Return to 1958 and build a century-old giant

Chapter 859 Preparations for Industrial Relocation

"Invest in our factory? Just like other joint ventures?" Zhu Yulong asked in surprise.

He never imagined that a top Hong Kong tycoon like Yang Wendong would take notice of a textile company like theirs. He even thought that Yang Wendong's visit was a favor to the government, choosing their company rather than his own.

Yang Wendong nodded and said, "Yes, if I invest in your company, you will have foreign exchange. At the same time, as an invested company, after the equipment is upgraded, as long as the quality and price are right, Hong Kong will give priority to purchasing it. In this way, your problem will be solved. Wouldn't that solve all the problems?"

Zhu Yulong thought for a moment and asked, "What about management?"

He also knew that some foreign companies and domestic enterprises had joint ventures, and the struggle for management control was very fierce.

Yang Wendong shook his head and said, "I won't get involved in management, but there will be someone to supervise the finances. We will also inquire about some major investments as appropriate. As for other aspects, just follow your previous model."

State-owned enterprises today carry a very heavy burden; this is true not only for Qinghe Wool Textile Factory but also for other state-owned enterprises.
Even if I form a joint venture with these companies, I still need to deal with these issues. It's impossible for me to just throw them away because I'm in a joint venture; society as a whole wouldn't allow that.
However, companies that are independently invested in by foreign capital or other foreign investors, such as Very Cola and Future Mini, are new companies and naturally do not have these things. This is one of the places where foreign capital and mainland China have disputes.

Foreign investors naturally couldn't support workers' families, let alone build factories, hospitals, kindergartens, etc. But later they found that these didn't cost much money, so they considered directly subsidizing wages to end the disputes. In the future, some of their factories in the 80s could also adopt this model; or they could use the model of borrowing people from other factories to circumvent the problem.

But now that he is actively investing in an existing company, it's different. So he's too lazy to get involved and just lets the company operate according to its original model. As long as it doesn't lose money, that's fine. Anyway, his goal is the land beneath the factory, so early subsidies aren't a problem.

"Really?" Zhu Yulong was also incredulous, not expecting that the other party would not fight for management rights.

Yang Wendong smiled, then looked around and said, "However, you need several million or even tens of millions of US dollars, while your factory is not worth that much money."

Land in this era wasn't worth much, not even a fraction of US dollars. As for the factory itself, it was even less valuable, since it was still operating at a loss. In Yang Wendong's eyes, after the new joint venture and equipment replacement, all the hardware could be sold as scrap metal; much of it was probably still equipment from the Qing Dynasty.
Zhu Yulong agreed, thinking their factory wasn't worth millions of dollars. He knew that Beijing's annual foreign exchange export surplus was only a little over ten million dollars. So he asked, "Mr. Yang, what should we do?"

Yang Wendong said: "We will evaluate the specific value of Qinghe Woolen Mill together later. No matter how much it is, if we don't have enough money to upgrade the equipment after the joint venture, we can take out a loan from Hang Seng Bank in Hong Kong in the name of the joint venture company."

With my funds involved, plus the increased orders from Hong Kong, Hang Seng Bank no longer needed any collateral.

However, this is also a resource on my side, so it needs to be factored in when calculating the joint venture share.

"I see." Zhu Yulong said with some difficulty, "Mr. Yang, even if it is a joint venture, we still have responsibilities. When it comes to borrowing money, even if the Yanjing Municipal Government does not provide a guarantee, the government's consent is still required."

Yang Wendong smiled and said, "That's no problem. Our joint venture negotiations also require the consent of the Yanjing Municipal Government. We will also bring the government in to discuss the loan arrangements after the joint venture."
Actually, you don't need to worry. As long as the companies I invest in don't have any quality issues on your end, their future operations will definitely be fine. Paying back the loan will be very easy.

