Return to 1958 and build a century-old giant

Chapter 868 Carrefour's Global Progress
Yang Wendong nodded and said, "Alright, then you go and negotiate with them again. After you've assessed the risks, I'll agree to invest. That way, we won't have to worry about electricity when we build factories in these places in the future."

In the future, it is impossible for me to transfer all industries to the deep sea. In the early stages, Zhuhai and Xiamen had the same policies, so I will naturally make some appropriate investments.
At the same time, he also needs to invest not only in industrial sectors, but also in industries such as real estate, hotels, and retail that can generate profits in the mainland. Investing in these cities when they need factories the most can also help build better relationships and facilitate future investments.

Electricity is fundamental to industrialization and urbanization. However, the inland areas lack funds and it is difficult to build power plants in multiple cities at the same time. So, investing there is not a loss. Although this industry is certainly not as profitable as the real estate industry, as long as the scale of investment is large, the impact will be very large. At least for the next ten or twenty years, many cities in China will be in a state of power shortage.

Jackson laughed and said, "Okay, with the addition of Hong Kong's power plants, the more power plants we have, the lower the cost of purchasing coal will be, and the profits will inevitably increase."

Yang Wendong said, "Okay, also, the train between Shanxi and Qinhuangdao in the mainland will be open soon, and coal can be transported out. The price should be more affordable than overseas. Check the quality and if it's suitable, you can buy some from the mainland."

This railway was built after the reform and opening up, using loans from small businesses in the mainland, and it has certain significance in the history of the reform and opening up.
However, the mainland ultimately lost money because the yen appreciated significantly in the future, and the transaction was financed by a loan in yen.

“Okay, Mr. Yang,” Jackson replied immediately, while also making a note of the matter in his notebook.

Yang Wendong then looked at Zheng Zhijie and asked, "How are the real estate deals with several inland cities going?"

Zheng Zhijie replied, "Mr. Yang, I have already reached an agreement with the four special zones to build an 18-story building in each of the four cities as a trial run to see what problems might arise during construction."
After completion, we will decide on the next steps based on the situation.

“Okay, let’s take it one step at a time,” Yang Wendong nodded and said.
The four special economic zones are still small cities with not very strong real estate demand. Even if I am optimistic about Shenzhen, if I build a few or even a dozen or twenty buildings there now, it would be meaningless if they were left vacant after completion, and it might even affect the development of Shenzhen itself.

Furthermore, in the early stages, I cannot show favoritism to any of the four special economic zones. When I invest in factories in Shenzhen, the other companies will also invest in power plants and real estate. In any case, they will not lose money. Giving the other three companies enough hope will be beneficial to my future investment plans.

Zheng Zhijie smiled and said, "Okay."

Yang Wendong then said to his assistant, Xiao Wang, "Xiao Wang, go and contact Hang Seng Bank and ask Mr. He to arrange for someone to make appropriate contact with the four special administrative regions in the mainland. These four special administrative regions are developing very rapidly now and their demand for external financing is not low. Hang Seng Bank should seize this opportunity."

Many infrastructure projects in the four special economic zones are public welfare projects, which the government is obligated to invest in. Yang Wendong could not possibly participate in these projects.

However, public welfare projects can be financed and built first, and the debt can be repaid when the city develops and fiscal revenue increases.
This is an opportunity for Hang Seng Bank. They already have good relations with Shanghai, and if they can further improve their relationship with the Special Economic Zone, they can enjoy many long-term benefits simply by leveraging these connections.

However, although Yang Wendong is currently the major shareholder of Hang Seng Bank, according to his agreement with Ho Sin-hang, the Ho family will still manage the bank. He will not participate. In any case, Ho Sin-hang is capable and not young anymore. There is no need for him to compete for the right to speak when the other party is so old. Doing so would also affect his reputation in Hong Kong.

Assistant Xiao Wang replied, "Okay, Mr. Yang."

"Okay, that's settled then. We need to make the first phase of investment in the four special economic zones look good, setting a good example for our group's future investments," Yang Wendong nodded and said.
The four businesses of industry, power generation, real estate, and finance all greatly contribute to the development of the mainland, and at the same time, we can also benefit from them.

