Hong Kong Island: From a small stall to a global supplier

Wang Yaotang plans to obtain land in Shenzhen to build a factory with an investment of around US$4000 million. The city government was very pleased when it heard the news.

It's been many years since the reform and opening up, but such a large one-time investment is still rare, after all, there are various strict requirements for foreign companies at this time.

Joint ventures: Shareholding cannot exceed 49%.

Sole proprietorship: More than 80% of the products must be exported.

On the one hand, it was to protect domestic industries, and on the other hand, there wasn't enough foreign exchange available for transactions.

For example, my hometown implements a 'mandatory foreign exchange settlement system'. If I earn 1 million RMB, theoretically I cannot use that 1 million RMB to buy goods from my hometown for export. The money can only be spent in my hometown, and there are various restrictions, such as it can almost never be used to buy land...

After 86, it became possible to buy and sell foreign exchange through the foreign exchange adjustment market, but this required approval from the foreign exchange management department, and the adjustment price was higher than the official exchange rate.

Although the market was gradually opened up later, by 89, the foreign exchange adjustment transaction volume of foreign capital was only US$15.72 billion, and these were all specially invited imports such as "steel" and "automobiles". This was called "market in exchange for technology".

The approach is to replace imports with domestically produced goods through the "production-for-import" policy. For example, if auto parts produced by Sino-foreign joint ventures meet domestic demand, they can be sold domestically and foreign exchange can be earned, thus alleviating the pressure on foreign exchange balance.

The various restrictions made it difficult to attract foreign investment, and it was only gradually relaxed as foreign exchange reserves increased.

Of course, with many restrictions, the compensation offered is indeed substantial, especially in terms of land applications, where the benefits are much more generous.

Wang Yaotang arrived in Shenzhen in the afternoon and held a reception that evening. Most of the matters were discussed privately over drinks before being presented at the meeting.

“Yes, my Yiu Kwong Audio-Visual Company in Hong Kong needs to import more than 7000 million videotapes from the Japanese every year. If they raise prices one day, the life and death of the company will not be in their hands. That is absolutely unacceptable.”

"The $4000 million is the first phase of investment to build a production line with an annual output of 1000 million boxes, but this cannot meet my needs, so there will be a second and third phase of investment. The total investment is expected to be no less than $2 million. I hope that within two to three years, we will no longer need to import from the Japanese and can be supplied entirely by our own factories."

"Good, good, good." As the prefect of the special zone, who was half a rank higher, he really wanted to be more reserved, but Wang Yaotang's promise was too big, too round, and too tempting. He really couldn't control himself. His mouth stretched wide, and he was so happy that his teeth were showing.

A dignified "patriotic comrade" and a famous tycoon in Southeast Asia would never lie or deceive on such a matter!
The prefect stood up and said, "Come, let's have a drink to Comrade Yaotang and wish the new factory all the best."

"Thank you." Wang Yaotang stood up, and everyone clinked glasses and drank their drinks in one gulp, instantly creating a lively atmosphere.

With a $2 million investment, what reason is there not to be enthusiastic!

"Comrade Yaotang, if you have any difficulties, just tell me!" The prefect didn't need to consult anyone; he waved his hand with great magnanimity, "What can be done, do immediately; what can't be done, find a way to cooperate and do it!"

Why did the leader surrender first?

Old Zhao from the Commerce Bureau glanced at the leader speechlessly, then joined in clapping and cheering.

“There’s no problem with funding, and I can handle the equipment import. The main difficulty is the skilled workers. It takes too long for me to recruit, screen, and train them myself. It will take at least several months to get all the workers in place, which greatly delays the start-up time. My idea is to hope that the authorities can help introduce skilled workers with relevant experience, especially engineers in key positions,” Wang Yaotang said with a smile.

Previously, the goal of forming a joint venture with a state-owned enterprise was to acquire skilled workers, which is extremely rare and requires time and a certain level of knowledge.

There are too many impoverished third-world countries with low populations. The reason they cannot develop processing industries is because their workers are not skilled enough.

"Oh, Comrade Yaotang already has a target, doesn't he?" the prefect said with a smile.

Wang Yaotang chuckled, “Guangzhou Pacific, Pengcheng Universe, and Hangzhou Tape Factory, Dalian Tape Factory.”

The prefect's lips twitched, and he sobered up considerably. "You really are asking for the moon!"

Old Zhao lowered his head, suppressing a laugh; he knew this would happen.

