By staff reporters Wang Xiaobing and Yang Binbin

“Development is the absolute principle” – the famous saying of Deng Xiaoping, who masterminded the first push of China’s economic reform, was reiterated several times by Liu Chuanzhi in an interview with Caijing.

68 year-old Liu is the founder of computer maker Lenovo, which he and his partners created in 1984 as a computer technology company under China Academy of Science. After 24 years of development, Lenovo has successfully grown into one of the world’s leading computer manufacturers with two listing subsidiaries, Lenovo Group (HKSE: 00992) and Digital China Holdings Ltd. (00861).

In 2004, Lenovo Group bought the personal computer business from IBM and made a huge step toward tapping the international market. In the same year, Lenovo became the worldwide partner of the 2008 Beijing Olympic Games. With a donation of US＄ 65 million, it was the first Chinese enterprise to become a member of Olympic club “Top Plan”.

In four years, Lenovo has invested heavily in its brand image. Sponsoring the Olympic torch rally was one manifestation of this. Lenovo’s close involvement in the Beijing Games has been compared with Korean Samsung’s role in the 1988 Olympic Games in Seoul.

Liu Chuanzhi has his own vision of the Olympics. Having lived through the sweeping transformations of China’s economy in the past two decades, Liu sees the Olympic Games as a new starting point for the nation, a chance to face the world more openly and reassert its strategy of development.

“Our goal is development, so we should stick on it and shouldn’t be impacted by anything. Don’t sway,” said Liu Chuanzhi.

CJ: You participated the opening ceremony of the Beijing Olympic Games, what’s your feeling?

LCZ: The opening ceremony was splendid and it has incited people’s passion. The effort China put into organizing the Games has shown the cohesion of our people.

Chinese people have attached great importance to the Olympic Games because it is the first time for us to hold them. It’s very exciting, just like the first medal won by an athlete. Chinese people are becoming rich now, but we also hope to win respects from the world. Now we have the opportunity to hold the Olympics at home and invite guests to see our country. It is really exciting for us.

The Beijing Olympic Games and the progress of preparation have offered us many lessons. There is a book about how the rise of China and India are changing the world order. China’s development may take opportunities from other countries and stir negative reactions. But China should try to understand others, and the government should work out strategies to deal with these kinds of issues.

CJ: What do you think are the major changes the Olympics have brought to China? And will they remain after the Games?

LCZ: The Olympics impacted China’s society to a greater extent than they have the economy. They have made Chinese people more cohesive, which is very important. We have seen rapid economic development, but if the development of our culture lags behind, we will lose direction. Moreover, the Games have raised broad public concern on environmental issues in China, such as the air quality in Beijing.

CJ: The government has made various efforts for the Olympics and issued a series of new policies. What do you think is the most important part of the adjustments in the government’s behavior?

LCZ: Before the Olympics, China had adopted a more opened and transparent approach in dealing with the Tibet “3.14 Incident”. And after the May 12 earthquake in Sichuan, the government also showed an open attitude toward media. We didn’t behave like this in the past, but now we changed and the effect is quite good. I hope we can continue in the future.

The Olympic Games have also been important in that they have taught us to follow the principles of an international society. Now China understands more about how to act according to international standards. China is seeking sustainable development. Therefore it is very important for us to face the world more openly, which will help us to be better accepted by the international community.

CJ: What is your personal expectation for the Beijing Olympics?

LCZ: My biggest hope is that Chinese people will become more cohesive after the Olympic Games. We have made significant economic achievements in the past decades. However, we also experienced a period of confusions over social values and apathy toward politics. Holding the Olympics has enhanced the awareness of the Chinese people, especially the youth, of being one nation. They’ve lit the passion of our people.

CJ: How do you differentiate the passion of nation and the extreme sentiment of nationalism? Do you worry about the latter?

LCZ: I am very worried about it. For instance, I don’t agree with behaviors such as the protests against Carrefour. From an enterprise to a country, we have to be clear about our direction and goal, and then figure out what obstacles we may face and how to overcome them. Anger, resistance and hostility are useless. For those who are dissatisfied with you, every effort should be made to win their understanding.

I experienced the Culture Revolution, a time when people’s extreme left-wing sentiments were so strong. But it is no help to the country.   

CJ: Many people are counting on the Olympics to boost China’s economy, while others worry about the possibility of an economic slump after the game. What is your opinion?

LCZ: There are several factors that could boost China’s economic development in the long term. The first is cheap but qualified labor resources. The second is the huge potential of domestic market. Especially during the period when rural labor transfers to urban areas, huge demand will be created. And the development of private enterprises will provide more jobs and consumption.

Not all of China’s economic development strategies have been correct during the past decades, but the economy has kept growing. Why? It is because the factors I mentioned have great power to boost the economy.

I believe that China’s economy will continue to grow, because the impetuses still exist. As long as our development direction is correct and policies remain stable, there will be no problem with future development.

Indeed, China is facing various challenges, including a wealth gap, and environment issues. But I think that when we try to solve these problems, development should remain the priority. I want to mention one thing, when we’re talking about a wealth gap, we should make clear that getting rich doesn’t mean getting rich illegally. Getting rich should be based on development, which will lift the fortune of the society and create a virtuous circle.  

CJ: China’s economic growth has shown signs of slowdown. People are talking about the closedown of export enterprises in Guangdong and Zhejiang, as well as the financing difficulties for SMEs. Do you think we need policy adjustments?

LCZ: Not all enterprises have problems. Some economists have said the lower exchange rate of the yuan has encouraged China’s export in the past, but it is not competitive anymore.

What I worry about now is the policy consistency. If we change the current policies on exchange rate and credit control at the moment, it may help many less-competitive companies survive but could also cause bigger problem in the economy, such as worse inflation risks.

Although I am not an expert, I understand that we should stick on our development strategy. Only a clear government policy can guide enterprises to upgrade and improve technology and marketing. It will bring pains to someone, but it is a promising progress.

The Olympics will neither bring great impetus to China’s economy, nor a post-game slump. I just worry that they might cause China to hesitate on its development strategy.

CJ: The Olympic Games is an opportunity for China to showcase its achievements during the 30-year reform. We have insisted on the current development strategy for 30 years. Do you think China needs to readjust its strategy after the Olympics?

LCZ: I don’t think China needs to reposition. The strategy set by Deng Xiaoping has been proved to be correct so far.

Development is the top mission for China, and it has had no conflict with building a harmonious society. If we don’t pursue development, we cannot solve environmental problems, nor improve the living conditions of vulnerable groups, or settle ethnic issues. China must insist on its development of socialist market economy.

We have to face challenges in the progress of development, such as monopoly and privilege. In 1980s, when the reform on planned economy started, we witnessed many corruption cases caused by those flaws.

Also, the measures conducted to control inflation are now impacting the market. For example, we are controlling the prices of oil and grain, which has hurt the domestic market. China is now in the process of development. Following the market rule is the only proper measure for us in dealing with international and domestic economic affairs.