Return to 1958 and build a century-old giant

Chapter 947 Investment in the Mainland Auto Parts Industry
“Alright, if that’s the case, it’s not impossible.” Yang Wendong thought for a moment and said, “It’s like I’m exchanging iron ore for your Baosteel’s finished steel, and then we can build shipping containers?”

Containers are one of Changxing Industrial's main products because the market is so huge. Global trade, except for oil, bulk commodities, etc., all require containers. Containers themselves have a lifespan and wear and tear, making them a perfect commodity.

However, the technical requirements for this industry are not very high. Although ordinary people may not be able to do it, capitalists and entrepreneurs with some ability can still participate, so the competition is very fierce.
Therefore, he also needs to integrate this industrial chain. Only when he has control over the entire industrial chain from beginning to end can he ensure that the technology and quality are the same while keeping costs to a minimum, thereby seizing more market share.
Australia has already mastered iron ore and sea transportation, but it is stuck in the middle of steel manufacturing because there are no suitable locations to invest in building steel plants.

It's impossible in Hong Kong, and he doesn't want to invest heavily in Taiwan because that would make him vulnerable to being blackmailed by the Taiwanese side. In mainland China, due to policy, he can only build a small steel plant at present, and with the future trend unclear, he can't control this industry.

Cooperation with Baosteel is also worth considering. In addition to deep-sea equipment, he also plans to build container factories in other places. This industry is too large to be produced in multiple cities.

Director Lin smiled and said, "That's good. We hope to have further cooperation with Mr. Yang in Shanghai."

Although Hong Kong has a lot of capital, it can be said that Yang Wendong owns half of it. His numerous investments in mainland China each start at hundreds of millions of US dollars, creating tens of thousands of jobs.

Today, Shanghai is also facing the return of many young people who were sent to the countryside, and even young people from other surrounding cities are coming here to look for opportunities. The government is also in urgent need of more job opportunities.

However, many state-owned enterprises are currently suffering serious losses, and some cannot even pay wages. They simply lack the capacity to do so and can only rely on foreign investment.

Foreign investment can not only boost employment, but also bring foreign exchange and commodity exports, or goods that are urgently needed domestically, which is a win-win situation.

Yang Wendong thought for a moment, then suddenly said, "There's another problem. There aren't any large container terminals around Shanghai, are there? I can't possibly ship the containers I produce to Hong Kong and then export them, can I? How about we consider building a container terminal in Shanghai?"

Director Lin said, “Mr. Yang, Shanghai does have container terminals. As early as 1978, there was Zhanghuabang Terminal. Although it is not very large and is far smaller than Hong Kong’s terminals, it is sufficient for the current needs.”

As for whether or not to build a new port, this is not something our municipal government can decide; it is a matter of national policy requirements. It is not only about considering Shanghai as a city, but also about the surrounding areas.

Currently, the Zhanghuabang terminal is adequate for most needs, and there should be no need to build any other large container terminals in the short term.

"Oh, okay, it's good to have a container terminal." Yang Wendong nodded;
He didn't say anything more. He thought that the economy of the Yangtze River Delta in this era was still not as good as that of the Pearl River Delta. The Pearl River Delta was close to Hong Kong and had a lot of overseas capital. In fact, it could be said that the country's main foreign exchange in the 80s was earned by processing trade in Hong Kong-funded factories.

The Yangtze River Delta took off in the 90s, followed by the Pudong Development Project, Yangshan Port, and so on.

His capital might be able to help Shanghai develop to a certain extent, but a giant port requires a strong overall economy. In the short term, Shanghai probably won't need any more ports, given that it already has one.

He didn't insist, as there would be many top-tier ports in China in the future, and Shanghai was just one of them.

He then said, "I will arrange for a team from Hong Kong to come here for negotiations. This involves multiple industries, so please make preparations for coordination in Shanghai."

"No problem," Factory Director Li replied with a smile. "In this way, you will be both our supplier and our customer. I hope we can have a pleasant cooperation."

At noon, at the request of Baosteel's leaders, Yang Wendong stayed here for lunch and then set off for the SAIC Volkswagen headquarters in Anting District.

