1988: Back to the human world for a few years

Chapter 236 Four Core Indicators
There is a famous saying in the investment world: You can find more opportunities in rising cities; only by investing money in rising cities can you cover enough opportunity risks through potential energy.

As an old VC, Yang Mo naturally knew this famous saying which was almost a rule; and dozens of investment cases that were successful or failed in the county-level sinking market in later generations also gave him a deeper understanding of this sentence.

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"When doing this kind of social project, the first priority is to promote regional comprehensive benefits, but at the same time, we must also take into account financial indicators. When establishing a project, the first thing to do is to accurately judge the short- and medium-term potential of a city. Otherwise, as the snowball rolls, you will only find it increasingly difficult to move forward, and eventually fall into a quagmire and be drowned."

"In summary, there are four core indicators to judge a city's short- and medium-term potential."

After entering the teaching mode, Yang Mo habitually sulked, and Lu Yingying, who had suffered countless small hardships in this regard, also sat up straight and obediently, like a model student.

“The first core indicator… population.”

“This is a core indicator that everyone knows, but not everyone knows why. It is also the most important indicator.”

"You must know that since your Uncle Mu has chosen commercial real estate as his entry point, land is the primary means of production for his project and a series of subsequent plans;"

"The economy is people-oriented. Land is valuable only where there are people. If there are no people, land itself has no value from a commercial perspective."

At this point, Yang Mo glanced at Tugou, who was hesitant to speak, and said, "I know what you want to say. It's nothing more than that our country now has a population of 12 billion, which sounds scary. Even the population of Qilu alone exceeds 8000 million. With so many people there, why should I bring this up?"

Seeing Tugou nodded, Yang Mo sneered: "Girl, unfortunately, I have to tell you that even though our country has a population of 12 billion, most of the land is actually uninhabited... To be precise, there are no people who have established effective economic production relations with it."

"Take Qi and Lu for example. Although the per capita arable land area is only a pitiful 2.2 mu per person, it seems that there are too many people and too little land. But in fact, there are more than 2 million mu of saline-alkali land that is unused and cannot be developed. Add to that a series of terrains such as tidal flats and barren hills, and there is even more wasteland with no economic production value."

"Even junior high school textbooks have written that land is the most basic means of production in human society. The amount of land that has established effective economic production relations with humans, the amount of land that each person in the region has established production labor relations with, the production efficiency of these people, and the economic production capacity that these units of land can provide are all directly related to the development potential of this area."

"In short, remember that there are more than 120 prefecture-level cities and more than 400 county-level cities in China. There are more than 500 cities and thousands of county-level regions in total. Before the country intervenes or there is a technological breakthrough, not every city really has sufficient development potential in the short to medium term."

At this point, Yang Mo shrugged his shoulders and said, "The dialectical relationship here is a bit complicated, and the specific calculation formula is even more confusing. You definitely can't understand it with your little brain;"

"So, you just need to remember that cities with a continuous net inflow of population can often be determined to have relatively optimistic short- and medium-term development potential. In the next 20 years, this criterion can even be regarded as the truth... There is no other reason. Our country's current scientific and technological foundation is still very weak. The only factor that can be regarded as a high-powered factor is [human resources]."

Tugou blinked his eyes and said, "They say people from Qilu are everywhere. In the past ten years, many people from Qilu have gone out to work. So, according to you, there is no development potential in the land of Qilu, right?"

Yang Mo's forehead darkened, and he slapped her head unhappily: "I just said that everything is based on the premise that the state does not directly intervene... Besides, the three provinces in the Central Plains and the two Shaanxi regions have different national positionings, and they follow the path of [overall situation first]. The medium- and short-term development potential of most cities is not low, but the people are not benefiting that much!"

After avoiding this life-threatening topic with an almost rude attitude, Yang Mo snorted: "Although we don't have the population data of Linyi County in the past ten years, we can feel it... In the past ten years, the population loss rate in Linyi County has definitely exceeded 20%!"

"You know, the country's average population growth rate in the past ten years is 14.8%... With a population growth rate of 14.8% and a population loss rate of more than 20%, Linyi County's net population outflow rate exceeds 5%... How high do you think the development potential of this part of the county is?"

At this point, Yang Mo snorted, "And we need to analyze specific issues specifically. You have to understand that the 20% population outflow rate is based on the data evaluated based on the continuous expansion of new employees in our oil companies every year. If we leave this factor aside and only look at the situation in Linyi County, its population loss is even more serious!"

