"For a company to endlessly thrive, it must rely on sound corporate governance, instead of on any single individual."

 

Paul Fang-Chairman & CEO of Midea Group

 

Thirteen years ago, the 70-year-old founder of Midea, Mr. He Xiangjian, entrusted the company to the then 45-year-old Paul Fang. At that momentous handover ceremony, Paul Fang said only two sentences. The first sentence I said was, "Outstanding talents are common, but those who can recognize them are rare." The second sentence was, "I am but a passerby in Midea's journey of development."

 

Fang defined himself clearly: a passerby.

 

And yet, it was this very passerby who went on to create one of the most extraordinary growth stories in the annals of Chinese businesses. During his thirteen-year tenure as Chairman, Midea's revenue quadrupled from RMB 100 billion to 400 billion. Its market cap soared eightfold, rising by over RMB 500 billion, securing Midea's place as the third most valuable private-held company on the A-share market, second only to CATL and BYD. He reshaped Midea, transforming it from a traditional home appliance manufacturer into a global, diversified, technology-driven conglomerate.

 

Every outstanding entrepreneur carves their own path, nourished by the unique soil in which they grow. Fang faced a distinct paradox: he led a vast business, wielded significant power, and yet he was neither its founder nor its owner. In such a profoundly challenging position, he not only carved out remarkable success, but also remained true to himself. At the heart of it all lies his clarity of self-awareness.

 

He has always seen himself as a successor, a steward preparing to pass the baton. He banned the display of his own portraits, rejected slogan-driven corporate culture, and even discouraged employees from praising him. Yet at the same time, he understood he must be more than a caretaker; he had to be a bold reformer, a true entrepreneur. It was this conviction that gave him the courage to change, to concede, to question himself. A mindset that helps drive Midea ever forward.

 

An entrepreneur's environment is never the same from one minute to the next. There exists no universal formula for successful management. An entrepreneur who once worked closely with Fang described him as a true master of management, not because of grand gestures or bold proclamations, but because he chose to follow the logic of the times and to respect the nature of things. Fang carved out a development path and management style uniquely suited to Midea, and executed it with striking efficiency. Ultimately, this approach bore him fruit.

 

This April past, on a sun-drenched afternoon in Foshan, Paul Fang recalled to us his arrival here 33 years ago, when the Town of Beijiao in Shunde was still a dusty backwater. The tides of time have since brought sweeping change. Many of the star enterprises that once shone in the region have long since faded from view. "Every era has its constellation of stars," Paul reflected. "But as time passes, most of them lose their brilliance." "For a company to thrive endlessly, it must rely on sound corporate governance, instead of on any single individual."

 

Toward the end of our conversation, we asked him: If one day you retire, how would you like to be remembered and defined?

 

"A passerby," he replied. "Once I'm gone, people will forget." There was a clarity to his words when he called himself a passerby, perhaps even a hint of detachment, almost a kind of grace.

 

He rarely gives interviews. This was one of only a handful of in-depth conversations he has granted over the past decade. Our discussion began at 4 p.m. and lasted until after 6, because, as he reminded us, he leaves work on time.

"I don't work overtime, and I don't encourage my employees to either."

 

LatePost: Midea recently trended online for requiring employees to leave work by 6:20 p.m. This stemmed from a directive you signed this January, titled "On Streamlining Work Practices," which introduced six prohibitions, including a strict ban on after-hours meetings and formalist overtime. Why so opposed to doing overtime? As the chairman of a company with a market capitalization of RMB 580 billion, do you work overtime?

 

Paul Fang: I never work overtime. I don't stay at the office past 6 p.m., and I've never worked weekends either. It's been this way for me for the past 20 years.

 

LatePost: So what is it that matters most to you? Life outside of work?

 

Paul Fang: Running this company well is what matters most. On the surface, I may seem relaxed, but my mind is always at work. That's its own kind of exhaustion.

 

My own life matters too. If you have no life outside of work, then what is the point of it all? Everyone here knows. I've never held a meeting after 6 p.m.

 

LatePost: On the one hand, you urge your executives and employees to embrace competition and not shy away from "involution". On the other, you require everyone to go home by 6 p.m. Isn't that a contradiction?

 

Paul Fang: When I talk about "involution", I'm referring to the fierce competition that plays out in corporate strategies and operations, where streamlining is key. We must streamline activities that are excessive or create no real value. Working overtime is one such example; over 95% of overtime, in my view, is merely formalism; it serves no meaningful purpose. Staying late at your desk, churning out endless reports—these do nothing of real use.

 

LatePost: At Midea's Annual Business Conference earlier this year, you spoke about the company's 2025 strategy being "streamlining for growth". You said that in the face of mounting complexity, the key is to simplify the mind: when we are simple, the world becomes simple; when we are complicated, the world becomes just as complicated.

 

Paul Fang: So what does "streamlining for growth" mean? As a company grows, similar to an aging person it becomes prone to illness. Hierarchies multiply, divisions become increasingly fragmented, and countless unnecessary, redundant, and valueless operations emerge. Even the smallest gesture can turn into a formalized "activity".

 

Take air conditioners, for example; Xiaomi might offer just a few models, but when we entered the market, we launched with hundreds. Many were entirely superfluous.

 

LatePost: Why not set limits from the beginning, rather than launch hundreds of models only to cut back later? Isn't that a massive waste?

 

Paul Fang: Once a company reaches a certain size, some things unfortunately tend to inevitably slip out of control. In the course of a company's development, growth often becomes an end in itself. The fact that we are now streamlining certain operations suggests that, in the past, some expansions may have gone too far. But if any problems or shortcomings, that's all right. We'll face them and work to resolve them.

 

LatePost: If you emphasize reduction of unnecessary business activities, might that discourage employees from taking the initiative? Doesn't this contradict your call for people to boldly try and explore?

 

Paul Fang: I don't think it's a contradiction. This year, we've shut down businesses that were losing money, that couldn't get off the ground, that showed no hope. Perhaps you once pursued them with great passion, believing you could make them work. But if time has proven otherwise or you don't have the capability, then we cut them.

 

This includes small home appliances. In 2022. We closed down some businesses, but that still wasn't enough. We simply don't have the capability to compete in those areas. Small companies have lower costs; our structural costs are too high. We can't keep up with these new players. In our home appliance segment, we've also been reducing SKUs. For non-core businesses, we're even more determined to shut down, restructure, and clear out the excess.

 

LatePost: It seems to me that Midea's approach to business is to first let internal teams race forward for a while, and then, after some time, implement unified adjustments. Expanding boldly, then cutting decisively.

 

Paul Fang: We first had to unleash vitality. Without tapping into that vitality, we could never have built up so many categories in home appliances. In the same way, as we now trying B2B transitions, I don't yet know which path will lead to success. We must allow room for trial and error, for exploration. But once we reach a certain stage, there will come a time for removal, termination, merger, and transfer of non-core activities.

