1988: Back to the human world for a few years

Chapter 456: If you want to take something, give it first (2)

As we all know, official meetings like this usually follow a process where the leader picks the topic, the executives set the framework, and the backbones work out the details.

In fact, in such an occasion with limited time and many non-related companies, it is not appropriate to discuss too deeply. Therefore, after the representatives of the four pharmaceutical companies expressed their willingness to negotiate a positive solution with the Chinese side, the meeting continued to move forward in an orderly manner.

So, after Wang Yinuo and his staff visited the Chinese representatives in Yokohama according to the itinerary, and warmly met with patriotic overseas Chinese from Southeast Asia in Japan represented by the Chen and Lin families, the senior executives of Dahua Company represented by Yang Mo moved between the three parties and started intensive communication and negotiations for a week.

Since Yang Mo, the boss of Dahua Company, came out to discuss the matter in detail, and both parties were in a state of affection, the results of this week's talks can be said to be fruitful. However, the complexity of the terms reached also made Wang Yinuo, a bystander, dumbfounded, and he even jokingly called it the "Thirteen Terms of Trickery".

………………

Although it was said to be "Thirteen Deceptive Articles", the agreement actually had as many as fifteen articles. It was just that the first two did not seem to be very deceptive, so they were not included by Wang Yinuo.

1. China and Japan jointly established the "China-Japan Economic Cooperation and Trade Promotion Association" (hereinafter referred to as China-Japan Economic Promotion Association) for the purpose of enhancing mutual understanding, promoting friendship between the two countries and actively promoting non-governmental commercial cooperation.

This kind of semi-official chamber of commerce established with official support is actually not uncommon. At present, there are at least eight chambers of commerce of the same nature in China, and their names are all similar; but the composition of its chairman and vice-chairman companies is quite "excessive" and very meaningful.

In addition to the expected companies such as Dahua Company, Sankyo Co., Ltd., Daiichi Pharmaceutical Co., Ltd., Otsuka Pharmaceutical, Fujisawa Pharmaceutical, and Tsumura Co., Ltd., the Lin family and Chen family, two groups that seem to have nothing to do with the pharmaceutical industry, have also joined in;
Well, in addition to the Lin family and the Chen family, a small chamber of commerce was also formed in Yokohama Chinatown, and then joined the China-Japan Economic Promotion Association in the name of the chamber of commerce, and also got the title of vice president of the company.

This membership structure model that is both outward-oriented and downward-compatible, if Dahua Company and those Japanese pharmaceutical companies were not all giants that could control the situation, the China-Japan Economic Promotion Association might have been regarded as a fake chamber of commerce and swept into the dustbin of history as soon as it was established.

2. Based on the principle of alliance and mutual assistance, Dahua Company promised to help Otsuka Pharmaceutical and Fujisawa Pharmaceutical coordinate and expand a 10-acre simulated wild poplar and Coriolus igniarius cultivation base in Shandong by the end of the year, in order to create positive news, stabilize and boost their stock prices;

In addition, Dahua will coordinate no less than 3 acres of authentic medicinal materials GAP planting bases for Otsuka Pharmaceutical in the form of a joint venture to promote its ongoing Nutraceuticals-related businesses.

Correspondingly, Fujisawa Pharmaceutical needs to invest no less than 300 billion yen in the construction of the Phellinus igniarius cultivation base and related supporting facilities;
As for Otsuka Pharmaceutical, in addition to the 300 billion yen for the Coriolus versicolor configuration base, it will also need to add no less than 150 billion yen in additional expenses for the investment and construction of those GAP planting bases and supporting industries.

OK, so far, these two agreements seem very normal. After all, one is an organizational framework, and the other is a normal transaction driven by current actual needs... Although the price offered by Yang Mo is indeed a bit high, it is like Zhou Yu fighting Huang Gai, one is willing to fight and the other is willing to be beaten, and no one can say it is wrong.

As for the subsequent thirteen-article agreement based on risk hedging, it is difficult for some people to understand it at present.

………………

3. In view of the fact that Fujisawa Pharmaceutical's shares have been acquired on a large scale in the secondary market, in order to avoid the uncertainty caused by the change in equity to the original cooperation agreement between China and Japan, Dahua Company will work with the Lin family to help Fujisawa Pharmaceutical establish a new joint venture in Hong Kong, and then establish a subsidiary with independent financial accounting rights in Malaysia to separate this business and help it build an offshore structure to circumvent tax jurisdiction.

In this agreement, the establishment of a subsidiary is not the focus, nor is the divestiture of business. The focus is... "building an offshore structure to evade tax jurisdiction."

