Return to 1958 and build a century-old giant

Chapter 896 Investing in the Huangpu River Bridge

In Shenzhen, Changxing Group has many other investments, such as power plants and office buildings.

However, the former belongs to heavy industry and involves pollution and national approval, so it is only just beginning; the latter is because Shenzhen has only recently opened up and its economy is average, so what is being built is just a typical office building.
In the overall layout of Changxing Group, these two are only small to medium-sized investments. The boss, Yang Wendong, will pay attention to them, but he won't go to see them in person. Generally, his subordinates will show him the relevant information or pictures at appropriate times.
Deepsea City has unlimited potential for the future, but it is still small in scale at present. It is only in terms of universities that he is concerned about his future talent needs and huge reputation cultivation plan, so he pays more attention to it.

The following day, Yang Wendong looked around various places in Shenhai City;
It has only been about two years since the reform and opening up, but there have already been some changes in Shenhai City. At least various buildings have taken shape.

In the future, Shenhai City will only become more developed because of its own existence, and it will inevitably reap huge benefits from the development during the process of industrial transfer.
The following week, Yang Wendong visited the other three special economic zones, met with representatives from each zone, and finalized new investment plans for the future.
That is the relocation of its various industrial chains from Hong Kong;

After all, Changxing Group is such a large industrial group that it has operations in multiple towns in Hong Kong. It is impossible for it to invest only in Shenhai City now. Like its suppliers, its production sites also need to be diversified to a certain extent. Moreover, the current population of Shenhai City is not enough to meet the needs of the entire Changxing Group.
Naturally, it will also be necessary to establish new collaborations with the other three special economic zones that can operate independently.
Of course, one of the investments was relatively small because Yang Wendong was knowledgeable about history, so he only invested in industry and did not consider other aspects. He believed that future events in the city would have little impact on industry.
After completing his patrol of the four special economic zones, Yang Wendong took a green-skinned train from the mainland and once again arrived in Shanghai.
After meeting with the municipal party committee, Yang Wendong visited his instant noodle factory in Puxi. At that moment, many trucks were packaging instant noodles of different flavors in front of him.

Accompanying him were the factory director, Mr. Lin, a bureau chief from Shanghai, Mr. Wang, and several high-ranking officials from the factory and the government.

Factory Director Lin explained, "Mr. Yang, our instant noodles are currently very popular in China. We even had an advertisement broadcast on CCTV recently, which has led to a continuous shortage in the domestic market. We are already urgently starting construction on the third and fourth phases of the factory here."

“Yes, instant noodles are indeed a good thing for the mainland right now. You can produce them in large quantities here, so you don’t have to worry about sales. The group’s overseas channels are also expanding, and the demand for instant noodles is also very high.” Yang Wendong replied, “In the future, the group’s food factory in Hong Kong will gradually transfer production to the mainland to reduce costs.”

Don't be fooled by the fact that many people used to call sugary drinks and instant noodles junk food. That was in an era of great abundance, when people generally consumed too many calories.

In this era when people couldn't get enough to eat or eat well, instant noodles and soft drinks were hard currency.

Similarly, the situation is similar in other Asian countries;
Changxing Group has been operating in the Asian retail market for many years and has already achieved a certain scale in the instant noodle market.

However, there are still many competitors. After all, instant noodles don't require much technology. There are Japanese brands at the high end and local brands from South Korea and Southeast Asian countries at the low end. When the taste is not bad, price becomes a very important factor.

With labor costs in Hong Kong gradually rising and many people no longer willing to work as laborers, relocation is a natural necessity. However, given the scale of Watsons Foods, the entire relocation would take years.
Director Lin replied, "Okay, I understand."

Upon hearing that Changxing Group had made an investment, Director Wang said with delight, "Mr. Yang, we are listed on the Shanghai Stock Exchange, and we would very much welcome your investment."

"Can I invest solely as an investor?" Yang Wendong suddenly asked;

"Sole proprietorship?" Director Wang was taken aback and said with some difficulty, "Mr. Yang, the central government has only granted the sole proprietorship policy to four special economic zones so far, and Shanghai is not one of them. So it's probably not possible for the time being."