 

LatePost: How do you determine when it's time to do so? How do you know it's the right moment to pull back and focus?

 

Paul Fang: It comes down to entrepreneurial intuition. Of course, it's not blind intuition. You must first have a sound intellectual framework, then real business experience, and a sensitivity to your surroundings. There's a saying: "The ducks are the first to know when the river turns warm in spring." You must be attuned to everything. And out of that attunement, intuition emerges. I forget who said it, but someone once remarked that at a certain level of management, science accounts for only 30 percent, intuition makes up the other 70. Commercial intuition, at times, is like the seasoned touch of a master craftsman. It's an art.

 

LatePost: So when you make decisions, is there a moment, an intuitive flash?

 

Paul Fang: In my experience, there often is.

 

LatePost: When does such a moment of insight tend to arrive? Is there any pattern to it?

 

Paul Fang: In my view, insight is built on a solid framework of knowledge: grasp of strategy, understanding of business. It also requires continuous learning that keeps your knowledge in step with the times, staying attuned to trends across industries, and being able to identify and sort through emerging issues. And, crucially, you have to stay connected to the front line.

 

Every year without fail, I travel to townships and county-level cities. Not long ago, I visited several cities in Jiangxi, speaking directly with frontline store staff, clients, employees, and distributors, sometimes over shared meals. Within the company, I also conduct such one-on-one interviews.

 

LatePost: Do you speak only with frontline employees, or with people across all levels?

 

Paul Fang: I speak to every one of our 200-plus mid-to-senior-level managers, without exception. If I ever miss someone, possibly because I'm away on a business trip, they'll reach out to my assistant and ask, "Why didn't Mr. Fang speak with me?" They may assume I have an issue with them, so I make sure to follow up immediately. We also select a group of fresh graduates, lateral hires across specialties, and even PhDs. Altogether, I estimate I personally speak to three to four hundred people, maintaining a biannual interview cycle.

 

LatePost: How do you get staff to tell you the truth?

 

Paul Fang: That depends on whether one truly wants to hear the truth. What a CEO or chairman ends up hearing tends to depend entirely on what they are willing to hear.

 

The reason I brought up this example is to emphasize that an entrepreneur must stay attuned to the reality on the front lines. That's where true insight begins. In large corporations, it's often difficult for a CEO to hear authentic voices. Layers of management act as filters, sometimes unconsciously. It's an inherent tendency.

 

LatePost: Spending an hour with each person—400 people means 400 hours. Twice a year, that's 800 hours.

 

Paul Fang: Yes, it takes a lot of time. Whole days, from morning until past 6 p.m.

 

LatePost: Seems like you're firmly committed to clocking out at 6.

 

Paul Fang: Now we're getting off track. You wanted to ask about experiencing moments of inspiration…? Some of my most important reflections don't come in the midst of the company's daily grind. They arise when I step away and when I place myself outside the frame. Long-haul flights, for instance. Even though the altitude thins the air, it's an excellent space for contemplation.

 

Swimming is another. It's a solitary act, just you and the water. And that solitude often gives rise to ideas. At least, that's been my personal experience.

We must "Go Out", "Go Up", and "Go Down" to Face the Competitions

 

LatePost: In recent years, Midea has been striving to reposition into B2B operations, but the home appliance sector is hardly a place to rest easy. Xiaomi is a formidable competitor that seems to be venturing into all sectors. Then there's Dreame, now expanding into Large Home Appliances like air conditioners and washing machines. These are challengers emerging from different sectors.

 

Paul Fang: I think it's great. Last year, Lu Weibing, President of Xiaomi, paid a visit to Midea. He gave a presentation outlining their bold vision: within three years, Xiaomi aims to become the world's number one in smartphone sales; within ten, a global top-5 automaker; and within three years, a leading force in China's Large Home Appliance market.

 

LatePost: The Large Home Appliance market, he didn't specify the ranking?

 

Paul Fang: Top three. At that moment, I just wanted to ask: Midea, Gree, Haier, which one are you planning to edge out?

 

LatePost: Ha! You've got quite a sense of humor!

 

Paul Fang: Xiaomi has entered almost all of our domains; Air conditioners, washing machines, you name it. Tactically, I take Xiaomi seriously. But strategically, I'm not afraid of them moving in.

 

For quite a while, the home appliance industry landscape has been stagnant. Most players were content with the status quo, coexisting peacefully. Xiaomi's entry, in this sense, has been a good thing. We've chosen to respond with a positive mindset. In fact, we've just completed three internal research reports on Xiaomi, totaling over 100,000 words. We've been learning from them every step of the way.

 

LatePost: Now that we look at it, Xiaomi's real brand success didn't come from appliances, but rather from Lei Jun entering the automobile industry, which in turn boosted high-end smartphone sales. Did that inspire you in any way?

 

Paul Fang: Several automotive companies have approached us for joint ventures. I thought long and hard about it, and we discussed it extensively within the company, but ultimately decided against it. I don't believe Midea has the capacity for that.

 

LatePost: What kind of capacity does it require?

 

Paul Fang: You need a deep understanding of the automobile industry. Beyond that, you need the kind of resolve and boldness that's willing to go all in. That, we don't have.

 

Our general logic when deciding whether to enter a particular industry is this: If it's labor-intensive, we avoid it, because there's little added value. If it's already saturated domestically, like photovoltaics or wind power, we stay out. And if we fundamentally lack the capabilities, we don't force it, like cars or smartphones. Back in 1997, Midea actually formed a team to make mobile phones. It was eventually disbanded.

 

LatePost: Midea has also avoided brown goods like televisions. Why is that?

 

Paul Fang: Because the pace of change is too fast. As a new entrant, it's extremely hard to keep up.

 

LatePost: Midea makes Robot Cleaners but hasn't broken into the top three or four in the market. Do you still think it's worth doing?

 

Paul Fang: This is a global business, every country needs it. It's an emerging industry. So even if we're lagging or losing money, we'll keep at it. Because we have the capability and the strength. If we have to bleed, so be it. We'll stay in the game and see how it ends.

 

LatePost: What would be the moment of breakthrough?

 

Paul Fang: We're waiting and watching. It's hard for a large corporation to act like a startup. We suffer from the typical ailments: bureaucracy and inertia. The turning point comes when technological iteration begins to stabilize. In the past, it was just robotic vacuum cleaners. Then came integrated sweep-and-mop models. Now there's one with a robotic arm, and soon, a version with two arms. Once the pace of change settles, that's the moment to break through. This is precisely why we've stayed away from smartphones. Same logic.

 

LatePost: Nine years ago, Midea had the boldness to invest over RMB 29.2 billion to acquire the German robotics firm KUKA, even though the net profit that year was only RMB 14.7 billion. Why did you believe in robots, but not in smartphones or cars?

