Proactively adapt to the requirements of transformation and consciously strengthen the association’s own development.

　　Editor’s Note: At the first Secretaries’ Working Conference of the China Machine Tool Industry Association held in Beijing on March 25, 2013 (for a report on the conference, see China Machine Tool Industry News, Issue No. 7, 2013), Chen Huiren, Deputy Secretary-General of the China Machine Tool Industry Association, delivered a speech titled “Proactively Adapting to Transformation Requirements and Consciously Strengthening the Association’s Own Development.” The speech provided a profound and insightful analysis of the necessity of strengthening the association’s own development; at the same time, it identified key areas for such strengthening, particularly emphasizing the three major functions and tasks of modern social organizations in the new historical period. This speech offers strong guidance for enhancing the association’s self-construction and better enabling industry organizations to play their role in the new stage of industry development. The full text is reproduced below. I. Why Strengthen the Association’s Own Development? There are at least three reasons: 1. The Requirement for the Association’s Sustainable Development Our association has been established for 25 years. Through the efforts of several generations, we have laid a solid foundation for our work and development—certainly one of the better ones among associations under the former Ministry of Machinery. When we say “better,” we mean relatively better compared to those associations that are not so good. However, there still remain considerable gaps between our current situation and the expectations of our member enterprises, the government, and especially the ever-changing demands of the reform environment—and there is still much room for improvement. To put it succinctly, our association has a strong foundation but also great potential for growth. While our foundation is solid, we cannot rest on our laurels, live off past achievements, or enjoy the status quo. We must avoid complacency, closure, rigidity, and stagnation; otherwise, problems will surely arise. This is a case of being vigilant even in times of peace. Therefore, we must proactively embrace change, adopt new perspectives, develop new ideas, and take new actions to open up new horizons. Thus, we must continuously strengthen our own development to adapt to these new requirements. 2. The Requirement of the New Stage of Industry Development We are in the machine tool industry, which has entered a new stage of development. Over the more than 20 years since the association was founded, especially over the past decade, the industry has undergone significant changes—changes that can be described as comprehensive and profound. The industry today is vastly different from what it once was. In the past two years, the industry has begun experiencing yet another round of new changes. As China’s economic growth slows down and market demand undergoes substantial shifts, the development phase characterized by scale expansion—which has lasted for over a decade—is essentially coming to an end. Meanwhile, the industry is entering a new stage marked primarily by transformation and upgrading. This is the latest shift in our industry. We are currently in a transitional period of development—a painful period of transformation and upgrading. These are the defining characteristics of our industry’s current stage. The industry’s new changes and new features will undoubtedly pose new demands and challenges for the work of our industry association. This is the second reason. 3. The Requirement of the New Stage of National Reform and Development Since the 18th National Congress and the Two Sessions, calls for reform have grown louder and louder—a sentiment shared by people across the country and around the world. It is safe to say that China’s reform, launched more than 30 years ago, has now entered a new stage of development. At the Two Sessions, aside from the first major event—the election of state organs and government officials—the second major event was the State Council’s plan for institutional reform and functional transformation. Since the reform and opening-up began, the State Council has carried out seven rounds of institutional reforms, with generally unsatisfactory results and a strong sense of merely changing the packaging without addressing the core issues. Although this reform has just started, we cannot yet predict its actual effects. However, at least in terms of approach, this reform is markedly different from previous ones and represents a significant departure. The first difference is that transforming government functions has become the central task—not just dismantling and reorganizing institutions. The second difference is the strong determination shown: Premier Li Keqiang called for “amputation”—self-reduction of power. Another important difference is that the measures proposed are very specific. The State Council’s functional transformation measures consist of ten points, five of which aim to reduce government intervention—such as reducing project approvals, diminishing qualification certifications, and cutting overlapping functions. Two points involve reform, one of which directly affects us: reforming the management system for social organizations. The remaining three points focus on strengthening. These ten measures are highly specific. The overarching principle