Yang Wendong said, "Director Wang, in that case, it would be a disadvantage for Shanghai. I personally am more concerned about whether it can be a sole proprietorship."

Director Wang thought for a moment and said, "How about this, I'll go back and mention it to my superiors. Maybe we can discuss it. But if it's a sole proprietorship, then the factory's products definitely can't enter the domestic market."

Even special economic zones in China must adhere to the foreign exchange balance strategy, which is a mandatory requirement of reform and opening up, leaving almost no choice. Unless it involves goods that China used to need to import in large quantities, which originally required a lot of foreign exchange, but attracted foreign investment to build factories, then there is room for negotiation on the issue of foreign exchange balance.
Clearly, the food industry is not among them;
Yang Wendong nodded and said, "I understand. We can just divide it into different factories. I hope to build a large food production base in Shanghai."

The joint venture factory is partly for the domestic market and partly for export, just enough to achieve foreign exchange balance. In addition, considering the early development of the domestic market, the joint venture is not a problem.
However, no matter how much potential the domestic market has, it is still not very large at present, far less than the overseas market which has been operating for many years and has a larger economic scale.
If these production capacities are to be expanded into the domestic market, they will naturally need to be wholly owned; they cannot be shared with the domestic market for no reason. This applies not only to instant noodles but also to other industries. Instant noodles are just a test; once it succeeds, other industries can also refer to it.
If the four special economic zones weren't currently too small to accommodate the diverse industrial production capacity of Changxing Group, he wouldn't have made this request to Shanghai; and it's not just Shanghai, but also other cities like Beijing and Guangzhou in the future.

“Okay, I’ll report this issue immediately, tonight.” Director Wang also realized this could be a large investment.

Although it violates the policy, these things are all negotiable, as long as the few hard requirements are not broken.
Yang Wendong's investments in Shanghai have directly created jobs for thousands of people. At the same time, the operation of the entire factory has also driven the development of surrounding factories.

Unlike other struggling state-owned enterprises in mainland China, Changxing Group's factories settle accounts according to regulations, never owing debts, and offer excellent employee benefits and additional taxes. This has brought considerable benefits to Shanghai, a city already facing economic difficulties, and the municipal party committee hopes to attract more investment. In particular, in the past two years, after the end of the XXYD program, too many unemployed students have gone to big cities, which has brought great difficulties to the daily management of Shanghai. These people are assigned to work in municipal government departments or the police, but they are unwilling and insist on working in factories, which has also caused headaches for the municipal government.
The city also urgently needs new factories that can accommodate a large number of jobs;
"Very well, I await your good news." Yang Wendong nodded;
This is just a small step in the experiment. China's reform and opening up is also said to be like crossing a river by feeling for stones. No one knows what the script will be like. Taking it one step at a time is the norm. As long as it is determined to be beneficial to the economy and the people, some non-principle policies can be changed.

The group stayed at the instant noodle factory until the afternoon, and when they returned to the hotel, they encountered a traffic jam on the way.
However, it wasn't cars that were blocked, but a large group of bicycles. Because the road was so narrow, Yang Wendong and his group's car couldn't get through either.

Even if you are very rich and drive a top-of-the-line luxury car, you are all the same in terms of road rights, and there is nothing you can do if you encounter a traffic jam.

Director Wang said apologetically, "I'm sorry, Mr. Yang, it's a busy time as many people are leaving get off work, so the streets are quite crowded."

"It seems like this is the only area that's congested?" Yang Wendong asked.

Director Wang said, "Yes, there is a ferry crossing ahead, which crosses the Huangpu River. So a lot of pedestrians will gather ahead. Once you get past this section, the traffic will stop. This is the norm in Shanghai. If you don't need to go there in the next few days, you can take a detour, but it will be a bit longer."

"A ferry?" Yang Wendong looked at the dense crowd in the distance and suddenly asked, "Isn't there a bridge over the Huangpu River?"

Director Wang said, "Of course there is. We built the Songpu Bridge in 1976. But as you know, the Huangpu River is very long. It's impossible for everyone to detour via the Songpu Bridge. Even if they did, the Songpu Bridge would be completely blocked."

