Siheyuan, Shazhu: I have both parents in this life

Chapter 367 Tertiary Industry
Later, the city organized a coordination meeting, and the department store representatives became agitated: "They are disrupting market order! They must stop selling immediately!"

He Yuxin calmly produced the latest document: "This is the 'Notice on Further Expanding the Autonomy of State-Owned Commercial Enterprises,' which was just issued yesterday. The document clearly encourages the common development of multiple economic components. We are fully in line with the policy."

"Boss, you have to help us solve this problem," the department store manager said.

"Your attitude is wrong. There are different ways to solve problems. You just told them to close down. Who gave you that right? How come you state-owned enterprises are allowed to sell, but others can't? The country's policies have changed. You're still clinging to old ideas. I think you have a serious problem. You need to make a deep self-criticism," the leader presiding over the coordination meeting said with a dark face.

Three days after the coordination meeting ended, the department store party officials submitted a 5,000-word self-criticism, which was criticized in a city-wide notice, and the matter was reported to a higher level.

Commentary: Opening up doesn't mean letting things go haphazardly, competition isn't about causing chaos, and state-owned businesses also need to learn how to swim.

The department store also used some tricks, with the industry and commerce bureau and the tax bureau taking turns to visit. In the end, Huanghe had all the necessary procedures, so it was just a formality, and they didn't ask for any preferential policies.

As for suppliers, there's no way to play that game. They're not on the same side as state-owned enterprises at all, and for some things, they can't even get past the supplier threshold.

Following the list provided by He Yuxin, Li Chengru visited four universities and two research institutes, bringing back seven computer orders. Each computer had a gross profit of 12,000 yuan, with a 30% deposit to be collected upfront and the balance to be paid upon delivery.

This really scared Li Chengru. Is this stuff really that profitable?

The university has set the following requirements: the computer model must be compatible with IBM, the hard drive must be at least 20MB, and the memory must be at least 512KB.

Li Chengru sent the requirements to the special economic zone, and the only response was, "Wait for the goods to be delivered."

The research institute was concerned about after-sales service, so Li Chengru wrote the service terms into the contract: on-site service within 72 hours for hardware failures, telephone guidance for software problems, and on-site service with the machine if necessary.

In early May, the first batch of ten computers arrived. They were tested on the spot and powered on immediately. The university then ordered five more.

The department store held an internal meeting and decided to negotiate prices as well. They sent people south to grab supplies, but the established factories refused to supply them, and the new factories demanded higher prices. When the goods were shipped to the north, the final price was even higher than the retail price on the Yellow River.

In mid-June, the city issued a new document: canceling the ration coupons for color TVs, refrigerators, and washing machines, allowing for open supply, with prices set by the enterprises themselves, and requiring clear price labeling.

After the document was released, the number of people queuing at the entrance of the Yellow River Mall actually decreased. People knew that there was enough supply and stopped panic buying. The department store also breathed a sigh of relief, but found that its purchase price was high and the retail price could not be lowered, so the counters remained deserted.

Li Chengru posted the document at the entrance of the mall, adding a line of chalk writing next to it: "Open for sale starting today, no quantity limit, no price adjustment."

Inventory reached zero that day.

After closing the shop that night, He Yuxin and Li Chengru did the math: three months after opening, the gross profit was 3.7 million yuan, and the net profit after tax was 2.2 million yuan. Computers accounted for 40% and home appliances accounted for 60%. The initial investment had been fully recovered.

Li Chengru's heart had grown much stronger, so he only asked one question: "President He, what's the next step?"

"The next step is up to you. I have other things to do," He Yuxin said with a smile.

"Oh, you're abandoning me?"

"What are you saying? You can always come to me if you have any problems. After these past few months, I've discovered that you have a real knack for business. I'm rooting for you!"

"Could you give me a little more time?"

"What are your thoughts?" He Yuxin asked.

“I’m thinking of separating regular home appliances from computers. We also need to hire technicians. Besides, I’m not familiar with equipment procurement. What do you think?”

"How about this, I'll transfer people from the special zone to help you. I won't be here anymore; there's too much going on at the group. Now that this test is successful, I need to do something else. Do you have confidence?"

"As long as you don't abandon me, I'll have it."

"Haha, this is something we started together, how could I not take care of it?" He Yuxin laughed.

In the scorching heat of July, the city of Beijing was practically steaming.

