was not willing to open to him because of technology protection. Last year, East Hope and Rio Tinto reached an agreement on mutual communication. Rio Tinto sent a dozen of workgroups to visit East Hope but Liu Yongxing was told that he was not able to visit the plant when arrived in Canada.  

“We have an agreement; why not allow me to visit?” Liu said. Rio Tinto replied that workers were on a strike because they are going to lay off workers. Liu did not believe that an enterprise with per capita capacity of 570 tons would have to fire workers.

Fortunately, Rio Tinto pointed out a better enterprise with per capita capacity of 750 tons for Liu Yongxing.

It is Alouette. Liu Yongxing visited this factory immediately and noted down how to manage the automatic machines, what work could let machines do, and what positions could use less labor.  

Liu Yongxing said energetically: “I thought we were close to the world class level with 7 to 8 years development, but now we knew the road ahead was long. Fortunately, we found a new target.”

His plan is that the plant in Baotou must achieve per capita production of 550 tons by the end of next year, and keep up with the world-class level two years later.  

Duan Yong, the GM of the plant in Baotou, told the Talents Magazing that there is a state-owned aluminum plant in Baotou with annual production of 430 thousand tons and 8000 workers. East Hope has 1700 workers with annual production of 880 thousand tons. The average salary of workers of East Hope is 1 third higher than that of the state-owned plant.

Duan Yong recalled that in 1997, East Hope had about 100 workers whereas the counterparts abroad just had 7 to 8 workers. The chairman Liu proposed to reduce our workers down to 10, which was crazy at that time. Now we have only about 20 workers.  

Circular Industrial Chain is another key to success.  

The idea of circular industrial chain already took shape in Liu’s mind ten years ago. With 10-year development, this chain has been gradually improved.

Currently, in Baotou, East Hope has established an inter-dependent assembly line integrating power generation, EA, Lysine, caustic soda, PVC, bricks into a whole. The steam generated by power could be used in making lysine, and the coal ash of the power plant could make bricks. The main material of PVC is calcium carbide, and the gas out of carbide could make anode carbon blocks which are the main material of making EA. The waste of last procedure could be used as the material of the next procedure, which greatly lowers the cost.

In the eyes of Liu Yongxing, it is a must to survive in an overcapacity industry that managing elaborately and operating efficiently.  

Production Transfer

Liu Yongxing plans to invest 100 billion yuan in Xinjiang within 5 to 8 years. Recently, he has been to Xinjiang over 40 times.  

East Hope has built an aluminum-power integration project in Xinjiang that put into production two years ago. The target production by the end of this year is 800 thousand tons. This project is not only the biggest of East Hope, but also the tops in Xinjiang.

The blueprint is to build 3 modules of businesses in the 15 square kilometers of Gobi desert, they are 2.4 million tons EA project, 1.8 million tons methyl alcohol and 600 thousand tons olefin project and cement project.  

It has been a tendency that the EA projects move to the west of China. It is estimated that the total production of EA plants in Xinjiang will be 18 million tons by the end of the twelve five-year plan, which accounts for 70% of the total volume in China. This is due to the low-cost resources of Xinjiang and the policy support.

“The main cost of EA is from the power and alumina. To make one ton EA needs power consumption of 14000 degree on average. Generally speaking, enterprises making EA power themselves, the cost to generate one degree is 0.32 yuan, and the cost of power to make one ton EA is 4500 yuan. The price of alumina is 2600-2700 yuan per ton, and the cost to make one ton aluminum is 4500 yuan for two tons alumina make one ton aluminum. The market price of EA for per ton is 14000 to 14500 yuan, and enterprises could hardly make a profit because of the cost for anode carbon consumption and labor.” An expert in aluminum industry told Talents Magazine.  

The cost of self-generated power relies on the coal price. Because Xinjiang has the low-price coal resource that is easy to exploit, enterprises in this area could lower the cost of power generation by 2 thirds compared with that in inland of China, which certainly reduces the cost of producing EA.

Furthermore, Xinjiang is supported by policies. Since the twelve five-year plan, many EA projects in inland have been shut down, but those in Xinjiang have survived. In May 2012, the national development and reform commission released differentiated policies pertaining to 12 industries like steel, EA, cement, petrochemical, coal chemical, thermal power and renewable energy.  

Liu Yongxing has high expectations of the project in Xinjiang. With more advanced equipment and technology, and low cost of resource, Liu Yongxing attempts to achieve his goal of highest in per capita production efficiency and lowest in average energy consumption per ton in the world.