"Why weren't more bridges built?" Yang Wendong followed up with his question.

Director Wang laughed and said, "Mr. Yang, we would like to, but we don't have the money. There are too many places in Shanghai that need investment in infrastructure, such as roads, water and electricity pipelines, landfills, waterworks, building construction, sanitation and pest control, etc."
These things, to some extent, are more important than building a bridge. After all, even without a bridge, ferries can still alleviate the problem, while the investment in a bridge can be used for many other things.

"Could I, as a foreign investor, participate in the bridge construction?" Yang Wendong immediately became interested: "I'll invest in the bridge construction first, and then gradually collect tolls to recoup my investment. This way, it can alleviate traffic pressure in Shanghai, and I'll also have a stable economic return. What do you think?"

A city has a lot of infrastructure; what Director Wang just mentioned is only a small part of it.
These are all state-owned enterprises and are not suitable for private capital investment, but the bridge, however, presents an opportunity for operation;

The Hong Kong property market is currently at its peak, and Changxing Real Estate Group has a lot of funds in hand. Although its main target is the Japanese property market, it can also participate appropriately in the domestic market, especially in large-scale infrastructure projects. These projects do not require much money, and as long as the projects are stable, they can operate with 9% efficiency using bank funds.
After listening, Director Wang frowned and said, "Invest first, then collect fees? Isn't that a bit inappropriate? Do we really need to collect fees to cross this bridge?"

“This is the perfect method. As long as we charge lower fees than the ferry, the economic cost for ordinary people will decrease, and the bridge’s traffic efficiency is very high, comparable to hundreds of ferries,” Yang Wendong continued. “For city management, there are also many benefits, and it can prevent further pollution of the Huangpu River, right?”

Whether it's a bridge or a tunnel, their traffic capacity is on a completely different level from that of a ferry. The only downside is that they are fixed in location and lack the flexibility of a ferry.
Director Wang said, "But bridges in China are usually built for free. Charging for them would be..."

“I understand Director Wang’s concerns,” Yang Wendong added. “There are actually precedents for this kind of thing abroad, not just for bridges, but also for highways.”

Generally, large capitalists invest first, and then gradually collect fees to recover costs while ensuring operation. The advantage of this is that various infrastructure projects can be built quickly.

For example, if Shanghai approves my plan, I can build several bridges across the Huangpu River in the next few years, thereby completely alleviating the traffic problems caused by crossing the river. This will greatly help the economy, make things more convenient for the people, and save them money and time.
If we continue with the old strategy, how long will it take the Shanghai municipal government to build the next bridge? And the one after that? How long will this traffic jam last?

In this day and age, investing in highways is still a bit too early, but bridges between major cities along the Yangtze River are worth investing in because the transportation demand on both sides is really high.
Shanghai is the most typical example. Pudong has no factories but has a population of over a million. They all need to cross the river to get around. In addition to the normal demand for crossing the river, transportation was in a tense situation throughout the 1980s and 1990s.
Historically, it wasn't until the 90s, when the government had more money, that it began to build new bridges continuously, alleviating this problem; of course, the bridges built by the government at that time were free.
Although the bridge I proposed will be tolled once it is built, it will still be far superior to the ferry in every aspect, and it will also benefit the people of Shanghai.

“Mr. Yang, your request is of great importance, and I cannot make that decision on my own.” Although Director Wang thought the method sounded acceptable, there was no precedent for it in China, and it still needed to be reported to the municipal party committee or even the central government.

Yang Wendong nodded and said, "Of course."

There are currently no foreign-invested bridges in China, so there are no case studies to refer to.
Therefore, Yang Wendong needs to reach a cooperation agreement with Shanghai. Once successful, he can then follow suit and cooperate with local cities to build bridges in other important transportation sections along the Yangtze River.
The Yangtze River, or other important waterways, will be crucial nodes for future transportation. Once the bridge is built, future highways will also need to be compatible with them.
As for the return on investment, there is no need to worry. With the rapid economic development in mainland China in the future, the profitability of the Yangtze River Bridge may even exceed that of ordinary highways.
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(End of this chapter)