Pengcheng Universe is alright, since it's a company under its jurisdiction. Pacific isn't bad either; it's half a level higher and can have influence in the provincial government. Besides, Pengcheng's achievements will ultimately be attributed to the province, so it's fair to say that the benefits will remain within the province.

But Hangzhou, Dalian...

It's across provinces, especially since Hangzhou was a key city in the "Seventh Five-Year Plan". How can he have the nerve to make a senior engineer give up a secure job in the state-owned enterprise and travel thousands of miles to work for his private company?
These days, the further inland you go, the more attractive the government's "iron rice bowl" becomes. Even 20 or 30 years from now, countless people will still be willing to use connections and spend hundreds of thousands of yuan to get a government job.

It might take eight or ten years of salary to earn back the money spent on gifts.

"Hangzhou, Dalian, that's simply impossible." The prefect smiled bitterly and waved his hands repeatedly.

"I know this is indeed difficult for the prefect." Wang Yaotang got up, poured the prefect a glass of wine, raised the glass in a toast, and said, "Drink up, drink more, and you'll agree when you're tipsy."

"But the prefect also knows that knowledge and skills require ten or twenty years of experience to cultivate. I can't recruit these people from migrant workers, and these positions are the most important. Without them, even if the factory is set up, the yield rate will be very low, and it will be impossible to meet the demand."

As he spoke, he poured another cup, and the prefect couldn't stop him even if he wanted to. Given Wang Yaotang's status, he simply couldn't get anyone to drink for him.

"To put it simply, the first phase of 1000 million high-quality videotapes, even at 70% of the current market price, would be worth $1260 million. A tall building starts from the ground up. With the first phase, expanding to the second and third phases will be much easier. Based on my demand last year, that would be $8800 million in export value."

"8800 million US dollars!"

This number... the giant meat pie is right in front of him, and the prefect is about to get drunk just hearing about it.

Wang Yaotang poured himself another glass of wine.

"In fact, Hong Kong needs far more videotapes than that; Hong Kong exported a whopping 1.8 million tapes last year!"

"It was so close, so easily within reach, yet we watched helplessly as the Japanese devils devoured the entire market. How can this not be heartbreaking!"

"How can we sit idly by and watch those despicable and barbaric Japanese pirates harbor their wolfish ambitions!"

Wang Yaotang poured yet another glass...

"It's not that I want to compete with Hangzhou, it's just that there are too many difficulties there. First of all, in the past few years, in order to pursue quality, we needed policy support to gain some market share. The market was too small to support their rapid integration, and the profits were too low to support their subsequent development. Are we going to keep relying on support from above?"

"I think it's impossible because others already have a huge first-mover advantage. They won't stop while you're trying to catch up. There are too many examples of this in steel, automobiles, lathes, and ships. To be honest, after ten years, there's still no hope of catching up."

“A recent example is that in order to help domestic companies open up the Myanmar market, I promised them to set up a motorcycle factory there. This required the introduction of technology from the Shanghai Motorcycle Factory. In 1985, Shanghai Motorcycle Factory and Chia Tai Motor Co., Ltd. formed a joint venture. Two years later, the Happiness 125 is still in trial production. Even if Chia Tai Motor Co., Ltd. opens up the market in Siam after the mature product is launched, the technology will already be outdated again.”

The prefect had drunk quite a bit, and the alcohol was affecting his facial expressions, making him unable to control himself. "How can you guarantee that the quality here meets the standards of imported products?"

“The deputy general manager of Fuji’s production department brought an entire R&D, management, production, and quality control team to work for me. He has been with Fuji since it started producing videotapes ten years ago, so he has experience starting from scratch. I am also recruiting key personnel from Tokyo Denki Chemical, Maxel, and JVC.”

"You can really poach people? Are they willing to work in Pengcheng?" The prefect looked over in surprise.

He had dealt with the Japanese a lot and knew all too well how arrogant they were, always finding fault and looking down on people.

"The Japanese devils fear power but don't appreciate kindness, and coincidentally, I, Wang Yaotang, am no better!" Wang Yaotang grinned, "Evil people need other evil people to teach them a lesson."

The group from Pengcheng were speechless. If it were about being bribed with money, they might still have doubts, but it seemed that only a truly wicked person could truly bring someone down...

Just across the river, there was a man like Wang Yaotang, who was always stirring up trouble. They knew something about him; he was indeed quite wicked.

