Moderator: Speaking of Meida, a lot of people’s impression of Meida was solar energy five years ago. Now when people talk about Meida, you may get different reactions. If you were to introduce Meida, how would you do it?

Xia Zhisheng: Meida is a diversified group of companies, and is in the so-called diversified multi-industry, multi-product, cross-industry. Meida just changed its name. Previously it was called Yaoming electrical plant. As time went by, Meida upgraded with the times. If I were to introduce the company, I can only say that it went from small to large, from scratch to a big company with the changes of time and space. The so-called survival of the fittest is a law of development, from a single product to our diverse products, from different sectors of industries.

Moderator: Taking 2008, for example, what was the structure of the Meida Group?

Xia Zhisheng: 2008 was a special year. We had to face the problem and head on. Meida Group’s main industries are Zhejiang Meida Solar company, Zhejiang US Large Industrial Company, Jiangsu Meida Electric Company. Anyway, we are engaged in several industries, the first is the renewable energy sector, the second is the environmentally friendly products, health products, and the third is advanced electrical appliances.

Moderator: In the case of the financial crisis in the international economic environment, what is the economic impact on Meida Group and how?

Xia Zhisheng: It should be said it has a certain influence. We should find ways to reduce the impact, and even try to change the unfavorable factors into favorable factors. It is the problem we should consider. So, as a large company, Meida’s output value (2008) doubled over the previous year (2007).

Moderator: In these times of crisis, as a chairman of multi-industry group, are there any unique measures?

Xia Zhisheng: Faced with such a big market and big environment, we certainly had to find ways for our industry outside and inside. Inside means internal management, training, product quality, product development. Outside means how to work with a society which includes receiving national guidelines and policies, and international market integration. We all know these ways, but the key is how to make the most of them.

Moderator: Previously Meida has been engaged in the solar energy industry, but in 2001, Meida began to convert into the modern kitchenware industry. What prompted you to make in 2001 such a large transformation?

Xia Zhisheng: Personally, I do not think this is a big change. I have always been engaged in manufacturing industries, and this is nothing more than different projects, different products. In my opinion, if someone previously did the aviation business, then converted into financial business, or some journalists changed their job and did real estate. This is a so-called cross-industry transformation. We always produce products according to market needs. The difference is just like originally producing children's clothing then adding maternity clothing. For us, the chance is the analysis of social needs and our needs for further development and survival.

Moderator: What was the reason seven years ago that you selected the kitchen industry and how?

Xia Zhisheng: Sometimes the business idea is just like the sprout. Once it comes, you need to know how to mend it, repair it and nurture it, and then it turns to be fruitful. Sometimes this idea happens just by accident, and then if you want to achieve it, you may encounter many difficulties, such as the grasp of the entire market. Then it depends on the information you collect, analyze and the conclusion. The modern kitchen idea just popped up, and it is a

way to improve people's living standards, housing conditions, and collect comprehensive information about real estate.

Moderator: It is a kind of innovation of combining the idea of modern kitchenware with an environmental friendly concept. How did you come up with it?

Xia Zhisheng: This is not innovation, it is the inevitable result of technological development. Of course, this change requires knowledge, vision, judgment. Then we need a team to achieve it. In the past 97-98% of the kitchen hoods were imported from abroad (the first hood was an American invention, China's first hood was manufactured in Zhongshan, Guangdong). The universal usage of hoods took 15 to 20 years time. The product needs upgrading, from simple, European-style exotic, to China's national conditions and combine Chinese-style products for the Chinese food culture.

Moderator: At the beginning of 2001 and in the subsequent three years, you have invested 80 million yuan in research and development to develop modern kitchenware with Chinese characteristics?

Xia Zhisheng: Absolutely not. I do not have ability to change the general situation. Now we do not advocate smoking, but in fact fumes do more harm to human health than cigarettes. In cooking a meal the fumes you breath in is equal to three or four packs of cigarettes. This is definitely a health issue. We need to change the kitchen environment, and then also purify the entire living environment.

Moderator: In 2001, you decided to get into the electrical kitchenware, and then in 2005, you invested 450 million yuan in Jiangsu and Zhejiang to establish a modern electrical kitchen production base. What kind of development opportunity did this investment and decision bring to Meida?

Xia Zhisheng: The market sometimes needs guidance and also the consumers sometimes need guidance. There are two ways to be successful in the business. One is to be a market follower, and adapt to consumers needs. The second is to guide the market. However, the latter is a successful differentiation of technological progress. Meida has developed to a certain stage and needs change and avocations. So there must be investment to pay, however, these things are worth doing, it should be done.

Moderator: Haining is a gathering area for the solar industry, and now the three largest solar manufacturing giants are gathered in Haining. The competition is fierce. Was Meida’s change into the solar energy due to the fierce competition between the same enterprises?

Xia Zhisheng: I do not think so. Solar energy is an emerging industry. There are many solar industry products, but solar water heaters is relatively mature, and has been accepted by the people of the whole society. In 1996 we produced the first solar water heater, and at that time no one knew this “monster”. Just as the environmental stove came out three years ago, there are a lot of people that feel that it is very strange. You should put some effort to popularize it, and you will be rewarded. There are many solar energy products, but Meida continues to develop and invest in technology and innovation. For Meida as a large group, in the industrial complex, this is an accessory to the main product. Then depending on the circumstances, and then according to the needs, the efficient allocation of group resources are followed.

Innovation requires less recklessness, and more activity.

Moderator: With three decades of business experience, you have gone through four transformations. At first you got into the electroplating industry and then the solar energy, and now have expanded into the electric kitchen. Many entrepreneurs believe only by focusing on core business you can the company stronger. However, your diversification is very fast pace, why is this?

Xia Zhisheng: Many large companies outside the main industry have many products. We always focus on the manufacturing sector, but just some changes in the products. Three decades passed step by step, and we have engaged in more than 60 different projects, products, many of which are products of historical significance. The earliest project started with a few thousand yuan. At that time, the market demand was limited, so according to the objective situation and our own conditions I chose electroplating, because it is a processing industry, and does not require a lot of investment. But the electroplating industry will produce large amounts of air and water pollution. As an educated person, when I was able to change, of course I pursued change.