On March 1, 2018, Guan Tongxian and Zhu Lianyu, respectively founder and current President of Shanghai Zhenhua Heavy Industries Co., Ltd. (ZPMC) were invited to “Tsinghua Forum of Chinese Entrepreneur Leaders” to share the legend of a national industry. Firstly, Vice President Yang Bin of Tsinghua University delivered a speech: in the 1990s when the restructuring of state-owned enterprises was undergoing transition and hardship, ZPMC pioneered going out and directly competed with international giants in European and American container machinery markets, quickly and legendarily becoming the world No.1 in just six years. Later, it almost pushed out established giants such as Krupp, Mitsui and Mitsubishi. It occupied 80% of the global market share and 90% of the US market share in a monopolistic manner. Starting from scratch, from weakness to mightiness and from learning and imitating to independent innovation, ZPMC continues to strengthen its international competitiveness, thereby setting a good example of howChinese machinery industry leads the world. ZPMC’s legend of a national industry, international competitiveness of China Communications Construction Company LTD (CCCC) and the construction of a world-class university by Tsinghua are best examples of confidence in the path, theory, system and culture of socialism with Chinese characteristics. Successful cases and stories of ZPMC and CCCC are the fountainhead of academic research and today’s speeches and discussions are expected to advance theoretical innovation in relevant fields.
ZPMC founder Mr. Guan Tongxian, 85 years old already, mentioned that ZPMC’s achievements were a result of “unity of heaven of man” (a phrase initiated by Zhuangzi 2600 years ago), introduced the history of how ZPMC rose from both “heaven” and “man” perspectives, and analyzed in a simple way the external environment and internal core competiveness of ZPMC in its rise.
Mr. Guan first summed up the external circumstances pushing ZPMC forward (i.e., the “heaven”, mainly consisting of four parts: (1) the Party’s reform and opening-up policy; (2) booming international trade, where container transportation was a necessary means; (3) south tour speeches by Deng Xiaoping in 1992, with “advancing production” becoming the then priority of priorities; (4) container ships growing bigger, which promoted the upgrading of terminal facilities worldwide and increased market demand for container machinery. ZPMC was founded in 1992, when China had good conditions for development following its reform and opening-up, and south tour speeches by Deng Xiaoping offered an important opportunity for ZPMC’s development. Berlin wall collapsed in 1989, allowing the world to be a single market. WTO was set up at that moment, bearing the mission of managing disorganized foreign trade at that moment and the aim of fighting against any form of foreign trade protectionism and facilitating high-speed growthof foreign trade worldwide, for which containers are a must, thus driving the development of container machinery. Containers are an integral part of foreign trade given their advantages. As is known to insiders, containers have ten advantages: capable of all-weather operations, highly efficient, facilitating door-to-door transportation in intermediate circulation, theft-proof, refrigeration-viable, standardized, free of warehousing, greatly improving loading capacity of ships and reducing cost on transportation, capable of repeated use as well as quickening the turnover of ships and strengthening delivery capacity. Besides, “Post-Panamax craze”, which urged updating of terminal facilities, was another important opportunity for ZPMC’s development. Foreign trade boosted container transportation and brought container terminals and container handling machines greatly forward, which provided a vast market for ZPMC. By analyzing rises and falls such as Kodak, Zhang Jian, a “Zhuangyuan entrepreneur”, and the rise ofAlibaba leading to bankruptcy of a number of enterprises, Mr. Guan made a summary that “the time ZPMC is in creates its success and ZPMC lives in a good climate. Any success is half owed to the so-called “heaven”, so it is important for young entrepreneurs to study overall circumstances and intermediate and long-term market demands, instead of stressing subjective struggles and efforts.
