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Corporate compliance is the key to the reconstruction

by:VIPUTRANS     2020-07-31
A few days ago, I chatted with a friend of entrepreneurs and talked about the recent hotly debated issue of economic decoupling between the United States and China. He asked him what he thought of it, and he said it was impossible. The supply chain has long since been among you and me. For example, in an auto parts, there may be several parts produced in different countries, some from the United States, some from Europe, and some from China. How can they be taken off? I said so. The people who stay out of the affair often have blind enthusiasm for patriotism, and like the Boxers, they play a big knife.

At this year's press conference for the two premiers of the two sessions, Premier Li Keqiang made the following reply: We should follow the important consensus reached by the two heads of state to promote the establishment of Sino-US relations based on coordination, cooperation and stability. We must respect each other, equality and mutual benefit, respect each other's core interests and major concerns, and seek win-win cooperation. This is beneficial to oneself, to others, and to the world.

So, on the whole, where has the global industrial chain gone? Does it need adjustment and reconstruction? Where is its core problem now? A few days ago, the reporter listened to a speech by Mr. Wang Zhile, director of the Beijing New Century Multinational Corporation Research Institute and former researcher of the Institute of International Trade and Economic Cooperation of the Ministry of Commerce. Choose the main points to share with everyone. Hope to inspire everyone's ideas.

The reconstruction of the global industrial chain will be safety-oriented
Wang Zhile believes that the changes in the global industrial chain today have a problem of reconstruction. To talk about reconstruction, one needs to understand the status quo and history. The global industrial chain generally has three stages of development. The first stage is called the regularity stage. These global companies, including multinational companies that entered China, and the emergence of a global market after the end of the Cold War The value chain extends to the world, building a global value chain for each enterprise, and then forming a global industrial chain in the process of convergence of various value chains in the same industry.

After the emergence of the global market in 1992, the global industrial chain of the global value chain was formed. At that time, these companies built the global industrial chain basically in accordance with the laws of market economy. Enterprises pursue resource endowments and comparative advantages, scale effects and cost advantages, competitive mechanisms and efficiency advantages, and input-output benefits. These pursuits are to build a global industrial chain value chain in accordance with economic laws. During this period, many companies in China have also built their own global value chains. Like the most competitive company Huawei, its global industrial chain is very powerful. It has announced that it has 92 most important suppliers. When it integrates 33 American suppliers, there are 8 in Japan, Taiwan in China, and 8 in Europe. Two-thirds of these 92 companies are from international sources, and they have integrated these supplier parts with the best cost-effectiveness in the world into their value chain to build a very competitive value chain.

There are many examples like Huawei. However, since 2000, the United Nations has established the Global Compact, which advocates corporate responsibility, including social responsibility, environmental responsibility, and anti-corruption. Why start to talk about the rules at this time? In fact, it has discovered that if a company introduces a market competition mechanism and does not follow the rules, although the value chain can create wealth, it may bring disasters to mankind, and social and environmental problems become more and more serious. This is the trend of advocating enterprises to stress responsibility. However, simply letting companies take the initiative to take responsibility is actually slower, because many companies are not willing to accept these rules in pursuit of efficiency. 2008 was a turning point. This year Siemens was severely punished for commercial corruption, which shocked the world. Because the penalty was 1.6 billion U.S. dollars, four years of supervision. This intensity is equivalent to the intensity of the penalties for China's ZTE in 2018 ten years later. Therefore, many international companies and global companies have strengthened their compliance after 2009, established the post of chief compliance officer, and established a compliance management system. Since the Sino-US trade war in 2018, the US has actually used rules to crack down on Chinese companies. He believes that Chinese companies are not compliant. And compliance actually refers to fulfilling compliance obligations. There are two aspects to compliance obligations. One is external regulatory laws, regulations, and regulatory provisions, and the other is its own compliance commitments. In the past decade or so, these global companies in the world can also be regarded as a global industrial chain. If a company is fined for violation of regulations, the industrial chain may be interrupted. In the third stage, since the Sino-US trade war has begun, security is about trust, especially since the spread of the new crown epidemic, especially like the United States, raising the security issue of this industrial chain to a high level. It is no longer a general rule, it requires safety. For example, on April 8, the U.S. Department of Justice, together with the Department of Homeland Security, the Department of Defense, the State Department, and the Department of Commerce and Trade Representatives, six ministerial-level units unanimously proposed to the U.S. telecommunications regulatory agency―the Federal Communications Commission to revoke the agreement signed in 2007. China Telecom's license to conduct business in the United States. What is the reason? It's safe! They believe that this kind of very sensitive industrial area depends on the cooperation of trustworthy partner countries with the same values ??in order to do well in this industry. This is to associate this security with values. Such an approach actually violates the laws of market economy, but it is now starting to do so, and as far as I know, about nine important countries have recently issued relevant regulations to prevent foreign countries from acquiring companies in their countries during the new crown epidemic. . Of course, this goal is very clear, pointing towards China. Governments have added geopolitics and values. Therefore, the next step of development is definitely to highlight the game of safety and efficiency. In the construction of the global industrial chain, there will definitely be a more acute problem in the future. Due to the influence of nationalism and populism, governments of various countries tend to give more consideration to trust, safety and even values ??when adjusting and restructuring the global industrial chain, so that the industry can be autonomous and controllable. However, a global company is more willing to adjust the global industrial chain in accordance with the law of value and competition mechanism, and is more inclined to consider cost scale, efficiency and benefit. For example, the U.S. sanctions on Huawei have expired in more than a year. Recently, it has been extended for 90 days. Almost all of those Huawei’s suppliers and the more than 30 U.S. companies mentioned just now demand that the U.S. relax and postpone sanctions because they are doing business. For this kind of security and efficiency game between the government and the enterprise, it determines the prospects of the future global industrial chain reconstruction. There is only one thing that may be acceptable to both parties, and that is the rule! Only rule factors can be accepted by enterprises as well as by the government. Therefore, the restructuring of the global industrial chain will profoundly affect China's economy and the development of China's industrial chain. The restructuring of the global industrial chain layout will be safety-oriented.

