Liu Wenhua – The Pioneer of China leading the World
China Leading the World with Front-row Leading Strategy
Businessmen who have dealt with the market know how important the finished products and services are. If we are to cut off the end of the row in the market place, our competitors will not be able to sell their products, and the consumers have no choice but to opt for our produce. However, from the perspective of strategy, cutting off the end-row isn’t good enough; we have to start from the front-row, the front end.
Liu said: “China leading the world – this concept is only possible when we work from the front end to win the dominance in the international market. Today is no longer an era during which we solve problems between countries with violence. Contrarily, we solve problems with economy – it is therefore very crucial for us to implement the concept of China leading”.
Mr. Liu Wen-Hua, the Pioneer of “China leading the World” cum founder of Winery Investment Group of China, has always been systemically analyzing the concept of China leading. With great foresight, Liu has been advocating the concept of China leading proactively. The term was first coined by Liu during Economic Forum of China’s Private Sector in 2013. Big Orange Media proudly invites Liu to introduce the concept of China leading to regions outside of China.
Liu quoted: “ For China, we can start our step of China leading by leading today the United States of America. Wherever America wishes to go, we take the initiative first, act and when the Americans are at their desired destination, Chinese are already there . If they wish to achieve global leading, we then work on China leading – so that when Americans reach their goal, we have already passed that stage much earlier. In other words, let the Americans follow our footsteps.
The quality of Chinese produce is a pivot to realize China leading. Made-in-China products are not of any lower quality than foreign countries. The Chinese products are not bad – they are indeed the best in the world. Not that we are tooting our own horn – but this is a fact which we have been ignoring in the past.
China is a world factory, and everybody knows this. Branded products from America, Britain, Germany, France, and Japan are processed and produced in China. Those products – without label or tag – are shipped to them. They then put on their own trademark or logo and sell back to China.
The notion that United States, Germany and Japan produce quality products is wrong indeed. Those products are produced in China – that is the product quality of China. The Chinese products are not of poorer quality – but better than other countries. This is a fact recognized by the world.
Given that China’s quality is not any lower than other countries, as well as the advantage of natural resources and labor cost – China can win the market of advanced countries with volume, quality and variety “.
Let Others Follow China
How shall we implement? Liu stressed : “Firstly, let us analyze volume planning to win over the market of advanced countries. For example, Europe takes an anti-dumping stance on China products. Let’s say the European market consumes 100 products every year, if we sell 120 products that would mean supply exceeding demand. Since the delivery cost of shipping back to China is very expensive, all we can do in Europe is sell goods at discounted price. Low price causes dumping, there is no doubt about this.
We shall take a different approach instead. If the West market demands 100 units of a product every year, we sell them 80 units. If we sell 100 units the price is one dollar each, 120 units would bring the price down to 80 cents each. But if we sell 80 units the price can be brought up to one dollar and fifty cents each. In other words, the West have to pay more for that 80 units – and our profit of 80 units is higher than that of 100 units. We are thus making higher profit, higher return.
Planning our volume allows us to make higher profit in foreign markets. It really shoots up our profit. When the demand stands at 100 units and the supply is kept at 80 units, the increase of selling price is justified and we can make money from there.
As we start our planning, sell them some better products occasionally at higher price. This is the part of quality planning.
Another planning involves variety of products – which China can learn from United States. While we are keeping the best products for our domestic market, we shall export products of lower quality to foreign countries. When our best products have been popular at home for two to three years, we introduce them to foreign market.
This is the way to increase our profit significantly. Scarcity allows us to increase selling price and enjoy higher profit. As we are making more money, we can acquire more resources from certain countries with low price or without cost.
The Internationalization of Chinese Yuan
The current trading currency is US dollar. Businesses sell high volume of quality products to western countries – especially United States – to earn US dollar. If United States allows its currency to depreciate, the effort of businesses will be wasted – they work hard for nothing.
Therefore, to protect the effort of businesses, it is feasible to adopt renminbi as the trading currency. Since many exporters are based in China, they can indeed request importers in foreign countries to settle the trade in renminbi.
If exporters and importers from China, Southeast Asia and other regions of the world adopt renminbi as a trading currency, that would accelerate the internationalization of renminbi. And more businesses would benefit from the trend of renminbi internationalization because they need not be controlled by US dollar anymore.
In conclusion, China leading has one ultimate goal – lead by one step, lead by every step, and thus lead the world.
As we are rolling our sleeves up to work on front-row leading, we are already taking the lead by every step. Other countries have no choice but to follow the footsteps of China for new direction. And that is the time for the Chinese to stand on top of the world”.