"Whether the inflow rate can outperform the outflow rate is the basic threshold for judging whether a city is worth investing in... Excluding the deterioration of our oil companies, Linyi County can't even get 60 points, let alone 40 points. How high do you think its short- and medium-term development potential is?"

Tugou scratched her head, feeling that Yang Mo's words were a bit vague, utilitarian, and negative, which made her a bit confused; but since Yang Mo could express this conclusion in such an affirmative tone,

That must be...

Makes sense, right?
………………

“The second and core indicator…the ability to create wealth!”

"If the first core indicator is an objective factor, then this indicator is a subjective factor... The relationship between the two is similar to the strengths and opportunities in the SWOT analysis method."

As if he was shooting a three-pointer, Yang Mo accurately threw the cigarette butt into the rusty dustpan: "The world is bustling with people because of profit; the world is bustling with people because of profit;"

"If ordinary people have money and can make money relatively easily, then the city will enter a positive cycle... Rich people continue to do business with rich people, and small businesses will also make more money. Even if they open a steamed bun shop or carry a shoulder pole to sell vegetables grown at home, they can live well... This will attract more funds, projects and talents, and ultimately the acquired will prevail over the innate, and the city will have a strong siphon effect."

Turning his head to look at Tugou classmate with a faint light in his eyes, Yang Mo shrugged: "In fact, your uncle Mu had the same idea."

"Using methods similar to whale falls, instead of considering direct economic benefits, we use commercial real estate as an entry point, relying on the industry's extremely long industrial chain and large number of workers to boost the county's economy while providing enough opportunities for some people to get rich. Then, we use the Chinese people's nature of rushing in, using this piece of honey to lure more people and projects into Linyi County."

At this point, Yang Mo nodded at Lu Yingying and said, "Have you heard of the Panda Car project that has been hyped recently? Even your Uncle Mu himself admitted that his idea is to learn from this project."

Panda car?

When Tugou heard about this project, which has been so popular that his ears are almost callused, he was stunned.

Among the foreign investment cases in the late 1980s, the most eye-catching and strange one was the Panda Automobile investment case in Huizhou, Guangdong. Even many years later, it was still shrouded in a thick fog of mystery.

According to publicly disclosed information, the general course of the Panda Investment Case is as follows: A South Korean-American businessman named Kim Chang-won, who is said to have been engaged in the import and export trade of auto parts for a long time, registered a company called "Panda Motors Corporation" (RMC) in Delaware, America in September 1988. That month, he contacted Huizhou for the first time and announced that he would build a large automobile factory there, with a planned land area of ​​9 square kilometers, an investment of US$81 billion, an annual output of 10 cars, and all of them for export.

In December of that year, the two parties signed a memorandum of understanding, the land was acquired in April 12, and Panda Company was inaugurated on June 1989. This project was like a pie that suddenly fell from the sky. It has many things worth recalling:
Since the company name is "Panda", it should be a company specially established for China. However, what is strange is that this automobile manufacturing plant, which claims to have an annual output of 30 vehicles, does not have the background of a professional international automobile dealer. Huizhou, where it chose to invest, is not a base for the auto parts industry and does not have an industrial foundation for automobile manufacturing.

But it doesn't seem like a scam. According to the announcement of the Huizhou government, Panda Company's first phase investment of US$2.5 million was in place before the groundbreaking ceremony, and the factory building will soon enter construction.

In order to verify the authenticity of the project, the cabinet and Guangdong authorities sent a team of senior technical and legal experts to the United States to investigate the investors' background, credit, market, etc. It is said that the experts visited the stamping and engine production line equipment purchased by Panda Company, and also tried out the small-displacement micro car that had been developed, which was said to have a market retail price of only 6 yuan.

Ultimately, the experts concluded that "Panda has strong financial strength and investors with strategic foresight who are looking to the next century."

But no matter what, the Panda Automobile investment project, which was said to be worth $10 billion, was the largest foreign-funded project in China at the time. It received widespread attention and was highly anticipated. After its establishment, almost all the imperial courts visited it. Although many people were skeptical about its background and true motives, they still hoped that it was a "real pie".

For Huizhou, an investment city, the arrival of Panda cars instantly made it a hotspot for investment and speculation. Southern media shouted the slogan "Look at Shenzhen in the 80s, look at Huizhou in the 90s". Local land prices skyrocketed in a short period of time. Real estate companies entered the market one after another, with more than 1000 companies at most. Housing prices in the central city were driven up from 200 yuan per square meter to 1.1 yuan.

In this era when the average wage per capita is less than 1.1 yuan per square meter, you can imagine how crazy the housing price of yuan per square meter is.

