In Hong Kong, we build a global business empire

Two more days have passed in the blink of an eye.

On the morning of March 13th, at Beijing Capital International Airport, Lin Haoran, along with Guo Xiaohan and others, boarded the Hawker Beechcraft long-range luxury business jet.

The gangway retracted, the cabin door closed, the engines roared, the plane slowly taxied, then accelerated, pitched up, lifted off the ground, and soared into the sky.

Guo Xiaohan held Lin Yaoguang in her arms, watching the capital city gradually shrink in her field of vision through the porthole.

That ancient city transformed from a magnificent complex of buildings into a dense cluster of rooftops, then into a silhouette on the earth, and finally disappeared beneath the clouds.

"Brother Haoran, I love this city so much." Guo Xiaohan looked out the porthole at the ancient city gradually receding into the distance, her voice tinged with reluctance.

Although this place is nothing like an international metropolis, it lacks the towering skyscrapers of Hong Kong, the bustling and vibrant atmosphere of New York, and the neon-lit modern vibe of Tokyo.

It even looks somewhat old, with low-rise buildings, narrow streets, bicycles everywhere, and the occasional bus with a huge natural gas tank on its roof.

Yet this seemingly "backward" city possesses an inexplicable charm.

That charm is hidden in the red walls and yellow tiles of the Forbidden City, in the winding Great Wall, in the weeping willows by Weiming Lake, and in the aroma of food wafting from the depths of the hutongs.

It doesn't need skyscrapers to prove its value, because it is value in itself.

"If you like it, you can come often in the future. It's only about a four-hour flight," Lin Haoran said with a smile.

Guo Xiaohan nodded, then glanced again at the direction of Beijing that was no longer visible outside the porthole, her eyes filled with a hint of longing, but she quickly regained her composure.

"Okay, I'll come often in the future," she said softly, resting her head on Lin Haoran's shoulder.

Lin Haoran glanced at Lin Yaoguang, who was looking at the scenery outside the porthole with curiosity, and his thoughts couldn't help but recall the scenes in the capital over the past two days.

He was genuinely thrilled when he visited Kyungjo University and saw his own statue placed in a teaching building on the campus.

This is something that can be considered to bring fame and fortune.

From this day forward, his statue will stand in that top university in China, watching over the students coming and going year after year.

After leaving Peking University, he was invited by a leader to have an in-depth exchange on financial reform in mainland China.

The leader then discussed the current predicament facing mainland China.

Among them, insufficient foreign exchange is one of the most pressing problems they currently face.

Since the reform and opening up, China's economic development has achieved remarkable results, but the growth of foreign exchange reserves has lagged far behind the needs of development.

Importing equipment, introducing technology, paying off foreign debt, and purchasing raw materials all require a large amount of foreign exchange.

However, the mainland's export-oriented foreign exchange earning capacity is limited, and its foreign exchange sources are narrow, resulting in a persistently tight foreign exchange reserve.

For example, last year, the total foreign exchange reserves of the mainland were only US$70 billion, the year before that they were only US$27.08 billion, and in 1978 they were a paltry US$1.67 million!
This is not the foreign exchange reserves of one person or one conglomerate, but the entire wealth of a population of over one billion.

Yet this country has to use a mere few billion dollars to support the import demands of its entire reform and opening-up process, buying equipment, technology, raw materials, and paying foreign debt interest.

When Lin Haoran heard this number, he couldn't help but fall silent for a moment.

He wasn't unaware that the mainland's foreign exchange reserves were low, but when he actually heard the specific figures, he still felt a heavy pressure.

$7 billion is less than $7 per person in mainland China, which has a population of over one billion.

And this money has to be distributed to departments and enterprises across the country that are vying for foreign exchange, so you can imagine how big the shortfall is.

No wonder the construction of the Daya Bay Nuclear Power Plant could only rely on international loans; it was simply impossible to manage with its own funds!
Compare that to yourself, you made over $40 billion last year just from the Latin American debt crisis.

It is nearly six times the size of China's foreign exchange reserves.

One person earned several times more money in less than a year than a country with a population of one billion has in its entire year’s foreign exchange reserves.

