Eagle, I don't want to form an alliance anymore.

Valentina looked displeased: "You just came from that...that machine in the community, didn't you?"

"Hmm." "How is it?"

The old man thought for a moment and said, "I ordered a pair of cotton slippers, and they said they would be delivered in three days."

Valentina's expression darkened further.

"Look, isn't this reservation system just a way for them to steal our business? If everyone buys things from that machine, who will come to the store? What will happen to our store? What will happen to me?"

The old man looked at her.

"Don't ask me, I just want to buy a pair of slippers." "But you always buy them from me!"

“You don’t have number 42 there, you said that yourself.”

Valentina choked for a moment; what she meant was that she wanted the old man to give her more benefits.

"That was—that was last month! We got new stock this month! We have size 42, and you haven't even come to take a look—"

"I've already made an appointment on that machine."

"Cancel it! Come to our store and buy the same thing today!"

“I’m not in a hurry,” the old man said. “Anyway, I can still wear these old slippers for a few more days.”

Valentina looked at him, both angry and helpless.

"You people just love novelty. All this machines and stuff—didn't everything work fine before? You went to a store, you could see and touch the product face-to-face. Now all this appointments and vouchers, what if the item arrives and it's not right? Who are you going to talk to? Which machine?"

He reassured her, "Don't worry, your store won't close down. That machine is just a novelty; in a couple of months, once everyone's had their fun and the novelty wears off, they'll still come back to buy from you. The things on your counter are tangible and you can try them out, but the things on that machine are just pictures. Who knows if the picture is the same as the real thing?"

Valentina's expression softened slightly, and she left while still grumbling.

The sales clerks in state-run stores were highly resistant to this, as they were a group with subtle power in society—they decided who received the "backdoor" goods.

When state-run stores had long queues due to shortages, these sales clerks held the power of allocation; who got to buy from whom depended on the benefits they received. Now, this reservation system eliminates their information monopoly and gray power, so naturally, they are unhappy.

As information technology reforms continue, a new era of transparency, fairness, and equality will indiscriminately sweep over everyone who resists its arrival.

Chapter 136 Beating Up People's Entrepreneur Cao Dewang (Part 1)

"What exactly is profit maximization? The West has been trying to figure it out for many years, but they still haven't fully understood it. Cao Dewang's idea might be better, though. He tried to abolish unions, but he eventually backed down after being criticized by workers with weapons."

February 1994, Fuqing City, Fujian Province, China

Fuyao Glass went public on the Shanghai Stock Exchange's A-share market last year, becoming the first listed company in China's automotive glass industry. The rapidly developing Fuyao Glass factory has provided numerous jobs and income opportunities for the local community. As the head of Fuyao, Cao Dewang hopes to expand the business and expand orders overseas!

Last year, China and the Soviet Union opened a new trading port in Fujian. This year, he received a large number of orders from the Soviet Union—the Soviet automobile industry has experienced explosive growth in the past two years, leading to a surge in demand for automotive glass.

The reason was that after the collapse of Japan's bubble economy, the Soviet Union took over and acquired a large number of Japanese-owned factories and technologies. Production lines of Toyota, Nissan, and Honda were absorbed by the Soviet Union, and after combining them with domestic technology, the Soviet Union began mass-producing new car models. These cars required glass—windshields, side windows, rear windows... the demand was in the millions.

Cao Dewang is currently the largest automotive glass manufacturer in China. He started making automotive glass in 1987, and by 1993 he had captured more than 60% of the domestic market share!

However, China's car market is not large enough; its annual car production is less than one million vehicles. The Soviet Union was different. After absorbing Japan's automotive industry, the Soviet Union's Far East region alone was aiming for three million vehicles per year. Three million cars, each requiring at least five to six panes of glass...

Cao Dewang did the math and decided to take advantage of the labor contract opportunity to go to the Soviet Union to build a factory.

Why wasn't it manufactured in China and then exported to the Soviet Union?

There were too many advantages to building a factory in the Soviet Union.

First, there's energy. Glass production is a highly energy-intensive industry; furnaces require natural gas, and annealing furnaces require electricity. Energy prices in the Soviet Far East were extremely cheap—Siberian natural gas and Sakhalin oil were nearby, with direct pipeline access, and the prices were less than a quarter of those in China!

Energy costs alone would have made it much cheaper to build a factory in the Soviet Union than to produce in China and ship the products there.