Simply put, Dahua Company and the Lin family will help Fujisawa Pharmaceutical set up a new multi-layered holding company in Hong Kong, a tax haven, and then use its Malaysian subsidiary to acquire the equity of Fujisawa Pharmaceutical's subsidiary, making the listed entity of the new joint venture a Hong Kong-registered company. However, the actual management and control of the company's operations, personnel, finance, property, etc. will still be in Malaysia.

As a result, the joint venture company's decisions on important matters such as finance and personnel are mainly made in Malaysia, and the main directors and senior executives with decision-making and control rights often reside in Malaysia... This will cause the reverse-holding subsidiary to be eventually recognized as a Malaysian resident company, which is equivalent to adding two layers of firewalls in one go in addition to tax planning. Even if there are major adjustments to the board of directors of Fujisawa Pharmaceutical, it will not affect the original performance of the agreement for a while.

4. As major pharmaceutical companies have gradually begun to implement their globalization strategies, the sharp fluctuations in the Japanese yen exchange rate have caused all-round impacts and inconveniences to these companies.

Therefore, based on the principle of diversified risk offsetting, the China-Japan Economic Promotion Council will draw professional talents from various companies to set up a special working office. Based on the existing cooperative business, it will carry out a series of "cross-border investment and financing erosion of tax base" work, helping companies to avoid the impact of currency exchange rate fluctuations as much as possible, and by the way, increase profits through exchange rate cashing.

The so-called "cross-border investment and financing erodes the tax base" actually means that domestic enterprises transfer loans to overseas affiliated companies, so that the borrowing costs that should have been borne by overseas companies are transferred to domestic companies; domestic companies deposit funds equivalent to part of the after-tax profits into domestic financial institutions, and freeze the funds of domestic companies in the form of "domestic guarantees and foreign loans" as a guarantee for overseas affiliated companies to obtain loans, and ultimately the profits are transferred to overseas companies in disguise.

5. In view of the economic status quo of the island country and its gradually loosening monetary policy, in order to better promote close cooperation and value circulation among member companies, and to help companies to produce a financial statement that satisfies investors but can withstand scrutiny in the short term while achieving policy arbitrage, the China-Japan Economic Promotion Association will encourage member companies to conduct "exchange business" among themselves, export intangible assets abroad free of charge, and erode the profits of domestic companies.

Simply put, this is to encourage these member companies to deliberately not charge relevant usage fees when they provide intangible assets such as goodwill, trademarks, proprietary technologies and customer lists to overseas subsidiaries or affiliated companies... In other words, this is to take advantage of the particularity of the current environment and the relevance of organizational structures, using methods and names such as "exchange" and "donation" to deliberately circumvent the principle of independent transactions and not charge royalties (not charging royalties does not mean that domestic companies will not incur high costs and prices to obtain these intangible assets).

If people in later generations saw this, no fool would agree to it. After all, there are too many tricks that can be done with the word "intangible assets", and tax authorities in various countries are keeping an extremely close eye on this area.

However, before the millennium, or more precisely, before the emergence of the classic international tax planning model, the Irish-Dutch sandwich, countries actually did not pay much attention to the transaction and supervision of corporate intangible assets. Therefore, at present, this is a very good way to "settle accounts."

Of course, since Dahua is a central enterprise, it does not need to apply for corporate loans from the state for policy arbitrage, and its corporate stance also determines that it is impossible to adopt this approach of eroding the profits of domestic enterprises. Therefore, the focus of this work is still mainly on these pharmaceutical companies in the island countries. Dahua is only involved in the simple "intangible asset replacement" link.

Don't underestimate the intangible assets that Dahua Company can now exchange.

Not to mention anything else, the copyright of the music on the China-Japan Cultural Festival alone, if placed in today's island country, with a little more money spent on hype and packaging, its valuation would at least exceed 1000 billion yen... Cultural copyright has always been a hard-hit area of ​​asset bubbles, and you can't deny it. As long as you get some data in the record market and event market, even if you set its valuation at billion US dollars, no one will find any fault with it.

In addition, the same logic applies to the brand valuation of the Mohua series of products. Although the goodwill valuation and trademark authorization of tangible goods are far less easy to inflate than cultural products, Dahua has more brands going overseas. As long as these brands can maintain their initial popularity and then do some data later, the valuation of their intangible assets can also become a series of scary numbers.

Of course, compared with these "account-settling tools" provided by Dahua, the intangible assets that these pharmaceutical companies in the island countries can use for exchange are much more plain and simple; they all know that Yang Mo is interested in the technical patents of his own company's original drugs and medical devices, as well as the corresponding scientific research data, production processes, and management details.

