 Ladies and gentlemen, good morning. Welcome to this session, China's Evolving Business Context. It seems that the guests on the stage are quite influential. I very often went to the winter session at the World Economic Forum, and from time to time we saw the number of guests on the stage outnumbered the audience, but today we see such a big audience. So this session is focused on China's Evolving Business Context, a quite big title subject, but unfortunately we have only one hour, so we have to focus our discussions on Chinese businesses and the re-engineering of micro-governance structure of Chinese companies. Yesterday there was a closed-door session at which Premier Li Keqiang delivered a speech. During his speech he said, more than 10 years ago there were only less than scores of Chinese companies ranked among the top 500 companies in the world, but today there are more than a hundred Chinese companies in the name list of the top 500, so obviously Chinese companies have been developing quite successfully. And for those top 500 Chinese companies, most of them are state-owned enterprises. So this is the first message Premier Li Keqiang delivered to the audience. Second message of him is what should be the next step that China shall take to reform, particularly in terms of economic reforms. Premier Li Keqiang said, the most important focal point will be how to have a proper limit on the power of the state of the government and to give a bigger play to the market. SOEs play a very big part in the Chinese economy, for instance Chairman Fu Chengyu who represents SinoPak. His company is a typical example and also Madam Dong, her company Ge Li is also a state-owned enterprise. So the first question will be why China must have reform on state-owned enterprises and after that we will have free discussions. I was told to brief the audience of the meeting approach. I think this session is televised and if you're interested in this topics you are welcome to raise your questions on the internet and I will convey your questions to the four VIPs on the stage. So we have wireless terminals available for you to raise questions but first and foremost I will give the floor to the three gentlemen and one lady on the stage they all of them represent a very famous companies Madam Dong chairman chairperson Dong chairperson Dong Ming Zhu is chairperson of Greek electric appliances well-established and very respected brand in China and the company's history can be dated back to the 1980s. Second Madam Fu Chengyu chairman of China Petroleum and Chemical Corporation and his company is of course definitely one of the top 500 and the third VIP is Missed Klaus Kleinfeld chairman and CEO of Alcoa. Look at Mr. Kleinfeld he represents a very strong American business he has been trying to promote his company his company's products in the meeting room and the fourth gentleman is Mr. Mohamed from SAPIC also a very big and influential investment company. Okay I think lady first I will first invite Madam Dong to say a few words about why China must reform its SOEs in the international community people always see SOEs as a part of the government so when they look at SOEs they look at them with a quite a subtle and special perspective this is quite unique secondly SOE is something formed with very special historical reasons but as China is opening itself wider to the rest of the world it is of course necessary and natural for China to reform its SOEs to make the SO Chinese SOEs more adapted to international business community to allow them to manage themselves from a more internationalized perspective I think this is the most important reason okay Mr. Fu what's your thought why why do we have to restructure Chinese SOEs any serious problems with SOEs well when we are talking about this round of Chinese economic reform we need to think about what happened back in the early 1980s when China started the market-oriented reform at that time the entire economy was a hundred percent I mean the companies in China were a hundred percent state-owned enterprises there were none private companies in China so at that time people believe the advantage of China to compete is to restructure its economic institutions at that time China started to practice a mixed ownership of companies with the state ownership as the dominant structure and coupled with the cultivation of private companies and in the past three decades the SOEs survived the economic reform and prospered and also private companies survived and prospered we see bigger and bigger community of private companies and private entrepreneurs and they are the new opportunities the new vitality of the Chinese economy and they represent the competitiveness of China in a new era in late 1990s and also at the turn of the centuries Chinese SOEs it experienced a very painful process of restructuring and in about three years time many SOEs almost died but fortunately after a very painful process of market-oriented restructuring they survived flourished prospered and competed in the market and now they are much stronger than before and even in the international business community these Chinese large SOEs function and perform very well so this represents the power the economic power of China compared with the former Soviet Union the biggest difference of China is as follows in 1980s when the Soviet Union practiced economic reform the practice of Soviet Union was similar to what China did namely market-oriented reform however in China we had a mixed ownership with the state ownership as the dominance and the supplementation of private companies but the Soviet Union didn't do that so the outcome was quite different the Russian SOEs lost their competitiveness but at the same time we didn't see the formation of a very competitive private companies and private business people in Soviet Union now come back to China both Chinese SOEs and private companies are developing