Liu Yonghao of New Hope Group: I am an “old farmer”!

"We're running a large enterprise with the spirit of a small business. This is essential; we've all grown up from small beginnings."

The New Hope Group's Beijing office, located in Beijing's Wangjing SOHO, is so simple and understated that it's hard to imagine it's the workspace of a Fortune 500 company. In August 2024, the Fortune Global 500 list was released, and New Hope Holdings Group Co., Ltd. ranked 378th with revenue of US$39.988 billion. This marks the fourth consecutive year that New Hope Group has appeared on the list. Liu Yonghao has spent over 40 years building this agricultural and animal husbandry giant.

Although he has long been a representative figure of Chinese private entrepreneurs, Liu Yonghao always refers to himself as "an old farmer." This simplicity provides a fascinating perspective on this Chinese agricultural and animal husbandry giant and its leader, reflecting the pragmatic nature of its development. From his humble beginnings as a family farm in 1982 to an annual turnover exceeding 280 billion yuan, 43 years into his career, Liu Yonghao has been both a force to be reckoned with and a trendsetter of his time.

The story of Liu Yonghao and New Hope Group's entrepreneurship and growth epitomizes the development of private enterprises since the reform andopening up. To explore the stories of New Hope Group and entrepreneurs like Liu Yonghao, the Outlook Think Tank program "Taste China: Dialogue with New Era Entrepreneurs" visited New Hope Group and engaged in an in-depth conversation with Liu Yonghao, appreciating his insights into struggle and business acumen.

The Times Brings "New Hope"

In 2022, on the 40th anniversary of New Hope Group, Liu Yonghao published his autobiography, "Renewal," recounting his 40-year entrepreneurial story with New Hope. The book repeatedly mentions a key word: "Time."

"When we started our business, we called it Yuxin Seed Farm, meaning to cultivate a new industry. In 1986, Song Jian, then State Councilor and Director of the State Science and Technology Commission, visited Yuxin Seed Farm and inscribed, 'The revitalization of China's economy rests on socialist entrepreneurs.' That's where hope came from." Reflecting on his entrepreneurial journey 40 years ago, Liu Yonghao still feels deeply moved.

In 1979, the Liu brothers attempted to start a business, but their venture was shelved due to accusations of "taking the capitalist road." In 1982, with the implementation of the household contract responsibility system in rural areas, they seized the policy opportunity and, with the goal of "inspiring 10 specialized rural households," plunged into rural entrepreneurship. Starting with raising chickens and quail, their initial motivation was simply to "make life better."

Photo: Liu Yonghao (second from right) and others in front of the Yuxin Seed Farm in 1982. (Photo provided by the interviewee)

"We were actually very poor when we were young. I barely wore shoes until I was about 20. Even before that, I only had three feet of cloth coupons each year, so I couldn't even make pants. Things that seem simple weren't easy back then." Escaping poverty was the starting point for the Liu brothers' entrepreneurship. Today, New Hope Group remains true to its original aspiration: to change the lives of their families and those around them, drive development in the villagers, and elevate people's lives.

Even amid the early pressures of entrepreneurship, Liu Yonghao remained sensitive to policy. His timely adjustments in the early days also helped him understand the essence of business.

When quail farming reached a significant scale, Liu Yonghao realized the limitations of the industry—it was a small product with low demand. Recognizing that "making life better" hinged on "meat, eggs, and milk," and that the production of these products depended on feed, he decisively led the company into the feed industry, laying the foundation for New Hope's subsequent scale-up. It can be said that every transformation at New Hope was accompanied by an assessment of market demand and adjustments to its core business direction, often meaning the abandonment of some previously accumulated achievements.

Liu Yonghao stated that a company's transformation and adjustment must be based on the market, society, and the future. However, they must also adhere to their values and original mission. Since the reform and opening up, people's pursuit of a better life has remained unchanged. Therefore, New Hope Group has remained anchored in the agriculture and animal husbandry industries for over 40 years, constantly seizing new opportunities for adjustment and change to pursue initiatives that benefit the company, the people, and are supported by national policies.

Over four decades of development have enabled this agricultural and animal husbandry enterprise, "born" in rural China, to become a global leader in the sector. However, compared to the world's top grain and agribusiness giants, New Hope, at 43 years old, is still quite young.

For example, the world's four largest grain traders—ADM (Archer Daniels Midland), Bunge (1818), Cargill (1865), and Louis Dreyfus (1851)—were founded. In China, COFCO Group was founded in 1949.

New Hope Group's position among the world's agricultural and animal husbandry giants is primarily due to its organic growth, but equally important is its ability to capitalize on the dividends of the market economy. Backed by the vast Chinese market, and provided with a policy environment that encourages entrepreneurship and innovation, generations of entrepreneurs can unleash unimaginable energy, condensing the century-long development history of international industry leaders in just a few decades.

