In China, private firms flourish among state-owned enterprises | business | Hindustan Times
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In China, private firms flourish among state-owned enterprises

business Updated: Jul 11, 2012 23:08 IST
Sutirtho Patranobis
Sutirtho Patranobis
Hindustan Times
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Zong Qinghou's story is not quite the rags to riches one. But when he and two retired school teachers began distributing soft drinks and stationary in the late '80s, it could have been difficult to imagine that by 2010, Zong would be the richest man on the Mainland, owner of China's leading beverage company, the Wahaha group.

In a country known for its mega state corporations and strict state control, many private companies such as Hangzhou city-based Wahaha, with 14% share of the Chinese beverages market, have really flourished well. In fact, Wahaha is the only Chinese firm to export dairy products to European countries and the US.

China has emerged second in the 2012 Fortune Global 500 list of world's biggest companies.

Although most companies on the list are large state-owned enterprises, there are also five private enterprises on the list.

"Private companies benefit from government policies," said Cliff Zou of Shengzhou-based Tianle Digital Electric company, the largest loudspeaker parts producer in Asia. "The opening up of the economy helped many private companies to flourish."

Another success story in Shengzhou is the Babei group. It is one of the biggest makers of neckties in the world - with 350 million every year - and has captured 90% of the Chinese market.

According to Kong Zhigong, vice-mayor of Shengzhou, the city has more than 23,900 enterprises including 21,000 privately-owned small and big firms. "Shengzhou has launched a series of measures…like industrial restructuring, reducing the burden on enterprises and optimising the development environment to ensure stable development," said Kong.

"The government is always there to help with policies but ours is privately-owned company," said Michael Qu, vice-president of Goodbaby International, the largest producer of children's products in China and a leading one worldwide. It sold 11

million baby strollers in China last year and nearly 20 million across the world.