Rebirth of the Industrial Tycoon

Dongshan Group, Zhao Jinshan held the last quarter's financial report with a smile on his face.

"The price of thermal coal this year has not been lower than 800 yuan. Even a money printing machine can't generate money as quickly as our mine. We are going to make a lot of money this year!" Zhao Jinshan continued; Now that the coal market is good, we have to increase investment."

"I don't think so." Li Weidong shook his head and continued; "The coal market should be good next year, but the coal cycle is about to end. We have to shrink our business and prepare for the cold winter of the coal industry."

Zhao Jinshan was stunned for a moment, thought for a few seconds, and then nodded: "Listen to you, your judgment of the market has always been the most accurate. If you say we will shrink the coal business, then we will shrink it!"

Coal prices have always been cyclical, with a cycle lasting about four to six years. The last time coal prices fell was in 2008. At its peak, coal prices once exceeded four digits, with fluctuations measured in minutes. However, the boom was followed by a decline. The outbreak of the subprime mortgage crisis led to a global economic recession, and coal prices also began to fall.

With the country's "four trillion" economic stimulus plan and large-scale investment in infrastructure, the production of steel, cement, and various building materials used in infrastructure are inseparable from coal. Therefore, coal prices have risen again. As the United States emerged from the subprime mortgage crisis and the international economic situation recovered, domestic coal prices reached a peak again in 2011.

After the peak, it is the beginning of the next cycle. In 2012, coal prices have begun to fall. However, because production capacity has reached its peak, coal companies have made good profits by selling large quantities.

By 2013, China's economic growth began to slow down, coal demand decreased, and the country began to import coal on a large scale. This year, China's coal imports reached 350 million tons, compared with only 50 million tons five years ago.

The increase in imported coal has caused coal prices to begin to fall rapidly. Coal prices have also dropped from a peak of more than a thousand yuan per ton to more than a hundred yuan per ton.

The profits of coal companies have also been significantly reduced as a result. Large coal companies have basically cut their profits in half for three consecutive years. The original profit of 100 yuan has been cut in half in three waves to 12.5 yuan. Smaller coal companies simply suffered losses. Those wealthy people who made huge fortunes from coal back then have all become country bumpkins.

The coal market did not start to improve until 2016, and then began to soar. In 2021, it once reached 2,000 yuan per ton. When will you feel that coal that cost 800 yuan per ton back then is really cheap.

Facing the coming coal recession cycle, continuing to increase investment is obviously a suicide move. Dongshan Group's coal mining business will also shrink. Li Weidong even pondered that when the coal industry hits the bottom in 2015, there will be a wave of low prices. Buy the dip.

Li Weidong continued; "The coal business will shrink, but the real estate business can expand, such as some new first-tier cities and second-tier cities. We can invest on a large scale, such as provincial capital cities in the southwest and several cities along the Yangtze River. The future economic development of this important town is promising, so if you go into real estate business there, you should get relatively generous returns!"

"I'm very optimistic about large-scale commercial complexes. It's a one-stop shop for eating, drinking and entertainment. You can make a lot of money by collecting rent. Many real estate companies are doing it. Should we give it a try?" Zhao Jinshan said asked.

"You only see thieves eating meat, but you don't see thieves being beaten! Large commercial complexes make money, but their management level must keep up. Without high-level management, they will soon go bankrupt, and so will large investments. We lost all our money. We don’t have management talents in this area." Li Weidong said helplessly.

Once a large-scale commercial complex is completed, it will indeed be a money-printing machine, but if it is not completed well, it will also become a bottomless pit. There are commercial complexes that have gone bankrupt in every city. Some have never been popular since they opened, while others were very popular in the first few years after they opened, and then they collapsed.

In addition to location, facilities, and other hardware factors, the most important thing is operational capabilities. Those commercial complexes that are operating well must have the support of a strong operating team.

Commercial operations are not Dongshan Group’s strength. Hong Kong-owned real estate companies have decades of experience in this area, and state-owned real estate companies also have a good reputation. It is difficult for Dongshan Group to compete with them.