He Yuxin handed over the daily operations of the electronics mall to Li Chengru and his assistant transferred from the special economic zone, and packed his bags to head south.

Gong Xue carried her daughter to the courtyard gate, where the little girl waved her chubby little hand and babbled.

He Yuxin kissed his daughter's cheek and then told his wife, "It's hot, don't go out too often. If anything happens, call the Special Economic Zone."

"I know, be careful on the road." Gong Xue looked at him, "Come back early after you finish your business."

"Okay, I'll head back as soon as I'm done."

When the plane landed, Xu Damao came to pick it up personally.

"Is it hot in Beijing right now?" Xu Damao took He Yuxin's bag and tossed it to the back seat.

"It's hot and humid."

"Having lived in the south for so many years, it's a bit hard to get used to."

"Yes, the road has melted from the heat."

"Go directly to the military region's guesthouse? Or..."

"Let's meet with them first. What's their background?"

"Your brother's old comrade-in-arms made the connection; he's from the logistics department, so it's easy to talk to him." Xu Damao started the car.

"Hmm, what are they all planning to do?"

"You'd never guess this. They're incredibly ambitious; they want to do anything, as long as they make money."

“Nobody cares, they’re soldiers.” He Yuxin frowned.

"Last year, the higher authorities issued a document encouraging them to earn their own money."

"What did my brother say?"

"Your brother wants us to talk first."

The car drove into the military area and arrived at an office building where four people in military uniforms were waiting.

The leader was a middle-aged man in his forties, surnamed Zhao.

The two sides shook hands and exchanged pleasantries, and then he led them into a conference room in the office building.

"Mr. He, Mr. Xu, welcome, welcome."

Upon entering the conference room, Chief Zhao got straight to the point, "We've been waiting for you two for quite some time."

"What do you mean?" He Yuxin asked.

"The team is short of money, short of money everywhere. That's why we're waiting for experienced and capable people like you to lead the way."

As he spoke, Chief Zhao spread out several maps and planning documents.

"General Manager He, General Manager Xu, let's get straight to the point." He pointed to the map. "We have idle barracks and warehouses, a dedicated railway line, and a large number of technical soldiers who are about to be discharged and transferred to civilian work. The higher authorities encourage us to engage in production and business operations to improve the lives of officers and soldiers. We want to cooperate in setting up factories, engaging in transportation, and even developing real estate."

He Yuxin flipped through the planning document, which included electronics factories, garment factories, auto repair shops, and even hotels, truly a "comprehensive development."

Xu Damao interjected, "Chief Zhao, these projects require a significant investment. Technology, management, and market access are all challenges."

"That's why we're partnering with the Yellow River!" Chief Zhao laughed. "You provide the technology, management, and distribution channels, and we'll provide the land, personnel, and policy benefits. Profit sharing is negotiable."

He Yuxin pondered for a moment: "This is a big deal, I need to consult with the group headquarters."

"Aren't General Manager Xu and General Manager He the heads of the domestic operations? Do they need to consult headquarters for such a small matter?"

"Chief Zhao, you call this a small matter? You've included almost every profitable business in the market in this regard." He Yuxin said with a wry smile.

"Well, we're in a hurry, so how about we pick two to make first?"

"We're already here, so let's not waste a little more time. Let me ask for instructions so that future cooperation will go more smoothly."

"Ask your brother, He Fei?"

"Correct."

"Alright, I'll wait for you." Chief Zhao still had some reservations, otherwise they would have had a long and complicated discussion today.

That evening, He Yuxin made a phone call to Hong Kong.

After listening to the report, He Yuzhu paused for a moment and said, "Tell them: First, prioritize building factories for electronic components and precision machinery. These types of factories are easy to transform and can be quickly converted into military production if necessary in the future. Second, the land must be legally compliant, and priority should be given to central areas. The troops can be moved to remote camps without delaying training. Third, select soldiers with good educational backgrounds to join the factories, and we will train them to become technical backbones. This is how we contribute to national defense."

He paused, then said seriously, "But if they only want to make quick money or affect the military's main business, then this cooperation is out of the question."

He Yuxin wrote down everything: "He also said, 'Brother, this is not easy to negotiate. Judging from their attitude, they won't give up until they achieve their goal. If we don't cooperate, they will find someone else.'"

“This is indeed a problem. Here’s what I’ll do: I’ll call Qianli to confirm the situation, and then you can talk to him again.”