themselves SOEs have gone through the period of survival and the target in front of them is to improve the efficiency of themselves as well as the efficiency of the Chinese economy as a whole so both SOEs and private companies in China are very much committed to enhancing their core competence and in that process reform is definitely the pivotal to to make Chinese companies more market-oriented to reduce the influence of the administration on the market on the business community and in that process the key lies in governance restructuring corporate governance the improvement of the quality of assets and of Chinese companies so the purpose of the SOE reform is not to get rid of them from the market rather on the contrary we want to build them bigger and healthier and this is very clearly written in the document of the third plan of the 18 CPC Central Committee the purpose of Chinese economies that the purpose of the reform of the Chinese economy is to improve the governance structure and institutions of Chinese companies and make them modernized that's the fundamental goal and every discussion about SOE reform must be based on that fundamental guide line in the document so number one we need to maintain the status of state ownership as the dominant power in the Chinese economy SOEs must be more competitive more vital more dynamic and the key is to reduce a diminutive influence on them thank you very much Chairman Fu and Madam Dong Mr. Fu said that market orientation and de-administratization shall be the key of SOE reform but I what I want to ask you is how can we realize the goals of making SOEs more market-oriented and make SOEs less influenced by the government by the state it might be a little bit sensitive or difficult to you Madam Dong you when Premier Li Keqiang organized a business forum to solicit opinions from business people you said on that occasion something very interesting Mr. Li of Premier Li asked what the business community wants to have from the government any support and your answer is that we don't need any support from the government you just leave us alone and that's the biggest support for us okay Mr. Fu talked about the unique features of SOEs my company is to some extent a state-owned company but we run the company as a free private market-oriented company the other three the three gentlemen represents three top 500 companies but my company is not yet ranked as a top 500 but we are working on that we are close to the threshold but not yet in the club yet air condition is quite highly competitive market Mr. Fu his industry is quite monopolistic industry my industry is quite different so for industry like air conditioner what we really need is of environment for free competition instead of the support from the government what I want to see is that what we really need is to gain the market by using our state art state of art technology if we really rely on the government support and the administrative support from the government I don't think our enterprise can be developed in a system system ability way so we really need to think about the long term and the sustainability of our corporation if you look at the fortune 500 we can see many of the previous fortune 500 has existed from the club I so I don't think that becoming a fortune 500 is such prime importance to us I think what I really want to focus is that whether we can establish a long term sustainable corporation that's really what I want to focus if we want to talk about the reform and the reshuffling of the SOEs the focus is that we need to set up eternity of enterprise which is we can have a long live enterprise now we would like to move to the international perspective now mr. Klaus from alcohol alcohol in your view I mean how you have been dealing with the state on enterprise all along so how do you view China's state on enterprises from your own point of view well look I would come from a different perspective and I would come from a perspective of China has roughly 1.3 billion people right a lot of those people are very intelligent and China is known for being very entrepreneurial right when you now move to the west coast in the US and look who is engaged there in the Silicon Valley you see a lot of Chinese you know and they are very entrepreneur they are involved in building new companies and it's just a simple fact of life that you have to let the market forces flow and give people of any age and certainly young people the opportunity if they have an idea to find the money to find the support and to build those right so I think that the question is rather I mean how do we have to reform the state on enterprises rather I mean we have to give that segment of the society better access so that they that they have the same type of chances than the state on enterprises right and we know that the financial system has not been as such and that it actually was was and is still very difficult and very expensive you know if you want to build your own company so I would start with this and I would yesterday we had the private session as chairman who said I mean with Premier Lee and I mean you see the reforms and the understanding is very very clear there is a desire to have a more balanced economy to have a more sustainable growth so in reality we need those type of reforms he was talking about yesterday about the financial reforms this is great let me tell you an anecdote that shows you that something has happened that I think we need to reverse I remember I've been coming to China for many many years and I remember and typically once a year I go to university and talk to the students and I remember when I first came as always nice and full and a great debate and now they are all speaking even better English you know fantastic and they are typically very intelligent and I would hire most the most of the time would love to hire almost everybody I still remember in the first years I would