This initial investment is sufficient; let's get to know each other better first.
We will make a second round of investment when other opportunities arise in the future. Given the pace of development in mainland China and the need for our industries to relocate, that day should not be too far away.

After arranging these matters, Yang Wendong called over Liu Huayu from Carrefour and said, "Old Liu, you know about the four special economic zones in the mainland, right?"

"Of course I know. Hong Kong newspapers reported on it quite a bit recently, and the group is also preparing to invest in the special economic zones." Liu Huayu asked with a smile, "Mr. Yang, did you call me here because you're thinking about preparing for Carrefour to invest in the four special economic zones?"

“Yes.” Yang Wendong nodded: “When I invested in several special economic zones in the mainland before, I didn’t deliberately bring Carrefour along. It was mainly because the consumption capacity of the four special economic zones in the mainland is not large enough to warrant a large-scale investment. So I didn’t mention it. You can go and discuss the cooperation yourselves.”

With Changxing Group making such a large-scale visit to various cities, it's clear they're discussing big business deals.

Carrefour has unlimited potential in mainland China and can achieve a certain scale in the four special economic zones, but it is not good enough at present because the basic economy is too weak. Carrefour will find it difficult to do well in the short term. Therefore, it is natural not to mention Yang Wendong's status.

Liu Huayu said, "Okay, I'll go and take a look at a few special economic zones. Also, in the past two years, I've visited some shops in Beijing, Shanghai, Guangdong and other cities, so I have some experience."

In recent years, Carrefour's expansion in the Southeast Asian market has been quite successful, but in terms of operations, its profit margin is far lower than that in Hong Kong, indicating some difficulties adapting to local conditions. Yang Wendong once said that it is difficult for supermarkets to achieve great success overseas, while the domestic market is the easiest.

After the reform and opening up in mainland China, he also saw a glimmer of opportunity, and Yang Wendong's other industries also began to cooperate with the mainland. So he naturally needed to make preparations as soon as possible, and thus he went to the mainland to investigate long ago.
However, he only went to big cities or provincial capitals. The sudden establishment of the four special economic zones was something he could not have predicted.

Yang Wendong smiled and said, "Good, well done. Actually, there's one more thing I was going to tell you. Our supermarket industry is developing well in Southeast Asia, but it's not doing very well either. This is within my expectations. In general, the supermarket industry is more likely to achieve success in its home country."

After the reform and opening up of the mainland, I was thinking of making the entire mainland the base of Carrefour supermarkets. But after all, the mainland and Hong Kong are very different in terms of culture and economy. If we want to succeed, you still need to do a good job of research here. Looking at the history of the global supermarket industry, no one has ever been able to do well in multiple countries. Walmart is so powerful in the United States, but it is not doing so well in Europe, Asia and even South America. If it weren't for its strong scale in the United States to reduce procurement costs, its business in other countries would have collapsed long ago.

Similarly, the major supermarket groups in European countries are in a similar situation. In addition, only RT-Mart in mainland China is doing relatively well. Unfortunately, it was not able to continue to develop after the rise of online shopping.

Now, Carrefour is facing the same situation in Southeast Asia, and its development is not very smooth. Of course, thanks to the early property investment, it is not losing money, but it cannot compare with the performance in Hong Kong.

For mainland China, investing in property early on means you can basically make money passively and definitely won't lose money. But if you want to succeed and excel in the retail industry, that's not enough. You have to work hard to operate, reduce costs to the extreme, and defeat all competitors to create a new "Walmart" in mainland China.

This was unprecedented in the history of mainland Chinese commerce. Supermarkets in mainland China only started appearing in the 90s. They were ten years ahead of schedule, and with the online shopping era still two or three decades away, coupled with their strong capital, they still had a chance to succeed. The only variable was the operation.

Once you succeed, you won't be afraid even in the era of online shopping.

“Yes, Mr. Yang, the economy in the mainland is indeed not very good right now, and some of the prices we purchase are still too high,” Liu Huayu said.

