Return to 1958 and build a century-old giant

Chapter 946 New Cooperation with Baosteel

After reaching a preliminary agreement with Sanshui County and Li Jingwei, Yang Wendong stopped interfering. After a few days, he even took his son to a very remote rural area so that his pampered son could experience the hardships of life.

"Daddy, did you grow up like this when you were little?" Yang Zhiwen asked his father after looking at a dilapidated village.
Yang Wendong's entrepreneurial experience is no secret in Hong Kong. Everyone knows that he was born in a squatter, a poor neighborhood in Hong Kong.
Yang Wendong nodded and said, "Pretty much. In terms of living environment, the place I lived when I was a child was not as good as this place, but the food was probably better."

In 50s Hong Kong, although the population was not large, there was also relatively little developed land, resulting in a high population density. People in slums had great difficulty finding housing.

However, there are many opportunities in Hong Kong. As long as you can do some work, you can basically get something to eat, and sometimes there is meat.
In China, it's the opposite. Rural areas have large living spaces, although the living conditions are poor. As for food, people really have to rely on the weather and pay agricultural taxes.

Yang Zhiwen said, "I never imagined that poverty could be like this."

“There’s so much you haven’t seen. In the current domestic environment, at least there’s no more politics. If it were the 1930s or 40s, it would have been even worse.” Yang Wendong shook his head and said, “Forget it, let’s not talk about the past. Let you see for yourself, so you can broaden your horizons.”
You've never experienced hardship growing up. After going to America, you might see poor people who all drive cars. Now that you know the situation of many people back home, I hope you can genuinely dedicate yourself to charity work in the future.

“Yes, Daddy, I will definitely not go all out,” Yang Zhiwen replied.

Yang Wendong said, "Okay, let's go then. Get a good rest tonight, and we'll head to Shanghai tomorrow."

The next day, Yang Wendong left a few people behind to discuss the Jianlibao matter in Sanshui County.

The future of Jianlibao may conflict with Red Bull's entry into the mainland market, but this is unavoidable. Even if we don't invest in Jianlibao, it can still rise normally.
Furthermore, although Jianlibao is also a sports drink, its price is not in the same range as Red Bull.

If he could acquire half of Jianlibao's shares now, then even if Red Bull and Jianlibao still compete in the mainland market in the future, he would be the winner.

Even if Jianlibao still has problems more than ten years from now, we can just acquire it ourselves and leave childhood memories for the future generations of 80s and 90s.
At the same time, I can now help Jianlibao go global, and maybe it can make a certain market share overseas, which would be an unexpected bonus.

On this trip to Shanghai, Yang Wendong and his companions still took the old-fashioned green train. Along the way, they saw many scenic spots, as well as a large number of farmlands and villages.

It wasn't until the next day that Yang Wendong and his entourage arrived in Shanghai. Yang Wendong did not make a big fuss about his visit to Shanghai, so the leaders of Shanghai did not treat him specially. Instead, they sent more than a dozen municipal party committee cadres to welcome him.

However, this was only on the surface; in reality, there were still many plainclothes officers present.

"What important person is coming? Why have all the staff at our station turned into police officers?" a woman from the railway office said in surprise. "Even the sweepers are all young men."

"Don't ask too many questions, just do your own thing. What good will it do if you know?" another older woman reminded her. "Just treat it as doing your normal job."

She knew that this was definitely a big shot, because among the crowd waiting on the platform, even her stationmaster would have to bow and serve tea to anyone.
Soon, the train arrived at the station, and several men and women got off. The one leading them was a young man who looked to be in his thirties.

"So young, could he be a wealthy tycoon from Hong Kong or overseas?" the older woman wondered to herself upon seeing him.
In recent years, many wealthy people from Hong Kong and overseas have come to Shanghai, but their whereabouts are kept secret.

On the one hand, it's for safety; on the other hand, it's to give these people a certain degree of freedom.

However, these people usually arrive in Shanghai by plane, and it's rare to see them get off by train. But since this train came from eastern Guangdong province, it's quite possible that they came from Hong Kong.

