Chapter 14 Chapter 13 Chinese Enterprises: From Tuba Road to Regular Army

I suggest that state-owned enterprises should pay more dividends and use part of the dividends to supplement social security funds.Is there a way to reduce this disguised business operating cost? Bai Chongen: I think there are two ways.First of all, social security is a necessary welfare policy and cannot be completely abolished, but there is a "Laffer curve" in economics, which means that too high a tax rate will have many effects: First, people will have a stronger tendency to avoid taxes, and those who pay taxes will Second, taxation will bring about distortions. Once too many taxes are collected, economic activities will be reduced, and the final tax paid will be reduced. The significance of the "Laffer Curve" is that the total tax revenue does not mean that the higher the tax rate, the higher the income. If the tax rate reaches a certain level, the income will decrease instead, because fewer people pay taxes.Therefore, the relationship between total tax and tax rate is an "inverted U-shaped" relationship.China's social security is like this. On the one hand, companies try to avoid paying fees and try not to participate in social security. Once the tax rate is reduced, it may increase the income of the social security fund, because the number of companies that evade taxes will decrease; on the other hand, such a high social security fee will be reduced. employment because labor costs are rising.From this, business owners will feel that they will never find two people for what one person can do, and reduce the number of personnel as much as possible.

With fewer jobs, fewer people pay taxes, creating a distortion in the labor market that creates an imbalance between supply and demand.I am currently doing quantitative research in this area, and I have a solution to the problem. I suggest that state-owned enterprises should pay more dividends, and use part of the dividends to supplement social security funds.First of all, from the perspective of efficiency, instead of consuming the profits of state-owned enterprises as they are now, or investing in some useless places, it is better to resupply the laborers.Of course, some people will say that after the transfer of dividends, the company will have no money to invest and no money to develop.It doesn't matter, state-owned enterprises can go to the bank to borrow money if they run out of money, and it is not difficult for large enterprises to get loans.As long as the investment project is good and profitable, the bank will support it, and the bank will restrict the investment.If state-owned enterprises do not pay dividends, they will have a lot of surplus funds to invest even if the investment does not make money.But after the dividends are distributed, these state-owned enterprises must borrow money from the bank for investment, and the effect is different. The bank will strictly check the feasibility of the investment project, so that external constraints will make its investment more effective.Secondly, from a fair point of view, most state-owned enterprises are monopolistic, and the profits of monopoly should be shared by all people participating in social security.Now most of the retirees with social insurance are retired employees of former state-owned enterprises. They have worked hard for the state-owned enterprises all their lives, and they should be denied the treatment they deserve.

Dividends from state-owned enterprises subsidize social security funds. On the one hand, it can curb blind investment and improve the economic structure; on the other hand, it leaves more labor income for consumers, increasing disposable income and consumption.In this way, the relationship between consumption and investment can be straightened out.This financial crisis has given us a very clear signal, that is, it is impossible to maintain the growth rate by export, even if there is no economic crisis, it will not work.Now we have to rely on domestic investment and consumption. However, investment is overheated and we can only hope for consumption.Where does consumption come from?It is the reduction of social security contributions, and then the dividends of state-owned enterprises.We did a study on the primary distribution, that is, the distribution of income between labor income and capital income.According to statistics, China's labor income ratio has declined rapidly. Since 1995, it has dropped by about 12%, of which 5.25% occurred between 2003 and 2004, due to changes in statistical methods. Before 2003, the income of self-employed persons was originally counted as labor income. After the 2004 economic census, it was divided into labor income and capital income.There are 40 million self-employed persons in our country. If the average income per person is 30,000 yuan, that would be 1.2 trillion yuan. Part of the income accounting for 4% of the national income will become capital income, and labor income will decrease by 4%.