In any case, a company as large as Changxing Group, with so many top-tier industrial companies, must need a lot of external suppliers.
Since the suppliers are profitable, it is natural to choose suppliers that the group has invested in. Whether it is Hong Kong, Taiwan, Singapore or Malaysia, the group will invest in high-quality suppliers. The few that he personally requested, such as Formosa Plastics and Foxconn, are only a small part of them.
In the future, the mainland will also be the main source of the group's supply chain, so it will naturally be necessary to find suitable suppliers for joint ventures. This applies not only to textiles but also to other industries.
The Qinghe Woolen Mill is now considered one of the first large-scale supplier enterprises. As long as it doesn't have any problems, it will be given special attention. On the one hand, it will make a profit from its investment, and on the other hand, it will serve as a model. In this way, it can be used as an example when investing in other mainland enterprises in the future. It can even be regarded as a typical case of successful foreign investment cooperation in the mainland, which would be even better.

"Great, if the Yanjing Municipal Government agrees, that will be even more convenient." Zhu Yulong was overjoyed.

In the past few years, the company was already in a bad state. At its worst, it couldn't even pay wages and had to rely on government subsidies. In order to get these subsidies, he had to beg and plead with everyone he could.
Now that we've partnered with foreign capital, we have funds, orders, foreign exchange, and new equipment. All we need to do is focus on making good products and meeting the needs of our Hong Kong customers.

“Okay, that’s settled then. Mr. Xu will be involved in this matter.” Yang Wendong nodded in agreement.

Zhu Yulong smiled and said, "No problem, we will definitely negotiate this cooperation carefully."

"Okay, sure." Yang Wendong naturally wouldn't participate in such a small negotiation. He came in person this time because he had nothing else to do and was just giving the Yanjing government face.
In addition, this is the first time that he has partnered with a major mainland factory, and his personal visit can also inform future similar business investments about the importance of this.

After leaving the Qinghe Wool Textile Factory and returning to the hotel, Yang Wendong looked at the other person behind him and said, "Old Xu, you were involved in this investment today as well. I asked you to come along so that you would continue to work hard on this matter in the future."

Old Xu replied, "Mr. Yang, I will definitely cooperate with Mr. Shen to complete this collaboration."

“No, you are the head of the group’s investment department in Yanjing, you don’t need to get involved in these kinds of details.” Yang Wendong shook his head and said, “These kinds of details will be handled by different branch offices sent by headquarters.”

Your main task here is to find similar large factories in Yanjing. They need foreign exchange, and we need to invest in improving the Future Group's industrial chain. Compile a list of these companies, make appropriate contact to gauge their intentions, and then submit the information to headquarters. Headquarters will then select suitable targets for further contact.

“I understand, Mr. Yang,” Old Xu said quickly.

The boss's idea was to have him act as the vanguard, roughly searching for targets in Beijing, a broad-net approach. Once the list was compiled, it would be submitted to headquarters for review, and then headquarters would make targeted contacts.

“Okay.” Yang Wendong then looked at Aying and said, “Aying, it’s the same in Shanghai. You pass on the order to the person in charge in Shanghai. I won’t go. The meaning is the same.” “Okay,” Aying agreed.

Yang Wendong added, "Furthermore, the electronics and automotive industries do not require your involvement. You can mainly focus on light industrial factories. I will have dedicated teams to handle those two industries."

Electronics and automobiles are the core industries of Future Group. Its investments in mainland China are mainly for the development of the industrial chain and are considered strategic investments.

As for light industry, it's actually similar to the courtyard houses; it's tactical. The main purpose is to take the opportunity to hoard land and develop one's own inland industrial chain. So he himself doesn't need to be involved much; he just needs to arrange for his subordinates to carry out his orders.

Ah Ying said, "I understand. I also know that He Guoyuan and He Sheng have been active in the mainland for a long time."

“Yes, that’s right, he’s in charge of the electronics.” Yang Wendong nodded and said, “As for the automotive sector, it hasn’t started yet. There really aren’t any suitable talents in Hong Kong. We can only wait and see if the UK can do it, or poach people from Europe, America, and Japan.”

Hong Kong has talent in the electronics industry, although it cannot compare with Silicon Valley, it still has some basic skills;
The automotive industry, on the other hand, is completely zero.

Currently, our own automotive industry can only rely on overseas personnel. Once we establish ourselves in China, we will focus on cultivating talent domestically.
On June 20, after a nearly 10-day trip to Beijing, Yang Wendong and Bao Yugang returned to Hong Kong together.