However, Zhao Jinshan was a little stubborn, and he said, "If we don't have talents, we can hire them with high salaries, or find a mature operation team. Look at the large commercial complexes in Beijing. They are so beautiful and crowded with people every day. That's It would really be a pity if we didn’t do it to really make money.”

"Okay, if you want to do it, let's try it. But the competition in first-tier cities is too fierce, and the market in third-tier cities is not big enough, so we should focus on second-tier cities!"

Li Weidong pondered for a few seconds and then said; "In addition, I have a suggestion. If you build a large-scale commercial complex, you should mainly introduce catering and experience merchants. You can even invest in a few such brands. There will be fewer retail merchants. good."

"Aren't you optimistic about the retail industry? But those commercial complexes all rely on big retail brands to support their appearance." Zhao Jinshan said.

"The consumption patterns of ordinary people are changing. You should have seen the news about the Double Eleven of Baobao. Although it has only been held for two years, it has grown very rapidly. The Internet will change the pattern of the entire retail industry. The traditional offline model, It will gradually be replaced by online models. However, experiential consumption cannot be replaced by the Internet for the time being."

Li Weidong paused and then said, "As for those top brands, they will definitely give priority to well-known commercial complexes. How could they get our turn? Rolex can't be stupid enough to come to us to sell watches, right? We have just entered this field. Thank God if we can attract a brand like KFC to settle in!”

Although Zhao Jinshan felt a little unhappy after being criticized by Li Weidong, he had to admit that what Li Weidong said was right.

With the development of the Internet, consumption patterns have changed. The commercial complex has changed from the so-called "integration of eating, drinking, playing and shopping" to "integrating eating, drinking, playing and shopping", and "shopping" has gradually disappeared. The retail industry has shifted from offline to online. Not to mention clothes, shoes and socks, even daily necessities such as toilet paper are purchased online.

When there are no theatrical blockbusters, many commercial complexes simply become "big canteens". Ordinary families come with their families just to queue up for the next restaurant, so and so to get hot pot, but the brand stores are empty.

Li Weidong continued: "If it is really difficult to attract investment, we will invest in a few franchise stores ourselves, such as hot pot, barbecue, milk tea, fast food and other franchise stores, all with standardized recipes, even the cooks are omitted, as long as If we can ensure food safety, recruit a few waiters and train them, we can open the business.”

"Listening to what you said, it's really easy to open a hot pot restaurant. Anyway, the food served is raw meat and lettuce. Let the customers cook it themselves. If the food is not cooked well or is old, the customers themselves have to recognize it. This saves the cook. If it doesn’t taste good, you’ll get complained.”

Zhao Jinshan chuckled, and then said: "How about I also create a hot pot brand! Isn't there Donglaishun and Xilaishun in Beijing? My name is Zhao Jinshan, and here comes Jin Laishun, and I also create a hot pot chain brand, open to All regions across the country!”

"If you want to engage in a hot pot chain, you should consider Sichuan hot pot!" Li Weidong said.

"Why? The taste of Beijing-style hot pot is no worse than that of Sichuan-style hot pot! And not everyone can eat spicy food." Zhao Jinshan said.

Li Weidong replied: "Think about it, what if the guests have diarrhea after eating hot pot? If it is Sichuan hot pot, it can be said that it is too spicy and irritates the stomach, but if it is Beijing hot pot, the guests will most likely have to think about the ingredients. Whether it’s fresh or not, the hot pot restaurant won’t be able to take the blame when the time comes!”

"It makes sense! I can imagine all this. You are really born to do business!" Zhao Jinshan nodded as if he was suddenly aware.

"One more thing, I plan to get rid of all the shops on Hong Kong Island." Li Weidong continued.

"Sell them all? Why? Those shops of yours can make a lot of money every year just by collecting rent, and the rate of return is several times higher than bank financing!" Zhao Jinshan said, showing a mysterious look, and asked in a low voice : "Is there going to be another financial crisis? Is the property market in Hong Kong going to fall?"

"You are overthinking. There is no financial crisis. In the short term, Hong Kong Island's property market is still bullish. In the medium and long term, the return rate on shop rentals will exceed that of bank financial products. I want to sell the shop because I am simply short of money." Li Weidong replied.

