Hua Xin, chairman of Maipu, believes the key to success for technology companies is to keep innovating. Provided to China Daily

Technology giant aims to provide platforms to help realize value

With the rise of the electronics and information technology industry, Chengdu, famed for its giant pandas and spicy food, is now also home to many entrepreneurs leading China's IT industry.

Hua Xin, chairman of Maipu Communication Technology Co Ltd, is one of them.

Hua, 56, a native of Sichuan province, of which Chengdu is the capital, is committed to making Maipu, one of China's three largest networking and telecommunications equipment and services companies, a world renowned brand by boosting the company's innovation capabilities.

"From Apple, Microsoft to Facebook or other large successful IT enterprises, we can conclude that the most successful IT companies today are, without exception, the highly innovative ones," Hua says. "Chinese IT companies should study and learn from the business model and creative spirit of their counterparts in Silicon Valley."

Hua says his many years in IT have helped him realize that those in high-tech industries are among the most vulnerable to market changes and instability. But a company that continuously innovates and markets its new products properly can maintain long-lasting growth.

"The only way Maipu can survive the fierce competition is to keep upgrading its capacity to innovate," Hua says.

Hua founded Maipu 21 years ago. Before that he was a lecturer at the University of Electronic Science and Technology in Chengdu, noted for its multi-disciplinary research focusing on electronics.

But Hua says his interest in teaching could not match his enthusiasm for starting his own business.

In 1991 he came up with his first invention, a multi-channel modem that was regarded as a technological breakthrough in China. It was developed with the help of 5,000 yuan ($940 at the time) he had borrowed.

Inspired by that success, Hua quit his job as a university teacher and founded Maipu.

"That's when my entrepreneur dream took off," Hua recalls, saying the hardships of the early days are still vivid for him.

Through many ups and down over more than two decades, Hua has helped turn a firm that employed just three people into China's major network equipment supplier and intelligent solutions provider, with thousands of employees.

Maipu boasts a strong R&D team, composed of more than 400 engineers, 60 percent of them having master's degrees or above.

With their efforts, the company has applied for more than 330 patents worldwide. Last year Maipu's sales revenue was nearly 1 billion yuan ($159 million, 121 million euros) and the company says its average annual sales growth rate is nearly 30 percent.

"Our investment in R&D every year has accounted for 10 percent of total annual sales revenue," Hua says.

"The constant launch of new products enables us to keep up with the pace of the industry's development, as well as meeting changing demand from customers."

While consolidating its position as the industry leader in the domestic market, Maipu is also stepping up brand building efforts overseas.

Its networking products and solutions have been taken up in more than 40 countries and regions. The company has also opened branches in the United States, Europe, South Asia and Southeast Asia.

"Our overseas companies, particularly those in the technologically advanced developed countries, will update us on the world's most cutting-edge technologies," Hua says.

Despite Hua's achievements, his quest to improve his company's innovation capabilities continues.

Last year Maipu bought five small IT companies in Chengdu to obtain advanced technologies.

"Most large enterprises get their core technologies through acquisition instead of developing on their own," Hua says.

"A country cannot only depend on large companies for technological innovations, because most of the best innovations are from small- and medium-sized enterprises."

Hua says that while SMEs are pivotal in industrial innovation and technological breakthrough, most have problems in obtaining finance and in competing with their rivals.

"If a good innovation project has not been mass produced and promoted into the market, it becomes useless, but if a large company buys it, it may have a bigger platform to realize its value."

Google acquired at least 79 start-ups last year, which means it has acquired at least 79 innovative technologies, he says.

Hua says he plans to acquire another five to 10 start-ups in the next two or three years.

In addition to acquisition, Hua says he also wants to provide an open platform to help people with entrepreneurial dreams to achieve their goal.

Maipu invested 10 million yuan at the end of last year to set up a Maipu Youth Entrepreneurship Fund in Chengdu, to provide venture capital to young start-ups established by college graduates.

He also plans to set up similar venture capital funds across the country, especially in the developed areas strong in the information field, such as Beijing, Shanghai and Shenzhen.

China's many industries generate various demands for intelligent services, which requires a lot of innovation, he says, and large enterprises can build strong platforms for all kinds of innovations to realize their value.

"If Apple Inc had not opened its platform, it would not be as competitive as it is. Large-scale IT enterprises and start-ups are interdependent on each other."

Hua says he is also considering establishing venture capital funds in overseas markets, including in Silicon Valley, in the next three years, to look for new growth for his company.

"Silicon Valley's achievements come not only through the efforts of engineers, researchers and innovators; angel investors and venture capital institutions have also played a very important role to facilitate those achievements by filtering out bad projects."

He says setting up a platform not only helps large enterprises and entrepreneurs, but promotes the upgrading and transformation of China's technology industry.

"Although we are just getting down to building this platform, I am confident in its positive impact to Maipu and even China's whole IT industry in the near future."

Contact the writers through liulu@chinadaily.com.cn