---
title: "Why Did Dong Mingzhu Choose to Endorse Gree Herself? Actually, You Don't Understand Miss Dong's Hardship"
description: "Dong Mingzhu chose to endorse Gree herself to protect Gree Electric from turmoil, decline, and even destruction. This is not an exaggeration. The article details the historical struggles between Gree Group and Gree Electric, including attempts to sell the company to foreign competitors, and explains why Dong's high-profile endorsement is a strategic move to maintain control."
author: "杨林"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2016-03-27"
language: "en"
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original_source: "https://mp.weixin.qq.com/s/3Zb3M-dIvI4yy0X0o-53Yg"
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# Why Did Dong Mingzhu Choose to Endorse Gree Herself? Actually, You Don't Understand Miss Dong's Hardship

> Dong Mingzhu chose to endorse Gree herself to protect Gree Electric from turmoil, decline, and even destruction. This is not an exaggeration. The article details the historical struggles between Gree Group and Gree Electric, including attempts to sell the company to foreign competitors, and explains why Dong's high-profile endorsement is a strategic move to maintain control.

Why did Dong Mingzhu choose to endorse Gree herself?
> She is striving to protect Gree Electric from turmoil, decline, and even destruction.
>
> — I am not exaggerating.
Have you ever seen a local government and the State-owned Assets Supervision and Administration Commission (SASAC) determined to sell a state-owned Chinese enterprise to a foreign competitor, even at the cost of the decline of an excellent Chinese enterprise and the shelving of a national brand?
Have you ever seen government officials and entrepreneurs fight for years for absolute control, at the expense of losing control of the enterprise, leading to chaos and near-death?
Have you ever seen a brilliant entrepreneur, once in the limelight, imprisoned and jailed?
Whether you have seen it or not, this has been a common script in the history of Chinese enterprises since the reform and opening-up. The list of cases is long: Xiaohushi, Dabao, Nanfu Battery, Zhonghua Toothpaste, Jianlibao, Chu Shijian, Li Jingwei...
Gree has experienced or narrowly escaped all these calamities.
First, we need to clarify Gree's shareholding structure (see figure below). The Gree we know—the one that makes Gree air conditioners for millions of households, the industry leader, the one that made Dong Mingzhu—refers to Gree Electric Appliances, Inc. of Zhuhai. Please note the word "Electric" after Gree, and it has nothing to do with the Gree Group Company or Zhuhai Gree Real Estate above in the shareholding structure.
The above is the 2015 shareholding structure. In the 2006 annual report, the structure was as follows.
To put it simply:
Zhuhai Gree Group, formerly known as "Zhuhai Special Economic Zone Economic Development Corporation," as the name suggests, was an administrative enterprise with strong administrative overtones, set up to cope with the policy of "separating government from enterprises." Except for Zhu Jianghong (former chairman of Gree Electric), all its chairmen were transferred from Zhuhai SASAC cadres. Since around 1994, when Gree got on track, 90% of its profits have come from Gree Electric.
From 1991 (the founding year of Gree Electric, formerly a small air conditioner factory called Haili, with an annual output of 20,000 units) to 2003, under the management of Zhu Jianghong and Dong Mingzhu, Gree Electric grew from an insignificant small factory to a domestic air conditioning industry leader with revenue exceeding 10 billion yuan, and has firmly held that leading position ever since.
The son's success is a good thing, but the father has too many schemes and insatiable desires. The "father-son conflict" is inevitable, and the family is never at peace. During the same period, Gree Group, as the parent company, engaged in disorderly diversification, investing in real estate and numerous subsidiaries. Some subsidiaries, such as Gree Small Appliances, targeted the same customer groups as Gree Electric, not only using the Gree brand built by Gree Electric for free but also posing potential competition. In plain terms, the eldest son opened a business and made money, giving profits to his father, who spent recklessly and even let other sons open shops, using the eldest son's brand to pass off as the real thing. That would make anyone resentful.
To this end, the "father and son" had been fighting for years. Zhu Jianghong repeatedly proposed to the group to restrict the use of the Gree brand and have Gree Electric acquire diversified enterprises like Gree Small Appliances, but was repeatedly rejected. By 2003, the "father-son rift" had reached a breaking point. A financial journalist representing the "Gree Group" stance publicly published an article attacking Zhu Jianghong, chairman of Gree Electric, as a Chu Shijian-like figure. At that time, Chu Shijian was in his fourth year behind bars. The father-son conflict had escalated to a nationwide spectacle. If the eldest son, who was not obedient and submissive, continued to be disobedient, prison was not impossible!
This article, publicly reposted by domestic financial media (including Xinhua Net), unabashedly stated:
"Those in the know are aware that there has always been a power struggle at the highest level within Gree Group."
In such a confrontational situation, Zhu Jianghong, facing threats of imprisonment and character assassination, with high integrity and tenacity, withstood the pressure and ultimately preserved Gree Electric's independence.
Since the son could not be disciplined, the solution was to sell. Gree Group, relying on its absolute majority shareholder status with a 50% stake, decided to sell Gree Electric to American Carrier. Despite countless precedents showing that excellent national enterprises sold to foreign companies never end well, this did not change the determination of SASAC and Gree Group to sell Gree Electric to a foreign enterprise.
Regarding the Carrier acquisition, Gree Electric strongly resisted. Zhu Jianghong repeatedly expressed opposition publicly, but to no avail—
"At the end of July 2005, a confident Carrier Group prepared to enter Gree Electric in Zhuhai to conduct pre-acquisition due diligence. It was only then that the municipal government revealed the acquisition plan to Gree Electric's management, whose shock and resistance can be imagined."