As for how tempting this overwhelming wealth is to ordinary people, we can get a glimpse of it from the population growth curve of Danshui Town where the car factory is located... Before the Panda Car project was launched, Danshui Town had a total population of less than 7. After the project was launched, the population increased from 20 to in just one year. Two years later, it rapidly increased to , among which there were countless "new citizens" with small assets.

Regardless of whether this project is true or not, in regional economic development, the role of a hugely tempting cake project in attracting various external resources is obvious; it is precisely because of the Panda Car super project as a case study that various places in the future will think about launching one or two big projects in their economic construction work... Although Panda Car was finally proved to be a huge pit and the losses caused were also horrifying, no matter what, after all, some things in it are very worth learning from!

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"Uncle Mu's idea... I think it's fine, it's great!"

Tugou, who didn't know the secrets and future outcome of the Panda Car Project, looked at Yang Mo with some confusion after thinking about the huge role this super project currently played in promoting Danshui Town.

Yang Mo looked at her speechlessly: "I have said before that the situation of state-owned enterprises is different from that of administrative supervisors. As long as you lead a project of a certain scale, the cause and effect will be entangled for a lifetime, and it can't be cut off at all... So to lead a project in the state-owned enterprise system, you actually need to consider a longer timeline!" "In short, the series of real estate projects that your uncle Mu plans to enter actually rely on that industrial park and the companies in those industrial parks as the core, otherwise there will not be enough leverage and sustainability;"

"Then here comes the question... What do you think is the biggest difference between using the automobile project as a leverage point and using the petrochemical industrial park as a leverage point?"

Tugou thought for a while and said, "I feel that although the industrial chain between the two is very long, if the automobile project is used as a lever, it is easier to form a labor-intensive derivative industry, and the business radiates a wider range of people."

Yang Mo nodded: "You hit the nail on the head. Although automobiles are industrial products with a high degree of integration and technological content, the production and assembly of their main components are currently basically only completed by state-owned enterprises;"

"But in fact, it is a labor-intensive industry. Because it has the natural attributes of TOC, it can derive many terminal industries and markets... such as shipping, car maintenance, car repair, car beauty, parking supervision, car electrical accessories, and even modification services, etc."

"In fact, about 40% of the driving effect of a large-scale automobile project will be concentrated in the manufacturing link, 20% will be concentrated in the daily consumption link of manufacturing practitioners, and the remaining 40% will be concentrated in the derivative market and related practitioners... It can be said that this is a project that takes both top and bottom into consideration and improves both inside and outside;"

“And what about the petrochemical project?”

"You are also a nominal employee of a drilling company, so you know that the petrochemical industry is different from other industries. Due to the current shortage of raw materials, the government has stronger control. Its business cooperation and circulation are still mainly B2B... and these B-end customers are basically state-owned enterprises."

"So, do you see the problem? This industrial park project directly drives only the economic effect of the manufacturing link, and these manufacturing units are basically state-owned enterprises... Given the closed nature of the state-owned enterprise ecosystem, how much of this added value do you think can spill over to the people outside the system, and how much real benefit can be given to the people, and how much real wealth-creating ability and opportunities can be provided?"

At this point, Yang Mo smiled sarcastically: "You have to remember that sometimes the starting point is good, but it may not produce the positive effects you expect... If the core customers of Linyi County's real estate projects are all those state-owned enterprise employees and some half-black gloves, it will not have much substantial promotion effect on Linyi County's economy, and it will also cause some scenes that no one wants to see."

Yang Mo shrugged his shoulders and said, "In fact, this situation has already taken shape in Dongying. Although they have been working hard to promote the construction of local worker-peasant relations over the years, over the years, West City and East City are like two completely different worlds. The local people in Dongying also don't like the tens of thousands of people in the base camp... This kind of dislike is even more serious than the rejection of drilling companies by local people in our area in the past!"

Tugou's brain was a little out of order. Her still innocent little brain was unable to immediately understand the logic behind this, nor did she understand why such a big difference would result from a slight difference in the proportion of the main groups benefiting.

However, since Yangshidan directly named Dongying and used it as a negative example, he definitely did not lie.

Seeing this guy holding his head and thinking hard, Yang Mo sighed with boredom: "Girl, after all, you don't know much about this world. It's normal that you can't figure out some key points."

"But you just need to remember that the most basic and most important structure of this world is actually the basic sand and stones that the so-called elites are too lazy to even look at... But if you are really careless enough to completely ignore them, you will definitely regret it... And when the middle and upper structures are almost built, you will find that the foundation is unstable and the load-bearing capacity is insufficient. If you readjust and reinforce it, the energy and cost required will be more than a hundred times greater than before."