Global industrial chain, focusing on restructuring rules
The second aspect is the reconstruction of the global industrial chain. In the past, we paid attention to the reconstruction of the layout, but not enough attention to the reconstruction of the rules. In fact, the reconstruction of the global industrial chain is not only reflected in the adjustment of the geographical structure, but also in the competition rules. The reconstruction aspect. Since the Sino-US trade war, the US, Europe and Japan have conducted seven dialogues on this future rule, and they have reached an agreement. Some of them have already been proposed with the Chinese side. For example, market access requires reciprocal opening, and China will expand its opening by then; intellectual property rights require to stop theft and forced transfer; competition-neutral elements obtain access permits, etc. These are actually Not only does it require compliance with enterprises, it also requires our government’s actions to be compliant. In addition, he reads the central government documents in these aspects. Wang Zhile believes that our Chinese government basically accepts them. For example, they are competitively neutral. In order to obtain access permits to operate government procurement and bidding, it is necessary to achieve equal treatment of enterprises of all types of ownership. Premier Keqiang wrote this in his government work report last year. On the other hand, the company’s compliance requirements, comprehensive corporate compliance, anti-corruption social responsibility, and environmental responsibility. Wang Zhile feels that such a rule requirement can be explored and is acceptable. This will be a change in the development of the global industrial chain in the future. Wang Zhile saw that the Politburo Standing Committee proposed to upgrade China's industrial chain. In fact, it was actually improved. Wang Zhile believed that not only the hardware upgrade but also the soft power, which has been a weakness of our company for so many years.

How do companies respond
The next question is how companies respond. Wang Zhile believes that Chinese companies lag behind global companies for about ten years in the first two stages of global industrial chain development. In 1992, global companies began to build global industrial chains; while Chinese companies truly It began to be more consciously integrated into the global industrial chain on a large scale after joining the WTO in 2002. When the Siemens violations in 2008 caused large global companies to attach great importance to compliance and strengthen compliance management, Chinese companies really began to pay attention to compliance, which was about 2018, another ten years later. After the Sino-US trade war started and ZTE was punished for the second time, as for the safety of the industrial chain, Chinese companies are no later than Western companies. When Wang Zhile was studying multinational companies, in 2006, there was a big domestic discussion about foreign mergers and acquisitions on Chinese companies. Everyone attaches great importance to the issue of industrial safety, so on this issue, even when some of our questions came up earlier than abroad, we lag behind in the first two. Over the years, Chinese companies have developed very fast. Last year, 119 Chinese companies were included in the list of the world's 500 largest companies (not counting Taiwanese companies here), while the United States only had 121. The number or scale of China's enterprise development is already comparable to that of the United States. However, our company lacks the competitiveness of compliance. For example, in 2018, four Chinese companies were removed from the ranking due to non-compliance, Anbang, Huaxin, HNA, and Wanda. Recently, a Chinese company listed in the United States, which has attracted global attention, has fraudulently reported to Ruixing Finance, and the Chinese government has made an unprecedented investigation by the China Securities Regulatory Commission to cooperate with the United States. What is the problem with it? The United States has attached great importance to such serious violations by Chinese companies, so the chairman of the US Securities Regulatory Commission even appealed to American investors not to buy the shares of more than 300 Chinese companies listed in the United States. Therefore, if we do not comply with the regulations, the global industrial chain of the company may be cut off in the global financial chain.

So why do Chinese companies have this problem? The main reason is that we only paid attention to the development of this hard power and paid little attention to the development of soft power in the development of this global industrial chain. Our Chinese companies really started to go global after 2008. It is clear from the statistics that China's foreign investment was more than 20 billion US dollars in 2007, and it more than doubled in 2008. We began to go global on a large scale, but just when the Siemens case occurred in 2008, when the global industrial chain of global enterprises paid great attention to compliance, our company went out, and we often do not know where the new international rules are! Therefore, the issue of ZTE being caught, and the Americans' pursuit of Huawei is also about 2010. Therefore, we recently investigated the compliance issues encountered by Chinese companies overseas. There are ten important manifestations: business corruption, project fraud, many Chinese companies discounting, smuggling, tax evasion, financial fraud, export control, intellectual property data protection, and social responsibility. , Involving national security, these are the problems we have encountered in recent years. Generally speaking, Chinese companies have developed rapidly over the years, some are integrated into the global industrial chain, and some have led an investment in an industrial chain. But these companies often focus on competition, but lack compliance awareness. Therefore, in this round of global suppression, although there are many political factors and unfairness, it is true that some of our companies are not familiar with international rules and fail to abide by the rules. This domestic company has many problems. We have introduced the mechanism of market competition and market economy, but we cannot introduce and attach great importance to the rules of market competition at the same time. Our company will not go far and will not do much, because we often lack a culture of integrity and compliance. If we want to rebuild after this round of the epidemic, we will integrate into this global value chain reconstruction. If we can tackle this compliance issue, Chinese companies may take the initiative in the future restructuring of the global industrial chain, and the industrial chain in China is at least high-level. Enterprises should change the state of emphasizing competition and despising rules in the past.

