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

The process of persuading Khvatov and others was as easy as Wang Yaotang had expected, since theoretically, he said there was no problem.

With everyone in agreement, the rest was easy.

Khvatov and others control the 'means of production', while Wang Yaotang's bargaining chip is the 'relationships of production' he controls. Without him, these means of production would be difficult to monetize. The two sides now need to value the means of production and calculate how much of a share Wang Yaotang can take in the future cooperation.

“I think the main parties in this conversation should be me and the Far East Consortium. As for how your consortium divides things up, I shouldn’t and can’t get involved. What do you think?” Wang Yaotang said with a smile.

Khvatov and his companions' eyes lit up, and they became interested in the term "Far East Consortium." However, while the word "consortium" was easy to understand literally, they had no idea what it meant or what it was like inside.

“Sorry, everyone, don’t look at me like that. I don’t understand the details of the internal operations of conglomerates.” Wang Yaotang shrugged. “I’m in Hong Kong. We Chinese live in a patriarchal system, with families as the unit. There are no conglomerates in Hong Kong.”

"The financial groups first appeared in France, then spread to the world via Britain. Today, most of the world's major financial groups are in the United States, with a small number in Europe."

"The Morgan Group, the Rockefeller Group, the First Citibank Group, the Boston Group, the Chicago Group, and many more."

"I remember Morgan and Rockefeller were from the same family, weren't they?" Khvatov asked, somewhat puzzled.

Wang Yaotang nodded. "First of all, the family system maintains control and inheritance through blood ties and marriage, while the conglomerate system is centered on financial capital and involves cross-family and institutional alliances. The two differ significantly in terms of organizational form, control methods, and the clarity of boundaries."

“American financial groups are broadly divided into two categories: those centered around a particular family and jointly operated by many affiliated families, such as Morgan, Rockefeller, DuPont, and Mellon.”

"Another type is those jointly operated by two or more families, such as the Boston Group, the Chicago Group, and the California Group, or simply those without a core entity, such as the First Citibank Group."

"Generally speaking, families are the units that make up a conglomerate. It's just a matter of family size. There's no way to say which form is better. Moreover, families themselves can rise and fall. For example, in the Boston Conglomerate, if a family grows larger over time and becomes the largest family within the conglomerate, it might become like Morgan."

"Similarly, if the Morgan family within the Morgan conglomerate gradually declines, it could also become like Boston."

"The foundation of conglomerates is mutual cooperation to increase their ability to withstand risks and obtain the greatest benefits."

Wang Yaotang gave a brief description, and the people from the Far East listened with frequent nods.

"And what about you, Comrade Wang? Why don't you form a conglomerate?" Sidorov asked with a smile.

“Our cultures are different. We are a ‘local’ society, so in the traditional Chinese system, there are only relatively loose alliances like ‘chambers of commerce,’ not as close-knit as conglomerates. Of course, my sphere of influence is in Southeast Asia, so the system has changed somewhat. Therefore, I am also considering whether to form a conglomerate with a few brothers in the future, since our connection is already very close,” Wang Yaotang said with a smile.

Khvatov and the others had a brief chat. After leaving the Far East and heading southeast, they no longer had a 'state' to rely on, so they could only form a consortium to stick together and weather the risks together.

As for the form of the conglomerate, it is most likely to be like the Boston Conglomerate, headed by the three giants Khvatov, Sidorov, and Baldin, with numerous smaller families as its subsidiaries.

Watching these people from the Far East whisper among themselves, Wang Yaotang maintained a smile on his face, but inwardly he was unconvinced. How could he possibly let them successfully form a conglomerate?

Neither my hometown nor I myself would allow it; it's inevitable that it will be gradually divided and digested.

These important factories will inevitably be separated after relocation, some in China and some in Southeast Asia. They will then operate independently, and since these people are not business elites or particularly outstanding political figures, they will eventually be divided and disintegrated.

After Khvatov and the others established the 'consortium' framework, Wang Yaotang continued, "I'd like to propose a profit-sharing arrangement: 40/60. I'll take 40% and you take 60%. You handle the factory equipment, technical data, and personnel in the Far East, while I'll handle the relocation address, partners, and other business matters. How does that sound?"