say the first ten years when I asked the question of what do you desire where do you want to go and I asked it in categories I mean who of you wants to join an international firm who of you wants to do a startup you know and who of you wants to know a state-owned enterprise it was very clear the desire of the best and brightest in the university was I want to join an international firm because I want to get it into education and I want to have an opportunity to understand how the global a global market works not so in the last I would say ten years if you go around to the top universe today and ask the question it's kind of scary because most most of the young talents as well I want to go to a state-owned enterprise when you say when you ask them why do you want to do that they say because that gives me better opportunities to grow inside of China right now there is something that's wrong with the allocation of of what I consider the most important resource for any economy and that's talent right so I think we got to put it back together let it let let opportunities grow and also see the opportunities that Western international firms bring because on the question of I mean what is wrong with state-owned enterprises first of all monopolies are never good I agree with that point that that point because they make you slow right I don't by the way I think that there are quite a number of state-owned enterprises that are very well-run also very very well run and have excellent excellent talent they have avoided this this lethargic lethargic move but at the same time you need to make sure that that the talent has opportunities to find its own way okay yeah thank you I'll pass out the question to mr. Armandy or he's one of the 500 you know just biggest company in the world but your company is also a state-owned right I mean so how do you operate a state-owned company in in Saudi let me let me share some of our beginning we started with almost two billion dollars that was the beginning the government gave us two billion dollars and say you know you have to start petrochemical that initial capitalization initial capital how many years ago now that was in 1977 today this company is 130 billion dollars and it's listed as the number 120 from the five fortune 500 so this didn't come really by chance it came by a really good strategy by the government it's a hands-off strategy and it put the company on the on the road and then it's up to the company to continue but we have not been tested you know if we had made a mistake or something whether the government is going to interfere or not we have been successful all the way so hopefully this strategy will continue we have a board from government and then later the government divested 30% from Sabbath to the private sector we gained some experience from the private sector we gained through our acquisitions we acquired the view companies around the world the likes of GE plastic and Dutch state mind DSM and Huntsman and we gained experience from those company from global company in the company especially in the compliance area which is very critical to us we gain experience from the media like you because you you keep the transparency of these companies under scrutiny so media compliance and government's hands-off policy really resulted in a good company we have joint ventures here and in China with the my friend here Mr. Fu and in the petrochemical area and we have gauged that the competence of state on companies in Sinopik and we don't find really much difference as a matter of fact we really appreciate what they do and the safety and the environment and other things which for our two companies was really a win-win so the most important thing is really have a long-term strategy and execute on that long-term strategy the compliance is of the essence and also I think some participation of the private is important but the muscles of the state must be there really to drive forward and bring the strategy to completion okay yeah so why do we need to reorganize or restructure the SOE the four speakers has shared with us their insights and their perspectives how can we just reform the SOEs what kind of methodologies can we use to really implement it the third plenary of the 18th CPC session has raised out the mixed ownership structure concept the so-called mixed structure concept is it really a very good methodology to have the reform of the SOEs our friend from the Arabian world has told us they are also SOE they're also developed from the 1977 the fund of 2 billion to current days of 130 billion so if we can solve the ownership structure can we solve all everything so I'm going to raise several questions since we are going to get some questions from the internet and then we are going to open the floor for Q&A session if you have any questions or any comments please just raise it madam don the mixed ownership structure do you think that is the good solution for the SOE problems I think the main issue is still about such a mixed ownership reform can be regarded as a kind of medicine if we take a good medication and then the disease will be well treated however we are worried about any kind of other complications it may bring about when we had the medicine the most important thing is that we need to follow the market rules the corporations will operate in a market oriented environment without the interference of the government if the government is still thinking about since I'm the biggest shareholder or least I'm one of the shareholder and still holding the old rooted concept of the administrative interference I don't think the mixed ownership structure can be a good solution I have been thinking about it for quite a long period of time since I've been serving as the delicate successively for three times and I have been raising the idea that no matter your mixed structure or listed company or SOE every company should have a uniform