The government is soberly facing the restructuring of the industrial chain
For the Chinese government, it should seize the opportunity to restructure the global industrial chain. We have done a good job in integrating into the global industrial chain some time ago, and the competition mechanism has played very well. Chinese companies have indeed developed rapidly after entering the market. All industrial chains have gathered in China, and China has become a global factory. However, after the start of this round of the Sino-US trade war, after the new crown pneumonia epidemic, the practices of developed countries, especially when the industrial chain was restructured, our government Wang Zhile believes that there should be some clear understanding. Wang Zhile saw some documents including the construction of the international market mechanism by the Central Committee of the Communist Party of China and the State Council on May 11, and the industrial chain issues mentioned on the Standing Committee on May 14. Wang Zhile believed that the central government was very clear.

First of all, we must build and enhance the global industrial chain as our core interest, because the upstream R&D design of the industrial chain, if we really break away from the global industrial chain, things will be very troublesome. Our technology can only be compared for a long time, that is, there are many tracking and imitations, and innovation is difficult to surpass. Second, the energy and minerals that we lack may have to be controlled. In the end, our market is due to a large amount of Chinese exports, with an annual export of 16 trillion yuan. This requires a lot of employment. If these problems are not resolved, It is certainly not possible to break away from the global industrial chain. Integration into the global industrial chain is three levels. The first is in accordance with economic laws; the second is to emphasize compliance with international rules; the third is security and values. Among these three, the last question is the most difficult, because the US’s security concept and US values ??are in many conflicts with us. However, it can be discussed at the level of rules, so Wang Zhile believes that the next paragraph should not be separated from the global industrial chain and be integrated with the global industrial chain as much as possible. We should play games with developed countries at the level of rules. When the second problem emerged in 2018, Premier Keqiang gave a very good instruction. Later, the Development and Reform Commission led seven ministries and commissions to issue the 'Guidelines for the Compliance Management of Chinese Enterprises Overseas Operations', and the SASAC issued the ' Guidelines for Compliance Management of Central Enterprises.

General Secretary Xi Jinping attaches great importance to compliance issues. He emphasized the need to operate legally and compliantly on the Belt and Road issue. In particular, he proposed that operations should be conducted in accordance with generally accepted international rules and standards, and he made a very important point. , Which means that enterprises are required to improve their competitiveness in legal compliance and form more world-class enterprises with global competitiveness. Wang Zhile feels that this idea can be used to build a world-class industrial chain.

Write at the back
To be honest, the lack of compliance awareness of enterprises is due to the general lack of compliance awareness of the people. For example, Chinese companies generally lack the awareness of intellectual property rights and take plagiarism and imitation for granted, and they deserve it. There is a comment that since the 'Six Walnuts' drink brand was launched, 'Seven Walnuts', 'Eight Walnuts' and 'Nine Walnuts' appeared in a blink of an eye. Finally, a 'All Walnuts' came out. Make people dumbfounded. Foreign computer operating systems are charged for use. We think it’s expensive, and we think how cool it is to use it for free. So if your operating system is called 'sorghum rice', mine is Corporate compliance is the key to the reconstruction of the global industrial chain
A few days ago, I chatted with a friend of entrepreneurs and talked about the recent hotly debated issue of economic decoupling between the United States and China. He asked him what he thought of it, and he said it was impossible. The supply chain has long since been among you and me. For example, in an auto parts, there may be several parts produced in different countries, some from the United States, some from Europe, and some from China. How can they be taken off? I said so. The people who stay out of the affair often have blind enthusiasm for patriotism, and like the Boxers, they play a big knife.

At this year's press conference for the two premiers of the two sessions, Premier Li Keqiang made the following reply: We should follow the important consensus reached by the two heads of state to promote the establishment of Sino-US relations based on coordination, cooperation and stability. We must respect each other, equality and mutual benefit, respect each other's core interests and major concerns, and seek win-win cooperation. This is beneficial to oneself, to others, and to the world.

So, on the whole, where has the global industrial chain gone? Does it need adjustment and reconstruction? Where is its core problem now? A few days ago, the reporter listened to a speech by Mr. Wang Zhile, director of the Beijing New Century Multinational Corporation Research Institute and former researcher of the Institute of International Trade and Economic Cooperation of the Ministry of Commerce. Choose the main points to share with everyone. Hope to inspire everyone's ideas.

The reconstruction of the global industrial chain will be safety-oriented
Wang Zhile believes that the changes in the global industrial chain today have a problem of reconstruction. To talk about reconstruction, one needs to understand the status quo and history. The global industrial chain generally has three stages of development. The first stage is called the regularity stage. These global companies, including multinational companies that entered China, and the emergence of a global market after the end of the Cold War The value chain extends to the world, building a global value chain for each enterprise, and then forming a global industrial chain in the process of convergence of various value chains in the same industry.