New Hope was fortunate. At its inception, the market economy surged, and a generation of dedicated individuals, represented by Liu Yonghao, emerged as pioneers.

"We caught up with this auspicious era, with reform and opening up, with the rapid national development since the 1990s, with the Party and the state's policy of prioritizing economic development, and with the entire process of our country's transformation from a traditional agricultural nation to a modern industrial power." Liu Yonghao stated that he has witnessed, participated in, benefited from, and promoted the great era of reform and opening up. This generation of private entrepreneurs, through their diligence and hard work, has created value and contributed to economic development. They are fortunate and even more honored.

At 43, New Hope Renews

New Hope Group's development hasn't been smooth sailing. Facing industrial upgrades, technological change, and generational shifts, the company has continuously pursued self-innovation, a process fraught with challenges.

Affected by factors such as fluctuations in global food and feed prices and the hog market cycle, New Hope Group's performance has come under significant pressure in recent years, and the company is widely believed to be facing significant challenges.

In Liu Yonghao's view, maintaining composure amidst crises is as important as timely renewal.

"We've already experienced four hog market cycles, and the company needs to think about how to do better." Regardless of the changing cycles, Liu Yonghao remains committed to his core agricultural, animal husbandry, and food businesses: "Meat, eggs, and dairy are enduring industries; there will always be demand. The key lies in making them better—making them more valuable, more nutritious, more distinctive, and with a better taste." This commitment to the essence of the industry has become New Hope's ballast to weather the storms.

"When pressure is high, we don't complain or give up; we turn lows into sharpening periods." Having weathered numerous business upheavals, Liu Yonghao remains remarkably calm in the face of temporary setbacks in his company's development. Facing downturns, he has his own "sharpening" theory: "Sharpen the management knife, reducing costs through refined management; sharpen the technology knife, using technology to empower farmers and support agricultural upgrading; sharpen the corporate social responsibility knife, closely integrating large enterprises with farmers, helping farmers while also advancing the enterprise."

Liu Yonghao believes that it is this approach of treating lows as sharpening periods that has enabled New Hope Group to navigate through cycle after cycle and overcome difficulties.

"In doing things and in business, you must always be half a step ahead." Liu Yonghao explains his management wisdom: "Keep pace with the times and avoid falling behind, and plan ahead appropriately. Getting ahead too much can lead to failure; getting ahead even half a step allows you to advance ahead and have room to retreat." This philosophy has permeated New Hope's transformation journey.

Liu Yonghao clearly understood that while traditional agriculture and animal husbandry industries struggled to play the role of disruptor like innovative technology companies, they could leverage new technologies to empower traditional manufacturing and agriculture. In addition to developing new products, in 2021, New Hope Group partnered with Harvard Business School to launch the "New Hope-Harvard Digital Transformation Strategic Acceleration Program." With this strategic overhaul, action followed suit. The group quickly launched 14 "digital lighthouse projects" covering cold chain logistics, pig farming, dairy farming, property management, and even neuroscience. Each project was considered a benchmark experiment, drawing lessons from trial and error before being replicated across the entire group.

At the same time, New Hope Group was also undergoing a transformation internally.

"After all, I'm over 70, and the people I started the business with are also relatively older. Although we're in good health and have clear minds, times have changed. Young people are more understanding and familiar with new things, so we launched a program to cultivate young talent very early on." Liu Yonghao praised the younger generation, including his daughter Liu Chang. He praised the new generation of young people and entrepreneurs for their high education, boldness, broad international perspective, and ability to leverage new models. Therefore, he is more concerned about the growth of this younger generation.

Liu Yonghao stated that the two generations of entrepreneurs should learn from each other. The younger generation should emulate the more pragmatic, diligent, responsible, and mature style and experience of the older generation; and the successful older generation of entrepreneurs should also emulate the younger generation's mindset and approach of striving for greater heights and daring to take on new technologies, new industries, and new environments.

Private Enterprises Have Confidence

On February 17th of this year, Liu Yonghao, as a representative of private entrepreneurs, attended a symposium and delivered a speech. Since then, he has shared the symposium's message with entrepreneurs in various locations. These visits have left Liu feeling deeply inspired and confident.

"I think it had a significant impact. Most private entrepreneurs were quite excited and happy." Speaking about the impact of the symposium on the private enterprise community earlier this year, Liu Yonghao stated that it sent a clear and strong signal to encourage, support, and promote the development of private enterprises. Furthermore, governments at all levels and multiple ministries have introduced specific policies and plans, sparking a new wave of support for private enterprise development from top to bottom.