The flight from Yanjing to Hong Kong wasn't very long, and Yang Wendong wasn't too tired, but he still decided to go home first.
Su Yiyi and Bai Yushan had already prepared lunch at home. It was already past one o'clock, and Yang Wendong was also quite hungry. The three of them ate and chatted, and Yang Wendong also told his family about what had happened in mainland China.
"So, does this mean we're planning to make large-scale investments in the mainland next?" Su Yiyi asked.
Of the group of women, apart from Su Yiyi who runs her own Yiran Home, Yang Wendong's group business is not involved. However, when they chat occasionally as a family, work is just a topic of conversation. It's fine to chat about it casually. You know, ordinary Hong Kong people will also discuss the situation of some large conglomerates when they have a normal chat.

Yang Wendong nodded and said, "Yes, I also received information that there may be special policies in Shenhai City in the future. At that time, our group plans to make a major investment in Shenhai City."

The establishment of the four special economic zones is no secret among the top levels of the mainland government and Hong Kong's business elite. It's only been a little over two months, so there must have been rumors about it beforehand, but most people just didn't know.

"Like Shekou?" Su Yiyi asked.

Yang Wendong nodded and said, "More or less."

“If it were the entire deep sea, I could open a factory there,” Su Yiyi said. “Yiran Home’s business has been picking up recently, with increasing demand, but it’s becoming increasingly difficult to recruit people in Hung Hom.”

"Difficulties? Why? Is nobody willing to work in the textile factory anymore?" Yang Wendong asked.

This is actually the norm. Textile factories are very hard-working. In my previous life, around 08, when the economy in mainland China had not yet fully developed, textile factories began to relocate to Southeast Asia.

Not to mention that the real estate industry is booming in Hong Kong now, and too many people have made money from real estate. Even those who only own one house feel that going to work is meaningless when they see the value of their house.

Su Yiyi replied, "It's not just that. The main reason is that your Changxing shoe factory is doing too well. Hung Hom itself is not a big town, and there are many other industries. It has poached all the people who wanted to work in textile factories. I can't even recruit anyone. Many people from my own factory have left."

"Haha, Nike's business in the US is booming, and I'm swamped with OEM manufacturing here," Yang Wendong laughed.

In his early years, he invested in Nike, acquiring 25% of the stock and some manufacturing rights. With the financial support of Yang Wendong, Nike developed extremely rapidly.

Hong Kong's production costs and quality are much better than those in the United States, so it naturally received more orders and was extremely busy.

Bai Yushan said, "Brother Dong, our group has too many factories in Hong Kong now. I went to North Point a while ago, and there were many people at the Glory Factory there. I estimate that Sister Yiyi's Hung Hom factory may even be affected by the Glory Factory in North Point."
Although our group belongs to the same company, each subsidiary operates independently. We only have a small number of people in Hong Kong, and many of them are also involved in real estate and other industries, making our internal competition much fiercer.

“Yes, you’re right.” Yang Wendong nodded and said, “Actually, it’s not just Yiran Home. Once Shenhai and other cities have special policies that allow sole proprietorship, our low-tech factories will all be relocated there.”
Including sticky note factories, plastic product factories, textile industries, container manufacturing, etc., in Hong Kong, only food and electronics remain; the others are indeed not very suitable.

Historically, after 85 years, Hong Kong's manufacturing industry experienced a precipitous collapse, a speed that was unprecedented in the world.

A company as large as Changxing Group cannot wait until that time to leave; it needs to prepare early. Now that the four special economic zones are about to be established, it plans to focus its investments on three of them.
Of course, the main focus is still on Shenzhen.

"What about the factories in Southeast Asia?" Su Yiyi asked again;

Yang Wendong laughed and said, "With so many factories in Hong Kong, we have enough to supply several cities in mainland China. We're not in a hurry for Southeast Asia; we'll talk about it later."

The three major cities are sufficient to accommodate the Changxing Group's industries in Hong Kong. As for Southeast Asia, we can discuss that after the second batch of 14 coastal cities opened up in 84, which includes Shanghai and Guangzhou, cities he has high hopes for.

PS: Please give me a monthly ticket
(End of this chapter)