A decline of about 6% is produced, and the remaining 6% is the reason for structural adjustment.The transformation is reflected in the reduction of the share of agriculture and the increase of the tertiary industry, which makes the proportion of labor income begin to change.This is an inevitable stage in the process of economic development and a favorable factor in economic development. What is the trend of Chinese enterprises?In response to the dilemma of domestic demand, Professor Qin Hui of Tsinghua University mentioned the paradox of value chain and profit rate.The origin is that at an economic seminar in Dongguan a few years ago, Mr. Wu Jinglian said: "my country's export companies are OEMs for foreign brand companies. A pair of shoes is worth 10 US dollars, but they are sold for more than 90 US dollars in the US terminal market. We only get the value. 12% of the chain, it’s too bad.” Some OEM shoe-making bosses questioned their profit margins based on their personal experience: “Foreign brand owners may not be easy to make money, and the profit margin of brand development companies is only 1%. It’s not easy to get, but our OEM’s profit margin is 20%.” What’s your opinion on this?

Bai Chongen: Shi Zhengrong put forward the concept of a "smiling curve", which means that the two ends of the value chain are the scientific research link and the sales link, and the middle is the manufacturing link.Western developed countries occupy the market for scientific research and marketing, while developing countries such as China are in the middle of the manufacturing process.Many people believe that the profitability of both ends is high, and hope that Chinese manufacturing companies will also upgrade to enter the two ends of the market. In my opinion, we should still stick to the market orientation. Enterprises can make money at both ends. If there is no distortion in the economy, they will go to both ends by themselves.What the bosses in Dongguan you mentioned are also right, as long as they make money in the middle.It is not easy to do both ends. Although you earn a lot, you also invest a lot. For example, marketing requires so many advertisements to open channels, so not only how much money you earn, but also how much money you invest.On the one hand, I advocate allowing enterprises to make independent decisions based on market demand; on the other hand, there are also problems, such as environmental pollution.If the pollution caused by manufacturing enterprises is not borne by enterprises, but by the whole society, this will reduce the cost of manufacturing.At present, there is a saying called "socialization of costs, individualization of profits", which has caused market distortions and over-expansion of the manufacturing industry.At this time, I think that manufacturing should not be restricted, but enterprises should bear the cost of pollution, and the benefits that should be obtained should be reflected in decision makers, and the costs that should be paid should also be reflected in decision makers.To sum up, one point is: as long as the concept is correct, all problems will naturally follow the path of healthy development.Of particular note is the price of energy.Everyone always blames the manufacturing industry for consuming too much energy and resources, but as long as you raise the price, the company will become far-sighted, and many structural problems will become reasonable.

In addition, Mr. Wu Jinglian also has another point of view, which means that the two-end market does not make money at the beginning, but you have a learning process, and after you mature gradually, profits will become natural.If companies have a long-term vision, they can also consider this issue. Once some companies start to do both ends, other companies will follow suit. This creates a kind of social value, and its development should be encouraged.Generally speaking, this issue is not a question of right and wrong. First of all, we must straighten out prices and taxes, enjoy the benefits that should be enjoyed, and bear the costs that should be borne, and then appropriately give certain incentive policies to both ends.There is another angle to the phenomenon mentioned by Professor Qin Hui: Although the Americans take 88% of the value chain, the profits are distributed in logistics, wholesale, sales, planning, market research, commodity inspection, etc. A large number of practitioners in the link share together.This is the reason why the United States has such a strong consumption in addition to the hegemony of the dollar.Although China's profit rate is only 12%, its profits are highly concentrated.This is a question of social distribution.For example, environmental tax and resource tax are also being considered by the government. The general direction is correct, but the reform of fuel prices and taxation at the beginning of the year seems to have been abandoned halfway.At that time, I hoped to follow the market and follow the prices in the international market. As a result, the tax reform was implemented, but the price did not form a mechanism in the end.Of course, our current economic situation is not good and we cannot increase production costs, but from the perspective of structural adjustment, the cost will go up one day, so it is better to prepare earlier.

