EDITOR'S note: Private business has become a pillar of the Chinese economy, and private entrepreneurs are sometimes stereotyped as cunning speculators. Wu Jiayuan breaks the stereotype in an interview with China Knowledge@Wharton.

Q: Some observers say China's private enterprises are struggling. What are your thoughts?

A: There is some talk about China's economy growing to be the largest in the world in 20 years, but I don't think achieving this is the most important thing at the moment. What is really important now is establishing a healthy, stable economic system and social order.

We often hear about asset price inflation. Why is this? Because many manufacturing companies are investing their money in the stock market or property market, which means the manufacturing parts of their businesses are struggling.

Q: What are the main challenges for private companies?

A: One of the biggest challenges impeding the growth of private companies in China is finding top talent. There is a traditional mindset in China that good students become government officials.

But issues of talent aside, social elements also have a profound effect. Some private companies owe their success to hard work and dedication, but others have become overnight successes through sketchy shortcuts and bribing corrupt officials.

Because China's market is not mature yet, an increasing number of people choose to succeed through bribery or other illegal means.

Q: What do you think of private firms' corporate management?

A: Some owners view a company as you would a wife - as totally private and no one else can touch. Some see the company as a son, to be nurtured for longevity. Some see it as an asset similar to a pig, and look for ways to increase its value. I lean most toward the third view. The relationship between you and the company is not the most important consideration.

Q: You employ professional managers trained at business schools to run your joint ventures. How do you handle the "agency conflicts" between shareholders and management?

A: Hiring professional managers is the only way to help your business flourish. You might trust them, but actions speak louder than words.

Your managers may be worried that you will go back on your word. In recent years, I have thought a lot about this issue. I communicate with my managers in writing, and in a transparent way ... so that other parties can see exactly how and what decisions have transpired.

There is indeed conflict between owners and managers. Owners are more concerned about the company's future and tend to focus more on long-term development. Managers are more focused on the present.

For example, some American companies build their factories in China with rented computers and furniture as a way of keeping costs and risks low. This might work well for them, but a Chinese owner might not want to run his operations this way.

If companies lack a clear, long-term strategy, they will have a difficult time developing further.

Q: How do you see the internationalization of Chinese companies and the integration of, or conflict between, Chinese and Western cultures?

A: Culturally, Western philosophy is based on objective principles. Chinese philosophy is based on humanistic principles, on the self. Personal elements and characteristics play a very strong role.

Q: How do you view wealth?

A: ChiNext (the stock exchange for start-up and small companies in Shenzhen) was launched last October, and many people came to me with estimates of how many times over my assets could grow (if we listed on it).

I don't think these numbers are very important. I grew up in a rural area, and even from an early age, life was never easy. Today, I treasure every stage of my life that I've been through. In 2007, I was in a car accident, and this has also shaped my views on what is important in life.

I concentrate more on how to lead this company into a promising future. Assets, numbers, records, rankings - they don't really matter that much to me. Some people may risk using bribes to win a million-dollar bid, but in doing so they have harmed the whole of society.

If you view the whole of society as being similar to a human being, then it's easier to see how one bad habit or influence damages the whole.

You might be able to lift heavy things if your arms are strong or run quickly if your legs are strong, but if you are only strong in one area, your body as a whole is out of balance and cannot last long.

Q: What do you think of executive MBA education in China?

A: Most EMBA training is a way to make money. Form outweighs content. Those running management-training programs need to find better ways to train people. For example, designing training courses targeted at specific individuals or, more generally, tailoring courses to student demand.

Before any training begins, they could use evaluation tools to identify a person's strengths and weaknesses, and use this information to devise a course suited to the person. This kind of training would be much more effective. Group classes tend to lose focus.

Q: Have you thought much about who will be your successor at the firm? Will it be your children?

A: It mainly depends on what my children wish to do. My goals are for them to be healthy, be independent and find happiness in whatever they choose to do.

My eldest son graduated from university last year and now works in Shenzhen. I suggested that we don't contact each other for three years, to let him decide for himself what he wants out of life. I can be an investor for them in the future. The advantage of being an investor in your children is that you trust them more than other people.

(Wu Jiayuan owns Hubei Dengfeng Heat Exchanger Co, one of China's largest of its kind. The article is reproduced with permission from Knowledge@Wharton, http://www.knowledgeatwharton.com.cn. All rights reserved. Shanghai Daily condensed the article.)