Chairman Liu Hanyuan recently received interview by media and aired his views on being rational in business investment, development and competition, concerning business running and industry development.

With 30 years of rapid development, China has grown into the world’s first manufacturing power, and the first trading power from a shortage economy. Besides the competition nature and the theory of "survival of the fittest", is there a business logic which is more rational for China’s socio-economic development? Mr. Liu believes that rationality is a common topic of this era. Companies have reached a critical stage of rational management.

He said that a significant feature of the market economy is redundant construction and overcapacity, which has become a widely received view to some extent. For each individual, especially China’s entrepreneurs, we shall do some deep thinking on being rational in development motive, incentive, and tempo.

It is of great significance to think about how to transfer from quantity-based economy to quality-based upgrade. Simply going after speed could lead to fast expansion in short term, but can also cause closing down of business. Only if there are enterprises with steadfast development, could a sector have better days and maintain a good operating order. Being rational should also at the same time being practical and down-to-earth. Direction, ideal and objective need to be combined with the evaluation of today’s environment, resources and restricted factors. In particular, the ecosystem of entrepreneurs and society, as well as the mutual win-win coexistence on the eco-chain shall be considered systematically. Therefore, from the perspective of business logic and corporate ecologic logic, it is important to consider how to co-develop with peers in a more relaxed, harmonized and rational way. Irrational thinking and competition would only lead to excessive competition with a huge loss of wealth.

Therefore, why do we agree and understand that under market conditions there would be redundant construction and overcapacity. Under the circumstance of "anti-driving mechanism", cost has to be reduced, service improved, and the added value of product improved, leading to the ultimate benefits of users and consumers. Especially in the process of promoting automatic equalization of resources, automatic configuration, and survival of the fittest, only efficient organizations and individuals that could satisfy the consumption need could exist and last. The rest part of organizations and individuals would be gradually marginalized and eliminated. This is a unique phenomenon under market conditions, but also the greatness of the market itself.

Mr. Liu emphasized that besides the drive and responsibility of development, we have to consider the appropriate balance between entrepreneurs and the development of real needs of society as a whole.

We need to advocate how to gradually differentiate into dominant group and dominant differentiated competitive organization. During the differentiation process, how does each participant understand the reason for his business existence or core value, so that mutual respect and rational eco-commerce is formed.

Mr. Liu pointed out, today we must be very careful about regulation. It is preferred to let the bubble continue to exist properly, and gradually purify it, rather than suddenly lose blood and let suspended building projects and chain debts reappear. This requires the government to guide the society and media to establish rational idea from business logic perspective. For Chinese companies today, we can put Andy Grove’s idea of "Only the paranoid survive" into "Reason-based paranoid survive. Sustained success is obtained through rationality and persistence". All in all, each of us should choose to follow our own way of differentiation, and invest rationally, develop rationally, and compete rationally.