and standardized modern governance structure which will also create a level playing field for all the enterprises no matter what kind of ownership are you and during the development process of your corporation no matter your SOE or private sector I believe the decision makers which means the senior executives decision are extremely important what kind of road are you going to take your corporation to 20 years ago for the very first 10 years we haven't fully aware of our corporate social responsibility that is to say for the first 10 years we are thinking about how to make a profit or how to survive that is our objective of our corporation however during the process of our evolvement the CSR seems to be more important than making a profit the environmental damage that has been brought about by the operation of our corporation or not being able to able to operate in an honest way all these things are not the things that we want from a modern corporation with CSR so one more we have realized we need to have better operational ideas and use optimal technologies to ensure that we can have a good corporation it is not really about whether we can realize a mixed structure which will just ensure our success so you are talking about from the shareholders or stake structures perspective if these types of ownership structure wouldn't be able to create a miracle without our modern governance for example in the board of directors there should be a platform for open exchanges and etc if we are only taking some fund from the private sector it won't solve everything right yes indeed grain electronic appliances at the very beginning it is a wholly owned SOE owned by our provincial government at the very beginning they have an investment of 30 million currently we have given them great return which is more than 300 times than the investment at the very beginning so they are getting our return with and they are trying to receive our generosity however if there is anything they will just interfere from the administrative perspective even though they have been gaining great returns from us so we need to battle with them as I said our industry is a fully competitive market without a market-oriented business approach we would have already died in the market so let me rephrase what you said the government comes to you when there is good things but when bad things happen they just run away yes that's true this is what what we have experienced in the past this is the truth they the government is sometimes we want sometimes the government comes to us that C agree is a company just to lend some money to this subsidiary of a Chinese of a government controlled company because that company needs equity injection but we always said no no way because we was a power agree is a public listed company we can't do that okay mr. Fu mixed ownership do you think it's the is that the solution I think our discussion as I said should be based on the document of the third plenum of the 18th CPC Central Committee mixed ownership is not everything about SOE reform and it is even not the main part of the SOE reform it is only one part or one of the many targets objectives of China's SOE reforms in the past actually mixed ownership is not something new ever since 1984 mixed ownership has always been the buzzword of the Chinese economy we've been walking along this road for more for 24 for 30 years already so today when we talk about mixed ownership our attention is focused on the ultimate goal of the reforming of Chinese economic institutions it is merely a two so as I said when we talk about SOE reform this topic actually involves many diversified thoughts modalities and so on the in my view the fundamental solution is what I said earlier how to make SOE is more market-oriented how to reduce the a domestic administrative interference in Chinese companies so great is a local government-controlled company but to my company Sino-Pak is a central government controlled company to be honest I think Sino-Pak is has a bigger degree of a freedom do you necessarily mean that the central government has less influence or interference in you compared to Madame Dong's company yes that's true in there is no no people designated by any central government ministry to sit in our boardroom you see this industry is somewhat a monopoly industry in China but when we compete we have to compete in the international market for instance for Sabic we work we cooperate with them but in some cases we also compete with them so for companies like Sino-Pak our eye is on the international market we compete in the international market instead of domestic market we have invested 90 billion Yuan and this 90 billion Yuan is not completely from the Chinese government or from Chinese banks actually we borrow from the international capital market from foreign banks because the borrowing cost is lower in the international capital market compared to domestic market so and there is no government approval process when we make investment decisions in the international market but only one exception exchange foreign exchange when we make outward investment we must get the approval from the state of administration of foreign exchange so as Premier Li Keqiang said the government also needs to change its mind and as far as this point is concerned first and foremost is the approval system and also the rule of law mentality so Mr. Li Keqiang said yesterday the Chinese government must delicate its power to the lower level government or even to the business community bigger freedom should be given to Chinese companies to make their independent business decisions of course some other topics shall be considered such as a safety or environmental protection but as far as the profitability as far as the bottom line of the company's concern this is the business of the company it's not the business of the government in China within China apart from tax we have to pay