When the topic turned to the specific division of profits, Khvatov and the others immediately fell silent.

It was quite sudden.

It seems that we provide the technology, talent, and equipment ourselves, but only get 60% of the profits. Isn't that too little? The guy surnamed Wang only helps with the operation but takes 40%.

This kind of thing can't be delayed. Wang Yaotang understood this very well, so he said decisively, "These 'means of production' are right there. Do they have any value?"

"some!"

"But why didn't it achieve its expected level of profitability during the Soviet period?"

"If it were Russia, the future would also be unable to be revitalized."

"It's like an AK47. In the hands of a veteran, it's a weapon of slaughter, but in the hands of an ordinary person, it's just something to scare people."

"And I, a self-made billionaire, am the only one who can revitalize these assets. What do you all think?"

“Our interactions over the past few months have proven that only I can handle so many completely different resources and integrate resources from different countries and companies for overall operation. For example, food is there, and it can fully satisfy the needs of people all over the world, but there are still 20% of the world’s population living below the poverty line.”

"The most important people are those who can make good use of resources; otherwise, those resources will just rot there, and resources that cannot be converted into cash are not resources at all!"

Wang Yaotang said firmly, "We are friends and comrades, which is why I said we would only take 40%. If it were real capitalists, they would not mobilize resources to solve your problems. Instead, they would further block supplies to put you in a desperate situation, thereby devaluing the resources in your hands to maximize their profits."

"It's like the everyday life next door, don't you agree?"

Speaking of this, Khvatov and the others nodded unconsciously. Indeed, even though several months had passed, they still couldn't believe how Wang Yaotang had mobilized so many supplies, let alone had the power to do so much as Moscow.

It is convincing.

“Okay, we agree in principle.” Khvatov and the others bowed their heads.

"We sincerely hope that we will always be allies. I already have so much money that it's become a number, and I foresee that there will be even more in the future. For me, what's more important is how to ensure that these assets are passed down in an orderly manner, rather than being divided up." Wang Yaotang changed his tone and said with great sincerity, "Just like Rockefeller 90 years ago, who monopolized the entire oil-related industry in the United States, and in the end, Rockefeller Oil Company was split into seven parts by the United States..."

“I can’t let this happen to me. I need allies, so I’ve given my heart and spent months helping you. How much money can I make from the petroleum products I get from the Far East? Even if I did nothing, I wouldn’t earn that much in a week. It’s not commensurate with the time and effort I’ve put in.”

"I believe the people on this frozen land possess admirable qualities such as resilience, unity, and integrity, which is why I came here."

Wang Yaotang looked at the group with deep and sincere eyes and extended his right hand.

Khvatov and the others were deeply moved. They all stood up with serious expressions and reached out their hands. "Comrade Wang, he really is... I'm going to cry!"
He is a friend of us Far Easterners!
forever!

Whether it's the Soviet Union or Russia, the Far East Fleet holds the greatest power in the Far East region, since all the industries in the Far East serve the Far East Fleet!

Khvatov and his team were very efficient and quickly obtained internal information from ten factories, including the "Eastern Shipyard", "Darnegorsk Mining and Metallurgical Complex", "Amur Steel Plant", "Far Eastern Diesel Engine Plant", "Amur Cable Plant", "Amur Foundry Machinery Plant", "Komsomolsk Foundry Machinery Plant", and "Khabarovsk Oil Processing Plant".

The factory's equipment information, detailed data on various production equipment, detailed information on technical personnel, resumes of their mastery of various advanced technologies, etc.

As expected, strong fortresses are always breached from within. If it were an outsider, even in the current situation of resource shortage, it would be impossible to obtain complete information about these factory secrets. At most, they could only obtain fragmented information. But Khvatov and his team could do it with just a few words.

After receiving the information, Wang Yaotang immediately flew to Hong Kong, where a team that had already been assembled was waiting for him.

