The company was founded in Qingdao in 1928. A decade later, the Yin family moved to Hong Kong and set up shop in Shau Kei Wan. With 1,000 workers, the firm was one of the biggest sewing-needle makers in the city.

But, Hong Kong's rising costs forced it to migrate to Shenzhen in the 1980s, and subsequently to Yangzhou in Jiangsu province a few years ago.

Branching out from Dah Chung's core business, Yin founded a trading unit in the 1970s selling screws and fasteners to electronics makers and car manufacturers. The company also now produces elastic items and shoelaces and has a houseware division that makes scissors, cutlery, kitchenware and cookware.

How different is the business landscape now compared with the past?

The world is increasingly performance-driven. In the old days, when customers in the United States and Europe visited Hong Kong to discuss business, I took them out for dinners, drinks or even sightseeing. There were more opportunities to build relationships. Now, they appear to care less. If the prices are not right, they walk away to the next door.

What about your staff?

Ours is an export and trading business, which requires our managers to be presentable, knowledgeable about products, and tactful in building ties with authorities like the customs and tax bureaus.

Once there were some sales staff who learned the skills, then resigned and set up their own company. They even sourced products from us. Well, this is a cruel world. Some of my managers told me not to do business with the 'traitors', but I didn't bear a grudge. About 500 workers in the Jiangsu factory and about 50 salesmen have worked at the company for decades. We work like a big family.

Competition is so punishing on the mainland. How do you keep your staff performing?

I have put in place a carrot-and-stick system, which is like the way God laid down the Ten Commandments. As the CEO, I set objectives and meet regularly with the staff to review their performance, discuss obstacles and solutions to achieve our targets.

For example, a salesman earns about 7,000 yuan (HK$8,400) a month, but if he fails to meet sales targets his salary will be lowered gradually to 4,000 yuan, at most. If he makes [the sales target], he will be entitled to share the company's profits.

Hong Kong manufacturers in the Pearl River Delta are at a crossroads as a result of a state policy to upgrade industries and cut pollution. What is your strategy?

Costs are rising sharply and policies discourage labour-intensive, low value-added industries. These industries will come to an end sooner or later in China. About a year ago, we relocated our factory from higher-cost Shenzhen to Jiangsu. Workers in our Jiangsu plant are relatively less efficient than those in Shenzhen, but their wages are lower. We don't know how long the low-cost advantage over there will go. This is the time to expand into the mainland consumer market for a new source of growth. We are building our own brands, too.

How do you rejuvenate a 70-plus-year-old business in a tough environment like this?

It's about refreshing thinking. I have joined different social and business groups to broaden my horizons. Through interactions and connections with other people, I learned a lot and brought some practices back to the office.

You have held some public roles. How did your company benefit from the practices you brought back to the office?

During the two-year term ending in 2009 as the president of the Chinese Manufacturers' Association of Hong Kong, I learned the importance of the division of labour within a large entity. For example, my company has since modified its structure by splitting into two main subsidiaries. One is responsible for operating manufacturing activities and trading services and the other is an investment vehicle managing a portfolio of investments.

The operation arm will seek to generate income and profits, which, if any, will be used as bonuses for the staff, and the rest will be channelled into the investment arm. The investment arm, in turn, will use the proceeds to invest for a stable return. Some of the money will be re-invested into the operation arm. This has worked well over the past two years. In this way, the company is run more effectively.

Another example is how we split operations into small teams, with a given task and minimum interference from top management. This aims to create room for staff members to come up with their own ways to meet business targets.

How do you and Chu, the COO, split management responsibilities?

Well, Raymond is responsible for drawing up strategic directions of the company. He helps prepare bidding documents and travels around to build connections with local governments and authorities. I head the management team and manufacturing operations and the investment vehicle. This gives a clear division of labour between us.

One day you will retire. Who are the candidates to take over the business?

My son and daughter, who are living and working in the United States, have no plan to return to work with the family business for now. It appears to me that they are not very into running the business. There will not be a good ending it I put a square peg into a round hole. The ideal thing is to leave the company in the hands of a professional management team. If the company is run on a profit-sharing basis, they have incentives to sustain the company.