China boasts a massive market, a continuously growing middle-income group, and tens of millions of university graduates each year, injecting a fresh stream of high-quality talent. These are the deep foundations supporting high-quality development. "The Chinese people's desire for a better life will surely be transformed into a driving force for development." Facing economic transformation and profound changes in the global landscape, Liu Yonghao expressed confidence while also acknowledging the challenges.

Liu Yonghao believes that facing this new situation, private enterprises have two solutions: high-quality development and leveraging the new development framework.

"China's economy is undergoing a transformation, from high-speed growth to high-quality growth (development). Today, we can no longer continue to invest, build factories, recruit workers, and produce products incessantly as before." In Liu's view, only by pursuing high-quality development can enterprises break through. New Hope Group is responding to this new transformation cycle by upgrading its technological innovation and refined management.

Figure: In 2021, New Hope Holding Group entered the Fortune Global 500 list for the first time. (Provided by the interviewee)

Under the new development framework, New Hope Group is adopting a two-pronged strategy: internally, leveraging technology to enhance product and service capabilities; externally, continuing to deepen its presence along the Belt and Road Initiative. New Hope Group's overseas expansion adheres to the "123 Principle": ensuring local employee salaries are approximately 30% higher than local wages ("One Higher"); emphasizing respect for local laws, religions, and cultures ("Two Respects"); and focusing on promoting Chinese entrepreneurial spirit, the value of "Made in China," and Chinese culture ("Three Disseminations"). After more than two decades of development, New Hope Group has established operations in dozens of countries, becoming a leading example of the internationalization of private enterprises.

A Dialogue Between an "Old Farmer" and the New Era

"I am Liu Yonghao of New Hope, an old farmer and a veteran private entrepreneur with over 40 years of experience in the agricultural and food sectors. I believe that the country is growing and progressing. We will overcome this period of adjustment and move towards greater heights and better outcomes, hoping for a better life."

Simple, humble, and hardworking, Liu Yonghao has left a lasting impression on people. In his view, companies should not only focus on commercial profits but also uphold their original aspirations. The "old farmer" said he hopes to cultivate more "new farmers" in the new era.

In 1994, Liu Yonghao joined nine private entrepreneurs in launching the "Guangcai Project." Over the past 30 years, it has mobilized tens of thousands of private enterprises to build bridges and roads, develop industries, and promote local products in impoverished areas, contributing to the country's poverty alleviation efforts. Entering a new stage of rural revitalization, Liu Yonghao spearheaded the "Ten Thousand Enterprises Revitalizing Ten Thousand Villages" campaign. He proposed the ambitious "Rural Revitalization Five-Year Plan": Over five years, it aims to encourage businesses to invest approximately 50 billion yuan in rural areas, create approximately 50,000 jobs, support 50,000 family farms and small and micro enterprises, train 50,000 "green-collar" farmers, and establish five demonstration bases. To date, investment and employment targets have been exceeded.

A special feature is the "Village Head Program" for rural revitalization, jointly initiated with the National School of Development at Peking University. Over the past four years, over 400 village secretaries and village heads from across the country have received training there. Liu Yonghao personally teaches the first class of every "Village Head Class," earning him the nickname "Teacher Liu" from the students. He jokingly remarked that some call him the "spokesperson for farmers."

As one of China's most influential private entrepreneurs with over four decades in the business world, Liu Yonghao's life story seems difficult to sum up in a few words, but in recent years, he seems to favor the label "old farmer."

"Many people ask me, 'You're one of the earliest and most successful private entrepreneurs in New China. Would you have been better off if you'd gone into finance or other more thriving industries like urban construction?' I say it's possible. But I believe agriculture is a foundational industry, closely connected to people's lives, and most aligned with my original entrepreneurial aspirations."

"I'm just an old farmer. I strive to do a good job in agriculture, produce good food, and ensure a good life for the people. I'm doing what I should do." Liu Yonghao sums up his more than 40-year agricultural career with these words. From his humble beginnings, simply seeking to provide for his own well-being, to his current grand mission of promoting "a better life," he has always been rooted in agriculture and the countryside.

The story of Liu Yonghao and New Hope exemplifies the interplay between an individual, a company, and the times. It encompasses the seizing of opportunities, the pain of transformation, the trials of cyclical change, the shouldering of responsibilities, and unresolved challenges. This complexity, perhaps more than simple praise, reveals the true profile of a Chinese private entrepreneur and the business ecosystem he inhabits. As he said at the end of the interview, if I had a glass of wine, it would be a toast to the times, customers, employees, and fellow travelers—a drink mingled with gratitude, responsibility, and a clear understanding that the road ahead is not smooth