"800 million shirts are exchanged for one Euro 380 passenger plane." It is understood that the State Council is organizing relevant departments to formulate two major plans: one is the ten-point plan for expanding domestic demand, and the other is the adjustment and revitalization plan for ten important industries.It is rumored that the top ten industries include steel, automobiles, shipbuilding, petrochemicals, light industry, textiles, non-ferrous metals, equipment manufacturing, and electronic information.Which industries do you think the government needs to support the most? Wei Jie: Looking at the ten industries, the first is to revitalize equipment manufacturing.Equipment manufacturing refers to all kinds of equipment and machine tools. Our product manufacturing is very developed now, but equipment manufacturing is very backward.100% of China's optical fiber manufacturing equipment, 100% of comprehensive cable manufacturing equipment, 85% of petrochemical equipment, and 75% of digital digital machine tools are imported.The status quo in China is actually a country with a large demand for equipment, relying heavily on imports, which actually puts itself at the end of the manufacturing industry.Because the front end of the manufacturing industry is equipment manufacturing, and the end is product manufacturing. We are at the end of product manufacturing, which is equivalent to working for others.

This problem is actually a problem of structural adjustment. For example, domestic private enterprises are full of light industries such as textiles, clothing, leather shoes, food and so on. In fact, the profits in the international market are very low. In the words of Bo Xilai: "8 One hundred million shirts can be exchanged for one Euro380 passenger plane." Therefore, we call for putting equipment manufacturing first, so as to drive the entire technological innovation.Equipment manufacturing is the material basis of social technological innovation. Only with equipment manufacturing can steel and automobiles have real competitiveness and real development.The second industry that needs to be supported should be the resource industry, that is, energy and raw materials.Resource industries should be expanded, especially for new resources, such as new energy and new materials.This is exactly what the government wants to do well. It is a strategic industry that involves national security.Others can be released, because the market can solve them.With the development of these two industries, technological innovation can come up, and then other platforms are given to enterprises, and they can adjust themselves.Don't engage in ten, grasping at once is equivalent to not grasping, and choose the main ones.

Structurally, the government cannot become the main body of investment. It mainly uses fiscal policies to guide the industry to adjust its direction.Don't take the so-called industrial upgrading as a government action, it should be a market action.In terms of product manufacturing, the world market chooses to produce in China mainly because of the scale. If there is scale, the cost will be cheaper. It is estimated that exports will not drop much, and China is still the best choice.In my opinion, if there is a market, don't overemphasize when the industry will upgrade. The market can adjust itself.Adjusting the structure does not mean not exporting. Export orientation and export are two different things.In terms of future manufacturing, China will continue to be a major producer of products in the world, and its status as the world's factory will be difficult to change for a while.On the other hand, it is necessary to speed up the process of equipment manufacturing.Now the largest equipment manufacturing country is Europe.The United States is basically the financial industry and the service industry. The service industry is mainly product design and product development, which is in the high-end field of product production.Looking around the world, the big manufacturing countries are nothing more than Japan, Germany and China. Germany and Japan are big countries in equipment manufacturing (high-end manufacturing), and China is a big country in product manufacturing (end manufacturing).There is still a lot of room for the development of China's manufacturing industry.

Chinese enterprises must be good hunters in China's large consumer market.Back to the level of economic entities and enterprises.Since the financial crisis, the U.S. economic structure is undergoing a major adjustment. What about China's huge manufacturing capacity and huge production capacity?How to move from a "big producer" to a "big consumer"? Xia Bin: You can look at this issue in this way.First, we should keep exports as much as possible and increase exports as much as possible.We are now a little out of balance in the three major proportions of investment, consumption and net exports.This is a reflection of the current world economic structure, and of course it is also the direction in which we are committed to adjustment.However, from the perspective of the history of the world economy, from a long-term perspective, and from the perspective of China's rise, our current net export needs to be adjusted relative to the three major ratios, but it does not mean that the absolute amount needs to be reduced.China is rising, China is catching up, and the absolute amount of "Made in China" will increase greatly.China's export in 2009 may be the first in the world.Now the three major proportions are out of balance and need to be adjusted.But we must be clear that the proportion of my country's exports to global exports is only 7% to 8%, and it was about 7% in 2007.While the British economy was at its peak, British exports accounted for 18.9% of global exports in 1870, nearly 20%.At its peak, the United States accounted for 16.8% of global exports in 1950.

