Rebirth: I am in Jin-Cha-Ji

"Governor Tao, I am sincere in my cooperation this time. But I need to export this order, so I must ensure the quality."

Guangdong took this matter very seriously. Even though it was a small order, Lin Baixin had placed an order for 1600 dozen shirts, or 24000 shirts. It wasn't a large order, but it wasn't a small one either. Furthermore, it was a first for a Hong Kong businessman.

So Guangdong Governor Tao Zhu came forward in person.

Tao Zhu nodded and said, "Business naturally requires integrity, and quality is one of the most important aspects of integrity. However, we are a newly established clothing factory after all, so there are bound to be some imperfections, and we don't quite understand the specific quality requirements. So my question is, can you send someone over to help us complete this order? Please don't let the final style or quality issues affect our cooperation."

Tao Zhu understood that if this cooperation was successful, there would be more cooperation in the future.

So, while this wasn't a large order, Tao Zhu didn't want any problems with this collaboration, hoping it would open up trade channels. He strongly supported the "processing on supplied materials" proposal put forward by Wei Hongjun and Mao Zemin. Having previously been in charge of bandit suppression in Guangxi and now serving as governor of Guangdong, Tao Zhu was well-versed in the conditions of the Guangdong and Guangxi regions. If rural areas in the two regions needed to develop, "processing on supplied materials" was a surefire way to achieve rapid growth.

This time, Lin Baixin was just like that.

From the fabric to the buttons, everything was brought in by Lin Baixin. All Guangdong had to do was turn it into a shirt according to Lin Baixin's requirements.

Therefore, Tao Zhu is more cautious than Lin Baixin.

"Governor Tao, if you agree, I'm willing to stay here and participate in this order."

"Of course we agree."

Tao Zhu accepted it happily.

As long as Lin Baixin is willing to take charge and help, the garment factory has experience.

Lin Baixin's focus on this is due to the increasing number of orders he's receiving. After opening up the African market in 1950, he became known in Hong Kong as the "King of Africa." He receives numerous orders from Africa every year, and the initial tens of thousands of garments were just a test run. Now, he has orders for millions of garments.

However, the profit from making clothes for Africa is too low.

So Lin Baixin set his sights on Western countries. However, in order to protect their own industries, Western countries protect their domestic markets. Just like the United States has a quota system for imports from various countries' clothing industries.

Fortunately, the UK has a small population, so it is impossible to develop a large-scale clothing industry.

So they have to import some clothes.

Lin Baixin became the first Hong Kong clothing merchant to enter the British market. Even some British brand companies began to look for Lin Baixin as a manufacturing agent. So Lin Baixin's mind began to become active.

Entering the UK market offers high profits, but currently orders are few, yet the prospects are vast. Because the UK market can be leveraged to expand into Europe, it's a market Lin Baixin will focus on in the future. While the African market offers lower profits, the large number of orders means the combined profits are equally substantial, making Lin Baixin equally unwilling to give up. Adding Southeast Asia to the mix, Li & Fung's current scale is completely insufficient. However, if he wants to expand, Lin Baixin knows he doesn't have enough money and will need a loan. However, he doesn't want to do that. He sees greater opportunities, untold wealth waiting for him.

So he took the risk and came to Guangdong in person.

Unexpectedly, it was Guangdong Governor Tao Zhu who personally received him.

Seeing how much the new Chinese government valued this collaboration, Lin Baixin grew increasingly confident. If this collaboration was successful, he could then hand over all future orders from Southeast Asia and Africa to the Chinese government. These orders were low-margin, and the requirements for clothing weren't high. He should create his own brand and enter the high-margin Western markets.

Of course, this is all based on the success of this cooperation.

So Lin Baixin has to stay here in person.

"Governor Tao, I'll leave it to you this time."

“Our cooperation is mutually beneficial.”

897 Pig Farming Issues

Lin Baixin's first order was a great success.