"You, Li Weidong, will be short of money? Hahaha, don't you usually look at various rich lists? When has your name, Li Weidong, not been at the top? If you were short of money, I would starve to death three times!" Zhao Jinshan laughed happily said.

"I want to make a long-term investment, so I need to withdraw part of the funds." Li Weidong then replied.

"I helped you buy those shops on Hong Kong Island. The prices have skyrocketed over the years, especially those shops in Causeway Bay. A small area of ​​tens of square meters is now worth hundreds of millions of Hong Kong dollars! If you sell them all If so, it could probably be sold for several billion Hong Kong dollars! What big project are you planning to do?" Zhao Jinshan asked.

Li Weidong did not hide anything. He said, "I plan to chip. This is a long-term investment project. It will be good to see results within ten years. In the chip industry, the investment is very huge, not to mention billions of Hong Kong dollars. Thousands of billions of dollars are thrown into it, and it just makes a noise!

A few years ago, I invested in a sensor factory, and now it can make sensors for general household appliances. Now that Jaguar Land Rover has built a factory in China, it will jointly develop electric vehicles with BYD in the future, which will require a large number of automotive chips. So I cooperated with BYD to build a company that produces automotive chips. "

…

The past few years have been the golden age of the coal industry. Mining coal is like printing money. Especially after the national government closed down a large number of small coal mines, medium and large coal mines have become large money printing machines.

Nowadays, coal prices are about to undergo a cyclical adjustment, and the money printing machine is about to be shut down. But fortunately, real estate has begun to rise rapidly. Dongshan Group has already made plans in this area. The real estate business can still bring Li Weidong a lot of financial income. .

In the next seven or eight years, real estate will continue to be hot. At this time, there is no need to consider any risk issues. Just expand without thinking. The faster the expansion, the greater the returns. Being restrained will reduce the returns.

Li Weidong needs funds, mainly for the chip industry.

If you want to get involved in the chip industry, you must have a lot of funds. The demand for funds in this industry is really too great. For the chip industry, hundreds of millions of dollars is just a ring.

The future US$55 billion chip bill in the United States sounds like a lot, but it is only a drop in the bucket when invested in the entire chip industry. For the chip industry, even if tens of billions of dollars are poured into it, it may not be possible to create a complete chip industry chain.

As for automotive chips, if it is not to ensure the security of the supply chain, it is not cost-effective to develop this industry specifically. It is much cheaper to directly buy finished products than to make them from scratch.

The market size of automotive chips is still very large. A traditional household fuel vehicle requires about 500 to 600 chips, a luxury fuel vehicle can use 800 chips, and an ordinary new energy vehicle can use more than 1,000 chips. , and high-end energy vehicles, such as those with intelligent driving functions, require more than 1,500 chips.

In terms of quantity alone, the demand for automotive chips is second only to household appliances.

However, the profits of automotive chips are not large, and they are small profits but quick turnover. Because cars are relatively large, there is no requirement for the size of automotive chips.

Cars are different from mobile phones. In order to pursue thinner and lighter electronic products, mobile phones and other electronic products use chips that are smaller in size and faster in computing speed. A mobile phone can be dozens of grams lighter, even one millimeter thin. selling point.

For the chips used in cars, one chip is not fast enough, so use two chips. Two chips are not enough for the fourth sister. Anyway, a car weighs two tons, so it doesn't matter how many kilograms of extra chips are used. There is room to install larger chips.

It is also for this reason that most of the automotive chips used are low-end chips. Only some intelligent systems, such as autonomous driving and AI services, use high-end chips.

Low-end chips have low technical barriers to entry and are easy to manufacture. In the chip supply system, they fall into the category of large quantities and full management, so profits are naturally low. Moreover, the automotive market has been divided up, making it difficult for latecomers to enter this field.

To give a simple example, TSMC began mass production of 7nm chips in 2018, and the previous 10nm, 14nm, 22nm, and even 90nm production lines will continue to operate, and the low-end production lines will be converted to produce automotive chips.

TSMC has accumulated many years of technology and experience in these low-end production lines, which can control costs. The products also have relatively good performance and yield, and will naturally be more competitive when brought to the market.

The same is true for other established chip companies. Although they have completed technological upgrades and can produce more advanced chips, they are still mature in the old technology.