Before even reaching the factory, Yang Wendong saw this area with a lot of construction going on. He asked, "Is this whole area under large-scale development?"

Director Lin replied, "Yes, Mr. Yang, Anting District will be the core industrial area of ​​Shanghai in the future. Not only SAIC Volkswagen and a number of suppliers, but also many other companies will need to relocate here."
The purpose of this is to change the previous situation where factories and residential areas were mixed together, avoiding pollution. Having factories located together makes both supervision and unified pollution treatment much easier.

“That’s right, that’s how it should be.” Yang Wendong nodded and asked, “How are the results of the Huangpu River cleanup efforts in Shanghai a few years ago?”

A few years ago, Yang Wendong also came to the Huangpu River. The smell of the river was indescribable, and the water quality was also very poor. The area along the river from the Suzhou River was full of factories, and all the sewage was discharged into it.
Director Lin said, "It's much better now. We have to thank Mr. Yang for arranging the loan; otherwise, the city really wouldn't have been able to come up with so much money to do this."

“Of course, if you have any needs related to listing on the Shanghai Stock Exchange in the future, you can continue to contact Hang Seng Bank,” Yang Wendong said with a smile.

He was fully aware of the future economic situation in the mainland, so he naturally felt confident in lending money to the government, especially to governments like those in Shanghai.

During the last Hong Kong dollar crisis, Hang Seng Bank seized the opportunity to successfully obtain foreign exchange rights and a large number of new customers. Its development in Hong Kong has basically come to an end, while its expansion in Southeast Asia has been difficult.

He didn't have a good solution to this either. It wasn't something he, as a prophet, could help with. It really required ability and connections. Even some European and American banks might not be able to succeed in Southeast Asia.
Therefore, the only option is to enter the mainland market. However, due to legal restrictions in the mainland, foreign banks cannot accept deposits, so they can only engage in lending business.

In recent years, several projects in mainland China have also partnered with Hang Seng Bank;

In fact, Hang Seng Bank's interest rates are not low. After all, Yang Wendong knows that the lack of risk is his business and has nothing to do with this matter, so he can proceed as usual. However, Hang Seng Bank's loans do not impose additional political conditions, nor does it concern itself with other matters, which naturally makes them popular with the mainland government.

“Okay, thank you very much, Mr. Yang, for your economic assistance to Shanghai.” Director Lin continued, “The container factory we mentioned this morning, if Mr. Yang is sure, can also be located in Anting District. It is connected to Baosteel by waterway, so the transportation cost is not high.”

"This can be evaluated by professionals. In any case, it will definitely be placed in Shanghai," Yang Wendong said with a smile.

He won't interfere with certain professional matters unless they seriously conflict with his known future interests; there are many such matters within large-scale industrial groups today, and he would be exhausted if he got involved in them all.
Basically, once the decision is made below, he just glances at it and approves it.

Director Lin said, "Of course."

Soon, the convoy arrived at the headquarters of SAIC Volkswagen, where a number of white and Chinese people were already waiting at the entrance.

After getting out of the car, Director Lin introduced, "Mr. Yang, this is Martin Post, the plant manager of SAIC Volkswagen."

"Hello, Mr. Post," Yang Wendong said in English as he shook hands.

Post replied in fluent English, "Hello, Mr. Yang, it's a great welcome to you. I've known of you since I was in Germany."

"Am I that famous in Germany?" Yang Wendong asked curiously.

Even in the future internet age, most people are unaware of the top billionaires in other countries. For example, mainland Chinese netizens in the 21st century would not know who the richest person in Germany or Italy is, unless it is someone like Bill Gates who is the world's richest person.
In the pre-internet era, this was even more difficult;
Yang Wendong has made significant investments in the United States and the United Kingdom, and is therefore quite well-known in those two countries, but he has not invested much in Germany.

Post explained, “The average German wouldn’t know this, but I’m also in the automotive industry, and I know you had enough of the British Mini cars. Also, you were a major shareholder in Chrysler after it broke away from Mercedes, which is something many people in the German automotive industry know.”

