Author: Zhang Shizhi
On December 31, 2021, Cao Dewang, chairman of Fuyao Glass, said at the Global Industry Development Forum:
In the process of reform and opening up, some people in our country first became rich and outrageously rich, and now they should take out the money they earn and share it with everyone, so that the society will be more harmonious and the business of entrepreneurs will be better.
As a successful private entrepreneur, Cao Dewang is respected, and his generous orientation and demeanor make it difficult to doubt his original intentions.
The intention is good, but the result is not necessarily.
Frankly speaking, Cao Dewang's statement is outrageously wrong, and even brings great negative effects.
1
Outrageous is a relative concept
First of all, he made a limitation, saying that in the process of reform and opening up, those who are outrageously rich should take out and share the money they make with everyone.
So what is "outrageous"? How to define this "outrageous"?
Intuitively understood, cao Dewang said that the "outrageous" is probably that the gap between the rich and the poor is too large, and the income earned is much higher than the average level of a society.
But such "outrageous" is a relative concept today, and the vertical view of history is also a relative concept.
With Cao Dewang's wealth level, a small boss who earns millions a year, he feels that Cao Dewang is outrageous.
And the white-collar workers of the company who enter thousands of dollars a month may think that the small boss who earns millions a year is outrageous.
And for those who are poor and backward in mountainous areas, the income of a city white-collar worker may be out of reach for them.
Even Cao Dewang himself, in order to make a living in his youth, planted white fungus, worked as a cook, repairman, agricultural technician of Zhiqinglian at the reservoir construction site, and also poured fruit saplings.
In 1975, he had accumulated more than 50,000 yuan of "huge capital". Notice that it was $50,000 in 1975, when he said he felt financially liberated.
In today's parlance, he was financially free. Cao Dewang, born in 1946, is 29 years old.
Looking at this today, Cao Dewang at that time was also "outrageously rich".
If someone had told him at that time that you Cao Dewang was too rich, you should take out the money you earned and share it with everyone, what would Cao Dewang think in his heart?
If Cao Dewang at that time was forced to take out the money he earned and share it with everyone under pressure, would he still have the motivation to continue to start a business? Will there be a later Fuyao glass?
Don't think too much, the young Cao Dewang will definitely not agree.
Thankfully, China at that time did not ask Cao Dewang, who was "ridiculously rich" at the time, to share the money.
If China had done so at that time, there would have been neither Cao Dewang today nor the miracle of China's reform and opening up economic take-off.
2
It's better to share than to invest
In fact, in the later development process of Cao Dewang, it is precisely because he did not simply share the money, but used the money for reinvestment and re-creation, and quickly occupied the market advantage.
In 1976, Cao Dewang began working as a buyer at the Special-shaped Glass Factory in Gaoshan Town, Fuqing, where his job was to sell water meter glass for the township company, which people called "mainland goods".
In 1983, Cao Dewang contracted this small township factory that lost money every year.
In 1985, Cao Dewang switched to car repair glass.
In order to break through the technical barriers, Cao Dewang tightened his belt, introduced the most advanced production equipment from Finland, and collected technical talents from all over the country.
After countless failures, we finally developed a special glass for automobiles, which cost less than 200 yuan and sold for 2,000 yuan, which is already an incredible windfall profit, but it is still much cheaper than japanese goods on the market. As soon as it was put into production, the market was already in short supply.
In 1987, Cao Dewang and 11 shareholders raised 6.27 million yuan to establish Fuyao Glass Co., Ltd. Since then, Fuyao has continuously introduced new technologies and new equipment.
By the early 1990s, Japanese glass in the Chinese market had disappeared. Cao Dewang has grown to become China's largest supplier of automotive glass at lightning speed.
Simply looking back at the starting process of Fuyao Glass, we can clearly see several keywords: tighten the belt of pants, introduce advanced equipment, collect technical talents, raise funds to set up a company, and continue to introduce new technologies and new equipment.
Obviously, at every stage of Fuyao Glass's growth, it is necessary to invest money and invest in people.
For private enterprises, there is no other source of this money, and every cent comes from their own early profits and accumulation.
Fuyao Glass's profit in 1989 was as high as 20 million yuan, so that some people thought that Cao Dewang was not making glass but printing money at that time.
According to Cao Dewang's standards today, is it outrageous? Absolutely outrageous.
If someone had come out at that time to ask Fuyao Glass to share the money, would there still be the rapid development of Fuyao Glass? Obviously not.
Over the years, Fuyao insists on investing huge R&D expenses every year, and some of Fuyao Glass's high-tech products represent the highest manufacturing level in the world today.
It is precisely because Fuyao Glass does not simply share the money, but is used for reinvestment and research and development, that there is today's world-famous Fuyao Glass.
3
Stable expectations are more harmonious
Cao Dewang said that they will share the money they earn with everyone, so that the society will be more harmonious and the business of entrepreneurs will be better.
Cao Dewang believed in Buddhism and took money to do good, which for himself, there was no economic pressure, and he was completely satisfied with his inner pursuit, and he believed that this would make society more harmonious.
This is true for Cao Dewang himself, but not for many other entrepreneurs.
Some entrepreneurs seem to be very valuable, but perhaps the cash flow of the company is extremely tight.
Some entrepreneurs have no problem with cash flow, but they need to deal with possible contingencies at any time.
For example, Yu Minhong, New Oriental does not lack cash flow, but it says that if you don't let you do it, you won't let you do it, and the original reserve cash is used to save your life at this time.
Every entrepreneur's situation is different, and the very clear and stable expectation at the beginning of the business is various taxes.
If you did not say at the beginning of the business that making money can not be too outrageous, wait until you really make money, but say that you are too outrageous, and use this as an excuse to ask to share it, such an environmental change itself may be too outrageous.
This seems to Cao Dewang to be a good thing for society to be more harmonious, but it is not necessarily for entrepreneurs with different situations, and it is even less a good thing for potential entrepreneurs who are preparing to start a business.
Stable expectations will be more harmonious, this kind of "outrageous" is not accurately defined, in addition to taxation for how to "share" there is no explicit provision of unstable expectations, obviously weaken the enthusiasm of entrepreneurs to start a business, in fact, it is more detrimental to social harmony, after all, everyone has more employment opportunities, make more money, the society will be more stable and more harmonious.
Cao Dewang's own philanthropic needs deserve encouragement and affirmation, but they cannot be arbitrarily promoted and applied to other entrepreneurs.
With Cao Dewang's influence today, I am afraid that saying such a thing will do more harm than good, and bring greater instability to the future Economic Environment of China.
Cao Dewang was not considered "outrageously rich" in the past, and he was not "shared" because of this, so we sincerely suggest that he should not determine whether others are "outrageously rich" in this way, and do not easily suggest that others "share" wealth.
Such a society is more harmonious, which will produce more Cao Dewang and more Fuyao glass.