 

Paul Fang: We were looking for sectors that had not yet taken shape or scaled up in China, but were already mature globally. Industrial robotics was one such field.

 

Our current investment in Building Technologies follows the same logic. In China, no company has yet grown dominant in this area, but in the U.S. and Europe, there are already two leading players in each market. In 2021, we acquired Wandong Medical to enter the diagnostic imaging field. At the time, China had only one major company, United Imaging, and the sector was just beginning to emerge.

 

LatePost: The 2016 KUKA acquisition was a pivotal moment in Midea's industrial transformation. How was that decision made at the time?

 

Paul Fang: At Midea, we have a strategic team of six to eight people dedicated solely to industrial research and tracking industry transformations. They report directly to me. At the time, I had already decided that we would enter this sector through acquisitions. The team conducted a comprehensive review of all industrial robotics companies worldwide and concluded that only the "Big Four" were truly worth pursuing. ABB and Fanuc were clearly off the table, as acquisition was out of the question. That left Yaskawa and KUKA as potential opportunities.

 

I first approached Yaskawa. As it happens, when Sun Yat-sen traveled to Japan, he stayed at the home of Yaskawa's founder. I even used this story to appeal to them emotionally, saying, to revitalize China today, we must advance into a new era of industrialization. We proposed a joint venture, but they flatly refused.

 

So next, I turned to KUKA. During the first meeting, they sent only a sales manager to greet us. Clearly, we weren't taken seriously. After returning from Germany, we began quietly buying their stock on the secondary market. When our holdings reached 5%, we made a public announcement. As soon as it was out, their CEO came knocking, financial statements in hand, ready to negotiate.

 

LatePost: Acquisitions come with a heavy price, not just in capital, but in the immense cost of integration. Back in 2015 and 2016, China's home appliance market was still growing. Why not focus on dominating every product segment first and finish that battle, before venturing into a completely unfamiliar territory?

 

Paul Fang: Our thinking at the time was actually very straightforward: if we kept doing home appliances and only home appliances, there would be no future for us. In the past, Chinese home appliance companies operated on a model of large-scale, low-cost production. As long as you weren't foolish or reckless, there was no way not to make money in this business. Before 2012, Midea was purely a home appliance manufacturer. When I took over as Chairman in 2012, we began an efficiency-driven transformation.

 

Back then, I often posed this question internally: "Do we want to become a company like Siemens, Philips, Samsung, and Sony, or end up like Electrolux and Whirlpool?" Electrolux, in Europe, has been making home appliances for over a century, and it still is. But Siemens started with telegraph machines before transforming its business; Philips has sold off its home appliance divisions one by one. Emerson Electric in the U.S., like Midea, began by making electric fans, but has undergone several reinventions, now pivoting toward software. Sony, in 2000, earned half its revenue and most of its profit from home appliances, yet last year, its appliance business posted zero profit.

 

Moving toward high-added-value products is aligned with the natural evolution of industries. Whether in Japan or the United States, those companies that endure across business cycles and remain resilient are the ones that have successfully undergone industrial upgrades.

 

LatePost: Midea has over 40 years of experience in global markets, with 35,000 overseas employees. Last year, more than 40% of your revenue came from abroad. How did Midea build its international capabilities?

 

Paul Fang: I wouldn't say we've fully built it yet. We're still feeling our way forward. But along the way, we've tried to learn from the lessons of Japanese and Korean companies, since we're all East Asian nations and share some similar patterns.

 

We were relatively early in putting forward a globalization strategy. Even before I became chairman, in 2010, we proposed the idea of "Global Operations." At the very least, it meant delivering your products and services to the world. That was our starting point. Our true global breakthrough began after the pandemic in 2020, when we finally paused to reflect on the road we had taken. That year, we made some internal course corrections, laying the groundwork for global product rollouts and strategic resource allocation. But it wasn't until the end of 2023 that we made a firm, committed push.

 

In the past, we relied more on contract manufacturing. But starting last year, we made a decisive shift: OEM was no longer the priority. We elevated OBM to the forefront, investing heavily and adopting entirely new approaches. Of course, these are paths already walked by Japanese and Korean companies. We drew on their experiences. Now, the basic framework is in place, and the direction is sound.

 

LatePost: What missteps did you take? What lessons were learned?

 

Paul Fang: The lesson was: we didn't trust common sense.

 

We often said we would learn from the West, that we would follow in their footsteps. The experience of Western companies has long taught us the importance of localization. But we still sent out large numbers of Chinese staff to lead foreign markets. And eventually, it became clear: any market effort led by a team of Chinese expatriates failed. Every single one. These were the costs we paid. Now, we are resolute in our belief in localization. Local people, local teams, managing local business.

 

LatePost: How do you manage these local teams overseas? How do you get them to believe in what Midea wants them to believe?

 

Paul Fang: That's a crucial point. What we often call the deep integration of values, or the resolution of cultural conflict. Among the 60 or so local entities we've established abroad, as long as the person in charge genuinely believes in Midea's approach, performance has consistently been strong.

 

LatePost: Midea executives say that internally, the concept you stress the most is "self-disruption and self-negation." What are the ways in which you still negate yourself today?

 

Paul Fang: This year, we're pursuing "streamlining for growth". To simplify is to disrupt ourselves—this is self-negation. What really is entrepreneurial spirit, you ask? It's a character, not a person. And I believe the core of this character is self-awareness. That is, the ability to self-negate.

 

LatePost: When we spoke with Zhang Weiying, he said that entrepreneurial spirit is about risk-taking and creation. Pursue what you really believe in, regardless of the resources you have to hand.

 

Paul Fang: To create is to first self-negate. Without self-negation, one cannot truly be an entrepreneur.

 

For example, after the breakup of GE, many began to question the legacy of Jack Welch. But I see it differently. Welch led for 20 years, and he changed every single year. Minor changes every three years, major ones every five. That was his doctrine: continuous self-renewal. He was a reformer through and through. We cannot judge his actions solely through the lens of today's context. The times were different. What made sense then may not apply now, but that doesn't render it wrong.

 

His successor, Jeff Immelt, led for 16 years without a single major reform. He later wrote a book entitled Hot Seat, reflecting on his tenure, but much of it pointed fingers at external conditions.

 

I once posed a question at a Midea annual meeting: If there are objective problems or historical burdens, how could 16 years not be enough to solve them? Sixteen months should suffice! After several leadership changes, GE appointed Larry Culp as CEO. What did Culp do? Efficiency. A few swift cuts. That was all. Before the split, GE's market cap had dropped to as low as $80 billion. Today, the combined value of its three spun-off companies exceeds $300 billion.

   

LatePost: Do you believe that as long as an entrepreneur continues to evolve and challenge themselves, there's no problem that can't be solved?

 

Paul Fang: There will always be problems. But at the very least, you cannot run from them.