After the emergence of the global market in 1992, the global industrial chain of the global value chain was formed. At that time, these companies built the global industrial chain basically in accordance with the laws of market economy. Enterprises pursue resource endowments and comparative advantages, scale effects and cost advantages, competitive mechanisms and efficiency advantages, and input-output benefits. These pursuits are to build a global industrial chain value chain in accordance with economic laws. During this period, many companies in China have also built their own global value chains. Like the most competitive company Huawei, its global industrial chain is very powerful. It has announced that it has 92 most important suppliers. When it integrates 33 American suppliers, there are 8 in Japan, Taiwan in China, and 8 in Europe. Two-thirds of these 92 companies are from international sources, and they have integrated these supplier parts with the best cost-effectiveness in the world into their value chain to build a very competitive value chain.

There are many examples like Huawei. However, since 2000, the United Nations has established the Global Compact, which advocates corporate responsibility, including social responsibility, environmental responsibility, and anti-corruption. Why start to talk about the rules at this time? In fact, it has discovered that if a company introduces a market competition mechanism and does not follow the rules, although the value chain can create wealth, it may bring disasters to mankind, and social and environmental problems become more and more serious. This is the trend of advocating enterprises to stress responsibility. However, simply letting companies take the initiative to take responsibility is actually slower, because many companies are not willing to accept these rules in pursuit of efficiency. 2008 was a turning point. This year Siemens was severely punished for commercial corruption, which shocked the world. Because the penalty was 1.6 billion U.S. dollars, four years of supervision. This intensity is equivalent to the intensity of the penalties for China's ZTE in 2018 ten years later. Therefore, many international companies and global companies have strengthened their compliance after 2009, established the post of chief compliance officer, and established a compliance management system. Since the Sino-US trade war in 2018, the US has actually used rules to crack down on Chinese companies. He believes that Chinese companies are not compliant. And compliance actually refers to fulfilling compliance obligations. There are two aspects to compliance obligations. One is external regulatory laws, regulations, and regulatory provisions, and the other is its own compliance commitments. In the past decade or so, these global companies in the world can also be regarded as a global industrial chain. If a company is fined for violation of regulations, the industrial chain may be interrupted. In the third stage, since the Sino-US trade war has begun, security is about trust, especially since the spread of the new crown epidemic, especially like the United States, raising the security issue of this industrial chain to a high level. It is no longer a general rule, it requires safety. For example, on April 8, the U.S. Department of Justice, together with the Department of Homeland Security, the Department of Defense, the State Department, and the Department of Commerce and Trade Representatives, six ministerial-level units unanimously proposed to the U.S. telecommunications regulatory agency―the Federal Communications Commission to revoke the agreement signed in 2007. China Telecom's license to conduct business in the United States. What is the reason? It's safe! They believe that this kind of very sensitive industrial area depends on the cooperation of trustworthy partner countries with the same values ??in order to do well in this industry. This is to associate this security with values. Such an approach actually violates the laws of market economy, but it is now starting to do so, and as far as I know, about nine important countries have recently issued relevant regulations to prevent foreign countries from acquiring companies in their countries during the new crown epidemic. . Of course, this goal is very clear, pointing towards China. Governments have added geopolitics and values. Therefore, the next step of development is definitely to highlight the game of safety and efficiency. In the construction of the global industrial chain, there will definitely be a more acute problem in the future. Due to the influence of nationalism and populism, governments of various countries tend to give more consideration to trust, safety and even values ??when adjusting and restructuring the global industrial chain, so that the industry can be autonomous and controllable. However, a global company is more willing to adjust the global industrial chain in accordance with the law of value and competition mechanism, and is more inclined to consider cost scale, efficiency and benefit. For example, the U.S. sanctions on Huawei have expired in more than a year. Recently, it has been extended for 90 days. Almost all of those Huawei’s suppliers and the more than 30 U.S. companies mentioned just now demand that the U.S. relax and postpone sanctions because they are doing business. For this kind of security and efficiency game between the government and the enterprise, it determines the prospects of the future global industrial chain reconstruction. There is only one thing that may be acceptable to both parties, and that is the rule! Only rule factors can be accepted by enterprises as well as by the government. Therefore, the restructuring of the global industrial chain will profoundly affect China's economy and the development of China's industrial chain. The restructuring of the global industrial chain layout will be safety-oriented.

Global industrial chain, focusing on restructuring rules
The second aspect is the reconstruction of the global industrial chain. In the past, we paid attention to the reconstruction of the layout, but not enough attention to the reconstruction of the rules. In fact, the reconstruction of the global industrial chain is not only reflected in the adjustment of the geographical structure, but also in the competition rules. The reconstruction aspect. Since the Sino-US trade war, the US, Europe and Japan have conducted seven dialogues on this future rule, and they have reached an agreement. Some of them have already been proposed with the Chinese side. For example, market access requires reciprocal opening, and China will expand its opening by then; intellectual property rights require to stop theft and forced transfer; competition-neutral elements obtain access permits, etc. These are actually Not only does it require compliance with enterprises, it also requires our government’s actions to be compliant. In addition, he reads the central government documents in these aspects. Wang Zhile believes that our Chinese government basically accepts them. For example, they are competitively neutral. In order to obtain access permits to operate government procurement and bidding, it is necessary to achieve equal treatment of enterprises of all types of ownership. Premier Keqiang wrote this in his government work report last year. On the other hand, the company’s compliance requirements, comprehensive corporate compliance, anti-corruption social responsibility, and environmental responsibility. Wang Zhile feels that such a rule requirement can be explored and is acceptable. This will be a change in the development of the global industrial chain in the future. Wang Zhile saw that the Politburo Standing Committee proposed to upgrade China's industrial chain. In fact, it was actually improved. Wang Zhile believed that not only the hardware upgrade but also the soft power, which has been a weakness of our company for so many years.