In fact, East Hope is not the most well-known one in the tendency towards the west.  

Shandong Xinfa Group entered Xinjiang earlier and developed faster than East Hope. In August 2009, Xinfa Group started its EA business in Urumqi Municipality and has realized the annual production capacity of 1.2 million tons.  

Although Zhang Xuexin, the founder of Xinfa Group, does not show in any ranking lists, it is estimated that the assets controlled by him have surpassed 100 billion yuan.

Mock Death

Zhang Xuexin is 66 years old, 1 year older than Liu Yongxing. They cooperated before when Liu decided to enter the aluminum industry, and Liu has paid for what he learned.

In April 2002, East Hope invested 1.5 billion yuan to the joint project of Xinfa and EH with production capacity of 160 thousand tons. In this joint project, EH wanted to take 51% shares, and half a year later, the Baotou plant was established with the total investment of 10 billion yuan.  

The comment about Zhang Xuexin is like this: courage and action. Zhang dares to do what others do not. When others are considering the feasibility, he has started. When others prepare to do, he has made his factory into production. Liu Yongxing called him the leader of Chinese industrial enterprises.

Comments from experts after visiting Xinfa’s factory are like this: the design, construction, production and expansion are ongoing at the same time. Production is what really matters and other auxiliary facilities are set aside.

In contrast, Liu Yongxing is more prudent. 10 years have passed when Liu decided to enter the chemical industry. Even now, when he plans to build a new factory in somewhere, he still builds a feed plant there first to get clear the situation of that area and then puts on the projects.  

When Baotou factory of EH was established, the feed plant has been running for 5 years there. Liu had known the information about resource combinations, construction modes and government demand. Nevertheless, he had made 8 emergency plans for the 10 billion investments in order to deal with different policies and industry conditions. Liu said: “An enterprise that lasts for 100 years should prepare for its mock death at least 20 or 30 times.”

In coal chemical industry, EH has explored for 7 years and launched two small projects in Hulun Buir and Chongqin, but large projects have not been launched yet.

“This industry has high technical requirements, and we have no experience. If you look at Shenhua’s project, the investment is 18 billion yuan, but the annual depreciation cost is 1.8 billion yuan. Therefore, projects like this should be launched after elaborate consideration.” Liu said.

Besides capital, environment issue is another risk for heavy chemical enterprises. Liu Yongxing attaches much importance to the environment protection. Not long before, the relevant security and environment department checked the tailings disposal in Sanmenxia and concluded that “good job, but is the cost too much?”  

Liu Yongxing smiled and said: “even the relevant department of the government thinks we have done too much, but we are a private enterprise, anything wrong could lead us to death, we have to do anything in a strict manner.”

Actually, Zhang Xuexin praised the elaborate management of EH when cooperated with Liu Yongxing.

To private enterprises like EH and Xinfa, which one is more important, entering the market early and fast or making emergency plans for the risks? The answer varies from person to person.  

As a matter of fact, Liu Yongxing is not a person who is always conservative. When making the decision of entering the heavy chemical industry, Liu bore much pressure. He said “I talked with many, but they all thought it was too risky. High investment, policy and monopoly are tough to deal with, but I have prepared for 10 years, I can do it.”  

In 2003, Liu found that the alumina, material to make EA, has been monopolized 100% by central-government-owned enterprises, which restricts EH’s development. He asked the government of Sanmenxia if they could let EH take this project of alumina, and surprisingly he made it. This project opens a good chapter for EH.

“It is the courage of Liu that makes EH the first-class private enterprises in aluminum industry and breaks the monopoly of this industry.” said by Zhang Rufeng, chief analyst of non-ferrous industry of Baiinfo.

Another enterprise similar to EH wanted to enter this industry and poached dozens of staff of EH including GM and directors of different departments. Facing this big shock, Liu decided to promote a bunch of young employees instead of losing temper.

In this industry, macro-control policy is an essential outside factor.

The policy direction is what Liu follows, and he never challenges the policy. Two years ago, the government permitted EH 2.4 million tons production in Xinjiang, but now the policy of reducing overcapacity is followed by Liu, and he is willing to reduce 400 to 800 thousand tons production.

It is a common problem for most enterprises that depending on expansion too much. However, for EH, scale is never the target they pursue. The slogan on the wall of EH’s factory says “high quality, fast production, low cost”, no “large scale”. Liu holds that if a company realizes the first three words, the last one will come after.  

Additionally, Liu holds a prudent attitude towards capital.