This comparison stirred up a complex emotion in Lin Haoran that he couldn't quite explain.

It's tough; this country is indeed facing extremely difficult times right now.

The leader even mentioned that the original purpose of establishing the Daya Bay Nuclear Power Plant project was actually to obtain foreign exchange.

The Daya Bay Nuclear Power Plant project was initiated in 1978, with one of its initial goals being to earn foreign exchange.

At that time, the mainland was desperately short of money, especially US dollars, which were almost completely scarce.

The design concept of the Daya Bay Nuclear Power Plant is very clear: after its completion, most of the electricity will be sold to Hong Kong, settled in Hong Kong dollars, and then exchanged for US dollars to supplement the country's foreign exchange reserves.

In other words, this nuclear power plant was not only meant to solve the power shortage problem in the mainland from the very beginning, but also to be a "foreign exchange generating machine".

However, the purpose of building the Daya Bay Nuclear Power Plant has quietly changed. It is no longer just for foreign exchange, but more for solving the power shortage problem in the Pearl River Delta region.

Even so, foreign exchange issues remain one of the most pressing bottlenecks to the development of mainland China.

During the conversation, the leader frankly admitted that although the focus of the Daya Bay project had shifted, the pressure on foreign exchange reserves had not been alleviated.

The deeper the reform and opening up goes, the more we need to import: production lines, precision instruments, chemical raw materials, aircraft, ships, and communication equipment—everything requires foreign exchange to pay for.

Most of the mainland's exports are at the level of primary agricultural products and low-end processed products, with low added value and limited foreign exchange earning capacity, and the foreign exchange gap has never been closed.

As the conversation deepened, Lin Haoran finally understood the main reason why the mainland had invited him to visit Beijing!

It's foreign exchange! That's the main reason why the mainland invited him to visit Beijing.

It wasn't a project from Guangdong Province, an investment from Shanghai, a donation from Peking University, or even the high-level receptions and courtesy.

Those are all appearances, all prelude.

The real purpose was to hope that he could play a key role in the mainland's foreign exchange predicament.

Having figured this out, Lin Haoran felt a sense of relief, as if he had known it all along.

During his stay in Beijing, he had been thinking about this question. The mainland must have had a deeper purpose in inviting him to Beijing.

Now that he knew the purpose, he breathed a sigh of relief.

He did not feel used or deceived.

On the contrary, he understands the mainland's approach: before formally making demands, the other party should first feel respected and sincere, which is the basic logic of any mature negotiation.

If you start by saying, "We need foreign exchange, can you help us?", then it's not a negotiation, it's a request for help.

The fact that the mainland has adopted such a high-level stance precisely demonstrates their high regard for this cooperation.

Their goal was not to ask Lin Haoran for foreign exchange; that was unrealistic.

Its real purpose was to hope that Lin Haoran, a Chinese businessman with considerable influence in the international financial market, could find a way to help the mainland solve its serious foreign exchange shortage.

It's not about lending money, but about establishing a mechanism—a mechanism that allows the mainland to continuously, stably, and at low cost obtain foreign exchange from the international market.

This is the true meaning of "teaching a man to fish".

The mainland is rich in resources, but even with abundant resources, raw materials are cheap.

A ton of ore, a ton of grain, or a ton of coal can only fetch a very limited amount of foreign exchange when sold on the international market.

What's truly valuable are high-value-added products that have undergone processing, technological enhancement, and brand empowerment.

What the mainland lacks is not resources, but the ability to transform resources into high-value products. This ability requires capital, technology, talent, management, and distribution channels, none of which can be lacking.

Lin Haoran quickly sorted out this logical chain in his mind: the mainland has resources, but lacks processing capacity; it has labor, but lacks technology and equipment; it has a market, but lacks brands and channels.

Ultimately, these gaps all need to be filled with foreign exchange. Buying equipment requires foreign exchange, introducing technology requires foreign exchange, hiring experts requires foreign exchange, and expanding into overseas markets also requires foreign exchange.

Therefore, if the foreign exchange issue is not resolved, the entire chain will be stuck in the middle and unable to move.