That is to say, there is a problem with the unbalanced ratio of our investment, consumption, and net export; but in terms of the rise of China and the position of Chinese manufacturing in the world, compared with the historical peaks of Britain and the United States, we are still far behind Far.Second, judging from the general trend, in the next 10 or 20 years, the "BRIC" and Asian economies will further maintain rapid growth, and the center of gravity of the world economy will move eastward.Our manufacturing, logistics, sales, product design, including global mergers, we must plan ahead, seize the opportunity, follow the trend of world economic development, and move eastward, to ASEAN, Asia, and to Africa and Latin American countries.Entrepreneurs should look beyond the United States, the European Union and Japan.These countries need to be watched, but in the context of changes in the global economic landscape, we must take precautions and take a step first.Third, I believe what I said when the crisis broke out last year, that is, the financial crisis in the United States is both a bad thing and a good thing for China, and it has brought two great opportunities to China.Because of the imbalance in the global economy, the original economic structure of various countries cannot go on, and the structure must be adjusted. Judging from the current situation, the Chinese government is facing many difficulties and is stepping up structural adjustments.However, I believe that in 5 to 8 years, one of the two major opportunities is that China will gradually become a big consumer country.Now we are adjusting the structure very painfully. After three to five years, the consumption power of residents will grow faster than today.Therefore, China's business community should keep their eyes open and be a good "hunter" of China's large consumer market. In the face of the ever-changing Chinese consumer groups, how to study and learn from how the consumption of residents in developed countries has come about? Xia Bin: I think, in this regard, our entrepreneurs can consider from five aspects.One is to develop new products and accelerate the upgrading of consumer goods, including high-end leisure and luxury consumption.The second is to follow the general trend of energy conservation and environmental protection, innovate various energy-saving and environmental protection consumer products, and occupy the commanding heights of consumer product competitiveness in the next few decades.The third is to carefully study the consumption characteristics of China's large rural market and the hundreds of millions of migrant workers who are planning to continue to move to cities for food, clothing, housing, and transportation, and grasp the development of China's popular basic consumer goods.The fourth is to carefully observe and study the derivative consumption of main consumption around the main consumption content, such as housing and automobiles.Entrepreneurs are much more proficient than me in this regard, I just clicked on it. For example, home decoration around the house, daily necessities, guide maps on the car, and supporting field trips, supplies, etc.The fifth is to keep innovating and developing new consumption content in line with the rising per capita income level of China and the trend of China's aging population, which is consumption content that some people have not thought of now, such as leisure, medical health care, elderly care, and children's intellectual development , Housekeeping services with different contents, education and cultivation, etc.I believe that as long as we follow the global trend, seize the opportunity of global structural adjustment, seize the opportunity of the rise of China's large consumer market, use our brains, and work hard, the halo above the Chinese business community is not just the halo of "Made in China". , but should produce more halos of "China service", "world office" and "Chinese market pioneer". OEMs will suffer a lot in the future.Today, when the crisis is spreading, where is China's brand strategy? Ai Feng: I have a saying in the theory of "five pairs of thinking" that "the above is against the bottom", which mainly states that now is a good time to develop China's independent brands, so where is the "opportunity" of the crisis?I think one of them is that China's independent brands cannot be separated from China, and cannot be separated from national brands. As long as the national brand is improved, it is equal to the improvement of independent brands.In fact, this financial crisis has improved us. The growth rate of developed countries is negative, while China's growth rate is still around 8%. In addition to the marketing of the Olympic Games, the international image is increasing day by day.On the other hand, the financial crisis taught us a lesson, including brand lessons.Three years ago, I went to Dongguan to give a lecture. I said: "One is happy, one is worried, and the other is worried" about your economy.The joy is that the processing industry is well developed, which can be said to be the manufacturing center of the world. The worry and worry is that you lack brands, most of which are OEMs, and one day you will suffer a lot in the future because you have no autonomy.But the situation was very good at that time, and many people disagreed. However, it seems that companies without brands are