On May 6, “From Wealth-Creating to Inheritance — 2017 Summit Forum on Family Inheritance of Minsheng Wealth” sponsored by China Business Journal and co-sponsored by Minsheng Wealth Management Co., Ltd. (Hereinafter referred to as “Minsheng Wealth”) was held in Shanghai. The representatives of outstanding entrepreneurs, high-net-worth customers of Minsheng Wealth and leading financial media from all sectors of society discussed in a deep-going way the topic on current high-net-worth group and wealth creating and inheritance of family enterprises in China. Jiang Xipei, founder, Chairman of the Board and Party Secretary of Far East Holding Group Co., Ltd. was invited to attend the forum and delivered a speech on Inspiration of “Foundership” and Inheritance of Industrial Genes.
Jiang Xipei Delivering a Keynote Speech
Jiang Xipei believed that if we wanted a better life and career in future, we needed to recognize the general situation and trend. “Global community of common destiny, harmony between man and nature, American’s hegemony and China’s rejuvenation form the general situation now. We meet the best of times and an excellent top leader — General Secretary Xi, whose governing idea of ‘both intensifying management and development’ impels many officials and entrepreneurs to revere laws, rules and trend. ” said Jiang Xipei
After Trump has been elected as the President of the United States, the society focused on entrepreneurs much more. Words like “entrepreneurship”, “craftsmanship” and “real economy” are commonly used in Report on the Work of the Government this year. As the helmsman of Far East over 30 years, what is the opinion of Jiang Xipei on current survival environment and inheritance of industrial genes for entrepreneurs?
Institutional Environment: Will the threshold of New Three Board be lowered?
Jiang Xipei pointed that favorable institutional environment and business environment shall be provided to entrepreneurs. Now, supply-side structural reform was implemented which meant supplying high-quality products and excellent service to change the economic structure and make it continuous.
He took an example that over 3,000 enterprises have been listed on the main board and 11,000 on the New Three Board among 160,000 stock enterprises in China. These enterprises had more standard finance, more transparent information and more contribution. Jiang Xipei proposed that whether the threshold could be lowered so that medium-sized registered with RMB 2 or 3 million or small-sized enterprises registered with RMB 1 million could engage in market transaction. The reason was that they were the main components for Chinese future economy.
Jiang Xipei laid special stress that we should respect creativity and intellectual property, ensure the Intellectual Property Law, Anti-Unfair Competition Law, Quality Law and Tendering and Bidding Law to be modified and implemented so that the business environment in which bad money drives out good and dishonest enterprise drives out good ones could be changed. And thus national strategies of reinvigorating China by improving quality and building brands would be realized.
Tax Reform: How to enhance competitiveness from a global consideration?
In the respect of tax, Jiang Xipei pointed that, tax revenue in China is high, let alone relevant fees. He thought that our competitiveness should be considered in the global scope. Trump’s tax cut plan squeezed or impacted on China.
“Could the added-value tax be lowered again? Could the problems of difficult and expensive financing be solved? No added-value tax deduction in current financing makes it expensive and high costs for funds into the enterprise.” said him.
Jiang Xipei appealed particularly to the reform in individual income tax. Individual income tax was imposed in a basis of RMB 3500. And tax declaration shall be filed over 120,000. The range is from 3 points to 45 points (seven-level excess progressive), but it is only 15%-17% in Hong Kong and Singapore.
In addition, 13 tax items were added to stamp duty and the tax rate was too high. Therefore he suggested that the stamp duty could be reduced or merged to reduce tax rate.
No opposition between state-owned enterprises and private enterprises, but concentration of social resources in good enterprises
Do the state-owned enterprises or private enterprises lead Chinese economy? Is real economy as the power for rebirth of Chinese economy or fictitious economy as the improving power for Chines economy?
Jiang Xipei supposed that state-owned enterprises were not opposite with private enterprises just like real economy and fictitious economy. Good enterprises were the basis and origin for Chinese economy development and happy life. “We need to respect economy rules and better orientation to make all social sources support good enterprises and industries.” He explained that “major work + investment” was the strategy for Far East. Far East devoted to make big differences in industry, education and philanthropy.
Jiang Xipei introduced five system reforms in the history of Far East, i.e. individual enterprises, township collective enterprises, mixed ownership enterprises, private stock enterprises and listed company. Stock reforms were to make Far East survive and develop better.
“People” was the core factor for enterprise development. Far East adheres to the policies shifting from people-oriented to the excellent employees oriented. Excellent employees had priority when it comes to resource allocation. And they would be provided with the most competitive treatment, i.e. “six incentives” — money, training, position, opportunity, honor, and accommodation.
Entrepreneurship, five ambitious spirits
“Continuous development of the enterprises needs entrepreneurship, five ambitious spirits, i.e. entrepreneurship, innovation, excellence, wealth-creating and wellbeing. The last one shall be realized through the former four. And it sticks to original mission and is the final purpose of five Entrepreneurs shall also need craftsmanship, honest and the spirits of never being satisfied and always pursuing excellence.”
Jiang Xipei stated that entrepreneur was the most precious wealth resource in China. It is hard for private entrepreneurs in the society. When we gave more appreciation to the entrepreneurs especially private entrepreneurs, our social environment would be better and better.
Photos of Jiang Xipei with Some Participants