However, new companies entering this field are inferior to established companies in terms of technology, experience, management, and cost control. The products they produce are not competitive enough. In addition, they are new brands and are not recognized by the market. It will be much more difficult to survive. .

This is also a common feature of the manufacturing industry. A manufacturing industry that upgrades from the low-end step by step has more advantages than one that is imported halfway.

It's like playing a game. Player A trains his account from scratch, grinds dungeons to get a good set of equipment, and slowly upgrades from bronze to diamond. Player B directly buys a diamond account equipped with good equipment, and you let two people PK. , there is a high probability that player A will win.

From a market perspective, it is indeed better to buy automotive chips than to make them. Even if you spend a lot of money to produce automotive chips, you may not be able to gain a competitive advantage. Of course, Li Weidong understands this.

But from the perspective of supply chain security, it is necessary to achieve independent production of automotive chips.

Leaving aside the fact that there will be a supply shortage of automobile chips in the future, which will lead to a sharp reduction in global automobile production, the rapid development of new energy vehicles in China requires an independent supply chain for automobile chips.

If new energy vehicles only replace traditional fuel vehicles, it may not matter whether there is an independent automotive chip supply chain.

But cars have begun to develop towards intelligence. In the future, when the Internet and new energy vehicles are more and more closely connected, and when autonomous driving gradually begins to become more popular, a certain country will definitely be unable to sit still and wield a big stick of sanctions against China's automobile industry. , it’s not unfounded.

…

In the past few years, the country has been implementing a plan to bring home appliances to the countryside. In 2010, the policy of sending home appliances to the countryside stimulated a consumption of 300 billion yuan in the home appliance industry, and by 2011, this number exceeded 400 billion yuan.

This has also made major home appliance companies make a lot of money. For example, Haier's sales exceeded 50 billion in 2010. Other companies such as Gree, Hisense, and Midea have also made huge profits.

Puppy Electric is also a beneficiary of the policy. Although Puppy Electric does not produce major appliances, the sales of various kitchen appliances are still quite good. No one is allowed to have a microwave oven!

However, after entering 2012, subsidies for home appliances going to the countryside began to decrease, which was also bad news for home appliance companies.

However, in the next few years, the entire home appliance industry has not been affected. Instead, sales have increased significantly, which has also benefited from the rapid development of the real estate market.

At that time, houses were mainly bought by groups with immediate needs. Since the house was bought to live in, it must be equipped with various household appliances, such as TVs, refrigerators, washing machines, air conditioners, etc., which are indispensable, especially air conditioners. One must be installed in each room, and several air conditioners must be purchased for each apartment. Sales volume has also increased. Gree's financial reports in those years were also particularly impressive.

The consumer market has always been growing, so for the home appliance industry, the biggest hidden danger comes from cost.

At the Puppy Group, Wang Jiuyang was holding financial statements and complaining to Li Weidong about the rising costs.

"In the past two years, our labor costs have increased a lot. Wage growth is one aspect, and the most important thing is social security and medical insurance expenditures. According to this year's social security base, our factory will increase costs by more than one billion a year. "Wang Jiuyang said.

Li Weidong sighed helplessly: "It is an enterprise's obligation to pay social security to workers. In the past, laws and regulations were not perfect, and policy implementation was not strict. Now it is just implemented in accordance with the regulations."

"Of course I understand, but the social security base will definitely grow. This year it is more than one billion, and in three to five years it may be several billion. This is too much of a burden on us. Especially in the factory, our several generations The factory employs a total of more than 200,000 workers, and they all pay social security and medical insurance, which is really a huge burden.”

Wang Jiuyang continued: "What's even worse is that we pay social security to the workers, which increases their own burden, and the workers are still rebellious. Because this social security also has to deduct part of the workers' wages, the result is that the workers get more money than It turned out that there were fewer workers, and many workers were unwilling to do so.

Some workers simply say, "I don't want social security. You can pay me the social security money directly. In that case, the workers will get more money, and we can save costs, but it violates the policy. It's really a dilemma!" "

"There is no dilemma. National policies and regulations must be implemented!" Li Weidong continued: "The workers recruited in our factory are basically from rural areas. Farmers have not enjoyed pensions, so naturally they cannot realize the benefits of social security. They value it more. Immediate benefits.

