Why did the group go through these changes?

We did it to stay in line with the trends of the times. The Far East Group started in Yixing. The collectively-owned enterprises of Jiangsu Province were performing nicely in the early 1990s. I used my own money to run the business as a private enterprise. After two years, I felt it should be transformed into collective ownership, to better suit the macro environment.

By 1995, compared to the enterprises of Guangdong and Zhejiang provinces, we found that collective ownership didn't support the development of both the enterprise and the market economy. We then made it a corporation with 95 percent of the shares owned by 80 percent of the employees. This particular reform prompted employees to take pride in and care about the performance of the entire corporation, not just their own personal income. This was a great source of motivation.

In 1997, the group had some partners that were the biggest of their kind in China, such as National Power Grid, Huarun Group and China Huadian Power Plant Corp. The group became a mixed economic enterprise that was partly state-owned, collectively-owned and employee-owned. Our cooperation with these medium and large state-owned enterprises was favorable and constructive, leading to significant growth.

At the end of 2001, we bought back the state- and collectively owned shares to become an entirely private corporation. These changes were made to better adapt to the environment and developmental climate. We should restructure the group as frequently as possible to suit changes in market conditions.

Why did you finally return to private ownership?

Both the rule of law and market economy have matured. Public opinion and the social environment are changing, which is good for the private sector. Because of this, we moved back to our initial status as a privately-owned enterprise.

Were you able to predict the result of each transformation?

All of our transformations were equally risky. For instance, when the group became collectively owned, there was a chance that I could lose my decision-making power. The impact of one individual enterprise is minimal. We are unable to change the external environment, but we are able to accommodate to it. The four transformations were vital to our future existence and you can't develop if you don't exist.

Do you foresee a fifth transformation?

The Far East Group changes in accordance with the market environment and conditions. As for the timing and outcome of the changes, it all depends on the market.

The pilot venture capital

By concentrating on the core business and investing 10 percent of the profits in research and development, and a development fund, Jiang Xipei has created a diversified development mode of "core business plus fund."

Gao Ran, former president of P2P visual website Mysee, has said that you were very important to his career. You didn't know him when you lent him his seed capital of 1 million yuan. Why did you trust a person you didn't know?

It was the first for the group to make an external investment in fresh graduates like Gao Ran, because they represented a new generation in China who are ambitious and entrepreneurial. The final decision on the investment approval took three to four months. I thought Gao was bright and hard working, and he was also active in social activities throughout his school years. He decided to start a business two months after meeting me. He mailed me a proposal for a commercial project, indicating his preference for e-commerce. I didn't think this was promising after looking over the plan.

Granting him the investment meant that you were confident in his success, but did you expect any return?

I thought he would make it because, first of all, he is ambitious and meticulous; secondly, he is perseverant; and thirdly, he is enthusiastic and persistent. I admired his spirit.

Did you see any business opportunities from your investment in Gao Ran?

I meet many smart, gifted and passionate people who plan to start a business and have fantastic ideas and projects at hand. Our assistance may help them to realize their lifelong career and pursuit. This is also a contribution to society. When an enterprise like our group has grown to a certain size, it has to think about whether to develop something about everything or to develop everything about something. We put some money into professional fund management companies, for them to invest in appropriate projects and talents. This is what we call the philosophy of "core business plus fund."

What percentage of your group's profit goes to external investment?

Ten percent of our annual profits are invested as venture capital. It is okay if only one or two out of three to five projects pay off. If none pay off, it means I have made bad decisions. But overall, it doesn't have an overly large impact on the group. It has been 16 years since the founding of the Far East Group in 1990. Our registered capital was 1.8 million yuan and the revenue from our first and second year was 4.62 million yuan and 18 million yuan respectively. In 2005, our revenue reached 7.4 billion yuan, making us number one in the China cable industry.

What do you think is the most important stage for a company?

There are many, but I think that during the embryonic and initial growth periods, different industries and companies involve different emphasis. Here are some general tips. First, choose an industry that suits you. It's like seeking a suitable partner; you won't regret it. Second, choose a supportive partner. You are not alone; rather, you are building a team. Your partner should use their advantages to support you. This is very important. Third, comply with the rules and regulations on which both parties have agreed. Without rules and regulations, in-fighting could occur when the enterprise grows above a certain size. Fourth, good financial arrangements are recommended. Don't do anything that exceeds your financial resources. Otherwise, you are risking a rupture in your capital chain. All in all, you should nurture a fine corporate culture.

What concerns you most right now?

The development of the group. The Far East Group aims to lead the industry and become a modern and global corporation.

(Xinhua Finance)