indeed deeply troubled by the crisis.On the contrary, brand enterprises suffered little damage, and a considerable number of enterprises increased their exports instead.I think the biggest education for people in this crisis is "market education", which makes people realize in a timely manner that there is no way out without branding.The central government organized experts and scholars from the eight major ministries and commissions to go to Guangdong for research, and asked for a brand expert by name, which shows that the top management attaches great importance to brand issues. We used to think that talking about brands was a fashionable topic, but now we may not be limited to shouting slogans, but also have to take real actions.Through this financial crisis, has the brand further improved in the national strategy? Ai Feng: I don't think we can talk about it yet.The 16th and 17th National Congress of the Communist Party of China, as well as central documents, clearly indicated the development of self-owned brands, but there is still a lack of a unified deployment and unified research on brand strategy.It turns out that brand issues are mainly under the jurisdiction of the Bureau of Quality Supervision, the Bureau of Industry and Commerce, and the Ministry of Commerce. Now, we urgently call for the establishment of an agency at the central government to coordinate everything. We still have a little flaw in this regard.As an enterprise, we must make up for our own weak links in going global. In the three links of R&D, manufacturing and sales, we are weak in R&D and sales, so we must focus on improvement.R&D may improve faster, and you can basically be self-reliant; but sales must deal with the world, and it is particularly difficult to have your say in developed countries. Their sales channels are already very mature, and it is difficult to squeeze in. Do vigorous exploration.For example, first develop some Chinese channels, which are integrated into the societies of various countries in the world, and then use the advantages of Chinese to connect with nationals of other countries.Now, due to the improvement of the quality of Chinese products, especially the improvement of China's status, enterprises are more motivated, and foreigners have begun to accept "Made in China". In fact, what is lacking is a feasible path.As a country, I think it is unreliable for the government to use a large amount of foreign exchange to buy US treasury bonds. It is recommended to consider some loans to enterprises, buy some mines and equity in foreign countries, and start some industries. The so-called "real versus virtual" is the concept.Don't "confront the virtual with the virtual". We are not the opponents of Europe and the United States when it comes to the virtual economy.Some city leading enterprises represent the regional image. Practice has proved that the development of each region is inseparable from local brands - "Haier" in Qingdao, "Changhong" in Mianyang, "Chunlan" in Taizhou, "Shuanghui" in Luohe, all of which show that brand enterprises have a strong influence on the local area. Economic development has a considerable leading role.In your opinion, what strategic significance does the brand have for the development of the regional economy? Ai Feng: Regarding the development of regional economy, I have a logic of "five sentences". The first sentence: "The development of a place depends on its market competitiveness." In the past, it was wrong to pursue a complete range of categories. The second sentence: "Market competitiveness depends on whether its economy is unique." It is differentiation. It has two connotations.The second is the irreplaceability of others, not the replacement of their humanity.For example, there are many milk companies in Inner Mongolia because it has grasslands. No matter how developed the coast is, there is no natural ecology of grasslands. This is the strongest competitiveness.For example, Guangdong has irreplaceable policies and irreplaceable mechanisms. If these two items are replaced, it can also have other irreplaceable features such as relying on its proximity to Hong Kong and Macau.Therefore, the local economy must find its own irreplaceability and develop its own irreplaceability, which avoids the Red Sea phenomenon. The third sentence: "Characteristics must form pillar industries and industrial clusters." That is, to form an industrial foundation and scale. The fourth sentence: "Pillar industries and industrial clusters must have leading enterprises." The fifth sentence: "What kind of enterprise can be a leading enterprise? It is a brand enterprise." Therefore, the development of a region ultimately depends on the status of brand enterprises. Many cities have proved this point. In some places, a single enterprise can drive the development of an industrial chain.Some city leading enterprises represent the regional image.For example, Changhong Color TV in Sichuan (Mianyang), Chery Automobile in Wuhu (Anhui), Changhe Suzuki in Jiangxi (Nanchang), Shuanghui Ham in Luohe (Henan)...without a brand, no matter how big a company is, it will be on its back. You once said, "If there is no brand, in the pattern of economic globalization, no matter how big your business is, it will be a lying economy, not an independent economy."So in the era of a new round of recovery of trade protectionism, how to implement the