Those Years When I Was Forced to Top the Forbes List

Chapter 196 The Art of Negotiation
“Mayor Wu, you know that we are in the air conditioning business, and the next step is a compressor project and some supporting facilities, which will cost at least 2 billion yuan. We will fully own the compressor factory and will not need your loans. We will only need a 50% tax rebate, but this time you must let me have it.”

"."

“If you force me to leave, Chairman Zhu will have to bring in a different team to negotiate. Then we’ll have to go through all the details we agreed on before. They won’t dare to be as unconventional as I am.”

"This won't do! It's too high, 10 points, we can't afford to make up for it!"

"Alright, Mayor Wu, I'll offer my best offer: 57 points, I'll give you three points."

"55! I'll think of something for you! We still have a meeting when we get back!"

"That's impossible, 57 is the lowest."

A lesson in negotiation where every penny is accounted for.

However, since it involves value-added tax (VAT), even one percentage point is not a small amount. This is collected directly from the gross profit. Based on an annual output value of tens of billions, with a gross profit of 3 billion, and a VAT of 17% on home appliance sales, that's 510 million in VAT. Each percentage point is 5 million.

When he arrived, Zhang Xu told him that Gree's annual output value would be 20 billion yuan. If that's true, each point would be 10 million yuan.

Three points, thirty million.

Conversely, if Hefei's growth rate is seven percentage points higher, then they would have to subsidize them with 70 million yuan.

Of course, if Gree can earn 6 billion yuan in gross profit and at least half of that in net profit, the income tax it ultimately pays to Hefei will be around 600 million yuan.

Gree is a state-owned enterprise, so it shouldn't be manipulating income tax.

However, this income tax is still split between the central and local governments, with Hefei receiving at most half, or even 40%. It would be difficult for Mayor Wu to squeeze out 70 million yuan out of two or three hundred million yuan for Gree.

However, when you add up the related industries that it drives, and the jobs and supporting enterprises that come with it, the profits for Hefei are hard to calculate.

This is the negotiating advantage of large enterprises, especially upstream companies that sell complete machines.

The art of negotiation lies in perfectly combining one's own needs with the other party's bottom line. The proportion of 7000 million was just right; any more and Hefei would definitely refuse.

Chen Xuebing was doing the math in his head, while giving a wink to his two female comrades, Ren Ying and He Yue.

Study hard.

The two watched quite intently. He Yue, a few years younger than Dong Mingzhu, was learning her rhetoric, while Ren Ying, like Chen Xuebing, was calculating the costs and benefits.

However, Chen Xuebing thought again that just studying didn't seem to be very useful.

Mayor Wu couldn't possibly be so tolerant of every woman.

When Chen Xuebing reads the news, he always subconsciously pays attention to news about influential figures from his past life.

Ms. Dong joined Gree in 1990 at the age of 36, and has been there for more than a decade. Her status is already very high these days.

China's Top Ten Female Economic Figures, Top Ten Marketing Figures, and one of Fortune's 50 Most Powerful Businesswomen in the World...

Deputy to the 10th National People's Congress.

This last identity is the most crucial.

That's the source of her confidence to stand on equal footing with a mayor.

"Uh"

Chen Xuebing was still lost in thought when Mayor Wu suddenly spoke up:
"Mr. Chen, shall I have someone get you a room so you can go up and rest? I'll talk to Mr. Dong first, and we can continue our discussion tomorrow morning."

Upon hearing this, Chen Xuebing's lips curled into a smile.

They're about to give in.

"Hehe, didn't President Dong say he wanted to treat us to drinks? We couldn't refuse his kind offer, so let's chat together."

Just now, Dong Mingzhu didn't want to leave; now it's him who doesn't want to leave.

Dong Mingzhu was not one to stand on ceremony; she came over and pulled Mayor Wu to leave.

"Come on, let's talk in our van. It's right by the door, the conference table is ready."

"Eh?" Chen Xuebing raised his hand: "Mayor Wu, I heard about the 57% tax refund! Everyone who sees it gets a share."

"This..." Mayor Wu was speechless.

Chen Xuebing had just arrived, and we hadn't even discussed the project clearly yet, so we weren't really on guard.

Now, he was starting to regret it.

Dong Mingzhu was displeased upon seeing this: "This is a 40 billion yuan investment, why are you getting involved!"

Looking at Chen Xuebing's young face, she almost said, "Little brat, go play somewhere else."

Upon hearing this, Chen Xuebing smiled.

"Mr. Dong, what, does that mean our investment is necessarily smaller than yours?"

What project are you working on?

Dong Mingzhu blurted it out, but seeing Mayor Wu's embarrassed expression, she realized that what he said might be true.

She suddenly remembered what Mayor Wu had said earlier, her brows furrowed, and she stopped moving, asking suspiciously:

"LCD project? Panel manufacturer? Which company are you representing?"