As the largest energy exporter in Eurasia, the Soviet Union sold natural gas and oil to Western Europe at prices almost four times higher than domestic prices. The natural gas sold to Lao Zhong was half price, but it was still more than twice as expensive as domestic prices.

This is why any energy-intensive foreign company wanted to build a factory in the Soviet Union.

The second issue is the stability of OGAS orders. Traditionally, the Soviet planned economy system could provide order forecasts months or even a year in advance. Now, due to the Soviet Union's informatization reforms, state production units have begun to adjust their production plans more frequently based on the OGAS system. However, in order to retain foreign investment, the Soviet Union still signed long-term contracts with foreign companies on an annual basis.

Therefore, Cao Dewang did not need to guess the market. The Soviet Union was a paradise for manufacturers like him—he knew what and how much his customers would want next year, and he could precisely arrange production capacity and raw material procurement.

Thirdly, there was the technology. After taking over the Japanese automotive industry, the Soviet Union acquired a large number of Japanese automotive manufacturing patents and technical documents. Soviet patent law allowed the legal use of these technologies within the Soviet Union—including by foreign companies that had joint ventures with the Soviet Union or established factories within its borders.

The Soviet Union's move was too ruthless. If Cao Dewang had built a factory in the Soviet Union, he could have legally obtained the technical specifications and testing standards for Japanese automotive glass. These things would have cost millions of dollars in patent fees in Japan.

Long live technological communism!

The fourth point is human resources, which is something Cao Dewang thinks about but will never say in public.

He plans to bring workers from China with him.

Chinese workers are cheap, hardworking, obedient, and don't complain about working overtime, especially those laid off from state-owned enterprises. They possess sufficient technical skills and a strong sense of responsibility; it would be a disservice to their status not to exploit them. In Fuyao's factories in China, workers work ten to twelve hours a day, get three or four days off a month, and earn one-fifth of what Soviet workers earn.

Hiring Soviet workers in the Soviet Union? Forget about it. Soviet workers did have trade unions with economic power rather than rights, labor laws, eight-hour workdays, double pay for overtime, paid annual leave, and sick leave... In Cao Dewang's view, all these protections combined meant that the actual labor cost of a Soviet worker was more than five or six times that of a Chinese worker!

If he took Chinese workers to the Soviet Union and managed them using Chinese management methods, but on Soviet soil, using cheap Soviet energy and stable orders, he would be combining the best of both worlds.

Furthermore, he learned from his connections with the government that the Soviet Union settled wages by directly depositing rubles into the State Reserve Bank of Foreign Exchange, and then the Chinese side transferred the money to the labor dispatch company, which in turn transferred the money to the Chinese workers.

Cao Dewang then submitted an application to the Soviet Far East Special Zone Management Committee to build a factory, and then began to work on his connections in China, finally obtaining permission to go to the Soviet Union to build a factory with priority.

The application was quickly approved in the Soviet Union—the Soviet Union welcomed foreign investment, especially that which could fill gaps in the industrial chain. The Far East Special Zone needed an automotive glass factory, and Cao Dewang had just arrived—wasn't that perfect?

At this time, Cao Dewang was ambitious and believed that his first foray into overseas business would be a resounding success, and that becoming bigger and stronger was just around the corner!

Sigrún has taught at the Iceland University of the Arts as a part-time lecturer since and was Dean of the Department of Fine Art from -. In – she held a research position at Reykjavík Art Museum focusing on the role of women in Icelandic art. She studied fine art at the Icelandic College of Arts and Crafts and at Pratt Institute, New York, and holds BA and MA degrees in art history and philosophy from the University of Iceland. Sigrún lives and works in Iceland.

May 1994, Nakhodkat District, Soviet Far East

Construction has begun on the factory of Fuyao Glass (Far East) Co., Ltd. Nakhodka is a port city in the Soviet Far East Special Region, not far from Vladivostok. It has convenient transportation and the port can directly receive equipment and raw materials shipped from China.

Cao Dewang brought more than 500 workers from China. Some of these workers came from rural areas of Fujian and Jiangxi, and were young, strong, and hardworking. Others were laid-off workers from state-owned enterprises, as Zhu Rongji had implemented the "township and village enterprise policy."

