Chinese Leadership by Barbara Xiaoyu Wang & Harold Chee

Author:Barbara Xiaoyu Wang & Harold Chee
Language: eng
Format: epub
Publisher: Palgrave Macmillan

Fu Chengyu, one of the star leaders at an SOE, may offer a glimpse of Chinese leaders in this sector.

Fu was born in 1951 into a poor family in northern China; he worked for CNOOC (China National Offshore Oil Corporation) from 1982, when it was established in response to the policy of separating government functions from enterprise management. He graduated as a geology major from a local college, and he was one of a few SOE leaders to get a foreign degree, a n MSc in Petroleum Engineering from Southern California University.

Fu was appointed on April 8 2011 as the Chairman of Sinopec (considered the giant of SOEs). Before this appointment, he had been the CEO of CNOOC from 2003, and he is also a Member of the Central Committee of Discipline Inspection of the CPC (Communist Party of China).

Compared to the majority of SOE leaders, Fu is seen as “Westernized,” because he has an American university qualification, he speaks English fluently and he has worked with foreign partners such as Amoco, Chevron, Texaco, CnoocPhilips, and Shell, for more than two decades. He chaired the strong, eight-person board, including four foreigners as nonexecutive directors. Yet he was in charge of the third-largest oil company in China, which is ranked 20 in the Fortune Top 500 in 2010. Amongst large SOEs, CNOOC is considered the most market-driven global-standard organization, and now he is at the wheel.

Fu is renowned for his audacity in leading China’s biggest overseas M&A initiative of $18.5 billion, seeking to acquire Unocal, the ninth-largest oil company in the USA, in 2005. Although CNOOC was Unocal’s first choice as a merger partner, this marriage was eventually to founder because of the opposition from Washington, as “Some beltway politicians would paint CNOOC, which is 70 percent state-owned, as an arm of a Communist government out to strip the U.S. of vital energy supplies.” (“Uncharted Waters,” Bill Powell, Time, July11, 2005.)

The bid for Unocal is by far the most audacious move which a Chinese SOE has made. Fu, the tall, dark, fit and energetic SOE leader, was really ambitious and believed that he could make it happen, given his experience and understanding of Western culture and business.

Fu may not be a sophisticated politician in the global arena, and he could not convince the US government of his argument of “We are a transparent company, and this is a good deal for Unocal’s shareholders and its employees.” Even sources close to CNOOC’s board told Time that “Fu, not some shadowy string-pulling figure in Beijing, has been the driving force behind the bid.” He is a reputable business leader who has been granted several awards in China, and is seen as a vanguard to lead SOEs to compete in the world market.

To many SOE leaders who are executing a “go out” strategy set by the Chinese government, the resistance Fu encountered illustrates probably the biggest challenge to their ambitions in the international market. Fu was educated in the US and “the most Westernized

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