Yang Wendong added, “Yes, these are also problems. So your procurement system also needs to start thinking about ways to reduce costs. Most of the supermarket's items are light industrial products, which are extremely sensitive to labor costs. So you and Changxing Trading need to increase your procurement in the mainland and develop your supply chain.”
This way, not only can our supermarket industry in mainland China develop, but our supermarkets in Southeast Asia can also reduce costs, and Changxing Trading can also obtain a larger share of supermarket orders in Europe and America.

After the reform and opening up in mainland China, the initial development was relatively slow. Therefore, some industries, for their own needs, hoped that Hong Kong capital could drive the development of some high-quality enterprises in the mainland first.

Liu Huayu said, "Okay, I will arrange for engineers from the purchasing department to go to various places in the mainland to investigate and see if there are any more suitable suppliers."

“Yes, once we find suitable ones, you can consider contacting Changxing Financial to provide these factories with some foreign exchange funds to upgrade their equipment and manpower, ensuring our supply.” Yang Wendong continued, “You and Fang Xianming can decide on this matter yourselves, and you can report to headquarters once a quarter from now on.”

There are countless companies with potential in the mainland, some of which are very famous and Yang Wendong knows about and is prepared to invest in when the time is right, but there are still more than 99% that he does not know about.
At this point, the only option is to have subordinates rely on their experience in normal investments. However, it is unrealistic to have Changxing Financial search for suppliers in such a vast industry. Therefore, it would be a good option for Changxing Trade and Carrefour to look for high-quality supply chain companies and then invest in them.

Moreover, history has changed. With abundant funds and huge orders, as long as they find capable companies, coupled with the opportunity of rebuilding everything in the 80s, the combination is likely to be successful.

The great mainland enterprises of the future will not necessarily have to wait for investment; they can create their own.

Liu Huayu smiled and said, "Okay, Mr. Yang, I will discuss it with Mr. Fang."

Yang Wendong then asked, "By the way, I haven't checked on things here for a while. How is Carrefour's development in Europe and the Middle East?"

In its early years, after Carrefour monopolized the retail industry in Hong Kong, it began to expand into Southeast Asia. Yang Wendong didn't pay much attention to this because his foresight was limited, and he also understood that developing the retail industry in so many small countries would inevitably be difficult, so he didn't have high expectations. It wasn't until the mainland opened up and a complete large market emerged that he began to devote some energy to paying attention to it.

But regardless, other countries and continents should also give it a try. Even if they don't make money or suffer a loss, they can continue to operate for the sake of scale, because huge consumption will drive procurement, thereby ensuring that the procurement chain can make money, which is also good, and can also increase their influence in the Asian region.

Liu Huayu said: "In Europe, we have invested in and built 26 supermarkets in four countries: the UK, Germany, France and Italy. In addition, we have acquired a local brand mid-sized supermarket in the UK. Their supply chain has been integrated into our system. The total sales in the first half of this year were US$7600 million."
In the Middle East, our main targets are countries with relatively stable political situations and wealthy economies, such as Saudi Arabia and the UAE. Currently, we have a total of 37 supermarkets with total sales of $6100 million.

In the future, I plan to further increase investment in these two regions. Based on current data, investing in Europe and the Middle East is much better than investing in Southeast Asia, where only a few major cities offer relative stability.

“Okay, then keep an eye on this part.” Yang Wendong nodded and said, “Also, don’t invest in Iran. Their relationship with the United States is not good, and it’s located next to the Strait of Hormuz, a key global oil transportation hub. I estimate that things will remain chaotic in the future.”

As a time traveler, he naturally knew what would happen in Iran in the future. Such things would not be affected by his butterfly effect, so he still had to avoid them.

“Okay, I understand. The losses on Zheng Sheng’s side are staggering,” Liu Huayu said, shaking his head.

Zheng Yutong, together with the gambling king, invested $5000 million in a casino in Iran, but it was shut down by the new regime due to the Iranian civil war, resulting in a 100% loss.

Yang Wendong smiled and said, "Okay, is there any other problem?"

Liu Huayu thought for a moment and asked, "Mr. Yang, the world's largest market is the United States. Should we consider investing there? Also, should we consider South America and Australia?"

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(End of this chapter)