Moreover, you have to pay for social security for a sufficient number of years before you can receive it. Many migrant workers only work part-time and are relatively mobile. They feel that they will not be able to receive social security after they have paid for the past few years, so naturally they do not want to pay.

These problems are not something we can solve. We need the country to increase its policy propaganda. It is difficult to change one person's concept. With such a large population, it will take one or two generations to establish a complete social security system.

As long as our companies do their own thing well, the issue of increased social security costs does need to be resolved as soon as possible. Nowadays, the reason why our products have price advantages is low labor costs. If labor costs increase, we will lose our price advantage and our competitiveness will weaken. "

Li Weidong said, falling into deep thought.

Although China established a social security system in the 1990s, for a long time thereafter, only formal employees of state-owned enterprises and employees of foreign companies could enjoy social security. Many private enterprises did not pay social security to their workers.

In particular, some labor-intensive companies rely on low labor costs to grab orders, and their workers are highly mobile, so they do not pay social security for their workers.

It was not until 2008, when the Ministry of Personnel and the Ministry of Labor and Social Security were merged into the Ministry of Human Resources and Social Security that the country began to strictly implement social security payment policies. In 2010, the "Social Insurance Law" was passed, which legally protected citizens' legitimate rights and interests in participating in and enjoying social security. Only then did China's social security payments gradually get on the right track.

Although there are legal protections, there are still many private companies and self-employed people who do not pay social security to their employees, but in general, social security is developing in the direction of standardization.

The standardization of social security payments will naturally increase the costs of enterprises, and labor-intensive enterprises will be hardest hit. It was at this time that foreign-funded companies such as Nike and Adidas took the lead in transferring orders to countries with lower labor costs such as Vietnam and Bangladesh.

The production factories of household appliances and electronic products also require a large amount of labor. The standardization of social security requires the Puppy Group to pay more than one billion in funds every year to pay social security and medical insurance to employees. And in the future, as the base increases, this number will It will also increase exponentially.

Li Weidong is not a black-hearted capitalist, and it is a matter of course to pay social security to workers. However, the home appliance industry is already relatively involved, and the competition is very fierce. Chinese home appliance companies basically rely on low prices to compete with international brands, and the social security payment brings The increase in costs will reduce the competitiveness of enterprises, which is what Li Weidong cares about most.

National policies must be implemented and social security payments must continue. Li Weidong can only find ways to reduce costs from other aspects.

After thinking for a moment, Li Weidong said: "I have three ideas that can reduce costs to a certain extent. The first way is to transfer part of the production capacity to Southeast Asia, such as Vietnam, Cambodia and Indonesia, where labor costs will be lower than in China. Some."

Wang Jiuyang immediately replied: "We have also done research in this area. The labor costs in Southeast Asian countries are relatively low, but the infrastructure is not perfect. The discipline and work efficiency of the labor force are not as good as ours in China, and there is also a lack of supply chain. Coupled with investment risks, the current cost is not lower than that in China.”

"Yes, Southeast Asia has development potential, but it is not worth investing in right now." Li Weidong continued: "Then let me talk about the second way, which is to automate production and use machines to replace manpower."

"We have also done research in this area. I also sent people to Europe to visit Siemens' robot assembly line. The efficiency is very high. One production line can be worth hundreds of workers, but the investment is also very high. The price of that production line But it's very high, more expensive than hiring people directly." Wang Jiuyang replied.

"German labor is already expensive, so it is more cost-effective for them to use robots to replace labor. Our national conditions are different from Germany's. Our labor costs are not that high, so we cannot copy the German set." Li Weidong sighed and continued:

"The Germans are eager to use robots for the entire production line to achieve fully automated production, but we can use robots in some production links to only replace part of the manpower. This can reduce labor costs and avoid excessive capital investment."

Seeing that Li Weidong wanted new instructions, Wang Jiuyang subconsciously took out a pen and notepad.