LCD panels are not part of Gree's supply chain. She wasn't very familiar with them, but she wasn't completely unaware of them either.

Most of the companies that supply LCD panels to China are based in Taiwan, Japan, and South Korea.

These companies shouldn't send two mainland Chinese to negotiate.

It's not that the mainland is completely devoid of them.

There is one.

"BOE?"

Dong Mingzhu tilted her head and uttered these three words with great flair.

Chen Xuebing thought to himself that he was indeed an expert.

But he didn't comment.

Salespeople are masters of reading between the lines, and even without Chen Xuebing saying a word, she instantly knew the answer.

"BOE is struggling to survive, how can they afford to build a production line? And how big of a production line would they build?"

The phrase "too busy to take care of himself" made Mayor Wu, who was unaware of the situation, look at Chen Xuebing with a questioning gaze.

Chen Xuebing knew that if he didn't make a strong impression now, things would get difficult later, so he put his hands in his pockets, chuckled lightly while holding his empty purse:
“They don’t have money, but we do.”

"Mayor Wu." Dong Mingzhu also put her hands in her pockets, turned around and walked over, sizing up Chen Xuebing and his group, before saying leisurely:
"Which company are they? A panel factory with billions of dollars in funding can't be run by just one or two companies. And they're just a few people coming to negotiate? You'd better be careful."

Maintaining cash flow is her most important job, and she knows it like the back of her hand.

Even companies with billions in assets typically only have a few hundred million in cash on hand, even if their cash flow is good. Gree can invest billions because it has a supplier fundraising platform behind it, with the support of hundreds of suppliers plus bank loans.

She had just listened to Mayor Wu's introduction of Chen Xuebing's company, but it didn't leave much of an impression. It was precisely because she didn't remember it that she became suspicious. A company that could afford so much money, if not a state-owned enterprise, must be one of the wealthiest in the country; she shouldn't have been unfamiliar with it.

Mayor Wu's thoughts gradually returned to Chen Xuebing's business deal.

However, it wasn't a matter of doubt. Chen Xuebing's intentions had already been conveyed to him by the investment promotion team, and he had also glanced at the materials. It was Dong Mingzhu who had misunderstood.

"Mr. Chen and his team are a financing platform. They brought the projects here for us to invest in. They provided the financing and helped us establish our businesses."

Mayor Wu wanted to add that it wasn't a project worth billions, but rather tens of billions, but since both sides were now inquiring about each other's conditions, he stopped himself from speaking.

"Oh," Dong Mingzhu nodded, then laughed, "Your government is involved in investment? How much money can they allocate for such a large project?"

Sure enough, the mutual inquiries began.

This time, Chen Xuebing was unhappy.

"Mr. Dong, you're asking so clearly, do you want to participate in the investment?"

"Hehe, I'm worried that Hefei will be under too much pressure and drain its resources, and won't be able to complete the industrial support promised to us. Mayor Wu, our project is funded by our own funds. I've heard about BOE. They have a huge debt in Beijing. You should think carefully about whether an existing project or an unpredictable one is more important."

Two mega-projects located in the same place, even if they are not in the same industry, will inevitably compete for government resources. If BOE has the ability to set up production in Hefei on its own, Dong Mingzhu will naturally welcome it. Home appliance manufacturers and panel manufacturers will create a synergistic siphon effect in some aspects.

But if BOE wants Hefei to invest its entire assets, that's a different story.

Government policies, whether in land or taxation, are essentially subsidies. With limited resources, if you subsidize one area, you can't subsidize another.

Mayor Wu naturally attaches great importance to Gree, while Chen Xuebing hasn't even had a chance to talk to them yet.

But based on the intelligence we have, their conditions aren't bad either.

He really wanted to act like a jerk, separate the two sides, listen to each of them say bad things about the other, and then comfort each of them.

But Chen Xuebing had already realized that this was a good opportunity to gain an advantage and did not want the debate to die down.

The conditions for industrial implementation are mostly the same, not to mention that LCDs and home appliances are closely related.

Sister Dong came from a sales background, and Chen Xuebing believed that the terms she negotiated with Hefei were beyond his reach.

Why not just copy the homework?
Moreover, he was acting as a facilitator in this investment, so it wasn't appropriate for him to immediately help BOE make exorbitant demands. If he had a negotiation template from a competitor, it would be easier for him to speak up.

You can't refuse to give me the conditions you set for her, can you?
You haven't given us such a large investment in Gree, so asking for even a little bit isn't unreasonable, is it?

Having secured advantageous terms and achieved altruistic objectives, BOE will find it easier to negotiate the next steps, and will undoubtedly feel your full sincerity.

This sincerity will be provided by Sister Dong.