 

I believe a company must be judged over the long term. Sustained success is what truly matters. It must withstand the test of time. Even if we're not talking about fifty or a hundred years, a company should endure at least twenty or thirty. Today, we see companies that are in their prime, shining as the brightest stars. A rare few manage to thrive endlessly. Most eventually fade, dimmed by the tides of history and the shifts of the times.

 

LatePost: Business used to feel like climbing a mountain: clear goals, established paths. But now it's more like surfing, riding the waves and navigating currents. Volatility is the new normal. Home appliances remain Midea's main battleground. How do you plan to fight today's war?

 

Paul Fang: My current strategy is simple. First, I must push the first curve upward: drive industrial transformation and find products with higher added value. At the same time, I will shift strategy this year: we will "go down" as well. I cannot stand by while Xiaomi steadily eats into the market. I must respond. I must go down, fight on cost, and go head-to-head with them.

And on that first curve, we must build a new advantage. That means investing in product innovation and technology research, so we can activate and push through the second curve. But this is no easy task. There is a foreseeably long and patient journey.

 

LatePost: Then who does Midea aspire to become? GE, Samsung, Sony, or perhaps Philips?

 

Paul Fang: Today, we don't aspire to become anyone else. We aim to move with the times, to define our own business structure and direction, and to walk our own path.

 

Midea Headquarters in Shunde

 

A Ladder Made of Chaos: Midea's Two Pivotal Transformations

 

LatePost: In China, Midea stands alone as the only privately held listed company with a market value exceeding 100 billion yuan and a history of more than 50 years. Most of its peers in the home appliance sector have long faded into history. Yet Midea has steadily grown into a diversified conglomerate with over RMB 400 billion in revenue, selling its products across the globe. As we look back, what lessons does Midea's journey offer us?

 

Paul Fang: Midea began in Beijiao Town, Shunde. When I arrived here in 1992, there weren't even paved roads, just a mix of coal cinders and lime. Whenever a vehicle passed, clouds of dust would rise. Beijiao was a small town, yet it gave rise to a remarkable number of home appliance companies. The top-ranked back then was called Yuhua, also a fan manufacturer. Its founder, in 1992, was already a NPC Deputy.

Photos of Midea's fan and air-conditioner factories in the 1980s

 

LatePost: That was considered quite prestigious at the time, wasn't it?

 

Paul Fang: Extremely. There was even a star named after him. I used to ride past his house on my motorcycle every day. A luxurious Mercedes-Benz 600 was parked by the door. Everyone looked on in awe and admiration. The second-largest company in the town was Xianhua Electric. Its name was hand-inscribed by a prominent leader, which shows the stature it held at the time. The third was Southern Electric, and Midea ranked fourth. And this was just in Beijiao alone. In a neighboring town, there was Macro, the water heater brand mentioned in Blossoms Shanghai. Then there were Shenzhou, Rongshen, Kelon, Huabao, and many others, each a household name in its own right. Given Midea's position at the time, it was nearly impossible to imagine what it would one day become.

 

Looking across China, which was the most formidable home appliance company in 1992? It'd have been Chunlan and Changhong. Look to Asia, Japanese appliance makers were at their peak—Sony, Panasonic, Toshiba. As late as the year 2000, over half of Sony's revenue still came from its brown goods division. Since then, we've witnessed the successful transformation of both Panasonic and Sony, and the decline of TOSHIBA. In 2016, Midea even acquired Toshiba's home appliance business.

 

LatePost: We've heard you have a keen interest in studying commercial evolution, that you've read nearly everything available on 200 years of American business history. What patterns have you observed?

 

Paul Fang: We were following in the footsteps of enterprises from developed nations.

 

Most Chinese companies today are just over 40 years old, born out of the reform and opening-up era, dating back only to as early as 1978. We've not yet truly experienced economic cycles. Looking at our own trajectory, we may be tempted to think this is the way the world works - that we've understood it. But that isn't the case.

 

There's nothing novel in what Midea is doing today. It is all drawn from lessons already lived and learned by multinational corporations in developed countries. For example, back in 2010, I proposed three core strategic directions for Midea: Product Leadership, Efficiency-driven, and Global Operations. Among them, efficiency has become our strongest competitive edge. Why does efficiency matter so much? Over a century ago, management theorist Frederick Taylor introduced the concept of scientific management. At its heart was efficiency. Later, Ford brought the assembly line to life—again, efficiency. Then came Toyota, Danaher, Tesla… all of them won through efficiency.

 

The path has already been laid out. The answer is right there. I don't think we can bypass this law. It's common sense. And common sense is something that holds true across time and space. It doesn't change.

  

LatePost: But efficiency is the outcome. What's at its core?

 

Paul Fang: The core is exactly that: efficiency is everything. For a company, efficiency means how to reduce even the smallest unnecessary use of money. What does that mean? Any cost a company bears is ultimately about capital being tied up. A product that just sits there, unsold stock, an idle employee—all of these are forms of money being occupied. To bring every excess penny under the umbrella of strategic planning. That is true efficiency.

 

Back in 2010, our transformation was driven by efficiency. Not the visible kind, but invisible efficiency. Cutting costs or squeezing labor—those are visible forms of efficiency. But the deeper kind lies beneath the surface. Over the past 13 years, Midea's cash flow has consistently grown faster than its net profit. That's only possible when two conditions are met: strong profitability and high efficiency.

 

For example, the first line of any balance sheet is cash. More than a decade ago, our competitors had RMB 100 billion in cash, which we looked on with envy. We had less than 10 billion. I remember stating in a company meeting that if we ever had RMB 50 billion in cash on the books, our days would become much easier. I urged everyone to work toward that. Many years have passed. Today, Midea holds RMB 320 billion in cash.

 

LatePost: At the annual company meeting earlier this year, you said: "The rules of the world are being rewritten. The paradigms are shifting." What rules have been rewritten? What paradigms have shifted? Has Midea found a new paradigm?

 

Paul Fang: China's industrial development has gone through three major phases. In the early days, most companies followed a model of imitation—large-scale, low-cost production. The market was vast, and with the withdrawal of foreign capital, everyone managed to thrive. Then came a phase driven by efficiency, where we focused on operational innovation. As development continued, we saw the rise of application-based innovation, which became a strength of Chinese companies. There's also what we might call reconstructive innovation. Taking what others have already done well and either applying it or reshaping it for our own use.

 

Last year, I visited Silicon Valley. At every company I went to, Microsoft, Apple, NVIDIA, the conversation revolved around one thing: these companies are harvesting value from the entire world. Everyone pays them service fees, software fees, because they've achieved paradigm-shifting innovation. They've changed the game. China still has very few companies like that.

 

Midea has focused on efficiency-driven growth, but our peers are catching up. And while China's strength in application innovation remains formidable, it alone won't be enough to compete with the United States in the future. That's why paradigm-leading innovation is so important. And to be honest, Midea has not yet made that leap.