In this industry, capital is the key to large corporations. Many of them devoted much to find new ways of financing.

By doing so can accelerate the development, but brings more intangible risks. Once the market fluctuates, capital chain would break. As a matter of fact, sudden death of huge private corporations is not new, from DLONG to Jiangsu Tieben.

Liu Yongxing never does what he cannot control. Many banks once found Liu and wanted to finance his projects with credit of 5 billion yuan. However, Liu just applied for 400 to 500 million yuan loans to control the risk.

Fortunately, before long the financial policies changed, and Liu paid the loans back immediately. He smiled and said that finally EH ran on its own capital.  

Actually, EH could successfully pass the cold current of 2004 because all the 1.5 billion capital of the first-stage construction in Baotou came from EH itself.

Currently, the capital of new projects in Xinjiang mainly comes from the profits made in Baotou, Sanmenxia and feed plants projects.  

“How much net assets, how much loans”, this rule was made by Liu Xiangyu, son of Liu Yongxing.

As a board director, Liu Xiangyu who is 38-year old is in charge of the finance of EH. Liu Yongxing has no worries about his son in this position and claims that it is a good thing to have someone debating with him when encountering risks. Now Liu Xiangyu plays the role of the opposition.

Liu Yongxing said that his son always checked his loan plans and asked lots of questions about risks and payback plans.

At first, Liu Yongxing told his son that he had plans in mind, but his son claimed that plans must be made in paper. Therefore, his son decides the financing affairs.

Besides loans, Liu Yongxing is not interested in strategic investors. He said, “first, what I am doing needs patience but investors need profits. Second, the risk is too much, so we had better bear it ourselves.”

Not like big corporations like Huawei, Wahaha and Xinfa, Liu Yongxing prefers not to let his employees hold shares. He thought the high risk of this industry should not be borne by his employees. On the other hand, he contends that keeping employees stay in EH by offering shares may not be a right thing. If the staff stay just for money, it is no good for the company.  

EH tried to enter the industry of high profit return.

In 2009, EH successfully bid for two pieces of land as a pilot project of real estate. The sale is fabulous. However, Liu Yongxing holds that real estate is too easy to make profits. More than a billion sales could make several hundred million profits. The development period is normally 3 years, and if you make it fast, 1 year is enough to make profits. There is no challenge to do real estate. Public relation is not what I am good at, which matters in getting the land, certificates, and construction plans. Therefore, Liu will not greatly invest in the real estate.

Finance is not what Liu Yongxing interests in. Actually, in his eyes, there are no bad industries, only bad enterprises. No matter in which industry, if a company could rank No.1, it could certainly survive. Does not China need aluminum or steel? Of course we need. The question lies on who, where, how to make.

Liu Yongxing stresses that he just wants to follow the market rules. However, is it possible to completely follow the market rules under the circumstances of business in China?

If everything goes as plans, the aluminum factory in Baotou should have realized the annual production of 1 million tons by 2008. In fact, this number is just 880 thousand tons, and the rest is waiting for permission. The coal resource promised to give EH is still not in place. If Liu Yongxing goes to negotiate with the relevant departments, it could be faster, but he is reluctant to do like this, and prefers it slower. Of course, doing so would pay the price.

In 2003, the gross profit of EA reached 55%, alumina 41%. But EH’s projects were shut down because of macro-control in 2004.

In 2005 and 2006, the price per ton of alumina was 6000 yuan, but EH’s factories in Sanmenxia just came back to production. Unfortunately, the price competition began right after 2006.

In the next two years, the profits of EA keep rising, but Liu Yongxing cannot expand because of lacking permission.

In 2009, EH decided to enter the cement industry after 6-year R&D. Spending two years to adjust the new technique, EH missed the golden stage of cement in 2010 and 2011. Liu Yongxing admitted that he missed several hundred million benefits, but did not regret to pay the price.

The same experience happened to the PTA project of EH in Chongqing. The PTA project started in September 2006, and missed the golden period. The price per ton of PTA is 7700 yuan, but in 2006 the price was 13000 yuan.

According to Morgan Stanley, the aluminum industry will continue to face the structural overcapacity. The estimated price of aluminum in 2013 is 2000 USD per ton, and in 2014 2100 USD per ton. Barclays even claims the price will fall to 1234 USD per ton. Goldman predicts that the aluminum industry in China will need to continue reducing production.  

2004 witnessed the relative overcapacity of the industry in China, but many experts holds that this overcapacity is absolute and everlasting, and China will not keep a high-speed economic growth.