brand strategy and the strategy of going out?Obama also proposed to revitalize the US manufacturing industry, which is clearly an unfavorable signal for developing countries. Ai Feng: If I were Obama, I would do the same.Because the manufacturing industry in the United States has indeed fallen behind. It was already inferior to Japan in the 1970s. It was only after the development of the IT industry that it overtook Japan, but the manufacturing industry has not improved much. One-third of the U.S. market is still Japanese cars. How can GM not fail?As for the strategy of going out, I think we should adjust our thinking and transform the strategy from relying mainly on "advantage confrontation" to mainly relying on "advantage docking".Advantage confrontation means that my cost is low, so I will export at a low price, then others will block you and others will protect themselves.Although the superiority confrontation will exist for a long time, the export model based on this will certainly be difficult to carry the banner.The future strategy of going out will still rely on "advantage docking", that is, to combine my advantages with yours.For example, the energy-saving lamp industry in Hengdian, Zhejiang Province has achieved considerable development through the docking of advantages.The domestic advantage is low cost, and the foreign advantage is high technology. If the introduction of high technology is combined with the domestic low cost, then the product has an advantage abroad, which is high technology, and has an advantage domestically, that is, low cost.Foreigners can make money, and we can make money too, and we will definitely not be able to sell it completely at low cost.Furthermore, compared with the world's home appliance giants, Haier Group's biggest advantage is its service network in China, which no foreigner can do. Bai Yansong once asked Zhang Ruimin: "How do you use your advantage to compete with foreign countries?" Zhang Ruimin replied: "I want multinational companies to use my channel to sell their products, and then, in exchange for using their channels abroad to sell our products. .” Later, he signed an agreement with Japan’s Sanyo to adhere to this principle.This is the docking of advantages, a win-win situation rather than a monopoly, just like a marriage.I think "Made in China" going out must get rid of the previous promotional vocabulary of "entering the international market", which is too "wolf".At the 16th and 17th National Congress of the Communist Party of China, the central government proposed that international trade should achieve mutual benefit and win-win results.In my opinion, the strategy of going out must be combined with the strategy of docking advantages, which is more realistic.Otherwise, foreigners will think that Chinese products are to destroy other countries' industries, and going out is harming others. Why don't they protect them?Protectionism and protection are not the same concept. Every government in the world must pay attention to national interests, but this is not the same as nationalism.In the strategy of going out, we must focus on ourselves, but we must learn to empathize. In the 1990s, I organized and planned the "China Quality Tour" campaign, using various channels to maximize the role of news and public opinion supervision. We know that domestic manufacturing companies are still in the first stage, with heavy OEM and low added value of products, coupled with a new wave of trade protectionism, China's manufacturing is struggling.From today's point of view, regarding the quality issue, I think the main reason today is still a cultural issue.Of course, the quality problem we usually talk about is a process problem and a technical problem, but now it has become a cultural problem.Deng Xiaoping said: "Quality is the expression of a nation's quality." Quality is the quality of a nation and the embodiment of national culture.The biggest problem with Chinese national culture right now is eagerness for quick success.The cost is small, but the benefits are huge. Everyone wants to take shortcuts to make a fortune quickly. Cutting corners and materials, and fake and shoddy products have become a habit.In fact, the development of technology today is not just a technical issue, but has evolved into a cultural issue.I think the most important thing at the moment is to overcome the culture of quick success and instant benefit, so that we can go down in a down-to-earth way and use our intelligence to the right place.Therefore, brand building is not only an economic issue, but also a cultural issue.The situation in the United States is different from that in China. The United States is full of sons and daughters, who feel that they are great and the richest. This concept has gradually formed a culture, which is an excessive sense of superiority.We are just the opposite, with a sense of inferiority mixed with a mentality of eagerness for quick success.China's economic characteristics are "manufacturing big country, brand small country". In the entire profit structure, our manufacturing and research and development only account for 5% to 10% of the total profit. Many problems in the "small brand country" are worrying.The international "smile curve", that is, one commodity, three links.The three links refer to research and development, manufacturing and sales.Among them, the manufacturing link