"I see." Yang Wendong said, "Actually, I also wanted to invest in Dazhong, but I didn't have the opportunity. It's a pity, otherwise we might have known each other long ago."

Volkswagen Group was originally one of his targets. Although it was listed on the stock exchange, most of its shares were controlled by the government and labor unions. Even if he tried to acquire it on the stock market, he wouldn't be able to acquire much, so he wasn't very interested.

Director Lin, who was standing next to him, could also understand English. After listening, he was greatly surprised. He did not expect that Yang Wendong was actually a major shareholder of Chrysler and Mercedes-Benz.
Both of these companies are among the world's top ten automotive groups. The central government once sent people to discuss cooperation, but ultimately it was unsuccessful.
Yang Wendong and Post walked and talked, mostly about Europe and the automotive industry. Soon, they arrived at the entrance of the Volkswagen factory.
“Mr. Yang, please come in and have a look around. I’ve been to your company’s production line in Yanjing before,” Post said.

"Oh, okay, I'll take a look at Volkswagen's production line too," Yang Wendong nodded and said.

Then, everyone donned their safety gear and followed them inside. After walking around for a while, Post asked, "Mr. Yang, what do you think?"

Yang Wendong said, "To be honest, it's not as good as I thought. I've been to the Mercedes factory in Germany, and there's still a big difference."

“Yes, even compared to Mini, it is still inferior.” Post said, “This is mainly because early cars were all prepared to be produced using the CKD (Completely Knocked Down) model, so the requirements for Shanghai were not high.”

Yang Wendong said, "The CKD model is indeed simple for Germany, but for the mainland, it is probably not feasible in the long run. Localization as soon as possible is the only way to achieve long-term results."

“I’ve heard that Mini has done a great job with localization in mainland China. How about we discuss a collaboration?” Post said.
Yang Wendong nodded and said, "Okay, that's exactly what I was thinking too."

Before the rise of electric vehicles, the global landscape of the automotive industry was basically set. In the future, only Hyundai of South Korea will be able to rise, thanks to the full support of the South Korean government and the deliberate care of the US government.

Even in the new mainland market, with its strong technological barriers, it is difficult for Yang Wendong, with his immense wealth and ability to build a complete distribution network, to gain a sufficient advantage.
Therefore, it is simpler to change our thinking slightly and achieve results in the supplier and channel fields, and we can also get a share of the pie from the entire industry chain.

The future Fortune Global 500 will include not only the automotive industry, but also many auto parts companies.
In terms of influence, the auto parts industry may even have a greater impact, because auto OEMs are basically large-scale and concentrated, with little flexibility and can only invest in large cities.
Parts factories come in a wide variety of types and sizes, and can be invested in in various cities and even towns. Once you master this industry, you will have more control over employment.

The group arrived at a meeting room, where the assistant served coffee and then left.

Post asked, "Mr. Yang, I hope to cooperate with you on the automotive industry chain in Yanjing."

Yang Wendong said, "Cooperation is of course no problem. As a supplier, I can't refuse a customer."

After establishing its factory in Yanjing, Mini began to fully localize its operations. With financial support from Hong Kong, it invested in suitable local companies using foreign exchange, and even hired experts from the UK, the US, and Japan, or sent people overseas to study.
Over the years, we have achieved some success. Although we are not yet fully localized, we are moving in that direction.

Post said, "I have also visited some auto parts factories in Yanjing. With your strong investment, they are indeed much better than those in Shanghai. However, transporting large quantities of goods from Yanjing is very costly, and most importantly, there is the issue of time efficiency."

Therefore, we hope that you can also relocate these industries to Shanghai and build related factories here.

Yang Wendong said, "Reinvesting in these factories in Shanghai? That would be a very troublesome and risky business. I wonder what your company's initial annual production capacity will be?"

He was naturally happy to invest in Shanghai, but in these business negotiations, since others were asking him for favors, he naturally had to act differently.

Taking advantage of the situation to demand a higher price is a basic skill for every businessman.

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(End of this chapter)