In some sense, the opposition of Liu Yongxing is not Chinalco or Xinfa, but the overcapacity of industry.

Perhaps Liu Yongxing missed some opportunities before, but his prudent personality makes him like a fish in water in this era.

As a matter of fact, Liu Yongxing was ranked in the rich list of inland China twice, once was in 2001 when the internet bubble broke up, the other was in 2008 when the financial crises reigned.

Liu Yongxing said, “we have been working hard and suffered a lot. However, if everyone could do it, where is my opportunity? ” This is the reflection of his heart transferred from agriculture to industry. “I have no worries; I am Yongxing which means keep moving in Chinese.”

Talents Magazine (hereinafter TM): all businesses of EH like aluminum, cement and PVC are in the industry of overcapacity and low profits. Do not you have other better choices?

Liu Yongxing (hereinafter LYX): once enter this industry, we want to make the best. If you always chase whatever it looks profitable, you will get nothing. I believe that the high profits will come to me after the hard times.

TM: Do not you worry about the aluminum industry which is so tough?

LYX: The market economy will definitely result in overcapacity. The market allocates the production based on the peak requirements. Therefore, when the economy stags, overcapacity comes after. Almost every enterprise is losing much, but few like us is profiting. This is our competitiveness.

TM: Did you miss big opportunities?

LYX: A successful enterprise must have a long-term plan. You cannot make decisions in the good time, because you cannot keep your mind cool in front of huge profits. For example, in 2007 the profit of aluminum per ton is 8000 to 10000 yuan. Therefore, a wise decision is made in hard times.

TM: Your projects in Chongqing delayed because of technical adjustment. Did you ever regret for that, because you lost more than a billion profits?

LYX: Not at all. Although we made less profit, our competitiveness was sustainable, and we will make it back.

TM: Facing the new round of macro-control, how long do you think the industry will get out of the hard times?

LYX: I never thought the industry would flourish again and hoped it kept the status quo. I am satisfied with the profit. Even in hard times, our profit rate surpasses the global average rate of 2011, the most profitable period of the industry.

TM: Many companies like Chinalco develop new businesses instead of aluminum alone. Will you do like this in future?

LYX: Maybe a few years later. Now I want to focus on aluminum and I have strengths. What is impossible to others does not mean impossible to me, I am Yongxing.

TM: When entering the heavy chemical industry, have you considered the steel?

LYX: I tried but I found I cannot get the permission and certificates.

TM: Luckily, you did not get it.

LYX: If I got the permission, I would definitely run it well. Maybe not in a large scale, but with strong competitiveness.

TM: There are economists holding that Chinese enterprises do not have comparative advantages in heavy industry.

LYX: I strongly disagree. Although China is in the middle-stage of industrialization, the industry needs upgrade and environment protection. China is not Japan which could purchase wherever there is. China needs 700 million tons steel and 30 million tons EA, where to purchase? Even if we could find where to buy, the price will rocket. Finally, we have to solve ourselves. What we need take into account is where, how, and who to do. There will be a transformation period of China’s heavy industry, from the east to the west. For example, the over 400 tons EA project in Henan must transfer to the west, to Xinjiang. This is reasonable transformation supported by the government.

TM: Do you lose much in the shutdown of PTA in Chongqing?

LYX: The PTA project stopped in January for the evaluation by the ministry of environment protection. Now we have it back to production. Actually, in 2011, we could make monthly profit of 160 to 200 million yuan in Chongqing, but the industry rises and falls frequently. One factor is the overcapacity; the other is the people’s opposition against PX. As a result, the upstream resource is taken by foreign companies, then the profits.

TM: You barely select acquisition, why?

LYX: the reason is that all the old equipment and out-of-date industrial chain are useless for me. The quality of assets in Europe and U.S is not as good as we think, actually, the manufacturing there started to move abroad long time ago, only rubbish left.

TM: Have you considered acquiring the resource abroad?

LYX: The resource projects are overvalued in price. We should be prudent and take more into account. Last year, Rio Tinto suggested me to acquire a potassium mine, and I gave up after thinking over the situation. The mine offered me a price of 350 USD per ton while the market price was 480 USD. It seemed profitable but I could tell that the price would go down. As I predicted, the price fell to 250 USD per ton.

TM: The resource really matters in the heavy chemical industry. In Xinjiang and Inner Mongolia, all big corporations are collecting resources. Is it easy for you to get resources?  