Although China's foreign exchange reserves have increased year by year with reform and opening up, the faster the economy develops, the larger the foreign exchange gap becomes.

This is a classic paradox of development: as the economy grows, so does the demand for imports, but the increase in foreign exchange reserves can never keep up with the pace of demand expansion. It's like a child who keeps growing, with an ever-expanding appetite, never feeling satisfied no matter how much they eat.

Therefore, this involves a very important issue: the upgrading of export industries!

Shift from selling low-end products to selling high-value-added products!
Only when the value of exported products increases can the foreign exchange problem be fundamentally solved.

In fact, Lin Haoran has been helping the mainland to upgrade its industries in the past two years, and Langwei Group is an important vehicle for helping the mainland to upgrade its industries.

He acquired brands of daily necessities, snacks, and beverages that were once produced in Europe and America, then moved the production bases to the Pearl River Delta, allowing products manufactured in inland factories to be labeled with international brands and sold to the global market.

In this process of importing and exporting, the originally cheap labor and raw materials are given brand premiums and transformed into high value-added products, naturally resulting in more foreign exchange earnings.

This is actually a form of industrial upgrading. Instead of letting the mainland build its own brands from scratch, it first transfers the production capacity of international brands to the mainland, allowing mainland factories to learn how to do it first, and then gradually learn how to create international brands.

Be a student first, then a teacher; earn processing fees first, then brand fees.

This path is feasible and stable.

While this approach is good, it currently doesn't offer much help to the mainland in resolving its foreign exchange issues.

The reason is simple: these industries ultimately belong entirely to Lin Haoran's group. The only benefits they bring to the mainland, besides promoting economic development and creating jobs, are settlements in US dollars or Hong Kong dollars for raw materials.

The raw materials themselves are not very valuable, and even if all settlements are made in foreign exchange, the amount is still limited.

The real bulk of the profits, the sales of the products, were all done in overseas markets, and the foreign exchange basically went into the pockets of Langwei Group and into the pockets of its boss, Lin Haoran!
The proportion flowing into the mainland is not as large as imagined.

In other words, while Langwei Group has helped solve many problems in mainland China, its role in directly generating foreign exchange has been overestimated.

It is more like an incubator and training ground for industrial upgrading in mainland China than a foreign exchange ATM.

At this point, Lin Haoran had fully understood the true demands of the mainland.

After careful consideration, he offered several solutions.

These plans were not spur-of-the-moment ideas, but rather were being conceived in the leader's mind during the conversation.

Now that the other party has clearly stated their demands, he naturally has to give a concrete response.

"Sir, I have two ideas. Please listen and see if they are feasible," Lin Haoran said to the leader at the time.

"Mr. Lin, please go ahead."

"The first option is to establish a dedicated mainland foreign exchange financing platform in Hong Kong. This platform can be led by Hengsheng Bank, in conjunction with Citibank and several other international financial institutions."

The platform's main function is to provide diversified foreign exchange financing services, such as international bond issuance, syndicated loans, and trade finance, to mainland governments and state-owned enterprises.

The advantage of this approach is that mainland China's foreign exchange needs can be met through a professional, permanent platform, rather than having to find alternative channels each time.

The leader listened attentively without interrupting.

"The second option is that state-owned enterprises in various parts of the mainland can introduce large foreign companies, such as international car brands like Ford, Chevrolet, Toyota, Honda, Volkswagen, and Peugeot, to conduct joint ventures in the mainland, with state-owned enterprises and international brands each holding a certain percentage of shares."

The automotive industry is a typical technology-intensive, capital-intensive, and brand-intensive industry. The value of a car far exceeds that of a ton of ore or a ton of grain.

If mainland China can establish joint ventures with international automotive giants, it will not only be able to introduce advanced technologies and management experience, but also generate substantial foreign exchange earnings through automobile sales.

The automotive industry is just one example. Besides automobiles, other high-value-added industries such as electronics manufacturing, precision machinery, biomedicine, and new chemical materials can also adopt similar joint venture models.

The mainland provides land, labor, market and policy support, while foreign companies provide technology, brands, management experience and international sales channels.

