The first Whitepaper on China Best Managed Companies, released same day, indicates private companies in China can learn from leading management practices

Strategy, capabilities, commitment and financial strength are the four cornerstones of management excellence

SHENZHEN, CHINA - Media OutReach - 21 March 2019 - Deloitte China, withBank of Singapore, the Business School of Hong Kong University of Science and Technology(HKUST), Harvard Business Review Chinaand the Federation of Shenzhen Commerce, launched the Best Managed Companies(BMC) program in August last year, the first program of its kind in China toidentify and recognize private companies based on their management systems.

The BMC review panel comprised morethan 40 experts from Deloitte and Bank of Singapore. After six months of rigorousreviews, interviews and specialist research, 23 private companies from citiesincluding Beijing, Shanghai, Shenzhen, Hong Kong, Nanjing, Changsha, andHangzhou were named the first China Best Managed Companies winners. Beijing andShenzhen outperformed other cities with six and five winners respectively.Today, executives from private companies from China and around the globegathered in Shenzhen for the BestManaged Companies Forum 2019 andBest Managed Companies Awards Ceremony 2019.  

Bank of Singapore is one ofthe proud sponsors of the Deloitte Best Managed Companies Awards in China. Derrick Tan, Global Market Head, GreaterChina and North Asia and Chief Executive, Hong Kong Branch, Bank of Singapore said,"The BestManaged Companies Awards puts a timely and well-deserved spotlight onChinese-owned companies and entrepreneurs that are operating at the highestlevels of performance, have a strong commitment to growing their business anddeveloping leaders of the future. While the winners cover a wide range ofbusiness, what is constant is their drive to do better and to be better. TheseChinese-owned companies have set the benchmark for excellence and will drivethe entrepreneurial culture in China in the years to come. Heartiest congratulationsto the 23 winners and I wish them continued success.

"AtBank of Singapore, many of our clients are entrepreneurs running familybusinesses. We understand how important it is to keep the flames ofentrepreneurism burning. We are committed to supporting entrepreneurs inGreater China, whether it is by protecting and growing their wealth through ourprivate banking and wealth management expertise, or supporting their businessexpansion plans as they take on the world through the corporate and commercialbanking network of our parent, OCBC Bank."

China has made incredible advancesin developing its economy over more than 40 years of reform and opening up,with total GNP having grown by 22,400%. Private companies in particular havecontributed significantly to China's economic development.

The Deloitte China Whitepaper on China Best Managed Companies(the Whitepaper), outlines the significance of private companies to China'seconomy -- the private economy has contributed more than 50% of state revenue;over 60% of GDP, fixed-asset investment, and foreign direct investment; inexcess of 70% of enterprise innovation and new products; more than 80% of urbanjobs and more 90% of new jobs. The Whitepaper includes Deloitte's analysis ofthe overall development of private companies in China and a samplequestionnaire on their management, case studies on the first BMC winners and insightsand opinions on the management of China's private companies.               

"By launching the first BMCprogram in China, Deloitte worked with partners in various sectors to nominatecandidates, review candidates' information, organize Best Managed CEO Lab on-sitereview and mentorship, and arrange reviews by an Independent Review Committee.The final list of 23 of winners shows management excellence across differentsectors. As we all know, multiple factors are driving the rapid growth of the privateeconomy, especially policy incentives and institutional innovation, and institutionalreform and innovation at the state level. But at last, the sustainability of acompany relies on its own competence. We hope that the BMC program will graduallyrealize our vision, which is identifying and witnessing companies excelling incorporate governance to sustainably grow with their outstanding management standards," says Zhao Jian, leadpartner of the BMC Program.

"Since its entry into the WTO,China has been accelerating exchanges between domestic and foreign enterprisesand enhancing enterprise management in both theory and practice, " adds Liu Xiao, co-publisher of Harvard Business Review China. "Inaddition, entrepreneurs and entrepreneurship play a key role in promotingprivate economic growth, with three generations of entrepreneurs witnessing thesurging development of China's private economy since reform and opening up.This gives the introduction of the BMC program in China by Deloitte profoundsignificance. Great entrepreneurship deserves broad recognition."

