Chinese Mandarin - Family fabric

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BIZCHINA / Biz Who

Family fabric

By Liu?Weiling and Diao Ying (China Daily)
Updated: 2007-08-20 06:51

But the most important lesson that he learned there was competition,
which he later instilled in his own management. Most enterprises in the
1980s were State-owned and inefficient. Workers were comfortable with
their "iron bowl" - a job for life under the planned economy - and never
worried about unemployment. But Zhou as a student was impressed that an
old friend from his hometown was fired for poor performance in Shenzhen.

Today in Hongdou, he sets up sales teams from two apparel factories with
the same product and has them compete within the enterprise.

"It is difficult to raise a single child," he explains. Some might think
the strategy increases costs, but Zhou notes "we need competition within
the enterprise to face with the fierce competition on the outside".

Party school

Zhou's grandfather started a cotton-processing operation in 1957,
employing three workers in a rented space. Later the small factory was
asked to merge with two others into a collective operation.

It was during the days when China was stricken with poverty and natural
disasters, and business was tough for the enterprise. His grandfather
died in 1964 after years of inhaling cotton dust.

In 1983, shortly after the reform and opening up began that would later
spread throughout China, Zhou's father, Zhou Yaoting, a local Party
secretary, took over the company, which Zhou joined in 1987. Zhou helped
his father privatize the company through a management buyout.

In 1992 the family and 50 others gained over half ownership in the
company. Later the family strengthened its hold, and the government sold
its last shares in 2004.

Education has been important in building Zhou's career and networks. In
1994, he was sent by his father to the Party school to study with
officials from various provinces. Zhou, a Party member himself, was
impressed with his classmates and admitted that he learned a lot from
them.

"They are very hard working and very moderate," Zhou says, "although
moderation sometimes does not fit into my business strategy."

But today the Party committee remains an important organization in his
company. "The committee doesn't interfere with the operation, but it is
the political core of the group," he says.

Zhou furthered his studies in the United States in 1997, where he had the
chance to visit multinational corporations such as Wal-Mart. There he
learned the importance of giving everyone equal opportunity and access to
information.

At Hongdou, he now asks a fresh graduate student selected through
elections to hold an important position in his factory. He has also set
out a mailbox to encourage workers in the factory to send their opinions
directly to him.

While China is still seen as the manufacturing base for most overseas
enterprises, Zhou's textile-dominated company has gradually moved up the
value chain. Outside the factory in his hometown in East China's Jiangsu
Province and in neighboring Zhejiang Province, he has outsourced
manufacturing jobs to over 40,000 workers.

The main market of the company's major brand, Hongdou, is now in
second-tier cities, but still has a low profile in the rising large urban
centers. Zhou invests money in design and employs designers from Paris to
give his products a new look.

(For more biz stories, please visit Industry Updates)

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