Because these were simple short shirts, the production process was relatively straightforward. The garment factory completed this order in just 12 days. Lin Baixin was very satisfied with both the style and the quality. Of course, since the clothing was being exported to Africa, the requirements weren't that stringent. Lin Baixin was in high spirits, as he was most pleased with the profit from this order.

Because the processing quotation from China was much cheaper than what Lin Baixin could have done in his own factory, his profit after this order increased by tens of thousands of Hong Kong dollars. Of course, he was satisfied with such a good thing.

This single order could bring in tens of thousands of Hong Kong dollars in profit compared to the previous one. What if we continue this partnership? What would the annual profit be? 100,000, 200,000, or 500,000?

There are now plenty of orders in Southeast Asia and Africa. Lin Baixin believes that if he continues like this, he will soon become a wealthy man in Hong Kong.

Lin Bai was delighted, and so were the Guangdong officials. With this order, at 7200 cents per garment, they earned a total of 7200 yuan. In just ten days, they had already earned yuan. That was enough for the entire factory's workers to earn a month and a half's salary. The garment factory workers were all women recruited from surrounding villages, and they had previously earned nothing. Now, with a little over ten yuan a month, they were incredibly happy.

After this order was successful, Lin Baixin placed another order with Guangdong for 4000 dozen pieces, or 60000 pieces of clothing. At the same time, Lin Baixin guaranteed that as long as Guangdong was solely responsible for the second order without Lin Baixin's supervision and there were no quality issues, he would place orders for 10 dozen pieces with Guangdong Province each year.

This made the Guangdong Provincial Government very happy.

If there are truly 10 dozen orders a year, and some of the garments are complex, then the OEM price will be higher. That way, perhaps I can earn or a year. While or isn't much, it's just one business. What if I could collaborate with more Hong Kong businesspeople?

What if we order tens of millions of pieces of clothing a year?

That’s millions in revenue.

What if there are tens of thousands or even hundreds of millions of pieces of clothing?

It can create tens of millions of output value.

It will also boost the domestic sewing machine industry. Furthermore, as farmers earn money, they can consume some industrial products. Currently, the biggest concern for domestic industrial development is the inability to find a market for industrial products.

Don't think tens of millions or even hundreds of millions of pieces of clothing are a lot. Southeast Asia and Africa boast a population of 3.5 million, and when you add the nearby South Asia and Japan, the total population exceeds 5 million. With such a large market, the annual consumption of clothing is significant. Historically, until the late s, Hong Kong's textile and garment exports could not be matched by the combined output of the other three major economies—South Korea, Taiwan, and Singapore. This demonstrates the rapid growth of Hong Kong's textile and garment industries at the time. Furthermore, after the British opened a trade route, they also supported Hong Kong's manufacturing industry.

Because this is also what British businessmen want.

Hong Kong businessmen are now collaborating with China, attracted by its cheap labor. Those more perceptive British businessmen are also interested in China's cheap labor. However, they are still cautious and want to see how Hong Kong Chinese businessmen cooperate with China first.

Originally, Hong Kong's exports required export quotas, but after the UK relaxed these restrictions, these became less of an issue. Hong Kong and mainland China now possess a unique development opportunity. Not only do they have the opportunity, but they also possess the foundation for developing labor-intensive industries.

Of course I am a little sad.

The current garment factory simply can't produce 150 million pieces of clothing annually. It must continue to invest in expansion, including purchasing a large number of sewing machines. Of course, another option is to import a batch of advanced machinery and equipment. Lin Baixin also offered suggestions for improvement to the Guangdong garment factory. Currently, the Guangdong garment factory still has many problems with division of labor and cooperation.

Despite the difficulties, Guangdong isn't afraid. At this point, Guangdong is least worried about a flood of orders. What China lacks the most is cheap labor. Some of the problems in factory production can be gradually resolved.

News of Lin Baixin's success sparked excitement among many Hong Kong manufacturers. Some began contacting the Guangdong Provincial Government, inquiring about the possibility of directly investing and building factories in Guangdong. However, the policy was unclear, and the Guangdong government naturally refused to agree.