 

LatePost: In a new era where rules, orders, and foundational technologies are in constant flux, what is the real moat for an established company?

 

Paul Fang: I have two guiding beliefs I hold dear. The first comes from Welch: if your company cannot be number one or number two in its field, it lacks real competitiveness. The second is Warren Buffett's moat theory. In his words, his dream investment is a business like a castle, surrounded by a deep moat, guarded by a loyal gatekeeper, that is, a professional manager or entrepreneur who protects and preserves the value of that castle. But for now, we have yet to find that moat.

 

LatePost: Is it that Midea has yet to find its moat, or do you believe such a moat doesn't really exist?

 

Paul Fang: It's constantly evolving. The moat is in flux. In the past decade, Midea's moat was efficiency. But that advantage is being steadily eroded. We must build a new edge upon that foundation by investing in products and technology, and by pursuing innovation that leads rather than follows.

 

But that takes time. To build the so-called 'second curve', we first need a robust capability framework. Last year, no matter how the situation evolved, we succeeded in putting that framework in place. Our B2B revenue surpassed RMB 100 billion. If we define the B2B and B2C transformation in simple terms, then yes, the objective has been achieved. But whether this business can become a top-tier player in China or globally is an entirely different stage of the journey.

 

That's also why we are firmly committed to globalization. I want to slow the descent of the previous growth curve, to ease the slope as much as possible. Domestically, incremental growth has stalled, stock growth is shrinking, and a wave of new competitors is flooding in. That's why we must look outward.

 

LatePost: Can top-down planning drive breakthrough innovation?

 

Paul Fang: Some aspects can be planned from the top down, but true innovation cannot be managed into existence. It requires an environment conducive to technological research.

 

LatePost: Are there requirements to publish papers? To rank on global charts?

 

Paul Fang: None whatsoever. The primary focus of our research institute is hardware technology. We established an AI research institute relatively early on, but our emphasis has always been on applied research. Back in 2012, Midea had fewer than twenty PhD holders. Today, we have over a thousand. Not far from us lies a 33-hectare campus, the Midea Global Innovation Center. It was built to reflect my ideal vision and is designed exactly like a university campus.

 

LatePost: In hindsight, should the institute have prioritized foundational and intelligent technologies over applications?

 

Paul Fang: We did pursue that direction as well. In early 2020, I recruited a scientist from a major tech firm and invested over RMB 300 million into service robotics. But the entire effort came to nothing—the research direction had been fundamentally misguided. Last year, we brought in a new dean from Silicon Valley to lead our humanoid robotics program.

 

LatePost: You invested over 300 million, and only then realized the direction was off?

 

Paul Fang: We're working on our second growth curve, and the investment is significant. We've explored several tracks: robotics, B2B services, but which one will ultimately prove sustainable is still uncertain.

 

That said, we're not rushing for quick wins. I remain firmly committed to robotics. Otherwise, we wouldn't have acquired KUKA back in 2015. Industrial robots can already handle intricate, highly precise tasks. We're also developing medical robots. So why not have robots take on tasks in homes and on production lines? The trend is clear to me. I believe in it. But whether it must be humanoid—that's another question. Right now, there's a lot of hype and froth in the industry, just as there has been in every wave of innovation. The foam atop the beer is, after all, a natural part of the pour.

 

LatePost: Very few companies in history have truly weathered the test of time. Even many benchmark firms featured in Built to Last eventually failed. In your view, what common traits do successful transformations share? And what about those that fail?

 

Paul Fang: In the 1980s, there was a famous book in the U.S. called In Search of Excellence, and in the 1990s, Jim Collins wrote Built to Last. The answers are all there. The reasons companies fail are nothing new: blind arrogance, reckless diversification, and excessive leverage.

 

Any true corporate transformation takes ten to twenty years. Panasonic, for instance, declared in 2010 that it was undergoing reform. When I visited them in 2013, their president at the time, Kazuhiro Tsuga, told me they planned to move into batteries, energy, and environmental industries. Just a few days ago, I saw Panasonic publicly acknowledge the difficulties in their transformation. Transformation takes time. But without it, a company cannot survive. If Midea remained solely a home appliance company, then in ten or twenty years, it would be another Sharp or Panasonic, on the brink of irrelevance, or already gone.

 

At Midea's 55th anniversary celebration. During an all-staff address in January 2024, Fang said, "What makes a company great is nothing more than the relentless pursuit of common sense, taken to its absolute limit.

 

LatePost: Is the pursuit of being "built to last" the right goal for a company? If a company, like a human being, cannot escape entropy and aging, is its continued existence truly beneficial for innovation and societal progress?

 

Paul Fang: That's an excellent question. According to Darwin's theory, no living organism survives forever, everything must eventually perish. The same is true for companies.

 

For Chinese enterprises, I believe it's still too early to define what it means to be "built to last". We simply haven't had enough time; only 47 years have passed since 1978. Many of the foundational elements that support lasting businesses are still lacking a shared consensus in China. In the United States, there is a well-established social understanding: companies are not expected to shoulder excessive social responsibilities. Their core mission is to maximize shareholder value and pursue sustained profitability and growth. A company is a company. It exists to grow and to profit, consistently and sustainably.

 

But in China today, such consensus has yet to be formed. Our experience is still too brief. So if some companies choose not to pursue longevity as their goal, that too is a legitimate path. That said, as China continues to develop, the aspiration to last should become part of our collective vision. Ultimately, a company's value lies in its ability to sustain profitability and growth over time.

 

LatePost: In Japan, there are artisanal workshops, and in Europe, there are family-owned businesses. They seem to have a better shot at lasting for generations. For large diversified conglomerates, maintaining scale and status often seems possible only by growing ever larger.

 

Paul Fang: If we look at the trajectory of global corporate development, the shift away from sprawling conglomerates began in the United States. Before 2010, the market still embraced large corporate groups, valuing them highly in both valuation and market cap. But now, the U.S. has collectively turned its back on the conglomerate model. UTC, GE, Honeywell, DuPont—so many have been split apart. Danaher too. Many were split into smaller entities, each refocused on specialized areas. This marks a paradigmatic shift.

 

There's another change: the industrial giants of the past managed their diversified businesses based on asset superiority. But companies like Google, Amazon, Microsoft, and in China, Alibaba and ByteDance, have ventured into numerous industries and sectors, yet they manage this complexity through data capabilities. That's a new paradigm.

 

So, for a company to truly be "built to last", it must not only survive the cycles; it must evolve with the paradigms. As for what kind of corporate form is truly suited for China's development, we're still exploring.

 

LatePost: Is your relentless pursuit of transformation a climb toward the highest peak, or simply a strategy to avoid failure?

