Return to 1958 and build a century-old giant

Chapter 867 The Beginning of Major Investments in Mainland China

In most Western countries, when there is a power shortage, the priority is to ensure the supply for residential use. In the past, when Hong Kong occasionally experienced power shortages, some factories were also required to shut down.
Yang Wendong was not surprised by this. After all, in this era, the mainland industry was more important. When he was a child, he often encountered power outages for civilian use, which were done to ensure power supply for industry.

Of course, this didn't happen before he traveled through time, because there was no shortage of electricity in the mainland, and even if a choice between the two were to be made, civilian use would definitely be prioritized.
It can only be said that the economy determines everything. When the economy is highly dependent on industry, it is necessary to protect industry. In fact, the civilian use in the mainland at that time was generally just things like electric lights.

Wei Zetao quickly realized what was happening and said, "Director Wang, this method is only suitable for the short term. In the long term, we still hope that the power system in Shenhai City can provide a sustained supply."

"Understood, but our Shenhai City is relatively new, and there are indeed some imperfections in this area," Director Wang quickly replied.

Yang Wendong then said, "Director Wang, I remember that the law was amended in mainland China last year to allow foreign investment in power plants, right?"

In 1979, the first law in mainland China concerning foreign investment, the Law on Sino-Foreign Joint Ventures, was promulgated, providing a legal basis for foreign investment to enter multiple industries, including the power generation sector.

Director Wang said, "Yes, Mr. Yang wants to invest in a power plant? Shenhai City would be very happy to do so."

“I can consider it. I also have power generation business in Hong Kong.” Yang Wendong nodded and said, “However, the premise is that our cooperation can be achieved. The power plant is a project following the Changxing Group’s factory.”

Historically, Hong Kong Electric, under Li Ka-shing's leadership, only made money in Hong Kong and never thought about expanding beyond its borders.
Now that Hong Kong Electric is one of his businesses, he naturally needs to consider expansion. However, he can't enter Europe, America, and Japan, where he can earn stable income, and he doesn't dare to over-invest in such heavy assets in Southeast Asia. Mainland China is a good choice.

In the future, the mainland will always be short of electricity. Although the profits of power plants are very low due to restrictions imposed by the State Grid, they have the advantage of stable income. Although the investment seems huge, it is basically funded by banks. The company generates electricity to make money and pay off the debt. As long as there are no losses, this game can continue indefinitely.

Knowing the course of history, he naturally knew that investing in power generation in the mainland was basically risk-free, and it could also help his company obtain a stable energy source, which was a win-win situation. Otherwise, if his factory had to shut down due to insufficient power, he would be the one who suffered losses.

Director Wang said happily, "Okay, I understand."

Yang Wendong nodded, and then said nothing more;
In fact, with his capital, he could easily handle many of the infrastructure issues in Shenhai City, but he can't be too proactive in this matter. At the very least, he needs to have multiple options, such as investing heavily in the other three special economic zones, in order to ensure that he obtains the highest profits in Shenhai City.

Wei Zetao didn't react. He had already discussed this matter with his boss, and bringing it up was just to make empty promises to Shenhai City. He then added, "In that case, there are still some minor issues, such as the road from Shenhai City to Luohu Port."

There are still many minor issues. A large investment requires a long negotiation period and involves many issues. For example, Volkswagen and SAIC negotiated for five or six years.
On Yang Wendong's side, because he knew the future and was able to make decisions unilaterally, many things were pushed forward very quickly, but there were also some problems that the other party needed to take responsibility for.

For example, roads. Yang Wendong couldn't be involved in that, even though building some roads wouldn't cost much.

As for investing in highways that would yield returns, there's no rush. Given the current economic conditions in China, even if we built highways, we would still lose money. We need to wait until Shenzhen develops before considering this issue.

Many investments are not good if made too early. Infrastructure projects should be decided in accordance with the economic needs at the time. Investing too early may result in losses.

The negotiations lasted until about 5 p.m. Fortunately, Shenzhen is close to Hong Kong and has long summer days, so everyone went back to Hong Kong to rest and continued the next day.

Thus, the two sides negotiated on various issues, and the progress was quite good;
Yang Wendong did not participate in the subsequent minor issues, but instead drove around Shenhai City. Shenhai City also sent a deputy director surnamed Lin from the Bureau of Commerce to accompany him.