Although it is impossible to exchange patents and technologies related to products with greater market potential and competitiveness with Dahua, there is no psychological burden in releasing some mainland products... The scale of China's pharmaceutical market is not that big in their eyes. Besides, even if they want to enter the Chinese market in the future, they can't use these common products with little competitiveness as the vanguard. Therefore, as long as the authorization scope is locked within China, it is not really a loss for them.

However, the specific method of replacement and how many patents and technologies can be replaced will depend on the specific discussions later.

6. Using the Lin family as the main transit body, Fujisawa Pharmaceutical was helped to transfer profits by having related parties pay external fees;
7. Using the Yokohama Chinatown Chamber of Commerce and the Chen family as intermediaries, reduce the overall tax burden of each business group through offsetting transactions;

8. The provision of related R&D services between member units does not reflect the corresponding benefits or returns of each enterprise;
9,……

Etc., etc.

………………

In short, the following thirteen agreements are basically all known to later generations, but many of them are tax planning and capital operation methods that are eye-catching at present;
No matter it was the pharmaceutical companies from the island countries or the representatives from the Lin and Chen families, although they fought for every penny during the exchanges and negotiations, as the entire map slowly opened up, they looked at Yang Mo with more and more awe and admiration... They really couldn't figure out what was going on in this young man's head. So many novel and borderline tricks were actually designed by this Chinese man.

Of course, the so-called "eye-catching" is only for outsiders.

Although Wang Yinuo was not proficient in this business, in his eyes, the agreements Yang Mo had negotiated were simply a scam;
To be precise, if these methods are used in island countries or internationally, there may not be any problem, but if these actions are carried out within China, you will definitely die without knowing how you died.

This has nothing to do with business insight. It is purely a firm judgment based on a Chinese leader's understanding of his country's national conditions and the operation and management mechanisms of society.

the reason is simple……

Chinese laws in the 1980s and 1990s, especially business regulations, were far less mature than those in later generations.

It can be said that this is the case only from the perspective of the soundness of business regulations.

If you think that you have countless loopholes to exploit in this situation, you are totally wrong.
To be precise, if you are an individual, or just a small boss, then as long as you don't cross the red line or do too much, there are indeed countless loopholes for you to exploit;
But if your scale is as big as Dahua, as long as you dare to drill...

Unless your superior gives you a break because of your merits and old friendship, you will be dead if you drill!
The reason is not complicated at all.

China is a country that "follows the party" and "talks about politics". Most of the rules on the surface are formulated for individuals and small economic entities to follow. When the size of an enterprise reaches a certain level, many rules are no longer applicable.
With the size of Dahua Company, if you dare to take advantage of those loopholes, you will be hit by an iron fist in a minute;
what?
Ha ha,

I'm sorry, but once it is defined as a positioning issue and causes serious property damage, the applicable regulations are no longer commercial laws; which of those charges, each of which sounds enough to realize the seriousness of the matter, can you afford?

Moreover, the more imperfect the business regulations are, the greater the possibility that certain loopholes will be filled and amended. China is now in the critical period of its next transformation, and its attitude towards some things is different from that of future generations. The flexible risks and operating methods implied in this can be figured out by anyone with a brain.

Therefore, Wang Yinuo is very sure that these island companies may save or even "earn" astronomical amounts of money by using these tricks in their own countries or overseas, but if they dare to do the same in China... well, even if China now welcomes foreign investment, after some official operations, I'm afraid you will still have to pay a large amount of various taxes and fees (teachers working in foreign-funded enterprises in Qingdao should have the most say).

………………However, what surprised Wang Yinuo was that he originally thought that after Yang Mo had spent a whole week tossing and turning, and after signing a series of framework agreements with these companies, he, the mascot who supported the event, had completed his mission and could start preparing to book a flight to return home;
However, facts told him that Yang Mo valued his promises much more than he thought, and took care of "his own people" much more than he thought;
Therefore, the representatives of a number of companies from the island country just hurried back to the headquarters, preparing to speed up the next round of negotiations and finalize the subsequent cooperation details; Yang Mo knocked on his room door and invited him to sit down and have a cup of tea with the representatives of the Chen and Lin families.

As everyone knows, Yang Mo is a person who hates socializing, and in the Chinese circle in Southeast Asia, the words "drinking tea" also have their own unique meaning... Needless to say, this is another negotiation that is not so formal, but not insignificant at all.

Obviously, Yang Mo felt that a superficial glory could be of great help to Wang Yinuo. No matter which system you are in, if you want to do well, you must have real achievements in your hands, or you must show your irreplaceability in some aspect.