 

Paul Fang: I believe the very essence of a company lies in its continual transformation. If you resist change, even for just a year or two, you will inevitably encounter challenges. That is a certainty.

 

LatePost: In Midea's 2023 Annual Report, you quoted a line from Game of Thrones: "Chaos isn't a pit. Chaos is a ladder."

 

Paul Fang: In times of chaos, everyone harbors their own agenda. It's not unlike the internal dynamics of many corporate structures.

 

LatePost: Can that ladder be shifted by external forces?

 

Paul Fang: I believe, ultimately, it depends on one's self. In the end, you can only rely on yourself. In the course of Midea's development, we too have faced relentless and unscrupulous attacks. But no matter how others acted, I have remained steadfast.

 

But I digress again. Back to your original question. Back in 2012, I couldn't have imagined where we'd be today. That year, our revenue was RMB 102.7 billion; last year, we surpassed 400 billion. In 2012, Midea's profit was likely less than 5 billion. Last year, it exceeded 30 billion. From Midea's roots in Beijiao Town, to the transformation of China's home appliance industry, and further to the broader evolution of East Asian enterprises... Having witnessed all these changes, I find it hard to believe there's anything left I haven't thought through or come to terms with. If there is, then perhaps the problem lies with me.

 

Sustainable Growth at Midea Depends on Corporate Governance

 

LatePost: At Midea, how would you rank shareholders, customers, and employees?

 

Paul Fang: Employees come first, customers second, and shareholders third.

 

LatePost: Employees first? That's quite rare among Chinese companies.

 

Paul Fang: If employees aren't comfortable, the company can't develop well. We're based in a township where the overall environment isn't ideal, so we've put in a lot of effort to improve it. Our founder, Mr. He Xiangjian, has established a hospital here. My alma maters, including primary, middle, and high schools, have opened campuses here. Additionally, Midea High School, affiliated with No.2 High School of East China Normal University, one of the top schools in Shanghai, is set to open soon. We also developed the ALSO commercial district nearby, complete with apartments where university graduates can move in with just a suitcase.

 

LatePost: You care deeply about your employees, but at the same time, Midea is known for being ruthless in staff turnover.

 

Paul Fang: We're constantly adjusting and optimizing our structure. People often ask, "Why is Midea always optimizing its workforce?"

 

At an annual company conference, I addressed this proactively and admitted we were right to do so. A company must keep optimizing in order to move forward. You can't look at a single employee in isolation. We have 8,000 core suppliers across China and 200,000 employees. Add in the upstream and downstream ecosystem, and we're supporting over a million jobs. Midea is a core enterprise in this value chain. Only when Midea continues to thrive can the entire chain remain vibrant and sustainable.

 

LatePost: It's said that you don't allow anyone to praise you at the company.

 

Paul Fang: As I often say, what a person hears depends on what they want to hear. At the very least, nobody dares say flattering things in front of me. Why? Because if someone tries to flatter me, I'll either criticize them directly or call them out at a public meeting.

 

LatePost: So you never praise others either?

 

Paul Fang: That's one of my shortcomings—I don't praise people.

 

LatePost: How do you usually criticize people?

 

Paul Fang: I name names at meetings. I believe in being direct. Transparency and simplicity are the best ways to handle things—no beating around the bush.

 

LatePost: Was Mr. He Xiangjian also like that with you back in the day? There's a story in a previous article that said when you were an executive at Midea, he would summon you to his office every few months with sticky notes filled with critiques of your recent actions.

 

Paul Fang: I think I was influenced by him quite a bit. Now that you mention it, I recall he seldom praised me either.

 

He was extremely meticulous. He would summarize everything, sometimes filling up ten or more sticky notes. He'd note down things like what I said in which meeting on which day, and point out, "That's wrong, you shouldn't have said it that way."

 

LatePost: Do you now train others the same way he trained you?

 

Paul Fang: Times have changed. We've built a robust leadership development system. Internally, we have programs like the Pilot Program, the Voyager Program, and the Navigator Program. Senior executives are required to undergo training at top global business schools. I personally have in-depth, one-on-one conversations with them twice a year. The system is already in place.

 

LatePost: How would you assess Midea's organizational capability? What are the key indicators of strong organizational capability? And what kind of organizational structure is best suited for a complex, global, and diversified corporation?

 

Paul Fang: Among Chinese companies, I'd say we're doing quite well. The foundation of organizational capability is the talent system. Ultimately, everything depends on people executing the strategy. No matter how great your plans are, they're meaningless without execution. Simply put, you need a clear strategy, a practical roadmap for implementation, and a capable team to execute. On a higher level, you also need a sound framework for corporate governance.

 

We've implemented a high level of decentralization. It may seem like I have nothing to do every day; no one comes to me because they don't need to. I delegate authority extensively, and that authority is further delegated downward. Combined with our talent development system, Midea has become highly inclusive. We recruit from both campuses and the job market, drawing in diverse talent, and this has allowed us to build a solid organizational framework.

 

LatePost: When did Midea begin decentralizing? At what point did people stop needing to come to you?

 

Paul Fang: It started even before I became Chairman, and after I took on the role, the decentralization became even more thorough. Now, I'm only responsible for setting strategic direction, like a radar scanning the company, evaluating team performance, selecting and developing talent. Other than that, I don't have much to do.

 

LatePost: Why are you so comfortable with decentralizing authority? Some CEOs have told me it's not that they don't want to, but that they simply can't; they can't find people they trust enough.

 

Paul Fang: That's not true either. It all depends on whether you truly believe this is common sense—all large enterprises must be highly decentralized. No matter what, I decentralize. Whether or not I can find the right people, I will still decentralize. If someone's not a good fit, I replace them.

 

LatePost: But if you just replace people who don't perform, won't that create a sense of insecurity?

 

Paul Fang: They do feel insecure. Every manager at Midea, including me, has a succession plan. Everyone is required to have three successors, clearly ranked as first, second, and third. The manager knows who they are, and I involve them in the interview process to choose their successors.

 

LatePost: You've said before that Midea's success stems from a system that unleashes the entrepreneurial spirit in everyone. But isn't entrepreneurial spirit something innate? Can it really be encouraged or developed?

 

Paul Fang: Entrepreneurial spirit is indeed innate. It's a trait, much like personality. Some people are naturally bolder than others. Everyone may possess it to some degree, but you might not even realize you have it until the right conditions bring it out. That's where corporate governance comes in.

 

That's why I always say that for Midea to maintain its vitality, we must rely on corporate governance and continuously stay ahead. Governance means combining reasonable incentives with reasonable constraints.

 

Reasonable incentives mean identifying those with entrepreneurial spirit. Our approach, known as "horse racing", "horse spotting", or "horse running" within Midea, is built on this idea. We fully break down the organization into business units (BUs), put people in charge as BU presidents, and see if they have what it takes. If they do, it quickly becomes evident.