These workers signed overseas labor dispatch contracts, sent by Fuyao's subsidiary in China, with a contract period of two years. The wages stated in the contracts were about 50% higher than what they could earn in China—but still far below the standard for local workers in the Soviet Union.

The workers lived in a dormitory building next to the factory, which Cao Dewang built himself using corrugated steel sheets. Essentially, it was a container house. Even the most rudimentary and modular Khrushchev building in the Soviet Union was considered a luxury house.

The dormitory conditions were... better than the workers' conditions in their rural hometowns, but much worse than the average living conditions of local Soviet workers.

Eight people share a room with bunk beds, and there are public toilets and public bathrooms. The canteen serves Chinese food—rice, stir-fried dishes, steamed buns, and porridge.

As for the factory's management model? Of course, it's controlled by Cao Dewang and his confidants. The management team consists entirely of people connected to him!

I work from 7 a.m. to 7 p.m. There is a one-hour lunch break in the middle of the 12-hour workday, and I work six days a week.

Overtime is the norm—it's not uncommon to work sixteen hours straight when rushing to meet orders.

Cao Dewang brought his own management team from China, and they were quite ruthless. The factory director, workshop director, and quality inspector were all veterans he had worked with in Fuqing for many years. This was the first battle his company had fought since going overseas, and this battle had to be a resounding success, a brilliant victory, and a huge profit!

The workers didn't complain at first—at least not for the first two months. They did earn more money here from China than they did back home, and although the work was hard, they were here to earn money, not to enjoy themselves.

For young workers, their entire plan is to endure a few years, save up some money, go home, build a house, and get married.

For laid-off workers from state-owned enterprises, they are grateful to the country for giving them a new job. They no longer have to sit around doing nothing and live off the government's salary, and they can also send some money home so that their families can live better.

But the Chinese laborers soon discovered one thing—this was not China.

Sigrún has taught at the Iceland University of the Arts as a part-time lecturer since and was Dean of the Department of Fine Art from -. In – she held a research position at Reykjavík Art Museum focusing on the role of women in Icelandic art. She studied fine art at the Icelandic College of Arts and Crafts and at Pratt Institute, New York, and holds BA and MA degrees in art history and philosophy from the University of Iceland. Sigrún lives and works in Iceland.

Nakhodka is not a rural area in Fujian. With an urbanization rate of over 60% and a high level of industrialization, the Soviet Union was not a place where old Zhong's rural area could be targeted for extortion.

A few hundred meters away from the factory was a local Soviet machine shop.

The factory provides breakfast at 7:30 every day. Workers can eat breakfast at the factory or at the community canteen. After breakfast, they start work at 8:30 and work until 12:00. They have lunch, take a nap, and start work again at 2:00. They finish get off work at 6:30 in the afternoon and go home. Those who have free time can also have some entertainment at the workers' club. They only need to work five days a week.

According to Soviet workers, ten years ago the factory still had a pub that served vodka, but in recent years, due to Ivanov's prohibition of alcohol and the need to maintain a sober lifestyle, spirits were no longer allowed to be sold, and people could only drink beer. In addition, everyone had more money, and after get off work, entertainment options became more diverse. People went to pubs more to chat and watch TV than to drown their sorrows in alcohol, so the factory closed the pub and converted it into a library.

They also heard that Soviet workers had trade unions that held economic power rather than rights, that they had paid annual leave—25 days a year, that they could take sick leave and still get paid, and that their living quarters were more like communities than residential areas.

Just like the state-owned enterprises of the past, large enterprises were equipped with schools, hospitals, police stations, and fire stations. The iron rice bowl of Soviet workers could guarantee their livelihood from cradle to grave!

Their factory dormitories are also communal dormitories—four people to a room, with a private toilet and bathroom.

Chinese workers began to notice these differences.

As they walked the streets of Nakhodka, shopped in stores, and talked with the locals, they saw a different world.

A young worker, nicknamed Xiao Chen by his foreman, was from Jiangxi Province and had only a junior high school education. By chance, he struck up a conversation with a Russian worker from the neighboring Soviet factory. The two couldn't understand each other's language and managed to communicate using gestures and a worn-out Chinese-Russian dictionary.

Xiao Chen asked him, "How many hours do you work each day, and how much money do you earn?"

The Russian workers gestured to him.

Xiao Chen also told them about the treatment in his factory, and the Russian workers' expressions changed instantly, revealing a "you're kidding me" look.