many kinds of fees fees are very special phenomena here in China apart from tax you also need to pay a kind all kinds of fees to the government last year we paid over 300 billion yuan of taxes and fees to the government every day I pay 800 million yuan every day to the Chinese government covering all kinds of taxes and fees this is unimaginable for my international peers because Sino-Pak is a state-owned company we have to fulfill our corporate social responsibility so the biggest thing we pay to the government is not tax actually it is fees this is very unique in China but was that said of course Sino-Pak has to improve its competitiveness to make it more make it stronger in the international market so we we are focused on the international market we need to be more open more transparent more standard as far as corporate governance is concerned only when we can do that can we develop into a stronger business can we have a bigger capability to undertake our corporate social responsibility for instance climate change big companies play a big role in this process we commit to the government that in a three year period we need to spend about 28 22.8 billion yuan to improve our environmental responsibility at the same time we cannot cut our workforce significantly this is also why the profit per employee of Sino-Pak is lower than our international peer so cutting the headcount is not the possible way for us to improve our profitability so our only way out is to run more efficiently so Sino-Pak is a huge company we have a big responsibility we also have big burden for the society for the government but still we managed to grow at a very remarkable remarkably faster pace year by year so as I said cutting employees is not the possible way compared to some of my international peers the number of Sino-Pak's employees is about ten times of them so Chinese companies have to find their own ways we shall learn from the west but that's not enough we learn the western concepts the western skills the western expertise but when it comes to the management the day-to-day management on the field we must take into consideration the Chinese unique Chinese characteristics so Chinese SOEs and Chinese private companies it's the same thank you now I'd like to give the floor to the two gentlemen from outside China maybe for for them the mixed ownership might be a little bit difficult to concept for them anyway it seems that there are many questions raised on the website the internet recently Chinese government decided to to set a ceiling on the annual salary of a C-level executives of Chinese state-owned enterprises and this involves many industries banking and many other industries and the ceiling is 600,000 or seven six 600,000 to 700,000 this is the ceiling for their annual salary so my colleagues from America and Saudi Arabia many of these Chinese state-owned companies are already top 500 companies they compete not only within China but also outside China when such a ceiling salary ceiling is set on them namely around a hundred thousand US dollars every year do you think it's a good way for them to stimulate or incentivize them in their day-to-day work well what's your what's your comment Mr. Klaus perhaps you can yeah I mean Mr. Fu I'm sure as a salary reduction he he's leading one of the largest oil company in the world he cannot make over his salary probably cannot be over a hundred thousand US dollars I mean so what's your take on this you like with the previous discussion on on co-ownership I mean I think the real question is what do you want to solve what's the problem that you want to solve right so if you if you reduce the incentives of talent going into a certain industry by cutting the salaries is that what you want to solve I personally believe that talent is the foundation for everything right so you want to attract the best and brightest to go into the places where you need the most right so that's one way to look at it I mean and and on the other point I mean if you have somebody co-investing with you I mean again what do you want to solve with this I mean I personally think that if we want to have a broader sustainable growth in the in the society and I think we have to focus on getting a level playing field first right and a level playing field requires a financial reform so if somebody has an idea and wants to wants to start their own company they have to have access to to money and to funds in the same way then state-owned enterprises have to have it because otherwise this is not going to fly on the discussion on governance you know again I can see what you solve with better governance I mean if you say I want to have a more global perspective in the board obviously that's a great thing I personally love the board that we have and the discussion that we have and every time that we are together I learn a lot and there but again it's a different perspective I mean there it could be could make a lot of sense for Chinese companies that say we want to globalize so we want the global discussion also to happen more strongly inside of the firm and we start with the board so we bring on board I mean a number of respected international voices so that you can have them reflected you know if you want to solve the the the whole aspect you touched upon it on and you too on environmental aspects I mean unfortunately not every company here in China as we know also from recent events is very safe you know and not every company here in China it really is very environmentally friendly otherwise we would not have these gigantic issues that we are currently struggling with here and here in country so there the issue is you you you establish not only standards we have established standards but you enforce the standards right so again I mean depending on what you want to solve the answer is different on the bureaucracy side there's thousands of ideas how you can solve for because you want