"That's for the best, otherwise Mao and I would be in a really awkward situation," He Yuxin said.

"So even you have your moments of fear, huh?"

“I’m definitely not afraid of civilians, but this is the military,” He Yuxin said.

"Okay, relax. At worst, we won't cooperate. They came to us this time; it's not like we're begging them," He Yuzhu said with a smile.

"understood."

After hanging up the phone, He Yuzhu called Wu Qianli.

"Old Wu, it's me, Zhu Zi!"

"You're such a busy person, how come you have time to call me?"

Is it convenient for you to talk there?

“It’s convenient, just say so!” Wu Qianli said seriously.

He Yuzhu briefly explained the situation, then asked, "Old Wu, what do you think about this?"

"Well, I was forced into this situation. I don't know which bastard put me in this position, saying that I know the higher-ups in your group, and of course, I also have connections with Lao Mei. He said he was the matchmaker."

"Then why don't you go to Old Mei? He's the one in charge of this." "What are you saying? He's from the local area. If we're going to do this, we're competing with the locals, you know?"

“Isn’t competition normal?” He Yuzhu said.

“You still don’t understand the current military. We are exempt from taxes, and the customs duties are also low, do you understand?” Wu Qianli’s voice was lower.

"I see, I really didn't know that. The more you do, the less willing the locals are to accept it." He Yuzhu suddenly realized.

"That's exactly right. I really didn't want to get involved in this kind of thing in the first place, but now there's already a conflict."

“Okay, then I’ll tell you my suggestions and you can report them to your superiors,” He Yuzhu said.

"Wait a minute, I need to write this down. You're not the same kid you used to be, what you say must be very important," Wu Qianli said.

"Okay, just don't say it was me who said it. You report it yourself."

"Why?" Wu Qianli asked, puzzled.

"What good would it do me to have my name published?"

"That's true."

"Also, you have to give it to the right person, understand?" He Yuzhu instructed.

“I know that, go ahead and say it.” Wu Qianli had already prepared paper and pen.

He Yuzhu then repeated what he had told He Yuxin, and then added a few more points: "Freight, contacting farms and the Production and Construction Corps to help them sell, joint ventures between the three parties to open factories on farms and in the Production and Construction Corps, etc."

The more Wu Qianli read, the more shocked he became. He felt that the logistics guys were just incompetent, only thinking about copying others without realizing they had so many resources within their own ranks that could be effectively utilized. Of course, what he cared about most was the combat effectiveness of the troops and the future upgrades to their equipment, and He Yuzhu's actions were like providing a ladder for them.

"Zhu Zi, how did you come up with this? If I didn't know you were in Hong Kong, I would have thought you had been staying in China all these years and had traveled all over the country."

“I can’t just have someone collect business information if I don’t go myself. You think these are all my ideas? These are all experiences that Yuxin and his team have gained from traveling around the country over the past two years.”

"oh oh!"

"Do you think you can actually accomplish what you're talking about? And these things must cost a lot of money, you know we don't have any."

"As long as you choose the right path, money is not a problem."

"He really is a big capitalist, so rich and powerful," Wu Qianli said.

"If you say that word again, I'll get angry," He Yuzhu said irritably.

"Hahaha, I won't say, I won't say, you're just a rich landlord, okay?"

"Next time we meet, I want to have a fight with you."

"No, spare my old arms and legs. Do you think everyone is like you, still able to go toe-to-toe with young lads?" Wu Qianli said.

"Humph."

"Fine, I won't say anything more. I'll organize this and then discuss it with Lao Xiong, Lao Yu, and Wan Li. You know the situation in the military."

"I understand, that's why I made sure you found the right person. Do you need me to show you the way?"

"No need, no need for you, I'm afraid you'll lead me astray," Wu Qianli hurriedly said.

"Then you should tell the logistics department that I'll have Yuxin and the others go back to the special zone first, and they can come over once you have the results here."

"Okay, I'll go and tell them."

After receiving a call from He Yuzhu in Hong Kong, He Yuxin and Xu Damao followed his advice and temporarily suspended their comprehensive cooperation negotiations with the Logistics Department before returning to the Special Administrative Region.

A few days later, news came from Wu Qianli's side: the situation was more complicated than expected, with significant internal disagreements, making it difficult to reach a consensus in the short term.

Wu Qianli said, "Zhu Zi, we've discussed it. Since we've chosen you, don't refuse. Why not try cooperating on one or two projects with less controversy and quick results? Even if something happens later, it won't be a big deal."

