Dr Ming Bo Sun

What are your views with regard to the global economy?

I agree with those who believe that the global economy is weakening or is, even now, in a recession. Such cyclical contractions are inescapable - it is impossible for any economy to go on enjoying a high rate of growth forever. I think, however, societal attitudes have contributed to the downturn. Governments can’t deliver on their commitments if they don’t encourage an industrious domestic workforce or enforce a sufficiently robust tax base. The alternative, in that case, is to borrow. Then, when the next administration takes office, it feels as if it must do a better job than the previous administration, so it borrows even more. That’s why Hungary and Greece do not stop borrowing; neither does America. They borrow until they have insolvency problems. This is what we have seen, and there is no way to stop it. Candidates for office try all possible means to gain votes; and citizens grow complacent about providing for themselves. But there’s no such thing as a free lunch. You have to pay for what you consume. It’s the same for national governments. It’s a problem when a state keeps borrowing until it finally runs out of money. That’s why I’m not very optimistic. But I am optimistic about the brewing industry. Why? Because from an economic perspective, the brewing industry tends to be counter-cyclical. That is certainly true of Europe and America - and according to our statistics, it’s also becoming truer of the Chinese market, too. In today’s economic climate, companies with strong brands don’t necessarily pay a premium on borrowed capital. So compared to our smaller rivals, during an economic crisis like the present one, we’re in an advantageous position. However, we are not shielded from inflation related to the commodities we buy, especially grain and barley. In a way, the financial crisis has benefited the Chinese business community in that it will encourage Chinese companies to stimulate domestic demand rather than just relying on export markets.

What can governments do to address the economic downturn? 

I don’t think it is a good idea to stimulate the economy by issuing more money. That simply discourage companies from doing what they should be doing: improving their management, restructuring their finances, and putting greater effort into innovation and brand-building. What’s worse, instead of flowing to the real economy, some of that newly-printed money will be spent on real estate or stocks, thereby creating additional economic bubbles.

How does one strike a balance between monetary loosening and tightening?

The balance has to be found through the mechanisms of the marketplace rather than through regulation. Take the example of Chinese home prices which have been held in check by monetary tightening. But can home prices be held in check forever? No. Prices have been brought down by regulatory policy, rather than market mechanisms. But one can expect that once controls on the real estate industry are loosened, home prices will rebound to levels higher than those that preceded regulation.

Have aspects of your strategy changed in the past year?

Our strategy is relatively stable and focuses on industry consolidation and internal integration.  From an industry-wide perspective, we view the next few years as an excellent opportunity to seize market-share. Today, China’s brewing industry ranks first in the world and plays an important role in the global brewing industry. Therefore, in the next few years we shall continue to strive for expansion and integration and do our best to forge ahead. Besides, crises like the present one creates favourable conditions for Tsingtao. As the central government tightens the money supply, some enterprises get into difficulty and seek to sell themselves. And we become willing buyers. Through the execution of our strategy we will gain synergy and scale of economy and get more competitive. 

Many of Tsingtao Brewery’s domestic competitors like to retain the original brands they acquire. Tsingtao Brewery, however, tends to bring acquisitions under the Tsingtao brand. What are your views on this matter?

I think our main focus should be to continue to build the Tsingtao brand. Of course, the market is highly diversified and there’s always room for market-share shifts among high-, medium- and low-end products. The Tsingtao brand is targeted at medium- and high-end markets exclusively. And to that extent, we do need to ensure that we also have medium- and low-end brands in our portfolio.

Has your company’s talent strategy changed at all in the past year?

Talent is always an important issue for our business. Without sufficient talent, we cannot succeed in our expansion plans. Consequently, we plan on increasing our budget for talent recruitment and training. In particular, we will try to recruit into Tsingtao some key senior managers from  the brewing industry. Right now, the central challenge facing us is how to transform our corporate culture to a more open one. As recently as ten years ago, we were intent on recruiting the best talent from around the entire country. But we experienced some setbacks. We hired experienced, talented people and gave them large salaries. But did we retain them? No. Even if some stayed, they never reached their full potential. We spent a lot of time trying to figure out what went wrong. In the end, what we concluded is that we were a victim of our own success. We’ve always considered Tsingtao’s culture and workforce to be superior to others. We thought we were the best and that others were inferior. We had a very close-minded culture, so when outsiders were hired into Tsingtao, our people tended to discount their talents, even if they were very capable. But at the same time, we had ambitions to become a leading national - and even international - brewer. And, I think, becoming a leading national brewer is not primarily measured by the number of your plants, or your market penetration, or the amount of beer you sell. Rather, the standard by which a national company should be measured is whether or not its corporate culture can welcome and accommodate talent from anywhere in the country and all the diversity of experience and background that implies. Likewise, the best measure of whether or not a company is truly international is its capacity to have global influence and impact. To transform Tsingtao from a local to a national company required taking a number of measures. In terms of company structure, we moved our marketing function from Tsingtao to Shanghai so that we could better foster a national marketing perspective, have greater access to talent nationally, and establish a more open and innovative culture. In fact, the corporate culture that we established in Shanghai helped to change the inbred culture that prevailed in our Tsingtao headquarters. And we understood that changing the culture of Tsingtao’s headquarters was key to establishing Tsingtao as a national, rather than a provincial, brand. The next step is to go global. Now, at our annual meetings, one can hear people speaking with different accents. And occasionally, someone delivers a speech in a dialect that most people in the audience don’t understand! Consequently, we have standardized our internal communications around a common dialect - mandarin. As a result, Tsingtao Brewery can no longer be considered just a company located in Tsingtao. Instead, it has become a national and an international company. And our status as an international company is supported by our corporate culture which welcomes outsiders and is open to different points of view.

What have you done to attract members of the younger generation?

The views and values of the so-called “post-80s” and “post-90s” generation in both our company staff and our consumer are different from ours. But the future is theirs. So  we must  rejuvenate our  company. When we do so we look at issues from the perspective of the “post-80s” and “post-90s”. Society is bound to progress and the future shall be represented by them.  The rejuvenation of the company  must conform to the fashion of the “post-80s” and “post-90s” and reflect their values. Only in this way, can the one-hundred-year old Tsingtao brand stay relevant.

Staying relevant to young people - both as employees’ and consumers - is our greatest challenge. And I think we have so far been successful in keeping the Tsingtao brand fresh which represente the rejuvenation of our company. For example, we have a lots presence on college campuses and as known as sponsors of world famous sporting events. In terms of our employment and professional development practices, I have only two requirements of our young managers. First, their personal values should fit within the framework of our corporate values. At Tsingtao, we don’t advocate selfless devotion. To the contrary, we encourage our young managers to voice their own values through contribution to the company and we will give them a platform to do so.  Secondly, they have to perform well. They should believe they can always do better. This is an issue of striving to succeed. Without a passion for success, there will be no achievement.