“I’ve always told them that we’re building a factory in Hong Kong, but actually Hong Kong is a research center. But once the contract is signed, it’s not up to them. If we don’t do it well…” Wang Yaotang chuckled.

Without needing to say more, a simple "heh" was enough for everyone to understand.

If I say I'll kill your whole family, I'll kill your whole family.

He was already prepared to pick one lucky person to make an example of.

Everyone looked at each other, their eyes darting around. And believe it or not…

It looks unreliable, but it sounds really reliable!

"Don't cause any trouble," the prefect said hesitantly.

"Don't worry, I won't make any big promises like 'nothing will happen,' but if something does happen, it was done by Wang Yaotang, a British Chinese. The incident happened in a British colony, so what does it have to do with my hometown?" Wang Yaotang said very openly.

Wang Yaotang poured himself another glass of wine.

“My demand is so large that it will inevitably drive the development of a videotape industry base and related industries. As long as the domestically produced materials are qualified, I will purchase them in a limited manner, especially some spare parts that do not have a significant impact on quality, such as videotape casings and labels.”

"The largest videotape manufacturer in the country, number one in Southeast Asia, top three in Asia, and top three in the world..."

With title after title bestowed upon him, the prefect was thoroughly intoxicated!
"Fine!" The prefect slammed his hand on the table. "I'll help you get the person. If they don't give me face, I'll go to the capital and ask the ministry for him. It's all for the development of the country. We clearly have better opportunities. How can we be restricted by regional issues!"

"Well done! The prefect is dedicated to the country and the people, his selfless heart shines as bright as the sun and moon!" Wang Yaotang raised his cup again...

Prefect Yue's little tongue was sticking out, his face was flushed, and he was all set for success!

Of course, Wang Yaotang needs more than just this kind of help. He also needs support from related factories, talent cooperation with universities, and scientific research support from relevant research institutes.

No rush, let's take it one at a time.

The more you invest, the more attentive the prefect will be; it won't be a small amount.

The next day, the prefect woke up with a splitting headache after sobering up. When he got to work, his secretary reminded him that his headache had worsened when he made the promise at the dinner table the day before.

What the hell...

Quit drinking!

Just as he was regretting it, his secretary answered a phone call and then came over and said, "I just received a call from the Bank of China in Hong Kong. Mr. Wang Yaotang has transferred US$4000 million of the registered capital."

The prefect's expression immediately brightened again.

Other foreign investors promised to invest in installments of ten or twenty times, being stingy and often reducing their investment in the end. But look at Comrade Yaotang; although he has a big appetite, he is a truly honest person!

This person is worth getting along with!
“I’ll call the provincial government and visit the leaders there. I’ll also let Comrade Yaotang know that we’ll have drinks together tonight.” The prefect’s headache was instantly cured, and he was full of energy. “For many years, Comrade Yaotang has been continuously procuring grain, oil and non-staple foods from China, investing in the textile industry, integrating Zhuhai’s stone mines, investing in Zhuhai’s thermal power plant, helping the provincial post and telecommunications department establish a digital communication system, and going through great lengths to obtain the latest thermal power generation technology from France. He also invested in the construction of Shajiao B. In the past two years, he has also worked tirelessly to help domestic enterprises expand into the Southeast Asian market, generating nearly 20 billion US dollars in foreign exchange.

“One incident after another reveals his patriotism. If the province doesn’t wholeheartedly support such a comrade, wouldn’t it be disheartening to hear this?”

The provincial authorities quickly expressed their willingness to provide their full support.

Wang Yaotang was actually quite familiar with this area, but since he was building a factory in Shenzhen, it wouldn't be appropriate for him to directly approach the provincial authorities; that would be too tactless.

Guangzhou Pacific and Pengcheng Universe already have too many employees.

Guangdong is mountainous with limited land, making it extremely difficult for young people to find jobs after returning to the city. Social order and morals have deteriorated significantly, and state-owned factories are overcrowded, with many experienced workers having to retire in order to secure jobs for their children.

It was difficult for Wang Yaotang to find these skilled workers, but if he sought them out through official channels, it would be a matter of an administrative order, and the factory and the neighborhood would handle it.

The factories are willing to cooperate, which will not only reduce their burden, but also allow them to fill the extra positions... Of course, in practice, the two factories would prefer to get rid of the troublemakers and young people.

There's not much the provincial or municipal authorities can do about this. They can't just force all the skilled workers to leave. Aside from the possibility of paralyzing the two factories, they also have to consider whether the workers are willing.