"Okay, I'll have Yuxin and the others make another trip to Huacheng."

"Yes, I'll have someone follow me this time."

He Yuxin and Xu Damao visited Huacheng again, once again in the conference room of the logistics building.

After listening to He Yuxin's account, Chief Zhao felt that it fell far short of his expectations, and his face betrayed his disappointment: "I understand, I completely understand! Large projects involve a wide range of issues, so it's only right to be cautious. In your opinion, which aspect should we start with?"

Xu Damao continued, "Commander Zhao, after some discussion, we think there are three areas we can prioritize. First, transportation. We have a fleet of vehicles and a dedicated railway line, and our group has a large volume of goods that need to be transported north and south. Second, feed processing. Doesn't our military region also have its own farms and breeding farms? We can cooperate to build a factory, and the products can be used for our own purposes and also sold abroad. Third, the service industry. For example, we can jointly open a high-end restaurant in a suitable location in the city. We will provide the management and brand, and you will provide the location and manpower, and we will share the profits."

Commander Zhao listened and nodded, his eyes lighting up when he heard the word "restaurant": "A restaurant is good, that's good! We entertain guests quite a bit, and if we don't have any guesthouses, we can generate revenue by opening one. Transportation and feed are also no problem, but isn't the profit margin a bit low?"

“It seems that Chief Zhao is not familiar with these things, so I will give a brief explanation.” He Yuxin took out the prepared materials and began to explain, and gave a rough estimate of the gross profit margin.

"This is so high? I didn't know there were so many intricacies involved. Let's do it, we'll take on these projects."

"And what about the scale?" He Yuxin asked.

"Of course, the bigger the better. We have land, we have engineering troops, so we don't need to worry about factory buildings at all. The main thing is the equipment from your side."

"I understand now. Would you like to discuss the details now, or take us to see it first?"

"Of course we need to take a look first, so you'll have a better understanding. Otherwise, you definitely won't have confidence just from what we say," Chief Zhao said.

“Alright, let’s take this opportunity to learn more about our soldiers,” He Yuxin said.

"Learn more about them, and you'll definitely come to like them." Chief Zhao's expression had changed from disappointment to anticipation.

Over the next week, He Yuxin and Xu Damao conducted site visits around Huacheng (excluding classified areas). After completing their tour, they began detailed discussions, and the team sent by He Yuzhu also arrived in Huacheng to conduct a comprehensive evaluation of the project.

The main transportation business focused on equipment and electrical appliances, encompassing both land and air transport; rail transport primarily handled agricultural products and animal feed. An assessment determined the feed mill's capacity to be 50,000 tons per year—equivalent to the output of an entire province elsewhere at the time. The military requested fewer automated production lines and increased reliance on manual labor to provide employment for military families; therefore, the factory needed to employ thousands of workers.

As for the restaurant project, the chosen location was a three-story military building that had been abandoned in the city center. The location was even better than the White Swan Hotel, and the land area was also larger. In the end, it was decided to demolish it and rebuild it into a thirty-story hotel—it could have been built even taller, but Chief Zhao was worried that it would be too conspicuous and abandoned the idea.

The two sides then negotiated again, with profit sharing becoming the focus. Commander Zhao hoped to obtain a higher percentage, arguing that the military had provided core resources such as land and manpower.

He Yuxin's attitude was firm: "Chief Zhao, what we are investing in is core technology, management team, market channels, and brand reputation. These are the key to the project's profitability. The transportation fleet management and dispatch system, the feed mill's formula and process, and the hotel's management standards and customer base—none of these can be solved simply by having land and manpower. The profit-sharing ratio we proposed is calculated based on market rules and the huge initial investment, and it is very reasonable."

Xu Damao added from the side: "Moreover, we promise to give priority to recruiting military family members and veterans and provide them with systematic training, which in itself is to relieve the pressure on the military. In the long run, cultivating a group of professional talents is more valuable than simply taking a few more percentage points of profit."

After several rounds of negotiations, an agreement was finally reached: for the transportation company and feed mill, the Yellow River Group would hold 60% of the shares, and the military region would hold 40%; for the hotel project, the Yellow River Group would hold 55% of the shares, and the military region would hold 45%. All projects would be accounted for independently, with the Yellow River Group leading the management team, and the military region dispatching financial and supervisory personnel.