is to give more freedom, while still maintaining some degree of control—balancing giving and taking, but mainly giving. The first direction of giving is toward the market; the second is toward society; and the third is toward local authorities. Giving to society involves us, because we are a social organization. Previously, State Council reforms seemed far away from us, but this time they are very close and directly relevant. The reform of the social organization management system has been clearly articulated: First, the goal and direction are very clear—to separate government from social organizations; second, responsibilities and powers must be clearly defined; and third, social organizations must practice self-governance according to law. This is what we call the modern social organization system. What are the functions and tasks of social organizations like ours—the industry associations? These are also explicitly stated in the reform plan. There are three main ones: first, providing services; second, reflecting demands; and third, regulating behavior—what used to be called industry self-discipline, but now carries a richer meaning. These are precisely the responsibilities and tasks that we, as industry organizations, should shoulder. This is clearly stipulated in the State Council’s reform plan and is extremely well-defined. The plan also clearly identifies priorities for the development of social organizations, emphasizing the need to cultivate and prioritize industry associations and chambers of commerce. In other words, our association is among those that will receive special attention and priority development. This information tells us that as reform gradually takes effect and deepens, it will bring new opportunities for our association. We can be certain that our development environment will become more standardized, our scope for action will expand, and our prospects for development will be brighter. Of course, this is only possible if we actively adapt and consciously embrace change. We must be fully aware that reform, while bringing us new opportunities, also poses new demands and challenges. Therefore, we must proactively adapt to these new changes and consciously make new adjustments. This is another important reason for strengthening the association’s own development. II. Where Should We Focus Our Efforts in Strengthening the Association’s Own Development? On this issue, let me briefly outline some key principles: 1. Clarify Our Role and Find Our Position This is a fundamental prerequisite for effectively strengthening the association’s own development. Who are we? What do we do? What role should we play? What impact should we have? What should we do, and what shouldn’t we do? Only by clarifying these most basic questions can we act with clarity and awareness in our work; otherwise, we risk going astray. The State Council’s plan has already set out broad guidelines. What remains is to further clarify our role and find our position based on the actual conditions and characteristics of our industry. At the very least, we must understand that we are neither the government nor a second government; we are not enterprises either. We are a social organization, and our path of change and effort lies in building a modern social organization. If we fail to clarify our role and get our direction right, we may end up working hard but achieving little, or even doing more harm than good. 2. Uphold the Spirit of Reform and Innovation Any organization that wants to maintain vitality and dynamism must follow one path: reform and innovation—and continuous, ongoing reform and innovation. Our association is certainly no exception. We are fortunate to live in an era of great change, especially during the past 30-plus years of reform and opening-up, when economic and social changes have been comprehensive and profound. If we don’t persist in reform and innovation, if we try to meet all changes with the same old methods, we’ll fall behind the pace of progress. And if we become closed and rigid, stuck in our ways, we’ll inevitably be left behind by the rapidly developing times. For the continued development of our association’s cause, we must choose proactive change and constant innovation. We must foster an atmosphere within the association that encourages innovation and consciously cultivate an organizational culture that is innovative and forward-looking. 3. Uphold the Fine Tradition of Seeking Truth and Being Pragmatic General Secretary Xi Jinping said, “Empty talk harms the country; practical action strengthens it.” Premier Li Keqiang emphasized, “Shouting yourself hoarse is less effective than rolling up your sleeves and getting to work.” To strengthen our association’s own development, we need to vigorously promote and uphold the fine tradition and style of seeking truth and being pragmatic within the association. We must tell the truth, do real things, and pursue real results. We must avoid empty rhetoric, avoid bystander criticism, avoid complaining and grumbling, and avoid formalism and superficiality. Instead, we should devote our limited resources and energy more to doing practical and useful things for the industry and our members. The recent “Top Ten Members” evaluation conducted by the association is a perfect example of this pragmatic spirit. Based on the information submitted by member enterprises, colleagues from the industry department and research office spent more than ten days visiting over 50 user enterprises, conducting on-site verification, and collecting a wealth of valuable first-hand data. The resulting evaluation results are therefore more authentic, more reliable, and more credible. We must strongly advocate for this kind of working style and strive to nurture and guide it so that seeking truth and being pragmatic becomes a core feature of our organizational culture. 