As he spoke, Yang Mo touched another cigarette and lit it: "In fact, not all the superiors are unaware of this problem, but they pin certain things on the saying "the rich first drive the poor", which is just a beautiful vision that is close to the ideal state!"

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Tugou had always felt that his childhood friend had some negative tendencies, and after hearing these words, that feeling became even more obvious.

However, when it comes to professional fields, she really doesn't have the qualifications to debate with Yang Mo, and she doesn't know how to start. After scratching her head, she can only ask in frustration: "Didn't you say that there are four core criteria for judging the development potential of a region or city? What are the other two?"

Yang Mo was feeling a bit depressed at the moment. He just waved his hand when he heard this: "Let's stop here for now. Some things can only be understood after you have experienced them in life. Otherwise, knowing the facts but not the reasons behind them is actually a very bad thing. "

"The third core indicator is actually the intersection of GDP per capita and actual tax per capita. I have taught you part of this. You may wish to expand and think about the relationship between this factor and the city's development potential based on your work experience during this period.

"As for the fourth core indicator [Extended positioning under national positioning], it's not something a little girl like you can think clearly about for now, so we'll talk about it later when we have a chance... But if you're really interested, you might as well deduce it yourself. After all, as a member of a central enterprise, you have more abundant information channels in this regard than ordinary people. Plus, with me and your sister Mu here, if you really want to deduce it, the minimum information foundation exists."

Seeing this guy looking down on him, Tugou was furious, and heaved his chest fiercely, wanting to teach this bastard who dared to look down on women a lesson...

There was a rapid knock on the door.

Oops!

Could it be that Miss Mu is here?

Yang Mo and Tu Gou panicked when they thought of the horrible scene that would happen if the young lady saw the two of them squatting in the kitchen secretly cooking and eating pork belly.

"Turn off the engine! Close the door! Drag her directly into the living room. Don't let her smell it!"

In a panic, Mr. Yang didn't care whether this contingency plan was self-deception in the face of the smell of meat all over the yard, and he directly issued the order.

Obviously, Tugou was also panicked. He didn't even notice such a big loophole. He jumped up from the stool, rushed to the stove, turned off the fire as quickly as possible, and then covered the pot tightly with a bang.

Seeing this guy anxiously urging him to go out so that she could lock the kitchen door, Yang Mo took a deep breath, kept adjusting his facial expression, then walked into the yard and turned the iron gate open.

"Master, Master, something's happening! Something's happening!"

When he opened the door, a petite, white figure appeared in front of Yang Mo.

As soon as they met, the lively little girl lowered her voice and rushed inside in panic.

Scared me!

I thought it was Miss Mu who came.

Yang Mo couldn't help but relax his chest. He moved aside and glared at her unhappily: "What are you yelling about! What happened that made you so anxious!"

Bai Mengmeng glanced at Tugou, who was sticking his head out of the living room door like a thief to observe the situation. She was usually a little gossipy, but she didn't have the desire to find out the truth. Instead, she closed the iron door as quickly as possible, and then, regardless of the fact that this was a yard, she whispered in Yang Mo's ear: "Master, do you know whose house Mu Siyuan took Supervisor Mu to dinner tonight?"

Yang Mo rolled his eyes. "That's it? Even a fool can guess it...Apart from Mr. Wang, who else in the drilling company can get this big boss to visit as a private guest?"

Bai Mengmeng took a breath and said, "Yes, it's not surprising that Mu Siyuan went to Mr. Wang's house as a guest, but this kind of private banquet with his own daughter should only be attended by their two families;"

"But, Master, do you know who Mu Siyuan invited to have dinner with you just 20 minutes ago, when the banquet was about to start?"

Hearing the unusualness, Yang Mo just looked indifferent: "Who did you invite?"

Bai Mengmeng was anxious when she saw her master acting so arrogantly. "Master, Mu Siyuan invited Vice President Feng to have dinner with him... and Wang Yinuo!"

"The most important thing is that Mu Siyuan personally knocked on Vice President Feng's door and invited him to the banquet... The heads of all the company's departments and leaders above the section level all live in the two buildings behind the general manager's office. Uncle Zhang saw it with his own eyes!"

! ! ! ?
Invite Vice President Feng to come over! ?

What is going on?!

Yang Mo was in disbelief. His brain, which he always prided himself on being quite clever, was showing signs of failing at this moment...

(End of this chapter)