Sail across the sea

Chapter 376 Don't try to help a fallen oil bottle
After leaving the Geological and Mineral Resources Bureau and getting into the Chemical Industry Bureau's jeep, Gao Fan let out a long sigh, feeling quite annoyed.

Xu Ying, sitting in the passenger seat, heard the noise Gao Fan made. Without turning around, she kept her eyes on the road ahead and asked:
"What's wrong, Xiao Fan? Are you not satisfied with the outcome of today's meeting?"

"It was somewhat expected," Gao Fan replied listlessly.

The Mineral Resources Bureau's performance was indeed within Gao Fan's expectations, but it was only the worst of the several possibilities he had anticipated. Before that, he had fantasized that after hearing his story, the people in the Mineral Resources Bureau would bow down and say "Let's go together," and go to Zeshan with him.

Looking back now, I realize I was too optimistic. Just as my father, Gao Yiping, often said, I was blinded by victory.

“Each department has its own considerations. The Bureau of Geology and Mineral Resources is probably thinking that it’s better to avoid trouble, which is very common in government work.”

Qiao Jiaxi, who had come with him, offered some advice. He had barely spoken during the meeting, but if the Chemical Industry Bureau were to participate in the rare earth remediation work in the future, the task would fall on his shoulders. Qiao Jiaxi was fully prepared for the potential difficulties in cooperating with the Geological and Mineral Resources Bureau and with Zeshan City in the future.

“The Department of Geology and Mineral Resources used to be a relatively obscure department in the province,” Xu Ying began to explain to Gao Fan. “Our Maolin Province is considered a major mineral-producing province, with copper and tungsten mines being among the most famous in the country. However, the development of copper and tungsten mines is directly controlled by the state, and the provincial Department of Geology and Mineral Resources doesn’t have much say.”

"In the 70s, the province discovered rare earth mines, which was the most prestigious thing for the Department of Geology and Mineral Resources. The mining of rare earth mines has only been going on for three or four years. Seven or eight counties in Zeshan have been able to get rid of their serious financial difficulties because of rare earth mining, and the lives of farmers have also improved significantly."

"In addition, the export of rare earths has generated a large amount of foreign exchange revenue for the province, which is a highlight of the province's work. And this achievement is attributed to the Department of Geology and Mineral Resources."

“However, I did not mean to deny their achievements. On the contrary, if Zeshan’s rare earth can be put on a standardized development track, production can be effectively increased while protecting resources. At the same time, deep processing of rare earth and exporting single oxides instead of mixed oxides will increase local revenue many times over. Isn’t that an even greater achievement?” Gao Fan argued.

Xu Ying smiled and said, "Have you ever considered another possibility? That is, the state will step in to regulate rare earth development, and eventually Maolin's rare earth will become a national industry, just like copper and tungsten mines, and will have nothing to do with Maolin? If such an outcome occurs, then the Bureau of Geology and Mineral Resources' current active cooperation with the state's rectification work will not only be fruitless in the future, but will also have caused trouble."

"No...no way?" Gao Fan exclaimed in surprise. He really hadn't thought of it that way.

Qiao Jiaxi said, "Xiao Gao, you've always been a tech person, so you don't know much about business operations. You'll understand if you talk to your father. When the province wanted to turn Canghai Fertilizer Plant into a provincial enterprise, it took a long time to negotiate with Cangtang County. The most crucial point was how to distribute the profits and taxes of Canghai Fertilizer Plant."

Gao Fan had actually heard about this from Gao Yiping. China's state-owned enterprises are divided into different levels, such as those directly under the central government, provincial governments, and county governments. These differences are not only reflected in the official positions of the enterprise leaders but also in the distribution of profits. Simply put, the profits and taxes of centrally-owned enterprises go to the central government, those of provincially-owned enterprises go to the provincial government, and those of county-owned enterprises go to the county government.

This involves details such as quotas and profit sharing, which are extremely complex. Writing it all down could take until next year.

Canghai Fertilizer Plant was originally a county-owned enterprise of Cangtang County, and its profits and taxes belonged to Cangtang County. The Ministry of Chemical Industry allocated 20 million yuan to carry out the conversion of ammonium to urine. After the conversion, the company's output value and profits and taxes increased tenfold. It would be unreasonable for these profits and taxes to still belong entirely to Cangtang County. Therefore, at the same time as the conversion, the nature of Canghai Fertilizer Plant was changed from county-owned to provincial-owned.

In fact, considering the source of the renovation funds, Canghai Fertilizer Plant should have been directly upgraded to a ministerial-level entity, with all profits and taxes going to the central government. Perhaps the central government didn't value these profits and taxes, which is why the ownership was transferred to Maolin Province.

According to regulations, once Canghai Fertilizer Plant becomes a provincial enterprise, all its profits and taxes will have to be handed over to the provincial treasury. Therefore, the conversion of ammonium to urine will not only not be a good thing for Cangtang County, but will actually be a bad thing. Previously, they could receive hundreds of thousands of yuan in profits and taxes, but now that the profits and taxes have increased to several million yuan, they won't receive a single penny – isn't that a loss?
Okay, I should also mention that before the conversion from ammonium to urine, Canghai Fertilizer Plant had been losing money for several years. Not only did Cangtang County not receive any tax revenue, but it also had to give the fertilizer plant a large amount of subsidies.

When the provincial government makes decisions, it's impossible to ignore the feelings of the county. Directly taking a company that can contribute millions in taxes from someone else's hands is bound to make them unhappy.

So the two sides began negotiations and finally agreed that the profits and taxes of Canghai Fertilizer Plant would be distributed proportionally between the provincial and county levels, with the province taking the larger share and the county taking the smaller share, which was a win-win situation.

This time, the provincial fertilizer industry company selected four county-level fertilizer plants for ammonium chloride-to-urine conversion projects, and again, profit and tax sharing had to be agreed upon with the counties. Given that each county bore half of the investment in the conversion, the final agreement was an equal split of profits and taxes. Furthermore, matters involving cost accounting, wage determination, and labor relations also needed to be discussed beforehand to ensure a equitable distribution of benefits.

Gao Fan had not participated in the negotiations, but he had a general understanding of the situation. Hearing Xu Ying and Qiao Jiaxi's words, he began to understand the concerns of the Bureau of Geology and Mineral Resources.

"Aunt Xu, Director Qiao, are you saying that the Bureau of Geology and Mineral Resources is taking a negative attitude towards this matter and is waiting to negotiate with the state?" Gao Fan asked.

Xu Ying said, "This may not just be the idea of ​​the Department of Geology and Mineral Resources, but also the idea of ​​the Provincial Economic Commission. The central government and the province have been discussing the issue of rare earth mining development rights for a long time, but there is still no conclusion. Now that the state has suddenly proposed to send a working group to rectify rare earth development, the province's first thought is not what problems this industry has, but whether the state wants to use this method to put pressure on the province."

"Damn it..." Gao Fan blurted out a curse, "After all this time, it turns out we're the only ones foolishly thinking about how to get things done, while everyone else is thinking about how to divide the spoils. No wonder some people say that once you're in the system, you have to learn not to pick up a fallen oil bottle, because someone might have deliberately let it fall over."

(End of this chapter)