 

LatePost: But some people are just naturally bold and willing to invest. That doesn't necessarily mean they have entrepreneurial spirit. How do you tell whether someone truly has it?

 

Paul Fang: That's difficult to define precisely. The most important trait is insight, or the ability to identify what the most critical problem is. In every phase of a company's life, the issues evolve. It's like pruning a tree; continuous refinement is necessary. If you can't even spot the issues, there's no way to move forward.

 

Insight is the most crucial criterion. Let's set aside things like character for now. That's just the baseline. The second is decisiveness. Do you have the courage, the guts? Can you make sharp, timely decisions? Can you diagnose problems accurately, turn losses into profits, reverse situations, pull back from the brink, and rally the team? That's what decisiveness is about.

 

LatePost: And the third?

 

Paul Fang: I don't think anything else matters as much. If someone has those two qualities, that's enough—leave the rest to others.

 

LatePost: Years ago, you talked about four stages of becoming an outstanding professional manager: "full-self," "with-self," "selfless," and "self-free." Where do you think you are now, and what's missing before reaching the next stage?

 

Paul Fang: That was something I said in an interview back in 2002, when I was young and naive. I didn't really have the qualifications to talk about being "self-free" at the time.

 

LatePost: Do you no longer believe in those four stages?

 

Paul Fang: No, the philosophy still holds. It's like what Socrates said, "know thyself"; or what Nietzsche said, "become who you are." It's the same idea. I remember back in 2006, during the first cohort of Cheung Kong Graduate School of Business, we had a dinner with Li Ka-shing. There were four tables, and he spent about 30 minutes at each. When he came to our table, I asked him a question similar to yours.

 

Li Ka-shing said: when your company has 100 people, you need to be at the very front; when it has 1,000, you should move back into the ranks; and when it has 10,000, you need to be in a place where no one can even see you. That's the same idea as "with-self," "self-free," and "selfless." But today, I wouldn't say things like "self-free" or "selfless" anymore. That was just the ignorance of youth.

 

LatePost: You mentioned being "self-free" and "selfless," yet Midea carries your personal imprint from top to bottom.

 

Paul Fang: Of course there's my imprint. After all, I'm the one who proposed the core business strategies. But if I were to step down tomorrow and someone else took over, there would be no issue at all. I can go on a month-long business trip, and no one needs to contact me. Everything still runs smoothly.

 

Midea's development today depends entirely on our systems and mechanisms. I believe our foundational framework is firmly in place. First, we're highly digitalized. Second, we've established a variety of operating, governance, and talent development mechanisms, including a robust talent pipeline.

 

At Midea, any business unit head can be rotated at any time without impacting operations.

 

LatePost: You once said that professional managers should function like precise components in a machine, being emotionless, even self-effacing. Do you still think that way today?

 

Paul Fang: That idea is tied to a uniquely Chinese definition. In the U.S., there's no such distinction. Entrepreneurs are simply entrepreneurs in the U.S.

 

People ask whether I see myself as an entrepreneur or a professional manager. This labeling is just something created in China. If you're not the founder, then you're not an entrepreneur. That's wrong. My point is that this kind of categorization doesn't exist globally.

At Midea's 2011 Company Sports Day, Paul Fang (left) leads the race, while a smiling He Xiangjian (right), Midea's founder, follows behind.

 

Midea's Succession Model Has No Parallel in China Today

 

LatePost: In 2012, Midea's founder, Mr. He Xiangjian handed over the company he built from scratch to you, making you Chairman of Midea Group. Over the past 13 years, Midea's revenue has quadrupled from RMB 100 billion to over RMB 400 billion, and its market cap has increased by over RMB 500 billion. Some say Midea is the only private enterprise in China to have successfully completed a leadership transition while also being elevated by its successor. A one-of-a-kind case.

 

Paul Fang: Whether the transition is truly successful can only be judged over a long period. My greatest responsibility now is to select the right person to hand it off to next.

 

When I became Chairman in 2012, it was a monumental moment. This is a massive company, a private enterprise, and the founder handed it to me. He has a son and a daughter. Many people didn't understand the decision at the time, and even the government had doubts. I remember at the handover ceremony, the founder gave a lengthy speech and then asked me to say a few words. Under normal circumstances, you'd deliver a long speech. But I just said two sentences, literally just two. And I'm still glad I did, because 13 years later, those two sentences have stood the test of time.

 

The first sentence I said was, "Outstanding talents are common, but those who can recognize them are rare." That clarified our roles: Mr. He was the key figure, not me. There are countless talented people, but very few who can identify them. The second sentence was, "I am but a passerby in Midea's journey of development." Like running the 4×100 relay, I'm doing my leg of the race well, and my successor will carry the baton forward.

 

At Midea's 2012 leadership transition ceremony, He Xiangjian officially handed over the company to Paul Fang, who became Chairman of Midea Group. 

 

LatePost: Why do you describe yourself as a "passerby"?

 

Paul Fang: In the 1930s, Lu Xun (a well-known Chinese writer) wrote a very short piece titled The Passerby. In it, a man is asking for directions. He meets a little girl and asks her what lies ahead. She says, "Flowers." He then asks an old man, who says, "A graveyard." Then he asks, "What comes after the flowers? What comes after the graveyard?" The answers reflect your reality, your material world, and your spiritual world. The man is just a passerby. No matter who you are, you will get the same answers.

 

Midea's progress today must rely on institutional mechanisms. Everything I've done has been in service of building them.

 

At every annual company conference, I reiterate: I will step down. I must step down. And I want to do it while people still don't resent me.

 

A prominent entrepreneur once told us, "Sixty is a turning point. At sixty, people become confused, more prone to mistakes." Of course, I say this half-jokingly. But it's part of the natural order. You're bound to fall behind the times.

 

LatePost: When you first took over, you described your relationship with the founder by saying, "Our relationship was built on deep trust, and that trust was cultivated over twenty years. But after I took over, that trust could change at any moment. It's fragile, because it's not based on family ties, but on employment."

 

Paul Fang: Trust is a critical issue in corporate succession, especially in Chinese companies. I may speak calmly about it now, but from 2012 to 2015, it weighed heavily on me.

 

Shunde is a land of fortune in the Pearl River Delta, deeply influenced by Cantonese culture. Back then, I was very aware of the enormous pressure. I wasn't sure I could handle it. Many people were waiting for me to fail. Truly, no exaggeration.

 

LatePost: Yet in 2012, right after taking over, you initiated a transformation that caused company revenue to drop from RMB 140 billion to just over RMB 100 billion. That's a tough move for a new leader. Shouldn't the first year be about maintaining stability? Why take such a risk?

 

Paul Fang: It was an incredibly difficult time, not just externally, but internally as well. I remember in 2014, even within the company, some executives questioned whether Midea Group's strategic direction was flawed. The company's market cap had dropped. Investors also felt the strategy was questionable. It wasn't meeting expectations.