However, the Guangdong government believes that it can adopt the Lin Baixin cooperation model.

Tao Zhu approached Hong Kong businessmen, stating that the Guangdong provincial government hoped to obtain a loan from them to help it set up a contract manufacturing plant. They were willing to pay interest at the current Hong Kong bank loan rate.

Some people hesitated, while others began to participate in negotiations.

Some small businessmen, willing to take risks, have even traveled to Guangzhou to inquire with the Guangdong government about the possibility of cooperating with rural cooperatives there. Hong Kong currently has many such small businessmen, who invest a few thousand yuan, set up a small location, and hire a few people to open a factory.

These small businessmen have nothing and only have a few employees.

They also wanted to seize the good opportunity now. They couldn't compete with Lin Baixin, so they couldn't cooperate with the larger garment factories in China. However, they could cooperate with the rural areas around Guangzhou.

Especially after listening to the introduction about rural cooperatives, they thought this was a possible way to cooperate.

Because they don't have much money, they only produce a few thousand or tens of thousands of pieces of clothing a year. Even for such a small factory, the owner's family and a few workers would spend nearly 10,000 Hong Kong dollars a year on salaries. However, if they partnered with a rural cooperative in China, they could employ 20 to 30 people, produce tens of thousands, or even hundreds of thousands, of garments a year, and still spend less than 10,000 Hong Kong dollars. They employ four or five times as many people as in Hong Kong, yet the wages are even lower.

There is no such good thing.

Small businessmen are actually bolder than big businessmen. After all, they have no money and are not afraid of losing money.

Of course we welcome you here in Guangdong.

Chen Tao, who is in charge of rural affairs in Guangdong, personally discussed ways to cooperate with these small businesses, looking for ways to help them reduce costs, including how to collaborate on transportation.

Many toy makers also came to Guangdong.

Toy manufacturing is also a labor-intensive industry, not a capital-intensive or technology-intensive industry. All they need is cheap labor.

At this stage, mainland China is the only country that can provide cheap labor on a large scale.

Moreover, Hong Kong toy merchants are not large in scale.

They also want to reduce labor costs. Therefore, they are very interested in collaborating with rural cooperatives. As long as the rural cooperatives can produce quality products, these small businesses are interested.

And because they are small businessmen, they are very willing to run back and forth.

For a while, Guangzhou was very lively.

A cooperation agreement was reached almost every day. Especially with the cooperatives, Chen Tao personally visited banks and credit unions to get them to cooperate, providing loans to these cooperatives so they could start collective enterprises.

Wei Hongjun approved all of these reports. Many things needed to be tried, including the ongoing "processing with supplied materials" initiative. The development of rural collective enterprises also required exploration.

There must be clear regulations on the ownership and management rights of collective enterprises.

If a collective enterprise grows into a large factory employing thousands of people, should ownership change? Currently, many cadres nationwide have no concept of ownership. They believe that state-funded public enterprises, provincial and municipal enterprises, county and township enterprises, and even village collective enterprises are all state-owned enterprises. Since they are all state-owned enterprises, what distinction should be made? This is the prevailing view of many cadres.

Because of this, Wei Hongjun repeatedly stressed the issue of ownership during his time in Jin-Cha-Ji, whether teaching at the Party School or the Military and Political Cadre School. He consistently urged Jin-Cha-Ji cadres to never confuse state-owned enterprises with collectively owned ones.

Arbitrary change of the nature of the enterprise. If the nature of the enterprise is to be changed, adequate compensation must be provided.

State-owned enterprises are state-owned enterprises, while enterprises invested in by provinces, cities, counties, and townships are collective enterprises. However, provincial and municipal state-owned enterprises are large collective enterprises affiliated with the people of the province or city. Rural cooperatives, on the other hand, are small collective enterprises affiliated with the rural people.