The joint venture leverages the strengths of both parties, enabling them to produce products that can meet domestic market demand and be exported overseas to earn foreign exchange.

The advantage of this model is that foreign exchange earnings are realized through the actual production and sales of the joint venture; they are earned, not borrowed. Borrowed foreign exchange requires interest payments, while earned foreign exchange is truly one's own.

Upon hearing this, the leader's eyes revealed a look of deep agreement.

However, he looked troubled and raised the difficulties again: "The mainland economy is backward now, the people are poor, and the market is neither big nor small."

The base of one billion people is there, but the people with real purchasing power are currently concentrated in a few regions and a few groups.

Faced with this situation, those big brands may not be willing to enter the mainland market through joint ventures.

Their concerns are very real. If they invest heavily in building factories, and the products can't be sold, or they can only absorb the production capacity through exports, then it's better to keep production in the country or choose other more mature markets. Businessmen pursuing profit is perfectly natural.

After listening, Lin Haoran did not rush to refute, but thought about it seriously.

That leader's concerns were indeed valid. Foreign automotive giants are not philanthropists; they have to consider return on investment and market risks.

Although the mainland market has huge potential, its purchasing power is indeed limited at present, which is an unavoidable reality.

Most importantly, there is no precedent for this!

If there is a precedent and it is successful, powerful international brands such as Toyota and Volkswagen will inevitably rush to enter the mainland market.

A businessman's logic is simple: if he sees others making money, he will follow suit.

Nobody wants to be the first to try something new, but once someone does, everyone else will follow suit.

Therefore, the key is not to persuade all brands, but to persuade one brand, a brand with enough weight and influence, to be the first to try it.

If this precedent is successful, other brands will come to us.

Upon hearing this, Lin Haoran smiled and replied, "Boss, that's easy. I've been screening investment targets recently. For example, when I went to the United States this time, I bought MGM, a major American brand, for investment purposes."

"So, let me see which major international car brands are suitable for acquisition. If I acquire a well-established car brand, I can have it establish a joint venture for production in mainland China and then export it to other countries!"

Lin Haoran had too much money and was just worried about not having any investment targets.

Now that this issue has been raised in mainland China, why doesn't he take this opportunity to find a suitable international car brand to acquire?

This not only allows him to profit from his investments, but also makes the mainland owe him a great debt of gratitude, paving the way for his future business ventures in the mainland.

In the business world, personal relationships are more effective than contracts. If the mainland owes him a favor, his future investments, project approvals, and policy support in the mainland will be much smoother.

Moreover, acquiring an international car brand itself has extremely high commercial value.

A mature car brand possesses a complete technology system, R&D team, production standards, supply chain network, and global sales channels.

These things cannot be bought with money; they require decades of accumulation and refinement.

If he could acquire all of this through a single acquisition, his business empire would gain a very significant new component.

When the leader heard that he had decided to acquire a major international car brand for the sake of things in mainland China, he even found it somewhat unbelievable.

He paused for several seconds before asking, "Mr. Lin, are you saying that you want to acquire a car brand yourself and then bring it to the mainland for production?"

Lin Haoran smiled and nodded, saying, "That's right. Instead of asking others to form a joint venture, why not buy our own brand and use it however we want?"

"At that time, the mainland will provide the production site and labor, while I will provide the brand, technology, and sales channels. We can cooperate, export our products overseas, and earn foreign exchange. Isn't that much more efficient than haggling and negotiating with those big brands?"

The leader took a deep breath and slowly shook his head, as if he couldn't believe his ears.

He had met many ambitious businessmen, but he had never seen anyone like Lin Haoran who would directly acquire an international brand to help solve a problem in mainland China.

"Mr. Lin, your gesture is too generous. If we in the mainland had more entrepreneurs like you, how could the reform and opening up not be successful?" the leader said sincerely.

……

The plane flew smoothly above the clouds, and the sunlight streamed in through the portholes, making it feel warm and cozy.

Lin Haoran's thoughts slowly drifted away from his memories.

He leaned back in his seat, gazing at the boundless sea of ​​clouds outside the window, his mind preoccupied with the question of which car brand to buy. (End of Chapter)