The Rich Man's Life Begins with a Comeback

Chapter 249 Policy Dividends
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After Zhencui Group increased the scale of its Chinese herbal medicine planting base from 800 mu to 10000 mu, everything became easier to discuss.

what?
Difficulties?
As leading cadres of the Party, we have always been adept at tackling tough challenges!

If there are difficulties, then overcome them!

Zhao Hongbo, who was just a little hesitant because the Zhencui Group's land area was too large, is now like a broken record.

Regardless of what Gu Heng and Fan Hong said, as long as it was a reasonable request within the scope of investment promotion, his answer was basically just three words:

no problem!
Attracting investment is a core tool for local governments to promote economic development and a key path for investors to achieve resource upgrading.

As the chairman of Zhencui Group, Gu Heng had already discussed policy benefits with the think tank of Zhaode Heritage when he intended to establish a Chinese herbal medicine planting base for Zhencui Group in the Changbai area.

The so-called policy dividends for attracting investment can be summarized into five aspects: land resources, financial leverage, policy support, talent ecosystem, and credit endorsement.

The land resources they just mentioned are commercial land, which are either existing facilities, such as local industrial parks, commercial parks, or mature platforms, where companies can enjoy low-cost sites that can be rented and used immediately. However, this type of land resource policy is definitely not applicable to Zhencui Group. Therefore, Zhencui Group chose another type of land resource policy, which is customized development.

Businesses request land directly from the government based on their needs.

After the government coordinates the infrastructure support, such as the "seven connections and one leveling" (water, electricity, road access, and land leveling), it will hand over the entire plot of land to the enterprise for independent development, either to build a headquarters building or to establish an industrial base like Zhencui Group.

Because this is a policy benefit for attracting investment, the price that companies pay for land from the government is much lower than the normal market average price.

Take, for example, the Chinese herbal medicine planting base that Zhencui Group plans to build in the Changbai area. Gu Heng just asked Zhao Hongbo for the land at a price half the market average. Zhao Hongbo only looked hesitant and embarrassed, using excuses such as "I can't make the decision" and "I need to discuss it with Director Huang and relevant departments in the province" to evade the question. He didn't dare to directly refuse Gu Heng's request on the spot.

Behind land resources lies the policy dividend of financial leverage, which is supported in two main ways.

One approach is equity cooperation, which involves introducing government-guided funds or urban investment companies as shareholders to reduce corporate financing costs.

Another option is credit support. The government can coordinate with local banks to provide low-interest or interest-free loans to businesses. For businesses with limited cash flow, obtaining interest-free loans is a very attractive policy benefit.

However, Zhencui Group has little need for financial leverage, and equity cooperation is definitely out of the question. With the current working capital Gu Heng has, it is more than enough to build two 10,000-mu-level Chinese herbal medicine planting bases at once. It is impossible for equity to flow out, even if it is just the equity share of the Chinese herbal medicine planting bases.

As for credit support, Gu Heng might consider it if the Changbai region could provide Zhencui Group with interest-free loans, but given the economic conditions of the Changbai region, it is highly unlikely that it would be realistic for them to provide Zhencui Group with tens of millions of yuan in interest-free loans.

At most, it would be a low-interest loan, but for Gu Heng, a low-interest loan would be a bit of a double-edged sword, a policy benefit that is neither appealing nor worth giving up. Therefore, in terms of financial leverage, which is of great concern to most companies, Zhencui Group did not make many demands.

The third major policy benefit for attracting investment, namely policy support, is rather general. It mainly involves assessing what the company needs and then having the local government examine its own capabilities to see if it can meet those needs.

In this regard, Gu Heng made three requests on behalf of Zhencui Group to the Changbai Management Committee.

Firstly, there's the matter of qualification processing. If Zhenyuan Shanfang wants to grow bigger and stronger in the future, it must strictly control the quality of its medicinal cuisine. And Chinese herbs are the key factor in ensuring the quality of medicinal cuisine, so the standards must be set from the very beginning.