How do companies respond
The next question is how companies respond. Wang Zhile believes that Chinese companies lag behind global companies for about ten years in the first two stages of global industrial chain development. In 1992, global companies began to build global industrial chains; while Chinese companies truly It began to be more consciously integrated into the global industrial chain on a large scale after joining the WTO in 2002. When the Siemens violations in 2008 caused large global companies to attach great importance to compliance and strengthen compliance management, Chinese companies really began to pay attention to compliance, which was about 2018, another ten years later. After the Sino-US trade war started and ZTE was punished for the second time, as for the safety of the industrial chain, Chinese companies are no later than Western companies. When Wang Zhile was studying multinational companies, in 2006, there was a big domestic discussion about foreign mergers and acquisitions on Chinese companies. Everyone attaches great importance to the issue of industrial safety, so on this issue, even when some of our questions came up earlier than abroad, we lag behind in the first two. Over the years, Chinese companies have developed very fast. Last year, 119 Chinese companies were included in the list of the world's 500 largest companies (not counting Taiwanese companies here), while the United States only had 121. The number or scale of China's enterprise development is already comparable to that of the United States. However, our company lacks the competitiveness of compliance. For example, in 2018, four Chinese companies were removed from the ranking due to non-compliance, Anbang, Huaxin, HNA, and Wanda. Recently, a Chinese company listed in the United States, which has attracted global attention, has fraudulently reported to Ruixing Finance, and the Chinese government has made an unprecedented investigation by the China Securities Regulatory Commission to cooperate with the United States. What is the problem with it? The United States has attached great importance to such serious violations by Chinese companies, so the chairman of the US Securities Regulatory Commission even appealed to American investors not to buy the shares of more than 300 Chinese companies listed in the United States. Therefore, if we do not comply with the regulations, the global industrial chain of the company may be cut off in the global financial chain.

So why do Chinese companies have this problem? The main reason is that we only paid attention to the development of this hard power and paid little attention to the development of soft power in the development of this global industrial chain. Our Chinese companies really started to go global after 2008. It is clear from the statistics that China's foreign investment was more than 20 billion US dollars in 2007, and it more than doubled in 2008. We began to go global on a large scale, but just when the Siemens case occurred in 2008, when the global industrial chain of global enterprises paid great attention to compliance, our company went out, and we often do not know where the new international rules are! Therefore, the issue of ZTE being caught, and the Americans' pursuit of Huawei is also about 2010. Therefore, we recently investigated the compliance issues encountered by Chinese companies overseas. There are ten important manifestations: business corruption, project fraud, many Chinese companies discounting, smuggling, tax evasion, financial fraud, export control, intellectual property data protection, and social responsibility. , Involving national security, these are the problems we have encountered in recent years. Generally speaking, Chinese companies have developed rapidly over the years, some are integrated into the global industrial chain, and some have led an investment in an industrial chain. But these companies often focus on competition, but lack compliance awareness. Therefore, in this round of global suppression, although there are many political factors and unfairness, it is true that some of our companies are not familiar with international rules and fail to abide by the rules. This domestic company has many problems. We have introduced the mechanism of market competition and market economy, but we cannot introduce and attach great importance to the rules of market competition at the same time. Our company will not go far and will not do much, because we often lack a culture of integrity and compliance. If we want to rebuild after this round of the epidemic, we will integrate into this global value chain reconstruction. If we can tackle this compliance issue, Chinese companies may take the initiative in the future restructuring of the global industrial chain, and the industrial chain in China is at least high-level. Enterprises should change the state of emphasizing competition and despising rules in the past.

The government is soberly facing the restructuring of the industrial chain
For the Chinese government, it should seize the opportunity to restructure the global industrial chain. We have done a good job in integrating into the global industrial chain some time ago, and the competition mechanism has played very well. Chinese companies have indeed developed rapidly after entering the market. All industrial chains have gathered in China, and China has become a global factory. However, after the start of this round of the Sino-US trade war, after the new crown pneumonia epidemic, the practices of developed countries, especially when the industrial chain was restructured, our government Wang Zhile believes that there should be some clear understanding. Wang Zhile saw some documents including the construction of the international market mechanism by the Central Committee of the Communist Party of China and the State Council on May 11, and the industrial chain issues mentioned on the Standing Committee on May 14. Wang Zhile believed that the central government was very clear.

First of all, we must build and enhance the global industrial chain as our core interest, because the upstream R&D design of the industrial chain, if we really break away from the global industrial chain, things will be very troublesome. Our technology can only be compared for a long time, that is, there are many tracking and imitations, and innovation is difficult to surpass. Second, the energy and minerals that we lack may have to be controlled. In the end, our market is due to a large amount of Chinese exports, with an annual export of 16 trillion yuan. This requires a lot of employment. If these problems are not resolved, It is certainly not possible to break away from the global industrial chain. Integration into the global industrial chain is three levels. The first is in accordance with economic laws; the second is to emphasize compliance with international rules; the third is security and values. Among these three, the last question is the most difficult, because the US’s security concept and US values ??are in many conflicts with us. However, it can be discussed at the level of rules, so Wang Zhile believes that the next paragraph should not be separated from the global industrial chain and be integrated with the global industrial chain as much as possible. We should play games with developed countries at the level of rules. When the second problem emerged in 2018, Premier Keqiang gave a very good instruction. Later, the Development and Reform Commission led seven ministries and commissions to issue the 'Guidelines for the Compliance Management of Chinese Enterprises Overseas Operations', and the SASAC issued the ' Guidelines for Compliance Management of Central Enterprises.

