As the world's leading car window maker with an exclusive focus on the sector, Fuyao Glass goes well beyond its business empire to be a trailblazer in efficient corporate practices.

The mainland's largest and the world's second-largest automotive glass manufacturer was among the first Chinese companies to win an anti-dumping lawsuit in the US in 2004 following a three-year legal battle. Its win freed the firm from paying any anti-dumping duty for exports to the US and also gave a leg-up to its pursuit of establishing a good global reputation.

And in an unusual but fortuitous fallout, the court case saw Fuyao forge a partnership with the plaintiff PPG Industries, a top US glass producer.

Fuyao then expanded its client list to the world's top 20 auto makers and the top 10 passenger vehicle makers on the Chinese mainland, including joint ventures like Shanghai Volkswagen, Beijing Hyundai and Dongfeng Nissan, as well as world leaders in car manufacture such as Toyota, Ford, Hyundai, Honda, BMW, Mercedes-Benz and Rolls-Royce.

Cao Dewang, chairman of Fuyao Glass Industry Group Co Ltd, believes the courthouse victory will create a good legal precedent for Chinese companies.

Points in the Fuyao case will be quoted by many Chinese companies as positive proof when they face anti-dumping charges, he said.

However, Cao pointed out that not all anti-dumping claims against Chinese enterprises in recent years simply came out of thin air and some firms are not as innocent as they claim.

"Small market players, especially, tend to ignore the rules of the game and the bitter fruit of their unruly competitive behavior has to be swallowed by all market players," Cao noted.

The hard fact is that international trade has been on a roller coaster ride the past few years, with headline-grabbing anti-dumping cases around the world detracting from the positive story that global trade could tell.

The world's two largest economies are under a constant threat of becoming involved in a pitched all-out trade battle over the anti-dumping sanctions imposed by the US on imports of Chinese solar panels and steel.

Every country has its limits in digesting imports, noted Cao, who believes that the reckless market behavior of individual enterprises could be magnified to damage the industry's image and cripple industry exporters as a whole.

Cao voiced hope that all market players would be concerned enough to be self-regulated, adding what is really important in international trade is "putting yourself in the shoes of others".

Apart from pioneering a model for Chinese companies to handle increasing trade disputes, Fuyao has also been at the forefront of corporate governance.

It was the first privately owned mainland enterprise to introduce the independent director system.

In 1995, Fuyao moved out of auto glass maintenance to concentrate on the related OEM (Original Equipment Manufacturer) market.

Cao took this opportunity to bring in the independent director system, which had proved to be popular and beneficial in many Western countries but was still unfamiliar terrain at the time for Chinese enterprises.

He hunted for a band of astute staff to serve as a think tank to help decision-making in the company.

More importantly, these outside talents - expected to stay strong in the face of money and power - could oversee whether minority shareholders were being cheated by the "big fish".

But Cao was well aware that the mere introduction of independent directors could hardly make a big difference. What mattered was a well-designed mechanism that enabled them to play a big role.

He then downsized the board of directors from 13 members to 11, comprising five big shareholders, three independent directors and three staff representatives selected from the lower ranks.

Voting on the board was determined by seats and the strong presence of independent directors and staff representatives could be expected to protect the interests of minority shareholders.

If big shareholders had reservations about board resolutions, they could submit the bill at the shareholders' meeting where, according to corporate laws, voting was determined by shareholding.

This democratic administrative method worked for Fuyao, though it was not until 2001 that the independent director system was officially introduced on the mainland.

Fuyao has scored a host of firsts, with more expected, and seen Cao become the first Chinese business owner to be named the Ernst & Young World Entrepreneur of the Year, in 2009.

Picked from among 43 entrepreneurs vying for the title, Cao was hailed as a great example of the new breed of emerging market leaders that has burst onto the global stage. "Among various honors I have won, this award stands as the one I cherish the most," Cao told China Daily.

Emerging from humble beginnings to become one of the most successful mainland entrepreneurs, Cao's is a true rags-to-riches story.

He was born in Shanghai in 1946 to a wealthy business family from Fujian but they became poor almost overnight while fleeing back to their home province during the civil war.

Cao started his own business at the age of 16, peddling cut tobacco. He also worked as a farmer, chef and fruit seller. In 1976, Cao began working as a merchandiser for the Fuqing Gao Shan Special Glass Factory.

In 1983, the factory was running at a loss and the local authority did not have the means to turn the business around. Cao was asked to take over the factory and he had it turning a profit within a year.

Mind the gap

Four years later, Cao founded Fuyao Group to specialize in the production of automotive safety glass and industrial technological glass.

But he warns that no success story can be duplicated and starting a business should always be a prudent decision - especially for young people influenced by books on the "science of success" and the profusion of success stories in the media.

"Founding a company is for those who have developed a skill in a field over several years and want to strike out on their own," said Cao, who does not encourage young people to dip their toe into these waters fresh out of school.

"Being an entrepreneur calls for sheer hard work, a down-to-earth spirit, diligence and modesty, as well as continuous learning," he said.

"You do have to think twice before stepping onto the road, where success brings supreme glory but failure leads to oblivion."

sophia@chinadailyhk.com

In 1995, Fuyao moved out of its automotive glass maintenance business to focus on the Original Equipment Manufacturer (OEM) market.

(HK Edition 04/13/2015 page9)