Looking at the many buildings under construction ahead, Yang Wendong asked, "Director Lin, can Hong Kong capital invest in these buildings in Shenhai City?"

"Of course, but residential buildings are not an option; they can only be operated jointly. As for commercial buildings, you can operate them as a sole proprietorship," Director Lin explained.

Yang Wendong then asked, "What about the hotel?"

“Hotels are fine too,” Director Lin replied.

Yang Wendong nodded and said, "Okay, after we finish discussing the Changxing Industrial project, I'll consider other investments here."

Yang Wendong also knew a little about the residential projects in Shenhai City. Thanks to special policies and its proximity to Hong Kong, a Shenhai City household registration is very important for mainlanders who have relatives in Hong Kong.

Because it is very difficult for them to obtain Hong Kong citizenship, and even if they do, few Hong Kong families can accept their relatives and friends.
Shenhai City launched a policy of giving away household registration with the purchase of a house. In addition, the house price is only 10-20% of that in Hong Kong. This immediately attracted many Hong Kong people to buy houses for their relatives. There were even Hong Kong people who could not afford to buy houses in Hong Kong who wanted to buy a larger house in Shenhai City to live in.
However, this market is too small for Yang Wendong now. Several Hong Kong capital firms have already participated, so he will not enter the market. Even people of the level of Li Ka-shing and Li Shau-kee look down on this small market.

As for commercial buildings, it doesn't matter. They're being built now so that he can hold them for the long term, just like many of his properties in Hong Kong.

Director Lin said happily, "Then I will arrange for someone to compile a plan for the future of Shenhai City for you. Please take a look and see which projects you would like to invest in, or if you have any other ideas, you can also bring them up. As long as it does not affect the plan of Shenhai City, it is all negotiable."

"Okay," Yang Wendong nodded. Actually, a decision could be made now, but there was no need to rush the real estate investment in Shenzhen.
In the coming years, any investment should be held for the long term. In the very early stages, it is necessary to proceed step by step. Investing too much at once may give others the illusion that the investment is worthless, which is not conducive to one's long-term development in mainland China.

The next day, Yang Wendong's team left seven or eight people behind to discuss follow-up matters with Deepsea, while the rest of them went to Xiamen, Shantou, and Zhuhai.
In Xiamen, the experiences were similar in various aspects: one was a factory, and the other was investing in a power plant. On the surface, it was all for industrial investment. Yang Wendong also inquired about the real estate policies in private, and they were similar to those in Shenzhen.

Similarly, Yang Wendong has also laid the hook, preparing for potential future investments. While deep-sea investments may offer the highest returns, he will not only invest in deep-sea stocks.

On September 15, Yang Wendong and his entourage returned to Hong Kong. This trip to four cities in mainland China took about 10 days.

Upon arriving at his long-unused office, Yang Wendong sighed, "Hong Kong is still the best. The living and working environment on the mainland is really making me feel out of place."

Over the past 20 years, since his business success, his life has been neither absolutely luxurious nor particularly extravagant, but generally above average. This time, when he went to the mainland for a few days, it was fine in the deep sea, as he could return to Hong Kong to stay, but in the other three cities, he could only stay in guesthouses.
Although he had previously stayed in guesthouses in Guangzhou, Shanghai, and Beijing, these three major cities were frequented by international friends, so the accommodations were relatively better.
However, the three special economic zones, including Xiamen, are a different story;
Of course, it's much better than when he was in the dormitory. It's just that people tend to forget the memories of poverty in the past. That's why many people on the internet in my previous life only remember the good things about their childhood in the 80s, but not the pain.

Zheng Zhijie laughed and said, "Mr. Yang, how about we build hotels in these special economic zones as well?"

“There’s no rush. Let’s wait a bit longer. Hu Yingxiang and Huo Yingdong are both building hotels in Yuezhou City. Let them go through this mess first.” Yang Wendong shook his head and said, “Have Tang Sheng go to both of them and arrange for two teams to visit their hotels to get a better understanding. That way, when we build hotels in the future, we won’t encounter the same problems, or at least we’ll have a solution.”