So, the former general manager, who had not had time to pack his luggage, changed into ordinary clothes, and then followed Yang Mo and Song Wenxuan into a private room of a retro teahouse.

Ok……

That’s right, Song Wenxuan is also on the list.

Obviously, the eldest son of the Song family, who has been invisible since he came to the island country, has a great relationship with tonight's negotiations.

………………

Different from the extremely strong performance in front of the representatives of the island country, Yang Mo's attitude towards the two representatives in their early fifties from the Lin and Chen families was extremely humble. He acted like a junior, repeatedly showed courtesy, and expressed his admiration for Mr. Chen and Mr. Lin. Seeing that the atmosphere was almost right, he began to get to the point.

"Uncle Lin, Uncle Chen, to be honest, both the country and I sincerely admire patriotic overseas Chinese like you. We also always remember the contributions made by patriotic overseas Chinese in Southeast Asia for more than a century. "

"So, please believe that no matter what time it is, we truly regard you as our own family... Dahua Company is a central enterprise. Although I am not a good person, I don't think I am a shameless person who has forgotten the classics;"

"So, please believe that Deputy Director Wang, Dahua Company, and I will never ignore your patriotic heart, and will never harm our own family!"

Yang Mo's expression was very serious, and he rarely used the words "please believe it" twice.

Although Yang Mo is young, his performance in the past week is really impressive. Therefore, the representatives of the two families looked at each other in surprise, and their eyes stayed on the gentle Wang Yinuo for a while, and their expressions became serious: "Although there have always been some different voices in our two families, from what we have come into contact with and felt in the past few years... We believe in the country!"

Hearing this, Yang Mo nodded slightly, and then went straight to the point of today's meeting: "Uncle Lin, Uncle Chen, although Dahua Company has reached many agreements with a number of companies including the two of you, there are only three truly important agreements;"

"Among them, the one that has the closest relationship with your two companies is the [Cross-border Investment and Financing Tax Base Erosion Operation Agreement], and it is also the most crucial... To be precise, the special studio that is about to be established under the Cross-border Investment and Financing Tax Base Erosion Operation Agreement is extremely important to Dahua Company and your company."

After a slight pause, Yang Mo lowered his voice slightly: "So, the reason why I asked the two elders to come out today is to ask you to join us and jointly strive for the leading power of this special studio!"

Cross-border investment and financing erodes the tax base operation agreement?

Special studio?
The two representatives were stunned, somewhat confused as to why Yang Mo was so concerned about this studio.

You know, the Lin and Chen families are both famous for their industries.

The Chen family certainly owns numerous plantations and factories in Southeast Asia and the mainland, and although the Lin family started out in the gambling industry, their focus is now on developing the tourism industry.

amount……

Well, if you have to say something, both families are more or less related to the word "finance", especially the Lin family. But this "finance" is not the same as that of the other family. There are not many talents in this field in both families.
Even if the two companies are willing to actively move closer to the motherland, even if the two companies can put out a portion of funds to test the waters regardless of gains and losses, but they have to compete for the dominance with the relevant elites of the large pharmaceutical companies in the island countries that have gradually begun to develop global strategies...can they compete?
At this moment, the shortcomings of the traditional Chinese system in modern financial business were fully demonstrated.

Yang Mo heard the two representatives' questions and shook his head: "Uncle Lin, Uncle Chen..."

"First, the situation is changing too fast. Believe me, the bubble crisis that the island country is facing this time is just the beginning. America and its allies have already deployed troops in the Persian Gulf. Under the thunder and lightning, it won't be long before the world's financial capital market will set off a huge wave again... Southeast Asia, as one of the world's major commodity export regions, will definitely not be immune... If you don't think about the future, you will have immediate worries!"

"Second, whether it is exchange rate cashing or asset appreciation, although it is indeed a very technical thing, as long as you master the right ideas and methods, it is actually not as difficult as you think;"

"Third, the special studio has not been formally established yet, and its planned personnel configuration is drawn from several companies. Therefore, under this personnel composition model, whoever can show the most dazzling historical achievements at the beginning will be able to gain the right to speak and the dominant position... Although those island pharmaceutical companies are large in scale and have begun to try global layout in the past two years, their main business is not finance after all. Even if they have experience in exchange rate cashing, their scale will not be very large; therefore, if they want to achieve enough results to gain the dominant position, the investment is actually not that big."

"Four……"

Yang Mo smiled strangely: "Speaking of talents, who said we don't have any?"