After the final text of the cooperation agreement was finalized, the signing ceremony was held in the conference room of the military region's guesthouse. Commander Zhao, representing the military region, and He Yuxin, representing the Yellow River Group, signed the agreement respectively.

During the exchange of texts, Chief Zhao gripped He Yuxin's hand firmly, his smile revealing a sense of relief: "President He, it's been a pleasure working with you! This is our first step, and we must make it a model!"

"Definitely, Chief Zhao, it's a win-win situation." He Yuxin replied with a smile.

That evening, the military region hosted a banquet, and the atmosphere became much more relaxed. After a few rounds of drinks, Commander Zhao pulled He Yuxin aside and whispered, "To be honest, the pressure is immense. So many eyes are watching, waiting to see the results, and also waiting to find fault. You really need to help us do these projects well."

"Don't worry, we're here to get things done," He Yuxin reassured him.

In the days that followed, He Yuxin and Xu Damao were busy with their own things: Xu Damao was mainly responsible for coordinating the preliminary preparations for the transportation fleet and the feed mill; while He Yuxin transferred the architectural design plan of the Grand Hyatt from Beijing to survey the site with the infrastructure team and discuss the design details of the hotel.

When Xu Damao inspected the trucks, he was dumbfounded. The trucks were so old and dilapidated that they couldn't handle long-distance freight at all, so he wanted to suspend the project.

As a result, Chief Zhao approached He Yuxin: "Mr. He, could Huanghe Transportation Company possibly extend some credit to us for our transport company? You know the reality; the motor transport corps has very few trucks in good condition. Most of them are past their service life and are barely capable of long-distance transport. It looks like Mr. Xu is about to stop operations. What do you think?"

"Chief Zhao, this is no small number. General Manager Xu estimated that at least two hundred new five-ton diesel trucks will be needed to get things running in the initial stage."

"I know, I know, this isn't a request for help."

He Yuxin frowned.

Upon seeing this, Chief Zhao hurriedly said, "Even if we don't have two hundred taels, one hundred vehicles will do. Let us set up the stall first."

"Chief Zhao, how about this? We can consider this car as our investment, but we can't calculate the shareholding like this."

Chief Zhao shook his head: "The shareholding cannot be changed, but we can forgo the profit sharing initially and use it as repayment for the car loan. Is that acceptable?"

"For the transportation company alone, it looks like you'll be paying off the vehicle loan for many years."

"How about this? Our military region has a few vacant plots of land in Huacheng and the Special Economic Zone. The locations are decent, but they've never been developed. Do you think we can use these to offset part of the cost?" Chief Zhao said.

He Yuxin thought for a moment and said, "Regarding the land, we need to assess its value and location. So, Chief Zhao, could you please show us the land information first? As for the trucks, I'll apply to the group and try to coordinate a batch to ensure our transportation company can get up and running."

"That's great! Mr. He, this really solves our urgent problem!" Chief Zhao breathed a heavy sigh of relief. Of these projects, only the transportation company could generate revenue the fastest, so how could he not be anxious?

A few days later, the military provided detailed information on several plots of land.

He Yuxin and his team conducted a thorough study and sent people to conduct on-site inspections. They discovered that two of the plots were located on the edge of the new district planned for Huacheng in the future, and the area was not small. Another plot was located in the special economic zone near Shekou. Although it seemed a bit remote at the time, it had great development potential.

He Yuxin called He Yuzhu and gave him a detailed report on the situation and the value of the land.

He Yuzhu laughed on the other end of the phone: "Tell them we want the land. We'll provide the trucks they ask for, and for the first three years of profit sharing, they'll take 30% less. The rest will be considered as our Yellow River supporting the army's construction. But the land permit procedures must be completed as soon as possible."

When they talked again, He Yuxin stated his conditions. Upon hearing them, Chief Zhao could hardly believe it: "This, Mr. He, how can we accept this! This level of support is too great!"

“My brother said that the military and the people are one family, and we have a long road of cooperation ahead of us,” He Yuxin said with a smile.

The matter was settled.

The Yellow River Group quickly allocated two hundred brand-new Yellow River Panshi diesel trucks to the troops.

The car dealership was overjoyed to see the neat rows of new cars in the parking lot.

Correspondingly, several land transfer agreements were quickly signed and formalities were completed.

The Yellow River Group used almost no cash to exchange these materials for land resources that will be extremely valuable in the future.

(End of this chapter)