The materials filled more than a dozen large leather suitcases, and over 100 'experts' from different industries began to sift through them day and night.

Wang Yaotang needs to filter which industries are completely beyond his control and which he can get involved in, and to distinguish the influence and future profitability of different industries.

Take shipbuilding, for example. Wang Yaotang would definitely not hold onto it. It involves too many industries and technologies, and it is too complicated. Although it can drive many upstream and downstream industries, has a huge influence, and is very profitable.

Take 'nuclear power' for example. Wang Yaotang had absolutely no desire to get involved in this. Whether it was Westinghouse Electric, Toshiba which acquired Westinghouse, or the future Brookfield, they were all dragged into bankruptcy by this thing.

But this doesn't mean there aren't suitable technologies that can be extracted and used.

Oil-fired power plants and heavy oil propulsion systems for large cargo ships share a high degree of technological similarity, with core principles and key components exhibiting 75%-85% similarity. However, their compatibility is extremely low. The core difference lies in 'stationary power generation' versus 'mobile propulsion,' eliminating the need to consider issues such as swaying, salt spray, high humidity, corrosion, and impact resistance, and thus imposing no strict limitations on equipment size.

The technology can absolutely be delegated!
Both CLP Power and HK Electric use heavy oil for power generation, and the equipment is entirely sourced from overseas. Controlling the upstream and downstream supply chains can greatly improve profit margins and prevent them from being held hostage by others in the future.

In addition, although Wang Yaotang had little interest in shipbuilding, he was very interested in ship repair. Natuna Island was located at a strategic sea choke point, and this kind of industry was needed for its development.

Moreover, their own fleet also needs maintenance.

Considering the potential hostility and criticism that a purely Chinese-speaking team might face in the future, absorbing some Russians from the Far East would be a good solution.

balance……

Other examples include the 'mining and metallurgical consortium'. Wang Yaotang owns two tin mines and plans to expand into the mining industry in other Southeast Asian countries, including Australia. It is necessary to spin off a portion of it to absorb these interests.

There is also the steel mill, which has no interest whatsoever in the large-scale production of ordinary steel, but is interested in the Russian 'electric arc furnace + electroslag remelting dual core' production of aircraft carrier steel (AK-25, 590MPa grade), nuclear submarine pressure hull steel, and ship shaft forgings.

The 'ultra-high power electric arc furnace' produces marine AH36, shafting steel 42CrNiMo, stainless steel 304/316L, and tool steel.

High-temperature alloys produced by 'vacuum induction furnaces' include Inconel 718 for gas turbine blades and precision alloys.

I'm very interested, and very interested!

The Amur Steel Plant and the Vladivostok Special Steel Plant both mastered the above technologies, while electroslag remelting was an original invention of the Russians.

The vacuum induction furnace was developed as part of the research support for the Far East Branch, and was produced in small batches specifically for military applications.

(On the eve of Russia's collapse, some technicians did want to transfer the electroslag remelting technology back to their home country. However, due to KGB monitoring and difficulties in transporting equipment, they ultimately smuggled key blueprints and core components by fishing boats.)
The more he sorted through the items, the more valuable things he discovered. Tears of joy streamed down Wang Yaotang's face as he bravely made his move...

I wish I could possess it all!
All I can say is, awesome, absolutely awesome!

By early September, Wang Yaotang called a halt to the organization. There were too few professionals, it would take too long, and he couldn't handle the workload himself. Time was of the essence, so after packing up, Wang Yaotang took the materials and headed north.

Shipbuilding, steel, mining, aircraft, machinery casting, petroleum... there are too many industries to talk to one department at a time. Wang Yaotang directly contacted the top level.

A massive team of experts was quickly and secretly summoned. After arriving in Beijing by private jet, they left rapidly under the protection of the crew-cut man.

What do you mean by "surprise"?
This is what you call a surprise!

Sure enough, Wang Yaotang returned with the items!
"We've known for a long time that you're exceptionally capable in this area, but our most optimistic estimate was that you'd bring back a lot of technical data. We never imagined you'd be bringing the entire Far East here!"

