【正文】 g factories in Indonesia, the Philippines, Malaysia, and Iran. Nor is Haier just a Third World wonder. In the . it says it has nearly 20% of the market for small refrigerators. Haier air conditioners have made inroads in Europe. Unit Two China39。s Haier Power — Antony Paul The pany that Zhang brought back from the dead is a “collective enterprise,”one of some 25 million quasisocialist mercial entities owned in principle by the workers but supervised by local bureaucracies and Communist Party officials. Though the problems of such small or middling, often citybased firms are not exactly the same as those of China’s vast, gangrenous stateowned heavy enterprises, both have suffered from a lack of accountability and poor management. Unit Two China39。s Haier Power — Antony Paul Haier has been able to solve those problems, even though it is still officially a city collective and Zhang therefore a city employee. (At the same time, it is listed on the Shanghai exchange and would like to be listed overseas: Chinese capitalism can be curious.) The pany’s anizational chart lists a category, “Party and Masses System,” not to be found outside China. There are subheads for the Propaganda Department, the Party Office, and the Armed Department. The city government is a constant factor. “We work in a mixed economy,” Zhang says. “You have to have three eyes: one on the market, one on the workers, and one on policy.” The larger point is that Haier’s success shows that even within these constraints, it is possible to resuscitate collective and stateowned enterprises. Unit Two China39。s Haier Power — Antony Paul Zhang, the only son of a worker in a Qingdao shirt factory, says his first love was ancient Chinese literature. As he tells it today, Laotzu (a sixth century . philosopher) and Sun Tzu (a military writer of the fourth century .) provide food for thought for modern businessmen as well as ancient warriors. Laotzu has advice about running a pany:“When the effective leader is finished with his work, the people say it happened naturally.”Sun Tzu is relevant on, among other things, marketing strategy:“Uproar in the East。attack in the West.” When Zhang was in his 20s, schools were closed for several years because of the Cultural Revolution. He spent much of the period in solitary reading and slowly rising through the Qingdao municipal administration, then a Unit Two China39。s Haier Power — Antony Paul Sovietstyle mand structure for local industry. With an eye on the future, he also absorbed, discreetly, Western and Japanese management texts. His chance to put his gleanings into practice came unexpectedly in 1984. As China opened to the West, foreign panies sought out Chinese factories to do business with. The Qingdao refrigerator factory, Haier’s own Website concedes, was then merely a “row of shabby buildings containing several lathes”with a production capacity of 84 units a month. And it was losing money: $179000 in 1984. LiebherrHaushaltsgerate, a leading German whitegoods