After thinking it over, Chen Xuebing revealed a defiant smile:

"Since Sister Dong is still worried, why don't you give Hefei some advice? Let's discuss our matters together, shall we?"

Dong Mingzhu glared at Chen Xuebing.

I'm old enough to be your aunt, why should I call you "big sister"?
However, in her view, given Gree's large investment and the construction of its third domestic production base in Hefei, it is necessary to understand the next steps in Hefei's funding and work priorities.

The two locked eyes and hit it off immediately.

"Alright! Let's not waste Mayor Wu's time. Let's get in the car and talk together."

Mayor Wu's chance to be a scumbag is gone.

But seeing the confident look on Chen Xuebing's face, and his fearlessness in discussing projects with the aggressive Dong Mingzhu, a great hope rose in his heart.

He also wanted to know how much matching funds Chen Xuebing had prepared.

It's a good thing that they have such confidence.

With Dong Mingzhu helping him question things, he saved himself a lot of trouble.

If we can really close this deal, then this trip to Guangdong will have been truly worthwhile.

At this moment, certain thoughts in the hearts of the three people resonated with each other.

"Haha. Very well, three cobblers can outwit one Zhuge Liang. You two are both outstanding individuals, so I'll benefit from your conversation with me, a mere cobbler!"

Having said that, he turned to Kan Zhidong and said very enthusiastically:
"Mr. Kan, Hefei is currently learning from the advanced investment experience of Shenzhen and your Shenzhen Capital Group. Moreover, the entire city is actively calling on financial professionals to participate in our investment promotion efforts to make up for any lack of market knowledge. You are a diversified expert in finance, investment, and securities, with rich experience. Our leader, Mr. Sun, heard that you are here and asked me to make sure you stay and give a lecture to our investment promotion team. He himself has also been researching government venture capital recently and heard that you have drawn on the experience of Silicon Valley. He would like to ask you some questions. How about it? Would you be able to spare some time to come?"

That's the significance of industry experts; no matter what level of leadership you are, when faced with a problem, you always have to humbly consult them.

Chen Xuebing was secretly astonished upon hearing this.

With everyone focused on learning finance, they were essentially masquerading as a government investment bank.

Kan Zhidong has seen a lot in his life; many veteran politicians and senior figures in the past had taken a course in finance.

He calmly waved his hand and said, "These are all past experiences. The venture capital environment has changed too much, so there's not much to say. Mr. Chen has a better eye for investment than I do. You can consult him if you have any questions. I think you have already grasped the most important thing for success: entrepreneurial fighting spirit. Just persevere and don't be defeated by one or two failures. If there are any procedural issues in setting up an organization, please contact me by phone, Mr. Sun."

In just a few words, he had already discerned the other party's intention: to wholeheartedly learn from Shenzhen and establish a unit similar to Shenzhen Capital Group.

They might even want to hire him.

However, after three years of working for the government to start businesses—Shenyin Securities, Shenzhen Capital Group, and Southern Securities—he gained nothing but fame and grievances. Now he has no desire to be a pioneer for others anymore.

Mayor Wu sensed the rejection and was slightly disappointed.

Dong Mingzhu suddenly spoke up: "President Kan, has the matter with Southern Securities been resolved?"

Kan Zhidong was slightly taken aback.

He had assumed that Dong Mingzhu didn't know him, but he didn't expect her to ask this question so suddenly.

"Hmm...it's almost over."

Dong Mingzhu smiled and said, "I've heard some things, you should be careful."

Of course she knew Kan Zhidong and Shenzhen Capital Group, as well as Southern Securities. A couple of years ago, Southern Securities was the top company in the industry, and Gree had even planned to ask them to underwrite bonds on the stock market.

However, when she was negotiating with Mayor Wu, he brought up Kan Zhidong, so she could pretend she didn't know anything about Kan Zhidong.

Now that everyone is ready to sit down and talk, she will find out again.

Her words made Kan Zhidong's face darken.

Chen Xuebing noticed, but it didn't seem like the right time to ask further questions.

More than half a year has passed since the Southern Securities incident, so there shouldn't be any problems now.

The group walked to the door, and Dong Mingzhu waved. A Coaster bus started up and drove to the door.

Mayor Wu checked the time; it was already 11 o'clock. He waved his hand, telling everyone else to go to sleep.

Chen Xuebing also asked He Yue to arrange a room on the spot. Cai Zhijian and Chen Xuebing exchanged a glance and got into the car.

Cai Zhijian is an exceptionally intelligent person who never speaks until he fully understands the situation. Having followed him all this way, he now has a comprehensive understanding of Gu An's situation and is just waiting to go to Shenzhen to check out another part of the group's business.

Chen Xuebing got on the bus.

Hey!
I want to buy a Coaster!
(End of this chapter)