(Chinese Version)

Editor’s Note:

During the 16th Annual Conference of Yalibu China Entrepreneurs Forum 2016 held from Feb, 19th, to Feb, 21st, 2016, all the major tycoons in the Chinese Internet industry shared their opinions on some of the key issues with the audience. What did they say exactly?

Jack Ma: Alibaba is to focus on building communities, not surpassing WeChat

Jack Ma amazed the crowd by pointing out that China should become the largest buyer’s market around the world shortly after he started his speech. He suggested that the outdated industries are fraught with overcapacity, while high-tech industries are lacking in capacity, and that the definition of consumption and domestic need should be re-defined.

“We should tell if the economy of a country from the number of job opportunities for young people, not from GDP figure. Fortunately, there isn’t so big a problem in China in terms of the job opportunities for the young people.”

For Jack Ma, consumption means buying new things, and even wasting them. If we don’t encourage the young people, the entire Chinese population, to buy new things, then we are demonstrating to the world that we are not confident of China’s future.

He added that BAT (Baidu, Alibaba and Tencet) weren’t monopolizing, but actually leading the Chinese Internet industry temporarily. Many Internet startups vowed to become the next BAT, yet few of them could survive more than five or ten years. “You wouldn’t get rich by killing the landlords in the village, ” he mentioned such concept again in the speech.

In addition, he suggested that BAT all had their own problems, and each of them was like skating on the ice. “No matter how big BAT are, it is likely that all of them will go bankrupt one day. As the second largest economy in the world, China needs not only one BAT, but rather tens of, hundreds of large companies like BAT. Only then can we call China’s economy prosperous,” he explained.

Speaking of the competition between Tencent and Alibaba in the social media sector, Jack Ma suggested:

“The Chinese business world is like a battleground, but I have already get rid of the idea ‘zero-sum game’. Tencent is certainly better at social networking, yet Alibaba is going to focus more on community, sharing economy. Our interest is to make our communities more diversified, not copy Tencent, not surpass Tencent.”

“Those who choose to work in the Internet industry, in Alibaba, should get prepared for pressure, and even enjoy it. The good thing is that no matter you are men or women, you will be promoted as long as you are competent,” Jack Ma said when explaining why the hair of Alibaba senior officials seem to go gray faster than others.

“It’s pretty easy for an entrepreneur to cut a division or business, yet a competent entrepreneur shouldn’t be always making such easy decisions. The traditional industries are beaten not by the Internet, by entrepreneurs who failed to adapt to the new trend and change,” he revealed.

“Were it not for Alibaba’s red envelop, few people would be interested in the Spring Festival Gala,” he explained why it was so hard to collect Jingye Fu Card (Good fortune for dedication in work, one of the five “good fortune cards” of Alibaba during the Spring Festival Gala. Those who collect all the five cards have the chance to share 200 million RMB)

“If possible, I wish I could have a tea with Mr. Deng Xiaoping, who is brave enough to reform China’s economy and master the key points amid chaos,” he suggested.

At last, he concluded that the growth rate of China’s economy was certainly slowing down, yet judging from the employment status of young people, the three promising industries have already appeared: service industry, consumption industry and tech industry. For him, hese industries represent the future trend of China’s economy.

He added that the government shouldn’t play so important a role in the development of these three industries. Instead, the market should be in full play.

Liu Qiangdong: Owners of traditional companies should go back and simply cut their own e-tailing division

This is the first time for Mr. Liu Qiangdong to attend Yabuli China Entrepreneurs Forum. In the opening speech, he first shared his opinions towards China’s economy. To re-boost China’s economy, he suggested that the Chinese government should focus attention of crashing down on tax-cheating behaviors and lowering value added tax.

“The added value tax rate of most countries around the world is around 14%, yet 17% here in China. Last year, the total consumption volume of Chinese outside of China is 1200 billion RMB. Most of this kind of consumption occurs in the high added value market, or high profit margin market. Most Chinese go abroad and carry out such consumption because the same product or service is more expensive back in China owing to the high added value tax rate,” Mr. Liu explained.

“Of course, 2,000 billion RMB is no big deal compared to a total domestic consumption volume of 3 trillion. Yet, if we take into consideration the high added value tax rate, 2,000 billion RMB outside of China is actually 1 trillion RMB here in China. Imagine how much money is grabbed by foreign companies!”

To re-boost China’s economy, he suggested that the Chinese government should focus attention of crashing down on tax-cheating behaviors and lowering value added tax. If so, the competitiveness of Chinese companies will be significantly raised.

Mr. Liu also mentioned the phenomenon: some traditional companies have started to conduct e-commerce service. For him, there is no need for every company to establish an e-commerce platform of their own. They can just cooperate with major e-tailers such as JD.

Few traditional companies can do well as e-tailers. Over half of them are not selling product directly, but through all kinds of retailers and distributors.

At last, he called on owners of traditional companies go back and simply cut their own e-tailing division.