General Secretary Xi Jinping attaches great importance to compliance issues. He emphasized the need to operate legally and compliantly on the Belt and Road issue. In particular, he proposed that operations should be conducted in accordance with generally accepted international rules and standards, and he made a very important point. , Which means that enterprises are required to improve their competitiveness in legal compliance and form more world-class enterprises with global competitiveness. Wang Zhile feels that this idea can be used to build a world-class industrial chain.

Write at the back
To be honest, the lack of compliance awareness of enterprises is due to the general lack of compliance awareness of the people. For example, Chinese companies generally lack the awareness of intellectual property rights and take plagiarism and imitation for granted, and they deserve it. There is a comment that since the 'Six Walnuts' drink brand was launched, 'Seven Walnuts', 'Eight Walnuts' and 'Nine Walnuts' appeared in a blink of an eye. Finally, a 'All Walnuts' came out. Make people dumbfounded. Foreign computer operating systems are charged for use. We think it’s expensive, and we think how cool it is to use it for free. So if your operating system is called 'sorghum rice', mine is Corporate compliance is the key to the reconstruction of the global industrial chain
A few days ago, I chatted with a friend of entrepreneurs and talked about the recent hotly debated issue of economic decoupling between the United States and China. He asked him what he thought of it, and he said it was impossible. The supply chain has long since been among you and me. For example, in an auto parts, there may be several parts produced in different countries, some from the United States, some from Europe, and some from China. How can they be taken off? I said so. The people who stay out of the affair often have blind enthusiasm for patriotism, and like the Boxers, they play a big knife.

At this year's press conference for the two premiers of the two sessions, Premier Li Keqiang made the following reply: We should follow the important consensus reached by the two heads of state to promote the establishment of Sino-US relations based on coordination, cooperation and stability. We must respect each other, equality and mutual benefit, respect each other's core interests and major concerns, and seek win-win cooperation. This is beneficial to oneself, to others, and to the world.

So, on the whole, where has the global industrial chain gone? Does it need adjustment and reconstruction? Where is its core problem now? A few days ago, the reporter listened to a speech by Mr. Wang Zhile, director of the Beijing New Century Multinational Corporation Research Institute and former researcher of the Institute of International Trade and Economic Cooperation of the Ministry of Commerce. Choose the main points to share with everyone. Hope to inspire everyone's ideas.

The reconstruction of the global industrial chain will be safety-oriented
Wang Zhile believes that the changes in the global industrial chain today have a problem of reconstruction. To talk about reconstruction, one needs to understand the status quo and history. The global industrial chain generally has three stages of development. The first stage is called the regularity stage. These global companies, including multinational companies that entered China, and the emergence of a global market after the end of the Cold War The value chain extends to the world, building a global value chain for each enterprise, and then forming a global industrial chain in the process of convergence of various value chains in the same industry.

After the emergence of the global market in 1992, the global industrial chain of the global value chain was formed. At that time, these companies built the global industrial chain basically in accordance with the laws of market economy. Enterprises pursue resource endowments and comparative advantages, scale effects and cost advantages, competitive mechanisms and efficiency advantages, and input-output benefits. These pursuits are to build a global industrial chain value chain in accordance with economic laws. During this period, many companies in China have also built their own global value chains. Like the most competitive company Huawei, its global industrial chain is very powerful. It has announced that it has 92 most important suppliers. When it integrates 33 American suppliers, there are 8 in Japan, Taiwan in China, and 8 in Europe. Two-thirds of these 92 companies are from international sources, and they have integrated these supplier parts with the best cost-effectiveness in the world into their value chain to build a very competitive value chain.