No matter how much they guessed, it was no use. The Shanghai municipal leaders, whom they looked up to, all greeted the visitors very politely, and then, under the protection of some plainclothes officers, they left the train station.

"Alright, the mission is over. These important figures have come, and they're not even doing it openly. The pressure is immense."

Upon arriving in Shanghai, Yang Wendong naturally checked into the Peace Hotel, which was once the most famous hotel in Shanghai's history.

This hotel isn't very tall, less than 100 meters, and can't compare to any new building in Hong Kong, but it has a very strong sense of history.

"Daddy, are you not used to it here?" Yang Zhiwen said, "In a few months, the Four Seasons Hotel in Shanghai will open. When we come back next year, we can stay in our own hotel."

"No, it's just that the strong Republican-era style here makes me feel a bit emotional," Yang Wendong shook his head and said, "Where I stay doesn't matter to me. As long as there are no mosquitoes, I can adapt to any guesthouse in Sanshui County."

Although he has been wealthy for over twenty years, Yang Wendong still considers himself not spoiled. As long as the conditions are not too bad and there are no problems such as mosquitoes, noise, or hygiene, he is fine with it.

"Oh, okay." Yang Zhiwen continued, "Daddy, the Shanghai government wants to invite us to visit Baosteel's location tomorrow morning, and then go to SAIC Volkswagen's headquarters."

"Go to Baosteel? They shouldn't be operating there yet, right?" Yang Wendong countered. "What would they send us there for?"

The main purpose of this trip to Shanghai is to discuss some matters with SAIC Volkswagen. As one of the few international car companies investing in mainland China and a future automotive giant, Yang Wendong also has some ideas about cooperating with them.

Yang Zhiwen said, "I asked about that too. They said it's the largest steel project in China, and it also has a cooperative relationship with our iron ore mine in Australia, so they would like to invite you to visit."

"Alright, let's go take a look. It won't take up much time," Yang Wendong nodded in agreement.

Baosteel will indeed be a major customer of our iron ore in the future, and as a supplier, we should definitely take a look.

Yang Zhiwen replied, "Okay, I'll call the municipal government right away."

"Okay, go ahead and do it," Yang Wendong said.
During this period, his son has been working as his assistant, and he has gradually been getting him to contact clients, suppliers, and government departments. These are things that his son will need to master in the future, and he still needs to learn them gradually.

The next day, Yang Wendong and others, accompanied by relevant government personnel, arrived at the Baosteel plant in Baoshan District, which is also close to Wusongkou. It is said that the reason for choosing this location was to facilitate the import of ore in the future, or if steel exports were to be possible in the future, that would also be convenient.

Both ore and steel are extremely sensitive to transportation costs. Therefore, most steel mills are located by the sea or along large freshwater rivers. In the future, domestic steel mills will not use domestic iron ore, not only because of its poor iron content, but also because of transportation issues.

"Mr. Yang, this is Director Li of Baosteel," an official introduced.

Factory Director Li quickly shook hands and said, "Mr. Yang, I've heard so much about you."

"Director Li, you're too kind," Yang Wendong said with a smile, shaking hands.

In this era, Baosteel's status in China is comparable to that of PetroChina or Sinopec in the future. Its plant director also holds an extremely high position in China. To exaggerate a bit, although Baosteel is located in Shanghai, Shanghai may not be able to control it.

"Mr. Yang, Baosteel warmly welcomes you. Please come in and have a tour with us," Director Li continued. "Although the factory is not yet in operation, please wear safety helmets and take necessary safety precautions."

"Okay." Yang Wendong naturally didn't refuse.
For the next half day, Yang Wendong followed Director Li on a tour of Baosteel's interior. Director Li introduced the Baosteel factory's situation and the future plans for the second and third phases.
It was only at this point that Yang Wendong realized that the other party was clearly planning to make grand promises first, and then negotiate prices with his Australian mine.

Although the cooperation was agreed upon last year, the details of the cooperation and the annual purchase amount have not yet been determined.
As for the price, it was determined based on the price of that year, but there are certain discounts for large customers.