 

Even my family and friends came to me asking what I was going to do. I told them, "At worst, I'll just step down. I have no baggage; nothing I can't let go of."

 

Those two sentences I said when I took over in 2012 already made my position clear, and I acted accordingly. On day one, I told my colleagues, "I'm mentally prepared. If even the founder didn't pass the company to his children but instead entrusted it to you, then what do you have to complain about? I certainly have nothing to complain about."

 

LatePost: During that reform period, Midea's stock price dropped and you faced a wave of criticism. Did you ever explain yourself to the founder?

 

Paul Fang: I didn't say a word. Midea's development is the best response.

 

LatePost: Many entrepreneurs want to know: what does it take to ensure a smooth succession? What's Midea's secret?

 

Paul Fang: A lot of well-known Chinese entrepreneurs have visited Midea to learn from our experience. But what I tell them is: it's not replicable. You can't copy it.

 

First, Midea's system and team are the result of many interlocking factors; you can't reproduce that. Second, China still doesn't have a robust market-oriented system, nor a well-developed managerial class. Third, as I've said before, society hasn't reached a consensus on many aspects of enterprise development. In Zhejiang, for example, many entrepreneurs are determined to pass their businesses to their children.

 

Once, a chairman of a listed company came to me. He had originally handed his company over to a professional manager from outside. After a while, he felt it wasn't working and started considering whether to pass it to his son or daughter. He wanted my advice. I told him, "I can't answer that for you."

 

From another perspective, when we ask how to manage corporate succession, or whether to go the family route or the managerial route, I'll tell you: 20 or 30 years from now, no one will even be asking that question.

 

Economic theory tells us that capital tends to concentrate, while entrepreneurial spirit is widely dispersed. Capital may be concentrated in the hands of the founder's family, but the chance that someone with both the capital and the capability to run the business also exists within that same family? That's unlikely. After repeated failures in passing the business to the second generation and then to the third generation, a founder will inevitably look to professional managers. This has already been proven in developed economies. With more advanced market systems, externally hired managers have often succeeded in those contexts.

 

LatePost: So ultimately, there needs to be a societal consensus and a highly market-oriented system in place?

 

Paul Fang: If China's capital markets allowed corporate spin-offs, that could actually be one way to solve the succession issue. Expecting one person to manage such a large enterprise—it's not impossible, but it's difficult. If you split the business, management becomes much easier.

 

 LatePost: GE once split into three separate units in pursuit of specialization. As a result, it was revitalized. Would Midea consider doing the same?

 

Paul Fang: That's a great question. It's something I've been discussing for years. I've said that if China's capital markets were mature enough, I'd split the company today without hesitation. But current legal regulations don't allow it, so for now, I must focus on finding my successor.

 

I insist that I must step down. For a business to progress, new leadership must emerge. It's not about me personally—it's not about retiring resolutely at the height of my career—but rather about ensuring that Midea continues to evolve. That requires someone new, someone better than me.

 

LatePost: When you search for your successor, do you compare them to your younger self?

 

Paul Fang: That's hard to avoid. Of course I do. But I also try to explore other ways to evaluate and recognize talent. I'm constantly evolving myself. At Midea, our next leader must be developed internally. They need to have gone through the grind and proven themselves.

   

LatePost: What continues to drive you to keep evolving and learning?

 

Paul Fang: It definitely isn't money. What drives me is spiritual satisfaction—the joy of seeing the company grow stronger, watching my colleagues succeed and achieve their financial freedom. What matters even more to me is witnessing Midea, as a private Chinese manufacturing enterprise, gain a foothold on the world stage. That's my greatest fulfillment.

 

LatePost: If one day you leave this company, how would you like people to remember or define you?

 

Paul Fang: I don't need to be remembered. I hope that the moment I leave, the company has nothing to do with me anymore. That's my sincere wish.

 

Our lives are all one-way tickets. No one gets a round trip. Since it's a one-way journey, we should spend our lifetime finding its meaning, and that's enough. In 1992, I could never have imagined where I'd be today. In 2012, I couldn't have imagined it either. I've already walked a very fulfilling life journey. Why would I need people to remember me? 

 

There isn't a single photo of me on the company's walls. Even in our corporate showroom. When it was being built, I told the team there was no need to leave any trace of me. What for? In the end, they did include one photo, taken during our listing in Hong Kong last year. It couldn't be avoided, so they used it.

 

LatePost: Is there anything you fear now?

 

Paul Fang: Personally, I can accept whatever life brings. But what truly worries me is the possibility that Midea might fail to keep up with the pace of change.

 

 LatePost: You once used a metaphor: you said being a CEO is like being a high jumper, and there will always be a height you can't clear. Eventually, you'll hit the bar.

 

Paul Fang: What I meant is that the CEO is ultimately a failure. Every CEO, in the end, will fail. Though society is filled with heroic narratives, I believe history is not driven by heroes. It's the failures that shape history. Only through failure can humanity advance.

 

LatePost: You've said before that books are your spiritual nourishment, and you're a prolific book buyer. You read philosophy, economics, management, literature, sociology, and more. Which book do you return to the most, one that feels new every time you read it?

 

Paul Fang: I went to university in the 1980s, studying history at East China Normal University. Back then, I voraciously read all kinds of Chinese and Western classics. One of my favorite writers is Stefan Zweig, though the book I cherish most is not his famous Decisive Moments in History, but The World of Yesterday.

 

During the pandemic, when I was "wandering" overseas, I only brought one book with me; this one. I'd read it many years ago, and the pages were already yellowed. But I carried it with me because so many passages feel hauntingly relevant to the world today. Another book I love is The Impossible Exile: Stefan Zweig at the End of the World, by an American author, a biography of Zweig. That one is equally profound.

 

LatePost: Decisive Moments in History tells the stories of 14 human "stars", heroes who shine brilliantly in human history. Which of them do you admire the most, and why?

 

Paul Fang: The one I admire most is Leo Tolstoy—how he chose to leave home while gravely ill and ultimately died on the road. To me, that's what a true hero looks like. If I had to choose another, it would be Claude Joseph Rouget de Lisle, who wrote the French national anthem, La Marseillaise. His brilliance was a fleeting moment, and his life flashed in an instant.

 

LatePost: He was an ordinary man. Everyone knows La Marseillaise, but few know his name. You mentioned you admire Tolstoy. What about him moves you most?

 

Paul Fang: I imagine that by that time, Tolstoy was already a literary giant. He knew he was ill, he was in his eighties, and yet he chose to leave his home. That doorway he walked out of was symbolic; it could have been the physical threshold of his house, or it could represent his immense literary fame and the adoration of countless admirers. And still, he chose a path of no return. I think that's heroic. At the very least, it shows a transcendence of all worldly attachments.