Returning wealthy individuals develop their hometowns and become rich in the 1980s

Chen Dong stood up, straightened his collar, and walked steadily onto the stage. All eyes in the audience were on him, filled with curiosity, anticipation, and even a hint of scrutiny. He stood in front of the microphone without a script, his gaze sweeping over the faces in the audience before finally settling on the old man with composure and confidence.

"Old leader, comrades, let me explain this offshore financial pilot program in the most straightforward terms," ​​his voice was calm and steady, with a trustworthy certainty. "To give you an example, our Tuocheng is going to build a large water tank. This water tank is built inside the special economic zone, and the fresh water in the water tank is separated from the seawater outside by a sluice gate."

"The foreign exchange held by overseas Chinese and foreign businessmen is like seawater. If unfiltered seawater is poured directly into a freshwater pool, it will definitely spoil the entire pool. Therefore, we need certain screening procedures!"

"They can store seawater in this pool and take it out when needed, then we have to charge them a certain handling fee. The seawater in this pool, once it's in our hands, can be used to invest in factories, docks and real estate in Tuocheng, or it can be used to lend money to local businesses."

He paused, looked at Wu Nansheng and nodded slightly, and continued, "The first benefit of doing this is to bring the seawater outside those sluice gates into our own pool. The second benefit is to provide a continuous source of funds for the construction of the special economic zone."

"The third benefit is that it gives ordinary people a legitimate place to store their foreign exchange, so they don't have to go to the black market anymore. The last benefit is that it allows overseas Chinese to send their money back with peace of mind, knowing that it is under national supervision and will not be wasted."

Chen Dong explained in simple terms why an offshore financial trading center should be established in Tuocheng, a special economic zone. He gave a thorough and easy-to-understand explanation to the cadres from various ministries, provincial committees, and Tuocheng municipal committees present. Even Chen Zaixing, who was "illiterate," listened attentively and nodded repeatedly.

Wu Nansheng picked up his teacup, took a sip, and asked Chen Dong, "Comrade Zai Dong, does this 'pool' you mentioned conflict with the existing foreign exchange management system? Will it impact the country's foreign exchange reserves?"

As soon as the question was raised, everyone in the meeting room held their breath. Everyone knew that this was the core problem of the offshore finance pilot program, and also the main reason why the previous plan had been rejected by the provincial party committee.

The central government is not unaware of the underlying principles; rather, it understands the nature of capital all too well. It knows that once this capital encounters any financial turmoil, it will all flee, causing a run on the bank, which would obviously severely impact China's already unstable foreign exchange reserves.

This is what the central government is truly worried about.

Offshore financial trading centers, to put it simply, are the old-fashioned money lending business. If you want to open this money lending center and use the hot money deposited by users to conduct lending and bridge financing, then your money lending center itself must have a sufficient capital pool to resist risks.

Furthermore, as the "person" who runs a money exchange, you must have a certain level of credibility. This credibility is not simply about keeping your word; it must be backed by the credibility of the entire country.

People deposit money and can withdraw and exchange it anytime, anywhere. You can complete the transaction immediately, and the capital gains tax is reasonable. Then, overseas Chinese businessmen in Southeast Asia will definitely come here for the development of their motherland.

The reason why Hong Kong was able to develop its financial and trade sector is because China itself did not formally integrate with the international financial market, so it could only enter and exit through Hong Kong, which enabled Hong Kong to develop.

Chen Dong wants to follow Hong Kong's path, to sever the glory that Hong Kong has enjoyed since the 1980s, and to let these useless youths know that it's not that Hong Kong is awesome, but that China wants you to be awesome, so you can be awesome.

If I say you can't do it, then you can't!

Chen Dong did not evade Wu Nansheng's question and answered frankly, "Old leader, you've hit the nail on the head. This is why I said we must build a large reservoir with sluice gates. Foreign exchange coming in needs to be approved, and going out also needs to be approved."

"At the same time, we also need to establish a comprehensive risk monitoring system to ensure that every fund comes and goes clearly and is used for a specific purpose. These are two independent financial systems that are not affected by each other."

"Funds outside the gate cannot flow directly into the gate, but we can use loans, trust investments, and other means to channel them into the fertile field of domestic infrastructure and industrial development."

After listening, Wu Nansheng remained silent for a moment. He lowered his head, wrote a few lines in the notebook in front of him, and then looked up with a hint of approval in his eyes. "Alright, Comrade Zai Dong, please continue."

Chen Dong nodded, his voice still clear and steady, "Old leader, this model has precedents internationally. Hong Kong started with offshore finance, but we are not going to copy Hong Kong's model. Instead, we want to combine it with the actual situation in Turkmenistan and forge a path of offshore finance with Chinese characteristics."

Tuocheng is a hometown of overseas Chinese, who hold hundreds of billions of US dollars in their hands. If 10% of this money could be returned, that would be tens or hundreds of billions of US dollars.

If this money could flow into the offshore financial trading center in Tuocheng established by Chen Dong, even if only 10% of the funds were lent to Tuocheng and even the Chinese government, it would be enough to raise the level of infrastructure in the early stages of China to a higher level.

The Chinese government was very poor in the 1980s and 90s, so poor that it had to carefully consider many infrastructure projects before daring to start them. Even after 1986, comprehensive regulation and tightening of large-scale infrastructure projects forced many visionary projects to be suspended and wait, resulting in the loss of many good opportunities.

The country is really too poor.

Everyone says that if you want to get rich, you must first build roads. But if you don't even have the money to build roads, how can you get rich? Do the people in the mountains really not want to build roads so that they can get out of the mountains?

No!

There really wasn't enough money. It wasn't just the local area that was short of money, but the country as a whole was also short of money. Chen Dong had spent four years in China and had come to truly understand the financial predicament of the Chinese government and local governments. That's why he was even more eager to establish Tuocheng as an offshore financial trading center.

For Tuocheng to develop, it cannot do without the participation of the surrounding cities. In the future, there will be the Pearl River Delta and Yangtze River Delta economic zones. Chen Dong is now working on the Tuocheng offshore financial economic zone. Zhangcheng and even Meicheng can rely on Tuocheng's take-off and enjoy the same good rental income as the people of Suzhou and Foshan.

Wu Nansheng nodded, then asked, "What about the risks? You just said the risks are controllable, but how exactly are they controlled?"

"Establishing the Tuocheng Offshore Financial Transaction Center requires the participation and supervision of the People's Bank of China," Chen Dong replied. "We allow overseas Chinese or foreign businesses to deposit legally held foreign currency from overseas into a dedicated FT account in the pilot zone."

"Under the premise of strictly separating these funds from ordinary domestic business, they can enjoy tax incentives uniformly formulated by the Ministry of Finance and the State Taxation Administration, such as a lower profits tax rate, and are exempt from foreign exchange risk reserves in accordance with the exemptions under the current macro-prudential management of cross-border financing."

"At the same time, the offshore financial transaction center, through the FT account system, allows banks with offshore business qualifications to issue a type of 'Special Economic Zone Offshore Foreign Currency Certificate of Deposit' to overseas Chinese and foreign businesses."

"The interest rate of this type of certificate of deposit is not directly subject to the domestic deposit interest rate ceiling. It can be determined by referring to the overseas US dollar market plus a spread, but it still needs to be subject to the macro-prudential guidance of the central bank."

"According to sound expectations, this will gradually attract some overseas Chinese funds from Southeast Asia to return through compliant channels, enhancing Tuocheng's ability to serve as an offshore financial transaction center."