With support from HKUST BusinessSchool, Deloitte China conducted a nation-wide survey on the enterprisemanagement and operation of private companies across different industries to betterunderstand and analyze the overall management and operational status of privatecompanies in China. The survey focused on questions about the strategy,capability and commitment of private companies. Its results show that privatecompanies in China are well aware of their own management strengths and painpoints. Based on feedback from interviews, the Whitepaper also summarizes threemanagement strengths and five management pain points of China's privatecompanies:

Dean of HKUST Business School Professor Tam Kar Yan said, "Chinese private enterprises have made far-reachingcontributions to the economic and societal development on the Mainland andacross the world. It is our honor to be the knowledge partner of the DeloitteBMC Program, through which we can harness our professional knowledge to selectand recognize some of the best managed companies in China, and thus promotebest management practices.

"There are many outstanding andhigh growth private enterprises in Shenzhen, including a number of FortuneGlobal 500 companies and other leading corporates in specific market segments.Shenzhen has introduced various initiatives to protect and support privateenterprises with the right services," says LinHui, memberof the Standing Committee of Shenzhen Municipal People's Congress, andexecutive president of Federation of Shenzhen Commerce and Shenzhen GeneralChamber of Commerce. "In the future, Shenzhen should continue to empower privatecompanies, which will play the role of driving the development of a level playingmarket. It should seek to create a market environment with fair competition,build a peaceful business ecosystem, simplify its business policies, and reduceburden on businesses. It should also introduce policies to propel thedevelopment of a high quality economy, reduce tax burden, facilitate capitalraising and support targeted business segments and industries. It should alsoestablish business platforms that cater to the needs of companies, focus ondeveloping the platform for shared infrastructure, and speed up the connectionwithin the industry value chain. Shenzhen would also need to create platformsfor royalty transaction, government services and the sharing of corporatecredit information." 

"Strategy, capabilities,commitment and financial strength are the four cornerstones of enterprise frameworksfor management excellence. Generally, private companies in China have focusedmore on business than management and pursued rapid business growth rather thansustainability. When a company grows big enough, it should take into fullaccount 'sustainable' profitability and growth as well as its socialresponsibilities," concludes WilliamChou, vice chair of Deloitte China and leader of Deloitte Private. "Companiesneed to address several emerging issues amid uncertainties in the future globaleconomy. In addition to the good number of successful private companies emergingfrom China's reform and opening up, there remain more hidden champions withexcellent management performance to be discovered. Through our BMC program, wehope to encourage more outstanding private companies to learn from best managedcompanies in other countries and improve management capabilities while pursuingtheir own business growth. Deloitte aims to work with partners and build aplatform to facilitate the development of private companies, an essentialpillar of China's economy."

By analyzing the stories of thefirst BMC winners in China, Deloitte proposes the following solutions forChinese private companies to achieve management excellence: 

• Develop long-term strategic planning as earlyas possible, focusing on future perspectives with clearly defined long-termvision, medium-term strategies and short-term plans;
• Do not innovate for innovation's sake. Builda clear innovation management and planning system to pursue targeted technologyand model innovations, and allocate sufficient resources and talent;
• Think globally and enhance internationalinfluence by integrating into local communities and value systems allowingcompanies to grow into "global organizations";
• Adhere to people-oriented principles to continuouslyinvest in talent development, sustain and develop corporate culture andentrepreneurship, and establish a sound social responsibility management systemto inspire teams' commitment to shared vision;   
• Lastly, be proactive and prepare forchanges. Be flexible and responsive in the face of external changes, displayingnot only an ability to survive and withstand risks, but also managementexcellence. Such risk management and response capabilities become even moreimportant in the context of macro-economic downturns and intensifying de-globalization.

About the Deloitte Best Managed Companies program

As a unique global initiative toprovide a full range of evaluations on private company management, DeloitteBest Managed Companies (BMC) program has been introduced to many countriessince its establishment in Canada in 1993. In 2018, building on Deloitte's25-year experience of running the BMC program in other countries, DeloitteChina leveraged global resources to study the management styles of over onethousand companies across the globe, and boiled down to four cornerstones ofmanagement excellence and relevant criteria for private companies. Byintroducing BMC in China, Deloitte aims to identify and recognize China's privatecompanies with advanced management ideas and excellent business performance,and help them develop into best managed companies with "industry leadership,global thinking, long-term strategy, innovative development and people-oriented"that are set to achieve solid long-term performance and robust growth.

Winners of 2019 China Best Managed Companies（Inalphabetical order by Chinese Pinyin of the company names）

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