There are many examples like Huawei. However, since 2000, the United Nations has established the Global Compact, which advocates corporate responsibility, including social responsibility, environmental responsibility, and anti-corruption. Why start to talk about the rules at this time? In fact, it has discovered that if a company introduces a market competition mechanism and does not follow the rules, although the value chain can create wealth, it may bring disasters to mankind, and social and environmental problems become more and more serious. This is the trend of advocating enterprises to stress responsibility. However, simply letting companies take the initiative to take responsibility is actually slower, because many companies are not willing to accept these rules in pursuit of efficiency. 2008 was a turning point. This year Siemens was severely punished for commercial corruption, which shocked the world. Because the penalty was 1.6 billion U.S. dollars, four years of supervision. This intensity is equivalent to the intensity of the penalties for China's ZTE in 2018 ten years later. Therefore, many international companies and global companies have strengthened their compliance after 2009, established the post of chief compliance officer, and established a compliance management system. Since the Sino-US trade war in 2018, the US has actually used rules to crack down on Chinese companies. He believes that Chinese companies are not compliant. And compliance actually refers to fulfilling compliance obligations. There are two aspects to compliance obligations. One is external regulatory laws, regulations, and regulatory provisions, and the other is its own compliance commitments. In the past decade or so, these global companies in the world can also be regarded as a global industrial chain. If a company is fined for violation of regulations, the industrial chain may be interrupted. In the third stage, since the Sino-US trade war has begun, security is about trust, especially since the spread of the new crown epidemic, especially like the United States, raising the security issue of this industrial chain to a high level. It is no longer a general rule, it requires safety. For example, on April 8, the U.S. Department of Justice, together with the Department of Homeland Security, the Department of Defense, the State Department, and the Department of Commerce and Trade Representatives, six ministerial-level units unanimously proposed to the U.S. telecommunications regulatory agency―the Federal Communications Commission to revoke the agreement signed in 2007. China Telecom's license to conduct business in the United States. What is the reason? It's safe! They believe that this kind of very sensitive industrial area depends on the cooperation of trustworthy partner countries with the same values ??in order to do well in this industry. This is to associate this security with values. Such an approach actually violates the laws of market economy, but it is now starting to do so, and as far as I know, about nine important countries have recently issued relevant regulations to prevent foreign countries from acquiring companies in their countries during the new crown epidemic. . Of course, this goal is very clear, pointing towards China. Governments have added geopolitics and values. Therefore, the next step of development is definitely to highlight the game of safety and efficiency. In the construction of the global industrial chain, there will definitely be a more acute problem in the future. Due to the influence of nationalism and populism, governments of various countries tend to give more consideration to trust, safety and even values ??when adjusting and restructuring the global industrial chain, so that the industry can be autonomous and controllable. However, a global company is more willing to adjust the global industrial chain in accordance with the law of value and competition mechanism, and is more inclined to consider cost scale, efficiency and benefit. For example, the U.S. sanctions on Huawei have expired in more than a year. Recently, it has been extended for 90 days. Almost all of those Huawei’s suppliers and the more than 30 U.S. companies mentioned just now demand that the U.S. relax and postpone sanctions because they are doing business. For this kind of security and efficiency game between the government and the enterprise, it determines the prospects of the future global industrial chain reconstruction. There is only one thing that may be acceptable to both parties, and that is the rule! Only rule factors can be accepted by enterprises as well as by the government. Therefore, the restructuring of the global industrial chain will profoundly affect China's economy and the development of China's industrial chain. The restructuring of the global industrial chain layout will be safety-oriented.

Global industrial chain, focusing on restructuring rules
The second aspect is the reconstruction of the global industrial chain. In the past, we paid attention to the reconstruction of the layout, but not enough attention to the reconstruction of the rules. In fact, the reconstruction of the global industrial chain is not only reflected in the adjustment of the geographical structure, but also in the competition rules. The reconstruction aspect. Since the Sino-US trade war, the US, Europe and Japan have conducted seven dialogues on this future rule, and they have reached an agreement. Some of them have already been proposed with the Chinese side. For example, market access requires reciprocal opening, and China will expand its opening by then; intellectual property rights require to stop theft and forced transfer; competition-neutral elements obtain access permits, etc. These are actually Not only does it require compliance with enterprises, it also requires our government’s actions to be compliant. In addition, he reads the central government documents in these aspects. Wang Zhile believes that our Chinese government basically accepts them. For example, they are competitively neutral. In order to obtain access permits to operate government procurement and bidding, it is necessary to achieve equal treatment of enterprises of all types of ownership. Premier Keqiang wrote this in his government work report last year. On the other hand, the company’s compliance requirements, comprehensive corporate compliance, anti-corruption social responsibility, and environmental responsibility. Wang Zhile feels that such a rule requirement can be explored and is acceptable. This will be a change in the development of the global industrial chain in the future. Wang Zhile saw that the Politburo Standing Committee proposed to upgrade China's industrial chain. In fact, it was actually improved. Wang Zhile believed that not only the hardware upgrade but also the soft power, which has been a weakness of our company for so many years.

How do companies respond
The next question is how companies respond. Wang Zhile believes that Chinese companies lag behind global companies for about ten years in the first two stages of global industrial chain development. In 1992, global companies began to build global industrial chains; while Chinese companies truly It began to be more consciously integrated into the global industrial chain on a large scale after joining the WTO in 2002. When the Siemens violations in 2008 caused large global companies to attach great importance to compliance and strengthen compliance management, Chinese companies really began to pay attention to compliance, which was about 2018, another ten years later. After the Sino-US trade war started and ZTE was punished for the second time, as for the safety of the industrial chain, Chinese companies are no later than Western companies. When Wang Zhile was studying multinational companies, in 2006, there was a big domestic discussion about foreign mergers and acquisitions on Chinese companies. Everyone attaches great importance to the issue of industrial safety, so on this issue, even when some of our questions came up earlier than abroad, we lag behind in the first two. Over the years, Chinese companies have developed very fast. Last year, 119 Chinese companies were included in the list of the world's 500 largest companies (not counting Taiwanese companies here), while the United States only had 121. The number or scale of China's enterprise development is already comparable to that of the United States. However, our company lacks the competitiveness of compliance. For example, in 2018, four Chinese companies were removed from the ranking due to non-compliance, Anbang, Huaxin, HNA, and Wanda. Recently, a Chinese company listed in the United States, which has attracted global attention, has fraudulently reported to Ruixing Finance, and the Chinese government has made an unprecedented investigation by the China Securities Regulatory Commission to cooperate with the United States. What is the problem with it? The United States has attached great importance to such serious violations by Chinese companies, so the chairman of the US Securities Regulatory Commission even appealed to American investors not to buy the shares of more than 300 Chinese companies listed in the United States. Therefore, if we do not comply with the regulations, the global industrial chain of the company may be cut off in the global financial chain.

