When Zhou Haijiang, a 22-year-old graduate, quit his job as a university lecturer and returned in 1987 to his then-obscure family factory, life did not seem rosy at all - his mother cried, his girlfriend left him and neighbors suspected that the boy was fired because of some "serious mistakes".
Today, as chairman of Hongdou Group, one of China's largest textile companies, Zhou said he is most happy that he had made the choice.
"I knew teaching wasn't my dream," he says. "I wanted to go out and create something."
He did. His company now employs over 20,000 workers - among the largest employers in privately owned companies in the nation. Sales revenue of Hongdou reached 14.3 billion yuan in 2006 and he was recently elected a delegate to the 17th National Congress of the Communist Part y of China scheduled for this autumn.
And before all that happened, his college sweetheart became his wife and gave birth to two children.
Competition first
Unlike many private businessmen in China who barely have a formal education, 41-year-old Zhou holds a doctorate degree in business administration and has had a wide-ranging education, ranging from a Party school to overseas studies.
He enrolled in a university in Shenzhen in 1984, a city that later became famous for Deng Xiaoping's "southern tour" and a long-time testing field for China's reform and opening up policy.
"Once an economist from Beijing came to our school and predicted that the liangpiao will finally be cancelled," Zhou recalls, "We all laughed because we had stopped using it in Shenzhen for quite a while."
Liangpiao was a rice coupon used under the grain rationing system. Beijing residents did not stop using it until 1993.
But the most important lesson that he learned there was competition, which he later instilled in his own management. Most enterprises in the 1980s were State-owned and inefficient. Workers were comfortable with their "iron bowl" - a job for life under the planned economy - and never worried about unemployment. But Zhou as a student was impressed that an old friend from his hometown was fired for poor performance in Shenzhen.
Today in Hongdou, he sets up sales teams from two apparel factories with the same product and has them compete within the enterprise.
"It is difficult to raise a single child," he explains. Some might think the strategy increases costs, but Zhou notes "we need competition within the enterprise to face with the fierce competition on the outside".
Party school
Zhou's grandfather started a cotton-processing operation in 1957, employing three workers in a rented space. Later the small factory was asked to merge with two others into a collective operation.
It was during the days when China was stricken with poverty and natural disasters, and business was tough for the enterprise. His grandfather died in 1964 after years of inhaling cotton dust.
In 1983, shortly after the reform and opening up began that would later spread throughout China, Zhou's father, Zhou Yaoting, a local Party secretary, took over the company, which Zhou joined in 1987. Zhou helped his father privatize the company through a management buyout.
In 1992 the family and 50 others gained over half ownership in the company. Later the family strengthened its hold, and the government sold its last shares in 2004.
Education has been important in building Zhou's career and networks. In 1994, he was sent by his father to the Party school to study with officials from various provinces. Zhou, a Party member himself, was impressed with his classmates and admitted that he learned a lot from them.
"They are very hard working and very moderate," Zhou says, "although moderation sometimes does not fit into my business strategy."
But today the Party committee remains an important organization in his company. "The committee doesn't interfere with the operation, but it is the political core of the group," he says.
Zhou furthered his studies in the United States in 1997, where he had the chance to visit multinational corporations such as Wal-Mart. There he learned the importance of giving everyone equal opportunity and access to information.
At Hongdou, he now asks a fresh graduate student selected through elections to hold an important position in his factory. He has also set out a mailbox to encourage workers in the factory to send their opinions directly to him.
While China is still seen as the manufacturing base for most overseas enterprises, Zhou's textile-dominated company has gradually moved up the value chain. Outside the factory in his hometown in East China's Jiangsu Province and in neighboring Zhejiang Province, he has outsourced manufacturing jobs to over 40,000 workers.
The main market of the company's major brand, Hongdou, is now in second-tier cities, but still has a low profile in the rising large urban centers. Zhou invests money in design and employs designers from Paris to give his products a new look.
The recent removal of tax rebates on textiles - still the company's core product - has brought new challenges.
So Zhou is investing in Cambodia. Hongdou recently acquired a 70 percent share of an economic zone in Cambodia, and plans to open factories there for further expansion to cut costs and avoid trade barriers.
Well aware that textiles always have a narrow profit margin, Zhou has been diversifying his business. In 1995, he acquired a motorcycle company in Shanghai and has gradually developed holdings in real estate and the medical industry. Textiles now contribute about half of overall sales by the company.
His plan is to build Hongdou into an enterprise with sales of 100 billion yuan in 10 years and become one of the top-500 corporations in the world.
