Sail across the sea

Chapter 426 will provoke serious dissatisfaction from the Japanese side.
Zheng Linong thought for a moment, waved his hand, and said:
"Regarding the photoresist, let Fenglin Institute give it a try first. Didn't you just say that anything is possible with human effort? Let's see what they can do first."

"The central leadership has given important instructions on the issue of rare earths. There is currently no consensus on how to handle rare earths, and the situation of light rare earths in the north and heavy rare earths in the south is different, so it is not appropriate to force a consensus."

"However, of all the opinions, your idea is the boldest. If these ideas were presented in some meetings, they would probably be severely criticized by the participants."

"Arrogant, ignorant, overestimating one's abilities, conceited, and fond of grandiose achievements—that's pretty much it, isn't it? I'm as thick as a rock, not afraid of boiling water," Gao Fan said with a chuckle.

“Within the system, these kinds of comments are still quite damaging,” Zheng Linong said. “However, I do admire your ambition and overestimation of your abilities to some extent, so you can tell me what you plan to do.”

Gao Fan said, "First of all, of course, we need to build our own rare earth smelter. Maolin Province's idea is to build an ordinary smelter that can purify mixed rare earths to 99%, which will increase the amount of foreign exchange earned from exports several times over."

"What I mean is to build a refinery in one step to produce 4N grade rare earth as a byproduct of the production process, and also to produce some products with 99% purity."

How to solve the investment problem?

"Let's take a multi-pronged approach. I'd like Maolin Fertilizer Company to contribute a portion, Zeyan Institute to contribute a portion, and then we'll contact the local governments of Zeshan City and its subordinate counties to raise funds. My initial plan is to raise 5000 million yuan, which should be enough to set up the production line. Even if we can't produce 4N-level products initially, if we can reach 3N-level, the income will be very considerable. Then we can use the profits to continue investing."

“50 million is too little, and rolling investment is too passive. You make a detailed plan, and I’ll try to raise another 50 million for you. If you can’t build a world-class refinery with 100 million in hand, don’t come looking for me again.”

"..."

"What, you're not convinced? No, are you worried that the Ministry of Chemical Industry will take away your shares?"

Zheng Linong was slightly taken aback, but he understood Gao Fan's meaning. Gao Fan wanted to set up this refinery partly out of public interest, to revitalize China's rare earth industry, and partly out of personal interest, to create political achievements for his father, Gao Yiping.

That's why he asked Maolin Fertilizer Company to invest, and from what he said, he wanted the fertilizer company to become the largest shareholder.

Zheng Linong claimed he could help him raise another 5000 million. While Gao Fan was delighted, he couldn't help but worry that Gao Yiping's limelight would be stolen.

"You!" Zheng Linong pointed at Gao Fan with a disappointed finger and said, "I've met your father, and he doesn't seem like the kind of person who's eager for quick success. On the contrary, you, as his son, are always trying to help your father get benefits. Why is that?"

"It's simple, who wouldn't want to be the son of an official?" Gao Fan chuckled.

“The government’s investment won’t compete with local governments for equity,” Zheng Linong reassured Gao Fan. “This money is earmarked for cultivating our own core industries. As long as we can develop a core industry, it doesn’t matter who benefits from it; it all stays with us.” “Indeed, the government is always a strong support for us ordinary people,” Gao Fan said eloquently.

"After you've built the factory, what are your plans?" Zheng Linong pressed Gao Fan, not forgetting the original topic.

"The next step is to gradually reduce the export of mixed rare earths. The government can publicly announce a policy stipulating that the export volume of mixed rare earths will be reduced by 20% every year, and the export of mixed rare earths will be completely stopped within five years. Foreign customers who need rare earths can just buy our refined rare earths directly."

"Completely stop the export of blended rare earths?" Zheng Linong hesitated. "That might be a bit difficult. In recent years, the amount of rare earths Japan imports from China has been increasing, and companies such as Yttrium Corporation and Sande Alloy have announced plans to expand their production lines. At this time, let alone stopping rare earth exports, even reducing rare earth exports could trigger serious dissatisfaction from the Japanese side."

"So what if we're dissatisfied? What's it to us?" Gao Fan said, using a foul language.

Zheng Linong ignored Gao Fan's wording, sighed, and said, "Xiao Gao, relations between countries are not so simple. We need to import Japanese technology and their advanced equipment. For example, Japanese precision machine tools are very important to us."

“Under these circumstances, if we disregard Japan’s demands and unilaterally reduce rare earth exports, cooperation between the two sides will be affected. If Japan then uses this as a reason to stop selling advanced equipment to us, we will suffer even greater losses.”

Gao Fan said, "However, as far as I know, Japan has not fully met our requests. For example, when Maoming Chemical Machinery wanted to import several high-precision machine tools from Japan, the Japanese side refused."

Zheng Linong said, "Of course. Although we have normalized relations with Western countries, ideological contradictions still exist between the two sides. Have you heard of the agreement between Western countries that prohibits the export of sensitive materials to socialist countries?"

"You mean the COCOM Agreement, right?"

"Yes, that's it. The full name is the Coordinating Committee for Multilateral Export Controls Agreement. The agreement stipulates that military equipment, advanced technology products, and rare materials cannot be exported to socialist countries. The high-precision machine tools that Maoming Machinery wanted to import, which you just mentioned, fall into the category of advanced technology products. However, this agreement has been relaxed somewhat. Some high-tech products that were absolutely not sold to us in the past can now be purchased by us."

“That’s right,” Gao Fan said. “Since Western countries can find reasons to embargo high-tech equipment on us, why can’t we find reasons to reduce rare earth exports? We’re not saying we’ll completely stop selling rare earths to the West; we’re just reducing rare earth mining for environmental protection reasons.”

"Furthermore, to reduce the trouble for Western customers, we will refine the mined rare earth elements before exporting them. This is also for the convenience of our customers. As long as they can obtain the rare earth elements, do they need to care which country they were smelted in?"

Zheng Linong thought for a moment, then picked up a pencil and scribbled a few lines on the notepad in front of him. He felt that Gao Fan's statement had merit, and with a few more details added, it might be usable as a policy.

　I had nearly 20 chapters of manuscript saved up during the summer vacation, but a trip to Northeast China wiped them all out. Now I'll try to save up more...

　　(End of this chapter)