LYX: Not easy. We have been in Baotou for 10 years and contributed nearly 10 billion taxes to the government. However, some resources we still cannot get. If I spend some money in public relations, it would be easier to get those, but that is crime. I prefer to be slower.

TM: Your plan of the project in Baotou was 1 million tons production by 2008, but why is the production only 880 thousand?

LYX: Yes, we are waiting for official approval. We always go up and down. When governments demand economic growth, they push us hard. When governments feel the industry shows overcapacity, they shut us down.

TM: Is the situation better now?

LYX: After the financial crisis in 2008, we are proved to be the best and sample of China’s aluminum industry. Because of large amounts of visitors, the government will not shut us down but reward us instead. Therefore, I love the financial crisis. (laughter)

TM: What did you worry most before entering the heavy chemical industry in 2002?

LYX: I worried about uncertainty, unfamiliar industry and high risks.

TM: Then what do you worry most now?

LYX: Nothing. I have passed the strictest macro-control in 2004, follow the rules, and obey the laws. No bribery, no corruption. Successful and treat my employees well. I have nothing to worry about. Any governments like outstanding enterprises and entrepreneurs.  

Liu Yongxing must hold the handrail when going upstairs and must buckle up when sitting in a car. His private driver gets accustomed to not start the car until everyone buckles up.

During 12 hours of interview, the cellphone of Liu Yongxing keeps on but has no calls in. It is said that all questions could follow the procedures and they could be solved by department managers.

If he is not on a business trip, Liu Yongxing would make 3 calls a day to talk with GMs of different areas. In the segment of heavy chemical industry, he could talk with all managers in a week.

If on a business trip, Liu Yongxing would keep asking for data on production. Workers being asked have to press buttons on a calculator but he, as a graduate of mathematics department, could calculate in mind.

Liu Yongxing would stop to pick up a cigarette end and check the maintenance date of machines. If he finds something wrong, he would inquire the reason and find solutions.    

When walking out of the factory, he will urge his staff to collect the coal ash on the ground and burn it.

Is it strange that the chairman of a company cares about “small things” instead of “big things”?

Liu Yongxing replied, what are big things and what are small ones? 1 million yuan investment seems big but is just for once. A manufacturing index seems small but could make an everlasting difference to improve our competitiveness.

In his eyes, strategy is not what Chinese entrepreneurs lack, tactics is. Although strategy is crucial to enterprises, but it remains stable at least a decade after being settled down. Tactics is what matters in daily operation. If a company concentrates on macro strategies and ignores the details, it must not be successful. Chinese people have a weakness, that is arbitrariness, which we should fight with. We should convert this weakness into strength, flexibility and innovation.

What is the gap between Chinese enterprises and top 500 in the world? Details. How to save a ton of water, a degree of electricity and manpower? Only if all details are well done, the strategy takes into shape. Otherwise, all strategies are empty.

The principles of Liu Yongxing is that details first, but not do everything by himself. He has never been to half of his 156 subsidiaries.

All the subsidiaries are independent on finance. The administration headed by its GM has enough rights to keep business running without asking Liu Yongxing. Only the investment of over 1 million yuan needs his approval. Interestingly, before Liu Xiangyu, his son, takes over the finance of EH, only the investment of over 10 million yuan needs his approval.  

Whenever Liu Xiangyu is mentioned, Liu Yongxing would always smile. He is proud of his only son and thinks his son is more careful in finance. He initially shows us the picture of his grandson. At that time, he is no different from other benevolent grandfathers.

In Shanghai, Liu Yongxing still has no real estate under his name. His wife and he live in the house which belongs to his son. The family of Liu Xiangyu lives in a rental house.

A person with strong sense of security does not need his own properties. Liu Yongxing is one of those who have strong sense of security and has nothing to worry about.

Having been an entrepreneur for 30 years, Liu Yongxing claims that he is not good at public relations which his brother Liu Yonghao does well in. He confesses that he would be uncomfortable if he attends a banquet where public speech and toast are given.

Therefore, he would like to do something “stupid” that others are not willing to do. What he pursues is to follow the market rules.

There is a saying that in terms of the relationship between enterprises and governments, the bigger risks are, the higher the benefit is, vice-versa.

Liu Yongxing admits the good relationship is necessary, but the foundation is that the enterprise should perform well. Frankly speaking, all local government officials including corrupted officials need achievements. We can satisfy their need with our performance, taxes, environment protection contribution and social image.

Shi Yuzhu once made a comment on Liu Yongxing, Liu Yongxing only made small mistakes, but never fell down.


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