After the tour, the group went upstairs to an office and conference room;

After some pleasantries, Director Li said directly, "Mr. Yang, you are aware of the future situation of Baosteel, so we hope to establish a long-term cooperation with your mine in Australia."

Yang Wendong said, "I naturally hope to achieve long-term cooperation, but this kind of negotiation is not my forte. I can only say that I will do my best to achieve this cooperation."

If it involves electronics, finance, real estate, etc., then he is quite good at those.

But he knew absolutely nothing about iron ore. Although he remembered that iron ore prices skyrocketed after the early 0s, he had no idea what the situation was like in the 80s and 90s.

Everything should be done according to market rules. At most, if there are a lot of orders, we can offer a suitable discount, but we should still follow the normal rules of international trade.

It's all normal trade, and he wouldn't offer any big discounts, unless it was a special situation like decades ago, in which case he would support the country's war of resistance even if it meant losing money.

Factory Director Li exchanged glances with the others and said, "That's easy to discuss. We have one more request: we hope you can accept a certain degree of non-US dollar settlement."

"Non-USD settlement? What currency do you plan to use? Japanese yen, German marks?" Yang Wendong asked uncertainly, "Won't it be RMB?"

If it were decades from now, when Dongda University controls the global supply chain, he would be happy to accept a certain amount of RMB; but now, that's impossible.

“It’s in RMB. We don’t need much, just a portion will do,” said a municipal bureau chief surnamed Lin.

Yang Wendong said, "What would I do with so much RMB? Do you expect me to use it to invest domestically? That's fine, but for the mainland, it wouldn't make any difference, would it?"

For some large-scale projects in China, if I want to invest, I need to use US dollars, since I didn't have RMB before.

If Baosteel wants to operate in this way, it is not unacceptable to him. However, in this way, Baosteel saves foreign exchange, but other places will indirectly lose foreign exchange income. For the whole mainland, it makes no difference.

Director Lin shook his head and said, "That's not the case. This is a separate cooperation between us. The RMB that Baosteel provides can be used to purchase steel from Baosteel."

"Buy your steel?" Yang Wendong thought for a moment and asked directly, "Director Lin, do you mean you want to supply steel to my container factory in Hong Kong?"

He owns many industrial factories, but only two of them have a high demand for steel: one is a container factory, and the other is Honor's home appliance and computer factory.
However, only the former directly purchase large quantities of steel; the latter directly purchase finished metal parts from suppliers and do not participate in the procurement of steel raw materials.

Director Lin smiled and said, "Yes, but we have another suggestion. We know that your container sales are very high, and the factories in Hong Kong have been unable to keep up with production. Therefore, you have also built factories in Taiwan and Shenzhen. There is even a million-ton steel plant in Shenzhen that has been specially approved by the central government."
Our suggestion is that you can build a container factory in Shanghai, where you can directly purchase raw steel from Baosteel, which would save you a lot on steel transportation costs.

We've also done our research, and the global demand for containers has been steadily increasing; the market is still quite large.

"Let me invest in a container factory in Shanghai?" Yang Wendong finally understood what these people were thinking, and then asked, "My factory in the deep sea is wholly owned. Can it work in Shanghai?"

If the factory's purpose is to expand into the domestic market, then entering the mainland and forming a joint venture with a mainland party is acceptable to him;
However, since his own factory is located overseas, he cannot form a joint venture with a domestic company. To do so would be to simply give away money.

Director Lin said, “It’s negotiable, Mr. Yang. Although Shanghai is not a special economic zone, last year, an American pressure gauge company invested in Shanghai and it became a wholly-owned subsidiary.”
Your factory primarily focuses on exports, so as long as it doesn't cause domestic or foreign exchange losses, everything is negotiable.

"Hmm," Yang Wendong nodded, then asked, "I remember Baosteel's production couldn't meet domestic demand either, right? Why are they voluntarily producing for us?"

The purpose of building Baosteel in China is because the domestic steel supply is insufficient, requiring the import of two to three billion US dollars annually.

Director Lin explained, "That's true, but with stable customers, Baosteel can expand its production scale, especially since your products are mainly for export, which can earn foreign exchange for Shanghai Stock Exchange. Mr. Yang should understand this."

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