As the saying goes, words are not enough. In the future, when consumers question the quality of Zhenyuan Shanfang's medicinal cuisine, Zhenyuan Shanfang cannot simply argue with them without evidence. They must be able to produce some substantial evidence to prove that the quality of Zhenyuan Shanfang's medicinal cuisine is absolutely up to standard.

In agricultural product quality inspection, there is a certification called "Green Organic Agricultural Product Certification," which is usually issued by the provincial agricultural product quality and safety center in the place of origin of the agricultural product. Traditional Chinese medicine herbs happen to fall under the category of agricultural products. As long as Zhencui Group's traditional Chinese medicine herb planting base can obtain this certification, then in the future, if consumers question the quality of Zhenyuan Shanfang's medicinal cuisine, Zhenyuan Shanfang can use this certification to make a valid claim.

what?
I've already provided proof, why don't you believe me?

Be nice!

Since you don't understand reasoning, we happen to understand some legal principles.

The so-called qualification agency means that if the Chinese herbal medicine planting base that Zhencui Group will build in the Changbai area needs to apply for relevant qualifications such as "green organic agricultural product certification", the Changbai Management Committee will handle it on their behalf.

Sometimes, it's easier to get things done between government departments.

The Changbai Management Committee is an agency dispatched by the province, while the Jilin Provincial Agricultural Product Quality and Safety Center is an agency directly under the province. Although they are not in the same pit, they are both in the same large pit.

We see each other all the time, so helping others is helping yourself.

For Zhencui Group, delegating matters that originally belonged to them to the Changbai Management Committee to handle, and simplifying troublesome matters, provided great convenience.

Secondly, the second point in the broader context of policy support is the tax issue, which no enterprise can ignore.

Regarding the tax incentives, Gu Heng didn't mince words and directly demanded that the Changbai Management Committee maximize its support for Zhencui Group, specifically requesting that the committee provide "three years of tax exemption and three years of tax reduction" for the medicinal herb planting base invested in by Zhencui Group.

The so-called "three-year tax exemption and three-year half-tax reduction" means that enterprises are exempt from tax for the first three years and the tax rate is halved for the following three years. The larger the scale of enterprise investment, the greater the tax benefits they can enjoy.

Just as Gu Heng announced the tax incentive of "three years of exemption and three years of half reduction", Zhao Hongbo's face turned into a bitter gourd. But since Gu Heng was a big spender who could provide a large number of jobs, he had to grit his teeth and swallow his bitterness no matter how difficult it was.

Changbai Mountain is indeed rich in Chinese medicinal herbs and is very suitable for growing them, but YB State, which is adjacent to Changbai Mountain, is also a fertile ground for the cultivation of Chinese medicinal herbs.

If the news of a Chinese herbal medicine planting base with a future total investment of over 300 million yuan and covering tens of thousands of acres were to reach the ears of the leaders of the neighboring YB state, they would probably come to intercept it tonight.

Don't be fooled by the fact that Changbai region is under provincial jurisdiction; compared to the vast YB state, the two are simply not on the same level. So as long as Gu Heng's demands tonight don't exceed the limits, they will grit their teeth and keep this investment project alive, no matter what.

If this investment project is snatched away by a neighboring prefecture or city, then the future of these leaders in Changbai will basically be over. Even if the higher authorities don't hold them accountable, they will probably still be labeled as "mediocre and incompetent."

Finally, the third point in this major aspect of policy support is risk warning.

Nowadays, every industry has its own standards, and the Chinese herbal medicine planting industry is no exception.

The main risk lies in environmental protection. The country's environmental protection requirements change every year. If companies are not careful, they may step on a landmine. At best, they will face hefty fines, and at worst, the responsible persons may even face imprisonment.

In the future, once Zhencui Group's medicinal herb planting base is established, the Changbai region will assign specialists from the Agriculture and Rural Affairs Bureau and the Environmental Protection Bureau to form a special team to be fully responsible for policy interpretation and risk warning, thus providing support and protection for the project.

(End of this chapter)