Li Weidong continued: "There should be many companies at home and abroad that make industrial robots. Foreign technologies must be relatively mature, but I prefer to give domestic companies some opportunities. We can invest money and entrust domestic companies Develop industrial robots specifically for us and negotiate the distribution of patent rights, and we might be able to take advantage of the opportunity to make money!"

"Are you planning to sell the robot to other home appliance companies?" Wang Jiuyang asked with a smile.

"Machines replacing manpower is the trend of industrial upgrading. If we use robots and reduce costs, other home appliance companies will of course have to follow suit, otherwise they will have no price advantage. And it is related to the production of products, which is our core Business must be in your own hands, and you cannot let others choke you!"

Li Weidong continued: "This is a step-by-step process. It may take us more than ten years to achieve this goal. You don't have to worry. I think if half of the workers can be replaced with machines within ten years, it will be enough." It’s a very satisfying result.”

"Okay, I'll send someone to do some research and then make a more specific plan for you." Wang Jiuyang replied.

"The third way is to make a fuss about the supply chain. With the advancement of science and technology, the application of new materials, new technologies, and new processes should reduce the cost of components. Our upstream supply chain will reduce the price a little bit at every step. , when you come to us, you can save a lot of money." Li Weidong said.

"Chairman, this may not be easy. In the past two years, the prices of various industrial raw materials have been rising, causing the prices of components to rise, but the selling prices of our products have not risen, especially in the international market. We We still have to compete with Japanese and Korean brands, so we don’t dare to lower prices easily!" Wang Jiuyang said somewhat pessimistically.

"This is the fault of the United States. When the subprime mortgage crisis came, the quantitative easing they carried out released so much currency would inevitably lead to inflation. In order to stabilize the exchange rate, other countries could only follow the United States in releasing currency. The global Inflation is inevitable."

Li Weidong continued with a blank look: "Since it is global inflation, other countries will also be affected by the increase in raw material prices. From this aspect, everyone is on the same starting line, and at this time the competition What matters is whose supply chain is more resilient!”

Wang Jiuyang nodded in understanding, but the confusion in his eyes seemed to be asking: What exactly are you going to say?

Li Weidong had no choice but to explain: "We need to make the upstream supply chain large-scale and diversified. A large-scale supply chain can help reduce costs, and a diversified supply chain can stimulate competition. To put it simply, we need to make the supply chain more scalable and diversified." It has to be involution!”

"Involution? What do you mean?" Wang Jiuyang asked subconsciously.

"This is a concept put forward by German philosophers. It means that when a type of model develops to a certain extent, there is no way to stabilize or transform into a new form. It can only continue to become more complicated internally. You can understand it as In order to compete, peers put in more effort, resulting in a decline in the revenue-to-pay ratio." Li Weidong explained.

"This 'involution' is to let the upstream supply chains compete with each other, lower prices and improve quality in the competition?" Wang Jiuyang asked.

After all, he graduated from a first-class university in the 1980s. His IQ and understanding ability are both top-notch. After a little thought, he understood the meaning of "involution".

Li Weidong nodded and continued; "The scale of our country's entire home appliance industry is still very large. It not only has the domestic market, but also exports, and OEMs for foreign brands. This is enough to support an upstream supply chain to the world. supply chain.

However, the level of these upstream supply chains is uneven. Some companies can make very good quality products that fully meet the high standard certifications of the United States and the European Union. Some companies can make products of very poor quality and can only be sold to Indians.

This is caused by two factors. One is market factors. There is still a market for cheap and low-quality products. Many small workshops and factories specialize in producing cheap goods. Although the quality of the products is worrying, as long as they are cheap enough, people will buy them.

The second factor is the hardware factor. Many factories hope to upgrade their scale and technology, but lack funds. Especially for some small and medium-sized enterprises with potential, it is difficult to get loans. If we inject funds into them and allow them to successfully complete the upgrade, they can become quite competitive in the supply chain. "

"I understand. If a group of such small and medium-sized enterprises are supported to complete industrial upgrading, the entire upstream supply chain will be raised to a higher level. This will create more competition and achieve what you call involution!"

Wang Jiuyang pondered for a moment, then asked: "Chairman, do you want to provide financial and technical support to these potential small and medium-sized enterprises? Let them carry out industrial upgrading, thus leading to the upgrading of the entire home appliance supply chain. But this will cost a lot. Funds?"