Yang Yuanqing: The government shouldn't trespass and create bubbles out of nothing

Recently, there has been a heated discussion over if Mr. Yang Yuanqing is competent enough as the CEO of Lenovo. Nevertheless, he attended this year’s forum and delivered a keynote speech on capital market, government policy and the national conditions of China.

For him, the growth rate of China’s economy slowed down because of the extensive economic structure. Now that boosting economy by manufacturing and exporting won’t work anymore, China is left with only one choice: fully explore the potential of China’s domestic market, boost domestic demands, upgrade industry structure and service.

To achieve that, the government should support national brands, increase national income level step by step, carry out necessary tax cut, so that ordinary Chinese can afford to buy new things, are are willing to do so. In addition, a complete social welfare system has to be established.

“There should be high-quality products among Chinese brands. Both the government and enterprises should play their fair role: the government should lower the tax burden of enterprises properly, crack down on monopoly and piracy, while enterprises should also focus more attention on improving the quality of their products and taking on more social responsibility. Reliable products can be made only through reliable technologies,” he explained.

As a matter of fact, Mr. Yang mentioned a related phenomenon during last year’s two sessions: many Chinese would buy milk powder for kids as well as toilet lids from overseas. Even if we could understand why they buy milk power from abroad, how could we understand why they buy toilet lids? Imagine how pessimistic they must be towards Chinese brands.

At the same time, Mr. Yang voiced his dissatisfaction towards the capital market. “The Chines government should take into consideration the regulations and policies of foreign stock markets when setting out similar policies here in China. Behaviors such as information asymmetry and internal manipulation should be banned,” he suggested.

“The government should do its fair part, but shouldn’t go extremes, should crack down on behaviors such as information asymmetry and internal manipulation, yet shouldn’t create bull market and bubbles out of nothing,” he concluded.

Wangshi: "Following" can be the best strategy for small and mid-sized companies

After a series of hard fight with Baoneng, Vanke encountered ups and downs recently. Wang Shi, CEO of Vanke Group, attended the forum and explained to the audience the importance of “following” strategy for mid and small-sized companies. However, he pointed out that with the growth of a company, one should get prepared to take on more social responsibilities, such as innovation.

For him, establishing a company is easier than selling it, because if you have done quite a good job in the business, you might have to consider for quite a while whether to sell it or not.

He also suggested that Vanke Group didn’t meet much problem when going abroad, since it adopted the “following” strategy.

“Vanke started as a tiny company. Sometimes, I think it’s already victory to survive after so many years,” he said, “no matter how bad the entire economy is, mid and small-sized companies should be open to changes and adapt to the new trend.” “Vanke Group has already become the leading player in the Chinese market, so there is nobody for Vanke Group to ‘follow’ anymore. In this case, every step is to some extent innovation, whether good or bad,” he added.

At last, Mr. Wang mentioned that Shenzhen’s economy manages to develop pretty well in recent years. He said that enterprises in Shenzhen should take the lead and set a good example for all the other cities over how to upgrade and transform industry structure.

The following are sayings of some other tycoons at the forum:

Li Dongsheng, CEO and chairman of TCL Group:

“With the rise of China’s economy, I feel that western countries have begun to contain China in more obvious ways. In the past, they are also doing such things, but only secretly. For example, when setting up the PPP zone, the US spoke very frankly that China was not welcome. Generally speaking, China is facing increasing and more obvious pressure from the international community.”

Guo Guangchang: chairman of FOSUN:

“It’s natural for foreign countries have second thought when Chinese companies aim to acquire foreign ones. Likewise, if an Indian company acquire Lenovo, we will also get pretty uncomfortable. Fortunately, the overseas investment environment for Chinese companies is getting more and more friendly. As long as Chinese companies don’t get into fight among themselves, I am confident that things will be fine within the next two decades.”

Feng Lun, chairman of Vantone Holdings:

“Since 1999, owners of private-owned companies have begun to realize that to survive, one has to manage the company well, not rely solely on one’s family. Many companies might go bankrupt in the Chinese real estate industry. I find that most of them failed because they ran out of money. For traditional companies, they failed mostly because they failed to keep a good relationship with the government, choose the right business model, establish a good team, keep clients, market satisfied, etc., yet for Internet startups, most of them failed because they ran out of investment, whether raised from A-round or B-round.”

Hong Qi, chairman of China Mingsheng Bank:

“The Chinese finance industry has been in danger of ‘death’ in recent years.” Disintermediation is increasing, the profit margin is shrinking, bad asset is taking tolls… Banks are under huge pressure. Yet, we still have to support Internet startups and establish a complete financial service model based on investment. Banks could either lend money to Internet startups that win the support from the government, or directly invest in them.”

(Like our Facebook page and follow us now on Twitter @tmtpostenglish and on Medium @TMTpost and on Instagram @tmtpost_english.)

[The article is published and edited with authorization from the author @TMTpost-Chinese, please note source and hyperlink when reproduce.]

Translated by Levin Feng (Senior Translator at PAGE TO PAGE), working for TMTpost.