What the hell is a private enterprise?

Chapter 489 Tank Economics (1800 monthly votes in June)

Tang Wen stayed in Nansha for less than a day, explaining some construction details before being called back by Zhao Hande.

The latter met him at the airport and went straight into the VIP lounge to get to the point:
"I'm going to Hamburg soon. Give me the details about the BMW."

Hamburg? To Europe?

"The eleventh trade negotiation with the EU, and of course I hope it will be the last."

Zhao Hande has been flying around a lot lately, and Europe is his second to last stop.

Although a deal was reached with the Empire to allow China to join the WTO, the country was not really prepared because it was ahead of schedule.

After China's accession to the WTO, what tariff level would be appropriate to allow for anti-dumping measures without impacting trade? What loopholes exist in border policies? Which regulations differ significantly from those abroad and require special oversight? In which areas should we cultivate good relations, and in which areas should we maintain distance?
Besides relying on think tanks to brainstorm ideas, the most important thing is to continuously negotiate with individual trading entities.

The half-dead Russia to the north was easy to deal with, and the surrounding countries, which were in economic crisis and eager to connect with China, were all resolved quickly. The only tough nuts to crack were Europe and the Empire.

There were over twenty formal negotiations in the original timeline, and now there are far fewer problems, but some minor issues still remain:
For example, Hans BMW and Geigin became enemies.

Strangely enough, although BMW determined that the Hanma S9 was a pure copy, they then surprisingly remade a promotional video for the upcoming 98 facelifted 740, based on the next-generation promotional style of Tang Wen, and even went through a lot of trouble to book the stage of the Bailin Music Festival to hold a car launch event.

You copy my product, I copy your marketing; that's perfectly reasonable.

Previously, local authorities in Hamburg ordered Geiger to pay hundreds of millions of dollars in damages and apologize, which initially made Zhao Hande worry that his accession to the WTO would be hindered. However, news of a settlement between the two parties soon followed.

Unable to understand or make a decision, Zhao Hande simply went directly to the person in charge to ask for clarification.

Tang Wen simply smiled faintly when he heard his question. In fact, it was just that the country had not yet realized its huge potential and was too conservative. In a few years, when the famous case of "Tao killing three warriors to exchange high-speed rail technology" appeared, the country's style of doing things would become bolder and more radical.

Even if Zhao Hande were to understand all this now, Tang Wen ultimately summarized it in two words:

"Borrow money."

"Borrow money?"

"It's about borrowing money. If you ask me, when you go to Europe, just borrow money from anyone who has a bad attitude. As long as the interest isn't too outrageous, borrow as much as you can, whether it's cash or just to buy industrial goods. Spend it all, start by owing a trillion US dollars."

Tang Wen's startling remark almost made Zhao Hande think he was joking: "How much is one trillion dollars?"
Last year, China's GDP was 7.22 trillion yuan, equivalent to 8600 billion US dollars!
However, Tang Wen continued to explain:

"The ultimate goal of commerce is lending, and debt relationships are the best way to bring people closer... Let me ask you, what is the interest rate on deposits this year?"

"The current account rate is less than 2%, and the guidance rate for one-year fixed deposits is around 5%, but local governments can actually offer 7% to 8%, or even 10%."

Do you think it's due to currency devaluation or rapid economic development?

Zhao Hande: "Both, but I think the latter accounts for a larger proportion."

Tang Wen shrugged: "So, which seller can refuse such a crazy market? We not only take out loans to buy their industrial products at high prices, but we also have to pay interest, which is equivalent to winning twice. Who can refuse?"

Zhao Hande quickly waved his hand: "You can't lend money at high interest rates, what if we can't pay it back? How much debt is that?"

"Hehe." Tang Wen narrowed his eyes:
“Our foreign trade revenue is not entirely at our disposal… Shouldn’t the negotiations with the Empire regarding its accession to the WTO have included the purchase of Imperial bonds?”

The purpose of buying US Treasury bonds is to help us maintain the liquidity and status of the US dollar after we join the group. So why not borrow money from them? As long as we can ensure that we get our principal back, it is all beneficial for the creditors. They can even pay us interest.

The more we borrow, the faster we develop and the stronger our repayment ability becomes, allowing us to continue borrowing and developing, thus creating a cycle.

“Indeed… Europe gave us nearly seventy million dollars in aid this year, but now that you mention it…”

Zhao Hande finally began to understand Tang Wen's thought process: following this path and relying on loans could not only build relationships but also drive domestic economic development, with only one drawback:
The domestic economy must maintain a rapid, rocket-like growth rate. For example, foreign companies are scrambling to enter the market, and their biggest dissatisfaction stems from the conservative and incomplete domestic regulations. However, if growth slows and debt tightens, it will create a vicious cycle.

The lessons learned from Lao Xi's experience are still fresh in everyone's minds. If you're not going to wait for an internal explosion, you can only resort to physical means to save the economy, but that's definitely not what Zhao Hande wants to see.

Is Tang Wen really that optimistic about the domestic economy?

Zhao Hande fell into deep thought, but quickly realized:

The South Seas have now formed a de facto partnership with the mainland. It would not benefit them if the country were in trouble, so they will definitely conduct an in-depth investigation and assessment.

Or, why not trust those seemingly miraculous Southeast Asian economists who even pinpointed the exact timing of the financial crisis?

Tang Wen's goal was to create a situation where the country used debt to pay off other debts, attracting foreign investment and technology through proactive borrowing to achieve rapid, leapfrog development, thus artificially creating an economic miracle and an industrial boom.

Of course, doing so is very risky—once the period of development dividends is over, one will be burdened by debt, and it will be very serious.

However, Zhao Hande still had one last worry:

"What if? What if we can't pay it back?"

Tang Wen: "That's even simpler. By then, Gaijin would have already given you the fifth or tenth 100 billion yuan subsidy, and there would be at least 10 aircraft carriers in China. Just tell the creditors directly:"

If you keep pressuring me, I won't pay you back. If you want the money, just convert all your debt into 10-year RMB government bonds. When they mature, I'll see if I can redeem them. If I can't pay them back, I'll just renew the bonds.

Have you ever heard the story of someone who borrowed money to buy a tank, and then never had to pay it back when the bank came to collect?

"why?"

"He has tanks!"

"This is outrageous!"

Zhao Hande was shocked by Tang Wen's idea and even took a step back.

"This is called the law of the jungle, the social Darwinist ideology, and of course I also call it tank finance."

Seeing that Zhao Hande was already somewhat swayed, Tang Wen continued to deliver the final blow:

"Old Zhao, at least before you die, I believe you will see a thriving and prosperous world."

"..."

Although the words were somewhat vulgar, Zhao Hande did not feel offended at all; on the contrary, he suddenly felt a surge of warmth in his heart.

Reason told him this was walking a tightrope, but...

"Tang Wen, you are a devil."

"No, no, no, I am a scholar."

Tang Wen also stared at a passenger plane that was taking off and said:

“I am currently pursuing a PhD in Business Administration at the University of California, Berkeley, and I am Dr. Tang now.”

(End of this chapter)