On November 11, Tsinghua-SAIS students visited a Sanquan (三全) production facility in Zhengzhou, Henan, as part of a broader effort to better understand China’s approach to economic growth. The cohort was warmly welcomed by Sanquan representatives, who provided a guided tour that explored the company’s history and business model.
Although currently one of China’s largest frozen food companies, occupying 30.6% of the market in 2016, Sanquan began in 1998 as a small local business with a market share of only 1.5%. The rapid progress in the intervening years has been the result of the synergy between the company’s effective business practices and a national developmental policy.
First of all, the company’s rapid growth is closely related to China’s developmental policy. Since China opened its economy, the gap between coastal provinces and inland provinces has been widened. To cope with this situation, the Chinese government came up with a series of policies to promote development of inland provinces. In addition to traditionally serving as China’s breadbasket, Henan is an inland province that is home to a significant population. As such, it has received a particular focus from the Chinese government as part of its initiative to reduce regional inequality.
Alongside this effort, Sanquan modernized its manufacturing facilities to increase efficiency, and invested in research and development with the goal of producing new and innovative products. The resulting technology has allowed the company to expand its production beyond frozen foods and into the market for room temperature meals.
As Sanquan successfully grew and diversified its product portfolio, it has had a broad positive impact on China at large. In addition to providing employment and financial opportunities for the local population, the growth of the company has supported multiple layers of the Chinese economy through its value chain. According to Sanquan, this value chain encompasses about 20 industries, 4,600 small businesses, and 400,000 farmers. Furthermore, as a leading food company, Sanquan is engaged in various research projects with the government, military, and universities, to develop new food products that satisfy public and private demands.
Overall, Sanquan’s success story illustrates the positive impact that effective government policies can have on businesses, who in turn contribute to national development. In this sense, the visit to Sanquan was a precious chance to witness the impact of the Chinese government’s economic model.