accounts for 5% of the total profits of the three links, and the maximum does not exceed 10%.R&D profits are high, sales profits are high, and the smile curve is high on both sides and low in the middle.Unfortunately, our country is in the middle.The price difference between it and other links is basically about 10 times.There are three problems involved in the brand small country: First, low efficiency.Because it accounts for a small proportion of total profits and mainly depends on quantity, the economic benefits of enterprises are not optimistic.The second is to affect the sustainable development of foreign trade.Even if there is no financial crisis, our foreign trade has already encountered great obstacles.The number of anti-dumping cases is increasing day by day, and it can be said to be trade protectionism, but this is related to the growth mode of China's foreign trade.Our original model was "incremental price reduction", that is, the total amount of exported goods is increasing, while the price of unit products is decreasing.In fact, this is also harmful to the importing country, and we do not take advantage of it ourselves.One cup earns 1 yuan, and ten cups may earn 5 yuan. It can be seen that this model is unsustainable.The best mode is that the export volume may not be too large, but the added value of commodities must be large.The third is that the OEM model is unstable.Even if there is no financial crisis, with the increase of wages, the cost of processing will increase day by day. In many emerging developing countries in the world, people's wages are lower than in China, and the progress of replacing China has been advanced, such as Vietnam and India.Therefore, the situation of small brand countries must change as soon as possible. Whether it is to deal with trade frictions or to stabilize future trade, it is an inevitable choice.Chinese entrepreneurs should learn to make more use of soft resources to make a fortune.What is the internal relationship between expanding domestic demand and brand strategy? Ai Feng: I think the main problem of expanding domestic demand is that it must be combined with changing the growth mode.If domestic demand is expanded to a large extent to cover up the transformation of the growth mode, the problems will still be serious. This is an obvious short-term behavior and will fall into a bigger bottleneck.The so-called growth mode in the past was extensive, consuming too many resources and energy, and causing too much pollution. We call it "three highs and two lows", that is, high input, high consumption, high emission, low output, and low benefit .Therefore, the focus of the transformation of the growth mode proposed by the central government is to concentrate resources on superior enterprises, and the real problem to be solved by the brand strategy is to concentrate resources and markets on superior enterprises, so that the market of those shoddy and low-level enterprises will continue to shrink, so that the The expansion of domestic demand and the transformation of the growth mode are realized simultaneously.At the same time, brand strategy can make more use of soft resources, that is, informational resources, including information, technology, culture, creativity, etc., to increase the cultural added value of products and brands.my country is a country with rich cultural resources, and this advantage can only be brought into play by implementing a brand strategy. I put forward a slogan: Chinese entrepreneurs should learn to make more use of soft resources to make a fortune.Now the "4 trillion" investment of the central government and the budget investment of various places, investing in infrastructure, I think it is still right.China is still a country in the middle of industrialization, which means that our infrastructure is not perfect, especially in some western and backward areas.If it is not feasible to invest in infrastructure when the economy is overheating, then prices will skyrocket. Therefore, the infrastructure that was developed during the Asian financial crisis in 1998 now seems to be based on long-term projects.Crisis is a dialectical concept. It is a "danger" to the overall economic situation and an "opportunity" to infrastructure construction.At this time, the central government's investment in infrastructure can boost GDP and balance prices, which will play a very positive role in China's long-term development and the coordinated development of various regions.The general public may not know much about infrastructure construction. In fact, about 30% of the investment will be converted into consumption funds. For example, if the railway invests 10 billion yuan, it may not be used by the railway department in the end. It will drive many industries and labor forces. After the final digestion , part of it is converted into consumption.Infrastructure is a big project, and it can only be attributed to large companies, and small companies must not be able to; but when the entire economy is driven, small and medium-sized enterprises will also benefit.In China in the mid-industrialization period, these things must be done; if the transportation is not developed in such a large country, it will be difficult for the economy to develop.A major factor in China's economic development is the coordinated development of the east, middle and west, and the integration as much as possible.