A secure job? You're kidding me!

Even though this is a frontier of openness, decades-old ideas are not so easy to break.

This required Wang Yaotang to negotiate with the two factories himself and persuade the workers.

After hearing the prefect's secretary explain the difficulties, Wang Yaotang smiled and snapped his fingers, "Easy."

In Pengcheng Universe, Wang Yaotang personally visited Ta Kung Pao. Ta Kung Pao is a pro-democracy newspaper that has survived all these years thanks to the support of patriotic businessmen, and Wang Yaotang is now one of the top patriotic businessmen, so Ta Kung Pao is bound to give him face.

At the same time, Silver Metropolis also helped lobby. As a film company of the * faction, Yaoguang and Yaoxing received support at Wang Yaotang's request, and many of their film videotapes were sold, which is why they were able to persevere.

Wang Yaotang had previously researched Pacific's information. It was a wholly-owned subsidiary of Guangdong Radio and Television Station. It not only produced cassette tapes but was also responsible for recording, distribution, and other businesses. At its peak, its sales accounted for 80% of the national market.

The main reason for such high sales is that as a distributor of Hong Kong and Taiwan songs in mainland China, the copyright revenue share given to record companies is very low. In the past two years, with the increasing exchanges between the two sides of the Taiwan Strait, many companies in Beijing and Shanghai have obtained distribution rights, which has greatly diluted the business.

Wang Yaotang's Yaoxing Audio-Visual monopolized the entire Hong Kong and Macau market, 30% of the Southeast Asian market, and 20% of the Taiwan market. Their market influence was incomparable!

After making several phone calls, the general managers of all ten major record companies in Hong Kong arrived and went directly to the broadcasting station.

We should cooperate with each other and make progress together.

For Guangdong's television stations, which are responsible for promoting cross-strait communication, Wang Yaotang can specially customize programs for the stations and arrange for Hong Kong and Taiwan celebrities to come and participate in the programs and interviews every week.

It's not necessary to express support, but there's absolutely no problem with expressing goodwill.

This is extremely important for the television station.

In addition, Wang Yaotang introduced a host of advertising businesses.

It's not that he's started doing ads, but rather that these celebrities are all carrying advertising contracts. They contact manufacturers, and even if only one-tenth or less is willing to place some ads in their hometowns, the total advertising revenue can make the TV station a fortune.

Not to mention that Wang Yaotang also holds the film and television copyrights accumulated by Hong Kong over the years, enough for TV stations to fill time slots and boost ratings.

Finally, Wang Yaotang promised to help the station export two TV series to Southeast Asia. The station's leaders could no longer resist... The general managers of Pacific and Universe companies were stunned.

TV station: I really tried my best to refuse him, but he offered me just too much!
Pacific Ocean, Universe: If there are so many benefits, why didn't you say so earlier? Why are you going to higher authorities?
Wang Yaotang: I've talked to the station director, and he supports me.

Pacific Ocean, Universe: I can support, I can give!
He has too many resources to play.

Beyond personal relationships, the publicity department also played a significant role at the same time. In previous years, with Wang Yaotang's support, Teresa Teng proactively stepped forward to collaborate with her hometown, holding concerts and publicly expressing her support. Over the years, she has consistently cooperated vigorously in public publicity.

Soon the United Front Work Department also joined in, stating that Wang Yaotang had significant United Front value!

The propaganda and united front departments operate under a system of "leadership by the same-level party committee + business guidance from the superior," and they also have a personal relationship with their respective departments. Furthermore, Wang Yaotang's previous efforts in organizing the "Laos-China Trade Fair" in Myanmar and Siam had greatly helped the propaganda and united front departments, so they also owe each other a debt of gratitude.

This is even without Wang Yaotang using the connections he had with the state-owned enterprises that benefited from the 'exhibition'; otherwise, people across the country would have been asking for his help in finding connections...

After pulling so many strings, it's really impossible for Hangzhou and Dalian not to give them any face at all. Besides, there are actually many capable but not senior enough or unable to get promoted in the venue. Letting some of them go isn't a bad thing. With two or three higher-level people, it'll be fine.

It's a favor, after all. If the factory is really doing as well as they say, they can go there to learn from them.

We are all working for the country's development, there is no distinction between us, how can we be so selfish and guard our own interests!

What exactly constitutes a "big company"?
The talent pool is truly abundant! (End of Chapter)