So why do Chinese companies have this problem? The main reason is that we only paid attention to the development of this hard power and paid little attention to the development of soft power in the development of this global industrial chain. Our Chinese companies really started to go global after 2008. It is clear from the statistics that China's foreign investment was more than 20 billion US dollars in 2007, and it more than doubled in 2008. We began to go global on a large scale, but just when the Siemens case occurred in 2008, when the global industrial chain of global enterprises paid great attention to compliance, our company went out, and we often do not know where the new international rules are! Therefore, the issue of ZTE being caught, and the Americans' pursuit of Huawei is also about 2010. Therefore, we recently investigated the compliance issues encountered by Chinese companies overseas. There are ten important manifestations: business corruption, project fraud, many Chinese companies discounting, smuggling, tax evasion, financial fraud, export control, intellectual property data protection, and social responsibility. , Involving national security, these are the problems we have encountered in recent years. Generally speaking, Chinese companies have developed rapidly over the years, some are integrated into the global industrial chain, and some have led an investment in an industrial chain. But these companies often focus on competition, but lack compliance awareness. Therefore, in this round of global suppression, although there are many political factors and unfairness, it is true that some of our companies are not familiar with international rules and fail to abide by the rules. This domestic company has many problems. We have introduced the mechanism of market competition and market economy, but we cannot introduce and attach great importance to the rules of market competition at the same time. Our company will not go far and will not do much, because we often lack a culture of integrity and compliance. If we want to rebuild after this round of the epidemic, we will integrate into this global value chain reconstruction. If we can tackle this compliance issue, Chinese companies may take the initiative in the future restructuring of the global industrial chain, and the industrial chain in China is at least high-level. Enterprises should change the state of emphasizing competition and despising rules in the past.

The government is soberly facing the restructuring of the industrial chain
For the Chinese government, it should seize the opportunity to restructure the global industrial chain. We have done a good job in integrating into the global industrial chain some time ago, and the competition mechanism has played very well. Chinese companies have indeed developed rapidly after entering the market. All industrial chains have gathered in China, and China has become a global factory. However, after the start of this round of the Sino-US trade war, after the new crown pneumonia epidemic, the practices of developed countries, especially when the industrial chain was restructured, our government Wang Zhile believes that there should be some clear understanding. Wang Zhile saw some documents including the construction of the international market mechanism by the Central Committee of the Communist Party of China and the State Council on May 11, and the industrial chain issues mentioned on the Standing Committee on May 14. Wang Zhile believed that the central government was very clear.

First of all, we must build and enhance the global industrial chain as our core interest, because the upstream R&D design of the industrial chain, if we really break away from the global industrial chain, things will be very troublesome. Our technology can only be compared for a long time, that is, there are many tracking and imitations, and innovation is difficult to surpass. Second, the energy and minerals that we lack may have to be controlled. In the end, our market is due to a large amount of Chinese exports, with an annual export of 16 trillion yuan. This requires a lot of employment. If these problems are not resolved, It is certainly not possible to break away from the global industrial chain. Integration into the global industrial chain is three levels. The first is in accordance with economic laws; the second is to emphasize compliance with international rules; the third is security and values. Among these three, the last question is the most difficult, because the US’s security concept and US values ??are in many conflicts with us. However, it can be discussed at the level of rules, so Wang Zhile believes that the next paragraph should not be separated from the global industrial chain and be integrated with the global industrial chain as much as possible. We should play games with developed countries at the level of rules. When the second problem emerged in 2018, Premier Keqiang gave a very good instruction. Later, the Development and Reform Commission led seven ministries and commissions to issue the 'Guidelines for the Compliance Management of Chinese Enterprises Overseas Operations', and the SASAC issued the ' Guidelines for Compliance Management of Central Enterprises.

General Secretary Xi Jinping attaches great importance to compliance issues. He emphasized the need to operate legally and compliantly on the Belt and Road issue. In particular, he proposed that operations should be conducted in accordance with generally accepted international rules and standards, and he made a very important point. , Which means that enterprises are required to improve their competitiveness in legal compliance and form more world-class enterprises with global competitiveness. Wang Zhile feels that this idea can be used to build a world-class industrial chain.

Write at the back
To be honest, the lack of compliance awareness of enterprises is due to the general lack of compliance awareness of the people. For example, Chinese companies generally lack the awareness of intellectual property rights and take plagiarism and imitation for granted, and they deserve it. There is a comment that since the 'Six Walnuts' drink brand was launched, 'Seven Walnuts', 'Eight Walnuts' and 'Nine Walnuts' appeared in a blink of an eye. Finally, a 'All Walnuts' came out. Make people dumbfounded. Foreign computer operating systems are charged for use. We think it’s expensive, and we think how cool it is to use it for free. So if your operating system is called 'sorghum rice', mine is Dare to call it 'sorghum flower seed'. After you use it, your plan to charge you will be wiped out. Faced with the advancement of intellectual property commitments, the collective unconsciousness of the Chinese people really needs to be thoroughly reviewed and eradicated. Otherwise, faced with the mentality of Du Fu, a foreign industrial chain cooperator, “to endure the other side as a thief, openly embracing the grass and making a noise,” facing others, “Guan Ning cuts off the seat” and “vowed to go to you.” 'The determination, we will lose a lot of market. Which is more important, you will make accurate judgments after understanding the overall economic situation.
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