You should know that the two of them invested in small hotels, while if I were to invest, it would definitely be in medium-sized, large-scale, and more upscale luxury hotels. Given the current economic size of the four special economic zones, it is not appropriate to invest too early. Like highways, if they are built too early, they will just be left empty. I know the future, but the other banks involved do not, and it may also affect the group's confidence in investing in the mainland.
As for Beijing, Shanghai, and Guangzhou, that would be sufficient, but these three cities would require joint ventures. In the 80s, many people in mainland China were still not used to Western ways of thinking, so there would be a lot of conflicting ideas.

In addition, given the historical instability of domestic policies in the early 80s, investments outside the special economic zones, especially those not intended as means of production, were likely to be severely affected.

Zheng Zhijie then asked, "So, Mr. Yang, are you planning to build office buildings in the four special economic zones?"

“Yes, let’s build this for now. The cost of office buildings is actually very low, especially since there’s no need to build a skyscraper in the deep sea area right now. A dozen or twenty floors will be enough.” Yang Wendong continued, “The information from the deep sea area has been sent over. Take a look at it yourself, and then send someone to the mainland to investigate and see which projects are suitable for us to invest in. Compile a summary of the information for me.”

When local prices are low and it is known that housing prices will rise sharply in the future, building ordinary floors is the most cost-effective option.
Because the unit area cost of supertall buildings is very high, when it exceeds the land price, building a skyscraper would actually result in a loss.
Therefore, anyone familiar with Hong Kong architecture will know that before the 80s, even in Central, many buildings were only twenty-something stories high. It was only after the 80s, when property prices skyrocketed, that buildings of 50 stories or more began to emerge.

"Okay, I'll arrange it right away." Zheng Zhijie agreed: "What about the other three special economic zone cities?"

Yang Wendong thought for a moment and said, "Let's check the information too."

Although the other special economic zones may not be as promising as Shenhai in terms of future development, their core locations are still worth investing in.
As for industry, he will not only invest in Shenhai City. First, no matter how fast Shenhai City develops, it is estimated that it will not be able to keep up with the industrial relocation needs of Changxing Group within a few years. Second, he will not put all his eggs in one basket.

There will be many investments in mainland China, but we need to proceed gradually. Let's start by getting the simplest industry, Changxing Industrial, sorted out first.

Moreover, large-scale investment, even in a special economic zone, will inevitably generate many conflicts and contradictions between ideologies and cultures. So let Changxing Industrial, which has the lowest technological content, test the waters first, learn and summarize, and then gradually transfer other industries after Changxing Group has gained experience.

Thus, the three major companies, Cheung Hing Industrial, Hong Kong Electric, and Cheung Hing Properties, all dispatched different teams to the four special economic zones, and the same was true for their headquarters.

Such a large-scale investment naturally attracted the attention of other cities in mainland China. Beijing, Shanghai, and Guangzhou all sent people to Hong Kong. Although they did not have special policies, they still wanted to try their luck.
Yang Wendong did not refuse outright, but instead sent people to negotiate with them. It would only take some manpower, but it would put some pressure on the special economic zone city, which was still worthwhile for him.

Even countries in Southeast Asia are trying to snatch up the project.

Time flew by and it was mid-October. The negotiations between the parties finally made progress, thanks to Yang Wendong's urgent urging. Otherwise, with such a large investment, it would have been normal for the negotiations to take a year or two.

Yang Wendong, Zheng Zhijie, Wei Zetao, and Jackson, the taipan of Hong Kong Electric Group, gathered together to discuss various details.

Finally, Wei Zetao said, "Mr. Yang, after this period of investigation and internal consultation, we have finally decided to invest in Changxing Industrial's first base in mainland China in Shenzhen. At the same time, in order to ensure a stable power supply, Hong Kong Electric Group will also invest in a 30-kilowatt thermal power plant in Shenzhen."

“Yes, we will import the most advanced technology for this from Germany.” Jackson continued, “There is still one problem. Mr. Wei is planning to invest in Shenhai City, but cities like Zhuhai are still communicating with us, hoping that we can build a separate power plant there. Mr. Yang, what do you think?”

"A power plant?" Yang Wendong thought for a moment and asked, "Do you have enough funds?"

Jackson replied, "The main funding for the power plant still comes from banks. I can borrow from HSBC, Standard Chartered, and Hang Seng. Our internal funds at HK Electric are also sufficient. In recent years, we have cooperated with Mr. Cheng to develop many real estate projects and have cashed out a lot of funds."

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(End of this chapter)