At this point, Yang Mo raised his hand and introduced the eldest son Song next to him: "Song Wenxuan, the office director of Dahua Company, you two should have met him;"

"But what you two may not know is that Director Song graduated from the prestigious Henry Business School and has a very high level of attainment in finance. However, due to the special nature of Dahua Company and the lack of a suitable window platform in China at this time, Director Song's dragon-slaying skills cannot be used."

"So, my idea is that you should form a relatively professional operation team, and then we will temporarily second Director Song to you to guide the next work... The investment does not need to be too large, and the time does not need to be too long. In about three weeks, we can pick a general from a group of short people and make achievements that are enough for us to have a say."

After saying that, Yang Mo thought for a moment and added, "Of course, although Dahua cannot directly participate in this work due to regulatory restrictions, support in other areas is no problem... If your funds are temporarily insufficient, Dahua can lend you a portion;"

"Just extend the payment cycle appropriately by transferring the money from the foreign trade company. In the past half month, the sales of Mohua's overseas brands should not be less than 5 million yen. If it is just for the sake of performance and short-term trading, it should be enough... If it is not enough, we can add more money later. The payment period of the foreign trade company can be controlled within 90 days. It should not be a problem to borrow a few more days of sales money temporarily... With Deputy Director Wang as the coordinator, and cooperating with patriotic overseas Chinese families like Lin and Chen, Dahua Company will not be held accountable even if someone in China finds out about the problem."

After glancing at a certain shield and finding that Wang Yinuo nodded without any hesitation, indicating that he was willing to take this responsibility, Yang Mo turned his head and smiled sincerely: "Of course, I said before that the country will not let all patriotic overseas Chinese suffer grievances, so if Director Song loses money in this short-term operation, all your losses will be borne by our Dahua Company; and if you make a profit... you only need to return the principal, and we will not take a penny of the profit!"

The two representatives felt embarrassed when they heard this. Yang Mo's attitude was full of sincerity. You take all the profits and he bears all the losses... To be honest, it's only because the other party is a central enterprise representing the official Chinese government and his family has the four golden characters of "patriotic overseas Chinese". Otherwise, in business, who would be stupid enough to make such a promise to you?

The Lin family representative was slightly blushing and struggling for a while. He gritted his teeth and said, "Boss Yang, may I ask what Director Song thinks?"

The other party used the official title "General Manager Yang" instead of "Section Chief Yang". Obviously, they were a little embarrassed to take advantage of the country, so they wanted to evaluate whether they could consider using normal business cooperation to help with this not-so-small favor.

Yang Mo heard the implication of "No matter what, I have to help" in the other party's words, and secretly couldn't help but give him a thumbs up. They were worthy of being the family of the patriotic elderly man who had never forgotten his homeland throughout his life. Such a pattern, such awareness, such courage... nothing to say!

The Lin family at this time was not the Lin family after the millennium. Although its strength was already not to be underestimated, it was still a long way from being "super wealthy". Therefore, even if it was just a short-term operation of a relatively small scale, if they participated in the form of business cooperation, the money they had to invest would definitely be enough to make them feel painful.

Silently keeping in mind the other party's unspoken kindness, Yang Mo smiled humbly like an ordinary junior, then looked at Song Wenxuan.

Song Wenxuan, who had prepared his speech long ago, saw Yang Mo showing such a humble demeanor for the first time, and he did not dare to be careless. After coughing lightly, he spoke in a calm and gentle tone: "Logically speaking, now that the yen has begun to rebound, and affected by the island country's gradually loose monetary policy, even if time is limited and you need to do short-term operations, whether it is long yen or simply cashing in on the exchange rate, you can make some pretty good results;"

"However, if we only focus on this area and follow the market, then even if we can achieve results, it will not be convincing, and it will be even more difficult to gain the leadership and voice of the special studio... It's simple. Not to mention large pharmaceutical companies such as Sankyo Co., Ltd. and Otsuka Pharmaceutical that have already started a global layout, even companies with a smaller scale and influence such as Tsumura Co., Ltd. have their own professional teams, and they are also following the market."

"so……"

Song Wenxuan paused, took a deep breath, and a strong sense of confidence blossomed in his eyes: "So, based on my careful research, I personally think that given the current world situation and environment, if you want to do short-term operations, the best entry point is not the yen, but... gold!"

At this point, Song Wenxuan's voice was full of confidence: "To be precise, it's gold futures!"

Gold futures?

The representative of the Lin family looked at him in surprise.

Even though he doesn't know much about finance or futures, he does have some basic common sense.

Right now you are choosing short-term operations in order to achieve results, so how could you think of trading gold futures?

(End of this chapter)