So why did ZPMC alone rise abruptly and catch up from behind, defeating all other competitors in the global container machinery market and occupying approximately 80% of the market share even now, amid the same circumstances? This is because ZPMC possesses its own “unique weapons” in addition to regular means of competition such as quality, price and excellent after-sales services. Mr. Guan presented some of these weapons. Firstly, ZPMC has set up its own transportation team and built the world’s first side-loading integral transportation ship, and a fleet of up to 29 ships with the capacity of 80,000~100,000 tons, allowing it to efficiently, safely and properly transport its integral products to different ports all over the world for on-time delivery. So far, there are no other heavy manufacturing companies with their own integral transportation ships in the world. So these companies require outsourcing, which is unreliable, disabling them to deliver goods on time or win in bidding. Secondly, ZPMC has built its factories by terminals, which also makes it unique in the world and allows it to shorten the distance to transport major components hard to handle, and increase the efficiency. Thirdly, ZPMC values technology talents and technological innovation. It recruited a large number of secondary school students as engineer assistants, freeing engineers from clerical work. At the same time, most of these students worked their way through an associate degree. They work contentedly and love the company that has nurtured them, and remain backbones of ZPMC. ZPMC has taken quite a few “deviant” actions such as advocating paid overtime, Party, labor union and League leaders in the company keeping engaged in production, and claiming foreign capital participation to make full use of preferential policies for foreign-funded enterprises (Shanghai Stock Exchange implemented the policy of “treating fake foreign-funded companies the same as true ones” at that time). Finally, he reiterated that ZPMC, as an ambitious and progressive enterprise not afraid of any strong rivals and daring to pioneer the world, had realized the aim that “at all container terminals all over the world should container cranes manufactured by ZPMC work” it set up when it was founded, and acted on its own to tell the world that “China’s heavy manufacturing is again leading the world”.
At the end of his speech, Mr. Guan raised some hopes for young students: one should not fear tortures or failures as life is not roses all the way; instead, one should understand that “every cloud has a silver lining” and correctly treat fame and fortune. One can gain knowledge and steel his/her enterprise in ups and downs. One should have an ambition and make contributions to his/her country and nation. When it comes to his own ups and downs, Mr. Guan pointed out that to rise, one had to have knowledge demanded by society, and he appreciated his time in university, leaving a mark that could be seen today (Mr. Guan keeps working as an engineer after retirement and is engaged in the research on ZPMC with several postgraduates). Therefore, young students must value the rare “opportunity” of the time in university, cherish each class and gain “knowledge”, especially to take seriously classroom learning。
Then, ZPMC President and Party Secretary Zhu Lianyu introduced outstanding achievements made by ZPMC, including epoch-making and innovative contemporary projects such as Hong Kong-Zhuhai-Macau Bridge and Yangshan Port IV fully automated container terminals. Today, ZPMC, as an international brand, is faced with a new historical development opportunity. ZPMC is now standing on the shoulders of giants and intends to write a good story of its own. It will develop towards “one body and two wings”: body means equipment manufacturing and two wings refer to capital operation and “Internet+”, and is committed to built the “flag + flagship” of China’s national industry.
In Q&A stage, Mr. Guan answered the question of how the management communicated with employees and strengthened enterprise cohesion with examples such as ZPMC chartering coaches to carry workers home and the company providing workers with two laundering services a week. Mr. Guan explained how ZPMC stood out from competition through the story of ZPMC winning the international market by guaranteeing on-time delivery. President Zhu answered the question about the source of ZPMC’s development potential and said that ZPMC would deepen its efforts in port machinery, especially after-sales services and the spare parts market, and also lead to scale up the port logistics system.
“Tsinghua Forum of Chinese Entrepreneur Leaders” is a high-end forum jointly launched by Tsinghua University and Overseas Chinese Affairs Office of the State Council, and this forum is also a part of “Tsinghua University Social Sciences Lecture” and “Humanistic Quality Education Course Lecture”. Present were also Prof. Peng Kaiping, Dean of School of Social Sciences, Tsinghua University, Zhang Hongwen, General Manager of heavy machinery manufacturing business of CCCC, Zha Changmiao, Deputy General Manager of Corporate Culture Department, among others. The forum was chaired by Prof. Long Denggao, Director of Center for Chinese Entrepreneur Studies, Tsinghua University.
The forum was participated by over 160 teachers and students.
(Written by Qiao Shirong; Photo by Wu Weili)