What truly saved Gree from being sold abroad, dismembered, and shelved was a CSRC opinion on share structure reform implementing "full circulation"—although this opinion was not specifically aimed at Gree.
Thus, unexpectedly, Gree Electric was saved.
In 2006, after difficult negotiations, Zhu Jianghong became chairman, party secretary, and president of Gree Group, providing a protective umbrella for Gree Electric and becoming Dong Mingzhu's strong backing, freeing her from worries so she could focus on market enemies. However, by then Zhu was already 60 years old. No matter how willing he was to hold the fort, time was running out.
In 2012, after holding the Gree Group bridgehead for six years, Zhu Jianghong retired. Thanks to the solid foundation laid during the Zhu-Dong partnership, Dong Mingzhu took over the baton, but she was only appointed chairman of Gree Group. The Zhuhai SASAC still controlled key personnel arrangements for vice chairman, president, and party secretary, and immediately parachuted Zhou Shaoqiang in as president and party secretary of Gree Group.
With Zhu Jianghong's departure, the stability of Gree Electric's original management team's control over the enterprise began to crack. In any case, even without unexpected events, as time passed and Ms. Dong's age increased, the SASAC's leverage grew—time was on their side.
In 2012, just three years ago, with Zhu Jianghong's retirement, the struggle over the group's president and Gree's board seats showed that the "father-son conflict" of the past 20 years has not been resolved to this day, and it is unlikely to be fully resolved in the foreseeable future. The smoke of gunpowder has never dissipated, and a major battle could break out at any time.
Dong Mingzhu holds only 0.73% of shares. Even adding Zhu Jianghong, who would undoubtedly support her, the total is only 1.5%. If we include Hebei Jinghai Guarantee Investment Co., Ltd. (the second largest shareholder of Gree Electric, jointly formed by Gree's core distributors, presumably also Dong's faction) with 9.09%, the total just exceeds half of the largest shareholder Gree Group's 18.22% (plus Gree Real Estate's 1%).
Unlike Zhu Jianghong, Dong Mingzhu is a more thorough entrepreneur. She does not have Zhu's original SASAC cadre identity, will never be eligible for the role of party secretary of Gree Group, and cannot have the same connections within the system. At the same time, her seniority and position at Gree are slightly inferior. The respected elder has left, and the pressure that two people once bore now falls solely on Ms. Dong.
To compensate for these resource deficiencies, Miss Dong must make up for them in the market. To guard against any possible counterattack from SASAC, Dong Mingzhu must maintain a high-profile endorsement, must have visibility and exposure, must represent Gree Electric, and must be tied to Gree Electric. Only then can she deter the restless administrative power, gain sufficient third-party support in necessary control battles, and summon a white knight if needed.
The harsh conditions faced by Chinese entrepreneurs, especially those under the state-owned system, are often hard for outsiders to imagine. Wu Xiaobo's "The Turbulent Thirty Years" uses heavy historical facts to confirm the law that "the better (state-owned enterprises) do, the faster (their leaders) die." In the ruthless elimination of market competition, corporate governance must follow market laws and modern management concepts and systems. The better the enterprise, the more so. This is in irreconcilable conflict with the administrative logic of the state-owned management system. This irreconcilable conflict often ends with the decline of the enterprise or the sacrifice of the entrepreneur's future and freedom.
I believe the authors of the high-vote answers, such as @money os 电波 and @恶喵的奶爸, may have overlooked or never realized the harsh survival environment faced by entrepreneurs with state-owned backgrounds in China. All their decisions are made in the complex cracks. If we evaluate these entrepreneurs' decisions without considering the specific social context and background, the evaluation will inevitably be superficial and miss the point.
History has no ifs, but based on my experience and judgment, I believe:
In the past: Without the strongman politics of Zhu and Dong in the face of the more powerful SASAC, the remarkable Gree Electric of today would not exist!
In the future: If Dong Mingzhu loses control of Gree Electric and the Zhuhai SASAC and Gree Group bureaucrats control it, Gree's fate may be the next Jianlibao!
Therefore, I support Dong Mingzhu endorsing Gree. Every time I see Gree in advertisements, I can't help but think that Ms. Dong is preparing for the inevitable battle in a way that outsiders find hard to understand.
The smoke of gunpowder has never dissipated, and the death knell can sound for you at any time!
She is striving to protect Gree Electric from turmoil, decline, and even destruction.
Salute to the not-easy Chinese entrepreneurs!
**Appendix: Super Impressive Gree Factory!**
> **Previously, I thought Miss Dong's 1 billion bet with Lei Jun was a joke. Now I see she was prepared!**
While everyone was still marveling at Dong Mingzhu's claim that she could take on the research and development of ballpoint pen tips, Gree Electric had quietly transformed from the "air conditioning leader" in home appliances to a "heavy industry equipment manufacturing company." In the coming years, Gree will make its equipment manufacturing products world-class, just like its air conditioners.
In the video, you will see advanced integrated injection molding automation factories, sheet metal automation factories, sheet metal chassis assembly automation lines, robot spot welding automation lines, advanced machining equipment, testing automation, intelligent logistics automation, heat exchanger automatic production integration, industrial robots...
(Video from Gree Industrial Products)
Gree's self-developed automation products currently cover more than 10 fields, including industrial robots, intelligent AGVs, injection molding manipulators, large automated lines, and final assembly equipment, with over 100 products and nearly 100 patents.
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