Ownership cannot be confused.

Once this confusion arises, the most dangerous situation in the primary stage of socialism will occur: "one equalization, two adjustments." What does "one equalization, two adjustments" mean? Equalization means egalitarianism, the kind of absolute egalitarianism the CCP has criticized since the Red Army era. The county wants to equalize townships, the township wants to equalize villages, and the village wants to equalize brigades. "Adjustment" refers to the unconditional increase in the means of production, labor, products, and other property of the production teams. The townships above treat the money of rural cooperatives and brigades as their own, forcing them to hand it over at will.

This is a very dangerous tendency.

It's not just in rural areas, it's the same in cities.

Historically, even though the Chairman himself wrote articles criticizing the "One Leveling and Two Adjustments" policy, he was unable to stop grassroots cadres from having such thoughts.

The emergence of the "one leveling and two adjustments" policy will directly dampen the people's enthusiasm for production. After all, a production brigade has finally become prosperous, but your township can take away all the good things from it with just one word. How can the production brigade still have the enthusiasm to continue developing?

Wei Hongjun is now in charge of rural affairs in China, so he must oppose the "one leveling, two adjustments" policy and make preparations in advance. He must not allow collective enterprises to achieve success and then have the townships, counties, and cities above them come in and grab a piece of the pie.

Luo Qirong and Tao Zhu also wrote a report to the central government. After reporting the current situation, they hoped that the central government would support Guangdong Province and help it improve its transportation conditions.

Facilitate material transportation.

Luo Qirong and Tao Zhu proposed developing Bao'an County into a "processing on imported materials" base. Subsequently, all Guangdong Province-funded "processing on imported materials" enterprises were located in Bao'an County, facilitating further cooperation with Hong Kong businessmen.

In fact, it is Shenzhen in later generations.

This place is connected to Hong Kong, offering significant transportation advantages. Luo Qirong and Tao Zhu wanted to build an industrial zone here, but the central government was still considering this. Meanwhile, Wei Hongjun convened a meeting of the Rural Work Committee regarding the pig issue.

Seriously, this was about the pig issue. Wei Hongjun, a member of the Politburo and Vice Premier of the State Council, personally convened a meeting to discuss it.

The Ministry of Foreign Trade has reached an agreement with Eastern European countries, especially with East Germany, which stipulates that East Germany will import 150 million pigs from China each year. Of course, they will also accept processing into sausages and canned pork for export to East Germany.

Including the contracts with the Soviet Union and Eastern European countries, China needs to export 300 million live pigs each year. This was a temporary figure determined by the Soviet Union and Eastern European countries because they were worried that China could not supply so much pork.

According to the ideas of the Soviet Union and Eastern European countries, China should export 500 million live pigs to the Soviet Union and Eastern European countries each year.

The most anxious among them was East Germany.

After the establishment of the GDR, the GDR's economy had recovered somewhat, but the supply of agricultural products was still far from sufficient. The Soviet Union itself was insufficient, let alone the GDR.

The German Democratic Republic loved sausages very much.

But the GDR didn't have enough pork to make sausages. Without improving the quality of life in the GDR, how could it compete with the Federal Republic of Germany? So the GDR turned to China. The GDR was willing to trade its industrial products and machinery for live pigs, sausages, canned pork, and other products. The Ministry of Foreign Trade and the GDR conducted calculations.

It was agreed that the import and export trade between the two sides could reach 5 million rubles in a short period of time.

This is absolutely no exaggeration. Currently, Chinese companies purchase live pigs for 26.7 RMB per 150 jin (approximately 6000 kg). If million live pigs were exported to the German Democratic Republic, or made into sausages or canned pork, the export value would exceed million RMB.

The current exchange rate between the ruble and the RMB is very unstable.

Since China adopted the new RMB, one yuan has been exchanged for two rubles, a fixed exchange rate. However, the actual prices are completely different. Based on current prices in both countries, one yuan can be exchanged for at least five rubles.