Over the years, people are talking about the “Made in China” products flooding the western market. But most of people also have an impression on “Made in China” as stereotype, cheap, roughly made, even fake things. Although driven by profit, some Chinese products are indeed cheap, roughly made, and sometimes even fake. But they are getting better. Ten years ago, I wouldn’t even consider to buy a mobile phone from a Chinese brand. But nowadays, I am using a Chinese smartphone and I will probably only by Chinese ones in the future, because the one I am using is perfect.
In this list, we list the top 10 private companies in China This is not a Forbes or Fortune list. To find those lists, please go to Forbes or Fortune websites. To avoid boringness, we mainly focus on consumer product sector. Therefore, you will not find all those banks, oil, energy or telecom monopolies, but something you may be able to see or buy some day. The order of this list is mainly based on the revenue, with also considering the influence outside China.
The term “Private Company” has a different meaning in this article. Since in the western world, private companies usually are the companies which are not listed in stock market. But in China, they often refer to companies which are not state-owned or state-holding. There is a special phrase in China called “Civilian-Run Enterprises” describing them. But to be honest, it will just causemore confusion. I mean, the other companies are not exactly combatant run.
The number 10 on our list is the sport brand Li-Ning created by Li Ning, a gymnast and Olympic gold medalist. People outside China barely know his name, because he is no Khorkina. But in 1984, Los Angeles, he did win his first Olympic gold medal, and his second, and his third, not to mention other two silver medals and a bronze one. Be aware of that before 1984, China had never won anything from Olympic Games. You can imagine how popular he was in China back then. After retiring, he took his athletic spirit and fame in to entrepreneurship.
In 1990, a company named after himself was established. Nowadays, the annual turnover of this company is over a billion dollars. Its jerseys and shoes are sold in many countries. A memorable moment is in 2008 Beijing Olympic Games, Spanish basketball team wore jerseys made by Li-Ning. Sadly, the Chinese team were wearing Nike. If the Spanish team is not enough for you, you’d better believe Dwyane Wade. He signed up with Li-Ning in 2012.
PS. Remember the “flying” guy who ignited the torch in the opening ceremony of Beijing Olympic Games? That was Li Ning himself. Wonder how many CEO can do that.
In contrary to the common perception of Chinese companies being non-innovative, BYD is all about innovation. Founded in 1995, the name BYD is an abbreviation of “Build Your Dream”.
It started as a battery maker and extended their business into automotive in 2002. Now they are selling half a million cars in China every year and also the second largest rechargeable battery maker in the world (the largest one is Panasonic). The most famous product of theirs is the lithium iron phosphate battery. Comparing to the conventional lead–acid battery, it is much more efficient, long-lasting and safer. If you have a hybrid car, you’ll notice, the car battery to start the engine is different from the one powers the car. This is not the case in BYD hybrids. They managed to use only one battery. They also made the car so smart, that when it detects the battery level is low, it starts the engine and power itself up. Therefore, you will never need a jump start, as long as there is some fuel left in the tank. Moreover, BYD built a very successful city bus K9, which is purely battery-powered. This bus has already been globally deployed.
ZTE started as a state-owned company, Zhongxing Semiconductors, in 1985. Later in 1993, it was privatized. Right after the privatization, it started its global deployment. In past 20 years, ZTE has extended its branches to over 140 countries. Currently, it is the 5th largest telecommunication equipment vendor and 4th mobile phone maker.
Like all its competitors in telecommunication industry, ZTE put a lot of effort in technology innovation. One thirds of its employees are doing research and development. The outcome is staggering. According to a recent report from World Intellectual Property Organization, in 2013 alone, ZTE filed 2309 patterns, which put it in the second place in the number of pattern applications worldwide. Yet we have another interesting number. ZTE is planning to launch around 30 different smartphones, all feature with 4G, in 2014. Ambitious enough?
In 1968, when whole China was in the Cultural Revolution, someone spent 5000 RMB to build a factory producing bottle caps. Later, they start to produce mechanical fans, and eventually air conditioners. They also had a new name for the company, Midea. In 2013, the total asset of Midea is more than 97,000,000,000 RMB.
If someone reading this article can build a time machine in the future, please go back to year 1968, and invest all your money in that nameless bottle cap factory. It will make you rich. Other than a lot of zeros in their asset, they produce massive amount of white goods sold into many countries. I have seen air conditioners of Midea in Germany, where they are barely used for climate reason. Midea now also has production bases in Vietnam and Belarus. One of the keys to their success is the consistent investment of 3% of the revenue in the R&D section.
“American made… Chinese owned”, this is the title of an article in the Fortune Magazine, when the Americans found out Chinese are building factories in their homeland. It was an awkward moment, when they realized it was cheaper to produce certain things in the US than in China. In fact, Haier was the very first Chinese company to build a factory in the US back in 2000. With the world’s largest market share of 7.8%, Haier is undoubtedly the most successful home appliance maker. Products of Haier dominate markets in China and Southeast Asia. You can also find them from major distributors across the US and Europe.
Enough for the refrigerators and air conditioners. Now it is time for some heavy stuff, literally. Sany is China’s No. 1 heavy equipment maker. About the products, let’s say they sell crawler cranes and excavators in Germany. I consider this activity the same as selling leather shoes to Italians or AK47 to Russians.