Li Weidong smiled slightly and continued; "We are at best the leader in small home appliances, kitchen appliances and beauty appliances. How can we upgrade the entire home appliance supply chain? Even if we really want to, we are powerless! Industrial upgrading of the entire home appliance supply chain , It can’t be done without tens of billions of funds, and we can’t afford that much money.”

Wang Jiuyang glared at Li Weidong for no apparent reason, and thought to himself: I have no money, but I still have the nerve to upgrade the supply chain enthusiastically!

Li Weidong continued: "Although we don't have that much money, the banks have plenty of money. Tens of billions of funds are just a drop in the bucket for the domestic banking system. Isn't it difficult for those small and medium-sized enterprises to get loans, but big groups like ours It’s very easy to get a loan.”

"You mean, we set up an investment company, borrow money from banks, and then invest in small and medium-sized enterprises with potential?" Wang Jiuyang asked.

"We are engaged in industry, not investment. What's more, as long as we invest, we are shareholders, and shareholders have to bear the operating risks. It's just venture capital. If the amount is not large, we will lose money. But if we invest in the manufacturing industry, we will bear the operating risks. The risk is not worth it.”

Li Weidong smiled indifferently, and then said: "So I plan to set up a financial company, borrow money from banks, and then lend money to potential small and medium-sized enterprises in the form of loans. We are only lenders, not investors. . Because it is not easy to invest in asset-backed securities.

I did the math and put out a principal of one billion, and went to the bank to make a mortgage loan. After lending the money, I used it to make asset-backed securities and used it as collateral to get a loan from the bank. The one billion funds were rolled out. There is no problem with 30 billion, it is enough to upgrade the supply chain. "

"Earn an interest difference?" Wang Jiuyang said instinctively.

"How much is the interest difference?" Li Weidong curled his lips disdainfully.

"You said it was 30 billion..." Wang Jiuyang muttered.

"The interest difference of 30 billion seems to be quite a lot." Li Weidong also cooed, and then said loudly: "Don't just focus on the interest, take a long-term view, we are here to upgrade the entire supply chain , It’s for the development of the country. But this kind of operation still needs the permission of the state. I will go to the National Development and Reform Commission to ask for policy support in a few days.”

The kind of financial method Li Weidong mentioned, using a billion principal to roll out 30 billion, is just a conservative operation. In the future, a certain financial institution used the same method, and the registered capital of 3 billion was withdrawn from the bank by more than 300 billion, which was more than a hundred times.

The financial risks behind the difference of a hundred times can be imagined, so Li Weidong had to ask the state for a policy.

Wang Jiuyang also thought of another problem, and he said: "If it is a loan, there is also the risk that the other party will not pay back the money. These days, the person who owes money is the uncle, and the one who has to pay is worse than a grandson! You must have a mortgage. ”

"You don't have to worry about this. What we need to support is our own upstream supply chain. They supply us with goods. This is the best mortgage. If you dare to owe money, the worst we can do is not pay the payment." Li Weidong decided replied.

"I seem to be confused by you. We lend money to upstream suppliers, they use our money to make products, sell them to us and make money, and then use the money to return it to us. I always feel that there is something wrong Something's wrong! Are we working in vain, or is the supplier working in vain?" Wang Jiuyang said.

"It's not in vain, everyone gets what they need." Li Weidong said with a strange smile; "The key here is actually the time for payment settlement. We are buyers, but at the same time we are the creditors of the seller. This This means that the loan repayment period and payment settlement time are all in our hands!

Since we have the initiative at the financial level, we can extend the loan period through multiple loans, extend the payment settlement time, and control the capital chain of upstream supply chain companies. By then, we will have the ability to break the capital chain of upstream companies at any time. If there are just one or two companies, this is not a big deal, but what if the entire supply chain is like this? "

Hearing this, Wang Jiuyang took a breath of air, with a horrified expression on his face, and said tremblingly: "That means we will control the upstream supply chain of the entire industry!"

At this moment, Wang Jiuyang finally realized that what Li Weidong really wanted was not the benefits brought by the involution, but the supply chain of the entire home appliance industry!