"You, I, really, oh dear!"

The high-ranking official held Wang Yaotang's hand tightly, his excitement evident on his face.

"Exceptional abilities?" Wang Yaotang's expression was somewhat strange, suppressing a laugh. "In what area? Are you trying to poach someone?"

"Hahaha, how can this be called poaching? This is called win-win cooperation!" the high-ranking official said with a loud laugh.

"I understand, because I am a successor to socialism!" Wang Yaotang said in a serious tone, but then he couldn't hold back anymore and laughed so hard he was shaking.

"that's right!"

"Ha ha ha ha……"

Compared to Hong Kong, where the business environment is more relaxed and it's easier to acquire advanced technologies, the technology available in my hometown is quite scarce...

The national system, which tries to do everything, is indeed powerless in certain specific projects, not to mention that it is decades behind.

When the report was submitted, the high-ranking official couldn't help but sniff as he looked at the catalog, as if he could smell an enticing aroma from the Far East.

What does it mean to be of the same lineage?

It's ready to use right out of the box!

It can immediately and significantly improve the entire industrial chain manufacturing capabilities of civilian and military ships, and specifically enhance metallurgical technology.

Examples include the hull of nuclear submarines, shafting steel and gear steel for large ocean-going vessels, stainless steel for the nuclear industry, high-temperature alloys for aerospace, aircraft carrier steel, and arresting gear...

More advanced types include soft magnetic alloys, elastic alloys, and corrosion-resistant alloys.

Currently, China almost entirely relies on imports for special steel. If we could acquire these technologies, it would solve a major problem. Many things aren't impossible to design; the problem is simply the lack of materials!
"Actually, it's not just these," Wang Yaotang said with a smile. "These are the ones I can get the fastest and easiest to obtain. For example, we may not be able to get the complete set of equipment from Gagarin's aircraft manufacturing plant, Amur Shipyard, and Darzavod Shipyard, but we can get the technical data, personnel, and core equipment without much problem."

"Comrade Yaotang, you have brought us so much good news. On behalf of the entire nation, I express my gratitude to you," the high-ranking official said sincerely.

“I am also Chinese, and this is my country. I hope my motherland will once again rise to the top of the world, so that I can be powerful enough abroad and no one, no country, will dare to have bad intentions towards me.” Wang Yaotang also looked sincere.

"Comrade Yaotang, please rest assured on this point. As long as you do not violate our country's laws, the country will be your strongest support!"

“I believe that,” Wang Yaotang nodded emphatically.

They are completely different from the US.

"These things are still in the Far East and require the high command of the Far East Fleet to handle. I promised some things."

"You said we agree in principle." Without even hearing the specific requirements, the high-ranking official waved his hand generously, demonstrating his trust in Wang Yaotang.

Why not believe someone who brought so much advanced technology and talent back to the country?

"We hope to use the equipment, technology and talent of these factories as capital to form joint ventures with relevant domestic enterprises."

The high-ranking official knew the request wouldn't be simple, but his eyelids still twitched when he actually heard it.

Iron and steel smelting, shipbuilding, precision large equipment casting, and petrochemicals are all core industries controlled by the state.

Take steel mills as an example. There are joint ventures, but state-owned enterprises hold the majority stake in them. However, the assets Wang Yaotang has brought out this time are too valuable. If they are valued in the same way as the previous investments with Japanese and German companies, then the majority shareholder position will be in jeopardy.

This is not in line with China's national conditions.

The same goes for ships.

"A complete merger would be difficult. What do you think about doing it separately?" the official said after a moment's thought.

“I will obey the country’s arrangements.” Wang Yaotang readily agreed and then said with a smile, “I want to invest in a steel plant in the south that produces special steel, and take a stake in a manufacturing company with R&D capabilities that produces fuel-fired generator sets and gas turbine generator sets. I will also obtain a petrochemical license, and subsequently invest in oil fields in the South China Sea and abroad.”

"Sure!" the high-ranking official agreed without hesitation.

An industry that was in principle forbidden to enter, but now it's been approved in principle! (End of Chapter)