On Aug 17th, 2011, Mr. Li Dong Sheng, the chairman and CEO of TCL, visited Stanford campus and met the students. He delivered a speech on the current state and outlook of the industrial development in China. More than 50 Stanford students and visiting scholars attended the event and the following mixer session. Mr.Li discussed topics ranging from China’s political and economic environment, TCL’s corporate strategy and his personal career path. Regarded at various occasions as one of the most influential business people in China, Mr. Li shared a lot of inspiring insights with ACSSS members.
The speech was divided into 3 sections:
- Firstly, Mr.Li expressed his view on China’s macro-economic environment. He named three advantages of China’s currently economy.
- The relatively fast GDP growth rate in China will likely keep its society stable. Compared to other emerging economies such as India or Brazil, China has a sounder social welfare system and more advanced infrastructure. As more people are lifted out of poverty and basic human needs satisfied, Mr.Li expects China’s social conflicts to remain tamed.
- China’s economic structure is fairly healthy. In contrast to the developed economies in the West, the Chinese government records steady government revenues and at the same time sustainable budget deficit. Even taking the regional government deficit into account, the total number is still a little shy of RMB 7,000 bn. In the recent years, China has been transforming from an export-driven economy to a domestic demand-driven one. Mr.Li thinks China’s booming domestic market is already surpassing Japan’s in size, only smaller than that of the US.
- China enjoys comparative advantages in most productive industries. The fast development of private sector companies such as TCL exhibited strong internal incentives. These companies are dynamic and efficient, therefore more likely to drive China’s economy forward sustainably.
- However, on the other hand China faces tantamount challenges. Mr.Li mainly identified the following
- The future direction and pace of political reform. Speaking from a businessman’s point of view, Mr.Li expressed his worry over the uncertainty masking China’s political transition. He regarded the political reform at the center of various pressing issues, including social inequality and the change of government’s role in China. Mr.Li also expressed his concern over excessive government interference with the economy would cause significant inefficiency in resources allocation and crowd out the private sector.
- Also, Mr.Li reckoned China needs an economic growth model which integrates well into the global system. At the same time, China has to manage the relationship with the European countries and the US. As China shifts up along the production chain, Mr.Li thinks it’s a good sign that other emerging economies such as South Africa, Indonesia and Pakistan can enjoy more opportunity to develop. Last, the legal system in China still needs further development and reinforcement.
- Lastly, Mr.Li gave an overview of TCL:
- Last year, the company recorded RMB 51.2 bn revenue and employed 60,000 people world wide. TCL consists of four sub-companies and 6 affiliated units. The four business areas are telecom, home appliance, TV set production and plasma screen production (a RMB 24.5bn new plant will inaugurate in early 2012). The three axises supporting the corporation’s expansion, in Mr.Li’s words, are production capacity, R&D and global operation. One of the reasons that Mr.Li came to the Bay Area was the establishment of a new R&D center at Silicon Valley. He firmly believed in the power of innovation. Cloud computing was an example of the frontier area that TCL was looking into currently.
The talk and mixer were highly successful. A lucky audience chosen from the ruffle drawing brought an iPad home after the event.
Besides Mr. Li, a number of top TCL officers were included in the entourage: