Those Years When I Was Forced to Top the Forbes List

Chapter 159 is about paying for knowledge.

There were only three people left in the office.

Chen Xuebing, District Chief Hong, Secretary Jiang.

Chen Xuebing took a sip of the champagne in his glass and silently considered his words.

BOE has consistently invested heavily in R&D, and its subsequent development has been very strong. It is undoubtedly the best choice for domestic substitution. If it could start developing the next generation of OLED screens for mobile phones earlier, it would at least be willing to provide support in the selection of screens for popcorn phones.

However, BOE's current production lines are focused on large-screen manufacturing, and the company is already struggling financially, so it is unlikely to be able to conduct targeted research and development to meet their specific needs.

But if they can persuade Chongqing to invest in them, or even participate in the investment, then it will be a different story.

District Chief Hong treated this matter as a political task. He considered domestic self-reliance as nothing more than a gimmick to add icing on the cake. To promote such a large investment, he had to make him feel the actual benefits.

“Uh…District Chief.”

"As a long-established industrial city, Chongqing should continue its consistent approach when choosing investment targets in order to maximize the employment prospects for its talent."

District Chief Hong nodded.

Promoting employment is important.

“Our current pillar industry is automobiles,” Chen Xuebing continued.

"The automotive industry has seen a decline this year," Secretary Jiang, who is very familiar with the data, interjected.

"Yes, the special steel company with 30,000 employees also went bankrupt this year. My company's administrative director came from the special steel company."

Chen Xuebing continued, following the lead of the conversation:

"Our special steel company was once a national-level classified military enterprise, but it still couldn't hold on and went bankrupt. Therefore, the choice of industry must be at the forefront of the times and the needs of the times."

"The development of the automotive industry is very good. As for supporting new industries, I think we should focus on mobile phone and computer manufacturing, the semiconductor industry, and related supporting industries."

"And the investment scale must be large."

The tone was firm.

"Big? How big?" District Chief Hong crossed his arms and stroked his chin. "The maximum funding the city has given this time is five hundred million."

Chen Xuebing smiled; he had anticipated this.

Moreover, the guess was quite accurate, because the document stated that the first pilot project in Zhongguancun in 2002 had a guiding fund size of 500 million yuan.

If we treat this as a political task, we will definitely not go beyond the scope of the task.

But this did not achieve Chen Xuebing's intentions at all. He immediately snorted and laughed:

“Five hundred million is too stingy, District Chief. Chongqing’s situation is different from that of Beijing, Shanghai, Guangzhou and Shenzhen. They are expanding high-tech industries, while Chongqing is creating high-tech industries. Five billion is probably not enough.”

"Fifty billion? What kind of company needs to invest fifty billion? We are supporting companies, not starting them."

District Chief Hong is the chief administrator of the mother district of a municipality. Although he wasn't shocked by the number, he was still quite surprised.

"Of course, it should be a listed or pre-listed company with high technological content. It must be large enough and have the desire to acquire upstream and downstream industries. Only industrial mergers and acquisitions can accelerate the listing process."

"Without accelerating development and going public, how can we demonstrate concrete results within three years?"

As Chen Xuebing spoke, a strange smile appeared on his face.

District Chief Hong chuckled.

Three years is the term of office for a leader. Those who get things done certainly hope to achieve results during their term.

This Xiao Chen has really figured out the policies and everyone's mentality.

Chen Xuebing picked up the champagne in his hand, downed it in one gulp, smacked his lips, placed the glass on the coffee table, and continued:

“District Chief, if we spend too little money and don’t achieve any results, it’s better not to spend it at all. But if the investment is converted into appreciating stocks, then no matter how much we spend, it will be a real achievement. On the other hand, once a leading listed company that is strongly supported and merges with the industrial chain is established, the scale of employment and revenue generation, as well as the cluster effect, will be unimaginable. If a city’s industrial genes are tangible, then they will definitely be reflected at this level.”

District Chief Hong crossed his arms, nodded with interest, and looked at Chen Xuebing with a smile: "Little Chen, I think this city has hope for the financial industry with you here. Are you planning to make high-tech investments next? Can Chongqing keep you here?"

Chen Xuebing smiled slightly: "District Chief, you flatter me. The nature of the financial industry is always determined by the attention paid by banks and the government. However, no matter where my business is located, I am a Chongqing businessman, and of course I hope my hometown will develop better."

"The city has always attached great importance to financial work, and the government financial office was just established last year."

District Chief Hong made a casual remark.

“I know, it’s a bureau-level structure, located in the Municipal Government Office.” Chen Xuebing nodded.

He had learned about these situations when he started his first stock security company. The company was mainly responsible for formulating local financial industry development and planning, coordinating financial departments, and the work of shareholding system reform and listing was also related to this department.

It involves a lot of miscellaneous management.

Many aspects of the country's financial work are still in their infancy. There are guiding departments at the top, such as the China Banking and Insurance Regulatory Commission, the China Securities Regulatory Commission, and the People's Bank of China. The separate institutions are also under vertical management. Local governments at the bottom must also have their own financial reach, often resulting in a lot of overlapping functions.

Chen Xuebing thought about it again and suddenly realized something was wrong.

This person's rank matches this office perfectly.

Being so dedicated to finance, could it be...?

District Chief Hong, who had been pondering something, snapped out of his thoughts and asked, "Xiao Chen, you guys are quite professional in investment, but this is my first time dealing with a government investment fund. What do you think is the best way to manage it?"

This time, Chen Xuebing did not overstep his bounds and spoke very cautiously:
"Let's learn from the past. Since the ministries have jointly approved it, the relevant guiding documents should be issued soon."

District Chief Hong noticed his caution and suddenly laughed:
"You also agree that Chongqing should have its own model. How can we just refer to the investment and management methods of small and medium-sized enterprises in other regions? You're not a government employee, so speak your mind."

Chen Xuebing smiled helplessly; there was really no need for him to say anything.

"There are only three forms of management. The first is to hold a large share and become the controlling shareholder, in which case the company becomes a state-owned enterprise and is directly managed by the Chongqing State-owned Assets Supervision and Administration Commission. The second is to hold a small share and become the second or third largest shareholder, which has two situations."

"First, the government only provides the money and sets the investment conditions. As a limited partner (LP), the government designates a financial management company as the general partner (GP). The financial company raises funds in the form of private placement to jointly establish a fund. The GP manager negotiates with the invested companies to fulfill the government's conditions."

"Secondly, the government will manage the fund itself, assigning personnel to act as GPs and LPs and establishing the fund, and will not accept private financing."

"Why not accept the second option? Why can't the government directly establish a fund to accept private financing?" District Chief Hong asked.

Chen Xuebing couldn't help but laugh: "The government may accept it, but who would be willing to provide you with the funds? Most of the wealthy people nowadays are people who left their former state-owned enterprises to start their own businesses. Who doesn't know that the state-owned enterprise model is cumbersome and inefficient? Putting money in and having a bunch of people who receive fixed salaries do investment—who wouldn't feel uneasy about that?"

"Then... does it have to be a private equity fund? Can't we assign a public fund to manage the investment?" District Chief Hong clearly had doubts.

Chen Xuebing pressed his tongue against the side of his cheek, slightly dissatisfied.

"District Chief, you're wrong about that. It's designated, not assigned. Strictly speaking, the management company and the government, the investor, are partners with equal status."

"Furthermore, mutual funds are not much more cumbersome than the government. Their funds come from the savings of the general public, and they face even more constraints than the government."

"They want to ensure full disclosure of every major investment. That is to say, the conditions proposed by the government and the results of negotiations are completely under public scrutiny. Changes in the investment targets must also be disclosed in real time. This is very disadvantageous to the invested companies, as it is equivalent to having a spy shareholder who can attend meetings and expose their decisions at all times."

"Therefore, public funds generally do not act as the main investors in equity investments. The entry point is usually before the IPO, and the goal of the entry is simply to make a profit."

"The government already has many restrictions, and if it combines with public funds to carry out industrial investment, the result is predictable."

Chen Xuebing's words were already very conservative.

In reality, public funds don't care about local governments at all. They are playing a firm "harvesting the韭菜 (retail investors)" model. They will not cooperate with any industrial policies or local development activities, and they will not even consider the interests of the invested companies. If the stock price has not risen, they will keep hyping it up. Once the stock price rises and the price-to-earnings ratio reaches the ideal limit, they will sell like crazy.

Which well-known companies were built up through investments from public funds?

They are few and far between. It's impossible to expect someone who has mastered the art of buying low and selling high to patiently run a business anymore.

Private equity funds come in all shapes and sizes, divided into primary and secondary funds. Some are even more ruthless than public funds, but there are also very insightful and patient fund managers.

You can't say who's good or bad; it's all about who's in control.

Therefore, Chen Xuebing felt that there was no need to go into detail about who should manage it; as long as the government had financial experts, it would naturally be able to come to a conclusion.

"Oh…"

District Chief Hong gradually realized why the public funds he had visited and studied previously had no experience in this area, and why he had gained so little.

From this perspective, it seems that private equity is the only option.

Having a condition that you have to choose is actually a good thing, to avoid being questioned.

"Xiao Chen," District Chief Hong smiled slightly, "Our district is planning to set up an expert group to analyze this matter and produce a professional report to report to the city. Would you be interested in participating as an advisor?"

Chen Xuebing coughed lightly: "District Chief Hong, this report isn't going to be written by us, is it?"

Government-guided funds are different from other funds. They are just starting out, and the relevant documents haven't been officially implemented yet. Even the district head's personal investigation hasn't yielded any results. What kind of experts do you have?
This group was just temporarily set up for me, right, Group Leader Hong?

Secretary Jiang, who was standing next to him, immediately picked up on this awkward response.

"No, we will write the report. If there is anything we need to know, Mr. Chen and I will coordinate with you."

As he spoke, he gave District Chief Hong a look.

The fact that he could say that shows he has understood the situation and is willing to take on this responsibility to relieve the leader's worries.

District Chief Hong nodded slightly in agreement.

Chen Xuebing watched a performance of "The Meaning of a Secretary" from the side and clicked his tongue inwardly.

This Secretary Jiang is probably even more difficult to deal with than the leader. He will pay attention to the little things that the leader might not care about.

But since the top leaders in the area had spoken, how could I disagree? Participating in this ridiculous group was my own just deserts.

Even if you put in the effort, the money might not necessarily go to you.

However, if you don't participate, the probability is almost zero. Let alone 5 billion, even 500 million would be enough for private equity funds across the country to line up and compete for it.

After a moment's hesitation, Chen Xuebing said firmly:
"No problem, I will definitely cooperate fully. However, District Chief, I have one condition."

"Oh? Tell me."

"My name must be on the report, and I will make one suggestion in it: you must invest in large targets, otherwise you might as well not do it at all."

District Chief Hong finally frowned.

"Fifty billion, as you said, is too much, isn't it? It's way beyond the limit."

Chen Xuebing's expression was solemn as he slowly said:
"Innovation is breaking the rules, and creation is destruction. This is the liberation of thought. Although the risks of innovation are high, those who can implement innovation into new standards will surely leave their mark on history."

"Small investments won't amount to much, and you'll also be under a lot of pressure. All sorts of connections will come knocking on your door, and the money will end up in some unreliable companies, wasting money and good policies. You might even end up with a bad reputation."

"To be honest, if it were an investment of several hundred million, I wouldn't dare to take it. If some leader were to bypass you and call me directly, asking me to invest tens of millions here or millions there, I wouldn't dare to disobey."

"Large investments are different. They attract attention from all sides, and the evaluation process is bound to be rigorous. Companies that rely on connections to survive will not be able to make the investment. This money will create real benefits for the government."

“District Chief Hong, I am still young and have a long road ahead of me. Now that I’ve gotten involved, even if I don’t participate in the subsequent operations, I hope to at least create a classic case of government-business cooperation and make it my signature. Of course, it will also be your signature.”

District Chief Hong took a deep breath.

This young man has thought things through very thoroughly.

Such a big thing, if it can be accomplished, that would truly be…

A bold and significant stroke.

Five billion is a staggering amount, but the money doesn't belong to him; it belongs to the government. As long as there's no fraud in the investment process, he doesn't feel any pressure.

Indeed, it's less of a burden than investing hundreds of millions.

Looking back on those words of the young man, they all seem to exude confidence in his success.

"You've already decided on your investment targets, haven't you? With such a large sum of money, who can you invest it in?"

Chen Xuebing smiled and shook his head, resolutely refusing to say anything.

“District Chief, this is a trade secret. If I want to help people make money, I must be able to make money myself first. I have done a lot of research, and knowledge should be paid for.”

District Chief Hong's expression hardened: "A lengthy investigation? Could it be one of the companies you've invested in?"

"I am not worthy of such a large investment from a company. You don't need to worry about compliance at all, as the other party is a state-owned enterprise."

Chen Xuebing simply revealed that he wasn't afraid of being investigated.

Even if he found out, he couldn't confirm it.

Once it's confirmed, does that mean it will be easy to operate?
I do not believe.

District Chief Hong breathed a sigh of relief. If it were state-owned assets investing in state-owned assets, there would be fewer obstacles.

It's still early, there's no need to discuss everything thoroughly at once, in case things don't go well and it gets emotional.

He still needs to spend time learning about Changzheng Capital and the group companies behind it.

At least he found a professional and got some direction, and it was an innovative and good idea. His political task was at least completed. As for whether the city agrees or not, that's a matter for the city.

"Alright, then I'll leave it to you, Xiao Chen. I've learned a lot from what you said today, and I'm heading back now. Xiao Jiang will contact you about the rest."

District Chief Hong patted the sofa with both hands and stood up.

After finishing the negotiations, Chen Xuebing immediately resumed his bright smile, picked up the empty wine glass on the table, and swirled it.

"District Chief, since you're already here, why don't you go outside and have a glass of champagne before you leave?"

District Chief Hong was taken aback. In fact, he had felt that choosing to pour champagne at the opening ceremony was quite inappropriate.

It's a bit extravagant.

So he didn't drink a drop and went straight into his office.

Chen Xuebing laughed and said, "Don't worry, that wine looks big, but it costs several hundred yuan a bottle. It's a domestic brand, Great Wall. I showed the label when I took the picture. You're here to support us, how could I cause you any trouble? If someone tries to cause trouble, you can go back and bang on the table."

District Chief Hong chuckled and pointed at Chen Xuebing, laughing and scolding him.

"You're such a shrewd person!"

"Hehe, I happen to have a few investors who are hesitant. Today you have gained knowledge and given me this opportunity, so consider it payment for the knowledge."

"Hahaha…"

District Chief Hong strode out the door with a smile.

(End of this chapter)