Song Zhiping is gentle and refined, not the kind of entrepreneur "full of wolf-like aggressiveness" and "exposed domineering", but more like a "preacher". Like Japan's Kazuo Inamori, Song Zhiping also tries to use Eastern Confucian thought to govern the company. He has published five books sharing his management experience: "The Power of Inclusiveness" on corporate culture, "Central SOE Market Operation" on reform, "Integration and Optimization" on transformation, and "My View of Enterprise" and "Management Strategies" are his insights from over 20 years as the head of large enterprises.

From 2009 to 2014, Song Zhiping held the positions of chairman of two central SOEs, China National Building Material Group and Sinopharm. In April 2014, Song Zhiping no longer served as chairman of Sinopharm Group. Upon leaving, he delivered an impressive answer sheet: Sinopharm Group's operating revenue jumped from 36 billion yuan when he took over in 2009 to 203.5 billion yuan in 2013, becoming the only pharmaceutical company in China to enter the Fortune Global 500. He also brought both companies into the Fortune Global 500.

In 2016, he completed the merger and reorganization of China National Building Material Group and China National Materials Group, making it a giant aircraft carrier in the world's building materials field and the world's cement king with 530 million tons of production capacity. "State-owned enterprises are not as some people imagine, without entrepreneurs and without innovation. Mr. Drucker said that innovation is not necessarily related to ownership; private enterprises have entrepreneurs and innovators, and the public sector also has entrepreneurs and innovators. I want to say that in fact, there are many enterprising entrepreneurs and innovators in state-owned enterprises."

1 Chinese companies building factories globally is an inevitable part of the development of Chinese enterprises and industry

Outlook Think Tank: In recent years, US manufacturing has been returning. Since Trump was elected US President, he will implement more substantial tax reforms to attract global companies to the US. What are your thoughts on the future development and confrontation of manufacturing between China and the US?

Song Zhiping: In the economic development process of previous years, the US felt it had suffered losses. It once overdeveloped the virtual economy and excessive financial innovation, which also triggered the 2008 financial crisis. After the financial crisis, the US summarized its lessons and found that the real economy is important as a foundation. The US is not a small country like Luxembourg, where developing financial industries such as funds is enough. The US has a huge consumer market; if it completely lacks a real economy, its foundation will be gone.

Therefore, after the financial crisis, the US reflected and proposed returning to industry. In fact, not only the US but also Europe have reflected on the excessive innovation of the virtual economy and financial derivatives, and proposed reindustrialization. History always repeats in tides, comparing with each other in a repeated process and gradually changing. The US is the same.

Regarding global economic balance, Stephen Roach of the US is a senior professor at Yale University. His book published two years ago is called "Unbalanced: The Codependency of America and China". The core viewpoint is that global economic balance depends on the balance between the Chinese and US economies. He believes there were two problems in the past: first, China manufactured and shipped large quantities of products to the US; second, the US issued large amounts of government bonds to China, equivalent to the US using Chinese products while spending Chinese money. He believes this is unsustainable. His proposed solution is that China should not overly rely on the US market and should expand its domestic demand, and the US should not overly rely on Chinese products and should accelerate the development of its real economy. He believes that in the future balance of the Chinese and US economies, whichever country recognizes this first will succeed.

I think in fact both China and the US have recognized this problem. The US is revitalizing its real economy, and China is also striving to expand its domestic market. But this cannot be solved overnight; it will take five to ten years to gradually reach a balanced state.

Outlook Think Tank: Not long ago, Cao Dewang pointed out that China's manufacturing costs are high. Many views refer to Cao Dewang building a factory in the US as "Cao Dewang has run away". Some companies under China National Building Material Group have also gone global. How do you view Chinese companies investing overseas?

Song Zhiping: I don't see it that way. Chinese companies building factories globally is an inevitable part of the development of Chinese enterprises and Chinese industry, not a matter of which condition is better or worse.

For example, China Jushi's products have a good market in the US, but shipping from China to the US is costly. To consolidate our market in the US, we need to build a factory in the US.

Not long ago, a responsible person from Owens Corning of the US met with me. Our two companies have a joint venture special fiber project in Tai'an, China. At that time, he also asked this question: why do we want to build a factory in the US? Zhang Yuqiang, President of China Jushi, told him, just like you build factories in China, we also have a market in the US, and building a factory in the US is to serve our US customers.

He said it very plainly but profoundly. After years of export-oriented economic development, Chinese products have been exported to many countries. The next step will be to increase factory building overseas to consolidate and develop overseas markets.

Previously, China was the factory of the world, with raw materials and markets both abroad, and processing in China. This was only the first stage. Now it has developed to the second stage: the world is China's factory, and China will open factories all over the world. This is also a historic leap in China's 30 years of reform and opening up. This is a major law. Regardless of domestic industrial policies, it is impossible and illogical for us to build all factories in China. We should build factories closest to the markets, especially in countries where market demand and raw material sources are close. This is the major development trend.

Japan is a major manufacturing country. After building factories worldwide, it shifted from focusing on GDP to GNP, from gross domestic product to gross national product. I think China is also making this progress. It is not that China's environment has worsened, nor that foreign environments are better than ours; this is the law of economic development.

China Jushi's investment in South Carolina, specifically viewed, is indeed an enterprise investment behavior. But if viewed in the context of the major trend, from the perspective of the trend of China-US economic relations and the growth of Chinese enterprises, China is moving from playing the role of the world's factory to making the world China's factory. The Chinese economy is gradually moving from GDP to GNP. The behavior of this one enterprise is actually a wave in the entire tide.