When the American heroes are saving the world, in their movies, machines from Sany are doing the real deal. In 2011, after the Fukushima nuclear disaster, the Japanese asked Sany for immediate help. And Sany gave them a million-dollar truck-mounted concrete pump with 62 meter long boom, for free. Half a year later, Sany made a new world recorder by building an astonishing 86 meter model, only this time, they did not give it to the Japanese. If one day they say they will build a transformer to fight the aliens, I will believe them.
Have you ever heard of Geely? It is not surprising, if you haven’t. But have you ever heard of Volvo? If yes, then you have at least heard of a subsidiary of Geely. And if you have been to London, you must have seen the iconic taxis. Please don’t be surprised when I tell you that they are also from Geely.
Many Chinese know a famous quote from the founder of Geely,”Cars are no big deal. They are just 4 wheels and 2 couches in an iron shell.” In the first a few years, cars made by Geely were no better than what they claimed. However, they did have their advantages, perfect marketing strategies. A good example is the Geely Beauty Leopard (BL), which was produced between 2003 and 2006.
Can you imagine a brand new sport coupe with less than 70 thousand RMB (around 10 thousand USD at the time)? It is even cheaper than a Ford Fiesta or VW Polo. Although with a tiny 1.3L Toyota engine, it differs quite a bit from people’s impression about sport coupes, that car was an excellent instrument for redneck dudes to pick up girls in the next village. It made world record too, with the first ever onboard karaoke machine. Geely even proudly announced that this car has become a permanent collection of the Chinese National Museum. The only problem is, when I was in the museum, I saw the car in the corner of the staircase, the only thing other than that car, on the same floor, was the men’s room. Of course this trivia did not affect the selling of the Geely BL.
The point I am trying to make is, they knew what they were doing, and they still do. Many people in Europe believe the Volvo deal is an example of the cunning Swedes selling crap to rich Chinese, who does not know where to put the money. In my eyes, what Geely really bought was not a car brand known for being safe and dull, but a ticket to enter Europe.
3. Weiqiao Pioneering
Weiqiao Pioneering is somehow one of the typical Chinese firms, which are very good at keeping a low profile. There is a saying in China called “shut up and earn money (闷声发大财)”. The people of Weiqiao are the masters of earning money without getting noticed. Even if you ask a Chinese about this company, you’ll probably get the answer “Never heard of it.” But, for the first time here, I have to quote something from the Fortune Magazine, Weiqiao ranked 388 on the Global 500 list with a revenue of 29560 million USD, higher than Geely’s place at 447 with 24550 million USD revenue. As our number 3. This company produces textile clothing, metal, chemical even power plants. 40% of its clothing is exported to Japan and Korea, 50% is to the US and Europe. Moreover, I dare to presume that Weiqiao has made another world record by converting more than150,000 farmers into factory workers.
The original name of Lenovo was “Legend”. The story of Lenovo is a legend. Mr. Liu Chuanzhi, the creator of Lenovo, was an engineer in the Chinese Academy of Science. In 1980s, all the research institute in China were suffering from poverty. Mr. Liu wanted to change that. In 1984, at age 40, a small group of engineers led by Mr. Liu founded the company which later became Lenovo. It was an era, when most of the China’s economy were still planned instead of free market. When they were buying raw material, they had two options. One was to apply import license, which could take a thousand years. The other was to buy smuggled things. Liu took the third one. He bought the smuggled material, but paid with full price including tax, and thus put the company in the position of a victim not an accomplice. Though this action may seem viperous, but it did give this company a chance to live.
Nowadays, while Lenovo stays strong, the old policies to confine private business exist no more. After China’s economy drove into the fast lane, Lenovo also picked up speed. In 2005, Lenovo bought IBM PC, and became the third largest PC maker. Eight years later, they became the largest one with a 40% market share of Windows computers. In 2010, they launched mobile devices, and after taking over Motorola Mobility recently, they will become the third largest smartphone maker.
Once an employee of Huawei told me that the number of oversea offices of Huawei is larger than the number of embassies and consulates of China. I believe him. A few microstates may be willing to prostitute themselves for some New Taiwan Dollars, but their people still need to make phone calls. In fact, people of Huawei travel so frequently to other countries that in many recent plane crashes (KQ507, AF447, MH370, etc.), there are Huawei people on board. The founder of Huawei, Mr. Ren Zhengfei served in a research unit of the People’s Liberation Army. He describes the corporate culture of Huawei as the spirit of wolf packs. Working in this company, you always have to fight your way out. After the Iraq war, when every western company is pulling its people out of that area, Huawei was sending people in, with a great compensation. You can earn 1 million RMB in 2 years, by working with Huawei in Iraq. It is dangerous of course, rumor says they keep five Kalashnikovs as company property just in case. Luckily, there has been no report of casualties. And the dominance of Huawei in telecom market of Iraq is almost exclusive. Similar stories happened in many countries.
I had the privilege to visit the global headquarter of Huawei in Shenzhen, 2012. Arriving at the campus at 9 am, you can see literally thousands of young people, all working with the same company, crossing streets to get to their offices. My contact told me that those were R&D people, the factory workers came one hour earlier. There was a small museum to showcase their history and latest developments, real time face recognition security cameras, a long-distance wireless connected lecture room, solar powered cellular base stations, fastest smartphones in the world and many many others. Nowadays, Huawei is the second largest core network equipment provider, and check out the list of companies it has overtaken: Nortel, Motorola, Cisco, Nokia-Siemens, Alcatel-Lucent…
Huawei is also the fifth largest smartphone maker. Remember in the beginning, I said my perfect smartphone is from China? It is from Huawei.