News

Corporate leadership throughout the global financial crisis

By Ren Jianxin (China Daily)
Updated: 2009-05-11 16:39

In introducing global best practices, continued structural adjustment is a test on our resolution and responsiveness.

In terms of IT construction, an over-complex human resource structure and the shortage of skilled personnel have proved to be the bottleneck for management transformation.

Safe production and environmental protection have historically been weak for us, while "chemical production equals pollution" in some ways remains part of the reality for us.

As such, we still have a long way to go to meet our objective of energy conservation and emission reduction.

Worse still, the sudden onslaught of the financial crisis presents yet another challenge for us: prices are falling, facilities are running at half capacity or closed temporarily and plants are struggling to break even. All of this will indeed test our resolve.

To seek changes in a difficult situation is our abiding philosophy.

However, it is always easier said than done. The global financial crisis, at first glance, appears to be the result of the "bubble bursting" in the financial and real estate sectors.

However, it is my belief, that what we are witnessing is symptomatic of a loss of direction for the global economy as a whole. In an unbalanced global economy, investment, albeit ample, suffers from a blurred sense of purpose while innovation lacks source and impetus.

In fact, ever since the end of the 18th century, every wave of economic boom comes with a landmark in innovation.

For instance, the first economic boom was marked by the advent of the spinning machine and the steam engine; the second and third booms came with the appearance of steel and railways, electrical, chemical and automotive industries respectively. These were swiftly followed by the coming of the automobile, computer, information and biotechnologies, which heralded the last two waves of great economic prosperity. Commercialization of technological progress and the deepening of the division of labor constitute the driving force for the global economy.

However, today when the workshops like China are running at full steam and nearly two decades after western consumerism, typically represented by the US, began to prevail, the world should be suffering dearly from the imbalance between real and virtual economies, sluggish market demands and lack of traction.

Until now there has been no obvious strong point of economic growth capable of contributing to wide scale employment and active consumption.

Yet, as I witness all the financial bail-outs of the money-hungry companies responsible for the crisis, I can only believe that the world economy, once it emerges from this crisis, will find new sources of growth. As Keynesian theory suggests, consumption is "the obvious end and object of all economic activity", and we can be sure that there will never be an end to human consumption.

To seize the initiative and survive further intensified competition in the post-crisis era will depend on our ability to forecast trends and adjust our future development accordingly. Every crisis creates opportunities for economic restructuring; therefore, I believe, the best policy for us is to avail ourselves of the favorable conditions and accept and embrace the opportunity that now stands before us.