aspect you mentioned I mean if you live in a province and the provincial leader who is basically also giving you the finance you know or gives you tax reliefs you know it tells you you can't fire any people well that's a sheer recipe for bureaucracy right and certainly there's no way if you have those type of restrictions that you ever are going to be competitive on a global scale okay yeah well what they are trying to solve there is this our central government that I'm party they feel that those stay on can enterprise the chief chairman's CEOs and that they are making too much over the society a tolerance level I mean that's what they're trying to solve I mean they feel that they're making too much I mean the simple rule of life is I mean like with taxes you know I mean people go where they feel their benefits are higher you know so in the end I mean the consequences people will go somewhere else that might be a good thing at this point in time you know and in general I mean these these discussions on who should make what are very difficult societal discussions I mean that have really multiple facets and I've always seen that they only come up in reality because very often they are a substitute for different discussions a substitute for discussions of what societal standards do we have I mean what how how clean is our society how do people get treated how much social responsibility is shown in a in a region usually this is the real discussion and the rest then becomes the proxy okay so you're not going to talk about conspiracy theory so to already I mean I'm not going to ask what you make I mean but could you imagine like a mr. fool here I mean they cannot make well is a hundred thousand US dollars a year I mean is that to you I mean it's too much to make or too little I mean could you make well let me go back a little bit to the mixed ownership question just if you divert little bit and they come back to to the compensation issue the mixed ownership is okay if it if it has the representation on the board without representation is meaningless as far as I'm concerned so having members from the private on the state owners right they will defend they will defend the company and if there is interference from government we always go and get the help from our independent people on the board and and the other way around I mean if there is much pressure here we can go to the government so you can you know get a balance of governance there so if you fix the the salary of the the there is no incentive for entrepreneurial ship and into the company the best way is really pay for performance if the company doesn't perform he doesn't get much if the company do a fantastic performance on a global basis he should be paid he should be rewarded not only him but all of the executive management on all of the employees so really we have a performance culture in the company that drives efficiency as mr. full said you cannot drive efficiency without performance and performance require you have to pay okay yeah now this one day jingles them and I'm sure we're going to find a way I would like to come back to the two Chinese speakers madam so on this competition scheme clearly involves you because it is closely relevant to you actually since we are listed public company for so many years we have been govern our corporation according to the rules of the public listed company so this question doesn't have so much relevance with me so I do not you do not have a ceiling of your salary right and actually it is not a new rule after the reform of the mixed ownership structure it is basically targeted on the central SOE is probably it has more relevance with mr. fool why would we just give the floor to mr. fool to share with us your opinion your idea probably it is more pro appropriate for me to address this issue because I'm one of the state coders real state coders actually personally all from countries perspective we are going to reach different conclusions and from the international trend you can also reach different conclusions and results from a personal perspective the reduction of a compensation wouldn't be extremely happy for a person however if you leave a person aside and if you stand under the level of our country you will believe it is something we should do why do I say so because our country is different from the western nations in a sense that we want to pursue a collective richness so this is the national and communist party policy of pursuant of the collective wealth of everybody and we have been paying great attention to the idea that our mass public and our workers stuff are the real masters of our nation this is a national strategy and also another thing is that we have a widening gap of the income distribution how can we have a harmonious development of our society and to benefit the majority of the society is that of only benefit the minority of a society for example the person like me who is the minority of a society I think from our country's perspective we should bring benefit and welfare to the mass public and the majority of the population however our reality is that we have been witnessing the widening gap of the income distribution our central SOE especially in the manufacturing industry is much better than our other industries however our salary is still much higher than that of the ordinary staff of our workers the more they pay me the better I the better it is however how the next question I'm going to ask is that how can we incentivize our stuff if I'm getting extremely higher salary compared with my stuff I'm not trying to sing high praise of myself or anything I want to share with you some of the examples of the early 98 years I began to engage the international exchanges as the chief representative of the Chinese side we are working with the foreign joint venture side including my secretary they are given the salaries from the foreign shareholders side