4. Strive to Build a Learning Organization The era we live in is one of rapid change. Over the past 30-plus years of reform and opening-up, our country has undergone tremendous changes, and our industry has also experienced dramatic transformations. Especially over the past decade, the industry’s development has been remarkable. Due to significant changes in the market environment and other development factors, the industry now faces new—and perhaps even deeper—changes. In fact, the industry has already entered a new historical stage of development, one characterized primarily by transformation and upgrading. To be precise, the industry is in a transitional period of development, and at the same time, it is undergoing the pains of transformation and upgrading. How can we keep pace with the constant changes and rapid progress of society and the industry? There is no other way but to learn. We must build a learning organization—everyone must learn. We must constantly broaden our horizons, be eager to learn, and good at learning. We must not only promptly study the Party and the state’s policies, acquire new knowledge, and master new information, but also be good at learning from member enterprises, branch associations, foreign countries, and other industries—drawing on and absorbing all advanced experiences and positive outcomes that benefit the development of our association’s cause. Only then can we ensure that our organization always stays at the forefront of industry development and consistently represents the correct direction of industry progress. 5. Systematically Plan the Association’s Own Development and Growth We must, based on the three major functions and tasks of modern social organizations and combined with the industry’s own characteristics, scientifically plan the association’s own development and growth. We must make systematic arrangements for the association’s future organizational development, institutional development, business development, team development, and cultural development. This is a new requirement posed by the new situation and an urgent task before us. For instance, regarding service provision, what services can we currently offer? Which services are relatively well-provided? Which services are still lacking? Given the changed circumstances, what new services should we provide? We must use our brains and come up with answers based on actual needs. Similarly, in terms of reflecting demands, the association has had several successful cases in the past of effectively representing industry demands.Under the new circumstances, a pressing task before us is for the association to sift through, distill, and scientifically summarize the industry’s common, mainstream, and overarching demands—those that are critical to the industry’s overall development—and then convey these insights accurately and objectively to the relevant government departments. While providing individualized services to specific enterprises is certainly necessary, such services represent a lower level of support. Offering public development services to enterprises across the industry, on the other hand, represents a higher level and standard of service. Finally, in terms of regulating industry conduct, to date the association has done relatively little exploration and practice in this area. This is precisely the field we must prioritize exploring and putting into practice in the next phase. This is also a new requirement put forward by the government: industry organizations must possess the capacity for self-discipline and self-regulation. At the same time, this is an intrinsic need for the industry’s own development—a new demand posed by the industry’s evolution into a new stage. We must acknowledge that our current foundation in this area is indeed quite weak; we can hardly speak of any experience at all. Essentially, this is an entirely new challenge, so we must actively explore and experiment. Beyond this, there is still much more work we need to plan and undertake—such as strengthening the association’s organizational structure and developing its strategic planning. Of our current 25 branches, most were established shortly after the association was founded. Now, looking back, their structures clearly have serious problems and have long since fallen behind the industry’s rapid changes and developments. We cannot afford to turn a blind eye to this reality. Furthermore, regarding the association’s talent pool, the current age distribution, knowledge composition, and professional profiles of our staff no longer fully meet the demands of our new tasks. Therefore, the association will take concrete measures to attract more outstanding talents to join our cause and usher in a fresh new chapter for our work. In summary, faced with the ever-changing new situation, we must proactively adapt and consciously transform ourselves. In line with the functional requirements of modern social organizations, we must continuously strengthen our own institutional development and better fulfill the role of industry organizations in this new stage of industry development.