they are getting a salary of more than 1,000 Hong Kong dollars and I'm getting 300 RMB and my secretary who is given a salary from the foreign side is getting a much higher salary so I'm used to that I'm also trying to share with your example of the working experience of working for Synoc which is the offshore oil company that is to say our company is a red cheap public listed company because we are listed in Hong Kong that is why we are called red chips so at that time foreign investors said that you are getting such a low salary and I'm really worried that you wouldn't really devote to your work so according to the international practice and the tendency we have designed the so-called the Hong Kong compensation scheme including the options that we can get as a senior executive so at that time our compensation scheme in Hong Kong in the year of 2001 should be around 3 million to 4 million and later this increase to more than 8 million the options added that we will have annual salary of more than 10 million Hong Kong dollars it is approved by the Board of Directors and it is also approved by the MOF the Ministry of Finance so it is totally legal and legitimate legitimate for us to get such a high salary but at that time I'm talking with my senior executive that we cannot get such a high salary the reason that we cannot get the compensation is because if you take such high salary you wouldn't be recognized by our workers to be the leader of this team because our Chinese history is different from the western world their history in the western world are accumulated by the process of privatization however our ownership is totally government monitored such a structure so if you want to give us such a high salary then we will just donate it and we are still getting the salary from the Chinese SOE but it doesn't has any influence to the performance of our company at that time our market cap is about 6 billion when I leave it has reaches more than a hundred billion Hong Kong US dollars all the investors said that I'm a happy investor so because the reason that they are happy investors because they have been making huge profits so when I come to Sino-Pak I have attracted the investors from the center could to Sino-Pak they begin to buy the shares of Sino-Pak so it doesn't really rely on whether how much I can make it really rely on the performance and the efficiency of a company so we cannot leave the Chinese contest to make a comparison with the salary with our firing counterpart after 2008 the financial crisis the whole world is criticizing the extreme high salaries of the city executive and so the Chinese have been following that concept even before 2008 if you want to get a high salary then you don't need to work for SOE since you are so capable you can work for other private companies where you can earn a high salary however all value is not shown there because I can gain respect by my peers because I can lead a Chinese SOE to be competitive in the whole world that is much more important than the personal salary and the personal income so Mr. Fu you mean that for the Chinese SOEs you will have to depend on your man morality right you will have to be very ethical you need to stand together with the country actually you should have a proportional kind of distribution of income with your staff if in the western world if this proportion should be dozens of hundreds of times if it is a corporation based on private ownership that is reasonable however it is if it is a public ownership as in China then you wouldn't be able to work in China when I leave SINUC my options measured by Hong Kong US dollars Hong Kong dollars it is reaches more than 400 million Hong Kong dollars I donate all of them so the Chinese leadership do not pay great attention to the income when they announce the new policy of the reduction of the compensation for the senior executives we are not complaining at all because of the time limit I would only allow one quick question I would like to see whether there are any questions from the audience please would you please be more specific because we are we don't have the time to cover a very big topic I'm coming from Tsinghua Technology Park we have already cultivated more than 2000 corporations in our park however there are a few private companies in China can become a fortune 500 so I think there should be a mutual and bi-directional investment between the private sector with that of the SOE sector how can SOE support the private sector corporations development because of the time limit we would only allow one minute for each speaker to answer this question how SOE support the private enterprise I think we shouldn't just divide the private and the private public in such a clear and crystal way because grain corporation our company it should be sad to be a mixed ownership we should say if we really want to have such kind of divide to be divided into big or small enterprise if you have developed yourself into a very big scale we would pay attention to the development of the SMEs this small and medium enterprises the SMEs should try to have your own reflections on how to create the state of art technology while at the same time the big enterprises would also give chance to the SMEs it is not such a simple relationship between public and the private to be very simple is the SOE is obliged to support the private enterprises for each enterprise we cannot cover all the supply chain so obviously the big enterprises will be followed by chains of SMEs in our petrochemical industry we have more than hundreds of enterprises working with us so we in the future the more we want to say is that when we go global can we just create such a supply chain conglomerate to go global well we don't have time left before the thing so now today we have a very good discussion about the SOEs we would like to ask everybody to have a round of applause to thank all the speaker on board