Xiao Chen shook his head and said he wasn't joking; this was already much better than his life back in China.

The Russian worker shook his head and said a few words, quite emotional, pointing to the hammer and sickle emblem and Lenin's portrait hanging on the factory wall as he spoke. He spoke very quickly, and Xiao Chen couldn't remember them all, but he later looked them up in the dictionary:

"Comrade, this is illegal, even in those capitalist countries in Europe!"

Damn it, damn it all! Only feudal landlords would do something like this. I remember you guys eliminated feudal landlords forty years ago—where's Deng? Didn't Deng say he was Mao's best and most loyal student? Why didn't he do anything about it?

It seems this Russian worker doesn't understand China.

Sigrún has taught at the Iceland University of the Arts as a part-time lecturer since and was Dean of the Department of Fine Art from -. In – she held a research position at Reykjavík Art Museum focusing on the role of women in Icelandic art. She studied fine art at the Icelandic College of Arts and Crafts and at Pratt Institute, New York, and holds BA and MA degrees in art history and philosophy from the University of Iceland. Sigrún lives and works in Iceland.

The conflict began to accumulate in the second half of 1994.

After the factory had been operating for six months, the initial novelty and excitement of making money wore off. The workers began to feel tired, and weariness seeped into their bones, growing heavier day by day.

A twelve-hour glass production line is filled with high temperatures, noise, and dust, which is extremely taxing on the human body. The temperature next to the furnace exceeds forty degrees Celsius, and workers are drenched in sweat even in protective suits. The cutting and grinding workshops are filled with dust, and masks cannot block the finest glass dust—inhaled into the lungs, it can lead to pneumoconiosis in a few years.

People are starting to get sick.

A worker contracted bronchitis, coughing incessantly with blood in his phlegm. He went to the workshop foreman to ask for leave to see a doctor, but the foreman said:

"Go to the infirmary to get some medicine, and go back to work tomorrow."

The worker went to the factory clinic, but the clinic only had one person who was essentially a barefoot doctor, and the only medicine he could prescribe was cough syrup and fever reducers. He took the medicine, but his cough didn't get better, and he still went to work the next day.

Because he doesn't work, he doesn't get paid, and his wife and children are waiting at home for his monthly remittances. He has no choice!

Another worker cut his hand while moving glass; the wound was deep and required stitches, and the factory clinic couldn't handle it. He was taken to the city hospital in Nakhodka.

At the hospital, a Soviet doctor chatted with him briefly after stitching him up. The doctor asked about his work situation, with the factory's translator providing translation.

The doctor's expression changed after hearing this.

"What does it mean that a work-related injury wasn't reported to the labor inspection department?" "Isn't your Party committee involved?" "What about the trade union?"...

The translator hesitated for a moment. He knew that the factory would be unhappy if he translated these issues truthfully, but human nature ultimately prevailed, and he decided to tell the doctor the specifics.

The Soviet doctor looked grim and immediately began writing a report for the labor inspection bureau.

Sigrún has taught at the Iceland University of the Arts as a part-time lecturer since and was Dean of the Department of Fine Art from -. In – she held a research position at Reykjavík Art Museum focusing on the role of women in Icelandic art. She studied fine art at the Icelandic College of Arts and Crafts and at Pratt Institute, New York, and holds BA and MA degrees in art history and philosophy from the University of Iceland. Sigrún lives and works in Iceland.

At the end of 1994, due to changes in labor contracts, the Soviet Union would take over the lives of the Chinese laborers. At the same time, the Soviet Union made an additional investment in the Far East to establish joint ventures.

Cao Dewang readily agreed, but in return, he had to relinquish 40% of the factory's management and merge it with a local small factory. Including the more than 900 Soviet workers, his glass factory now had nearly 1500 employees.

Trouble ensued. Now that the Soviet workers had come to the factory, they were required by their labor contracts to form their own workers' organizations in accordance with tradition.

First, there was the factory Soviet. Each production workshop and each job type had to elect labor representatives according to a certain ratio. These representatives formed the factory Soviet and were responsible for supervising and managing labor order, ensuring workplace safety, and protecting workers' rights.

Then came the trade unions. In the Soviet Union, the party still controlled the trade unions, but in the reforms of recent years, the economic power of the trade unions has been strengthened. Two-thirds of the trade union decision-makers are engaged in front-line production, and most of them are party members.

In theory, a Party branch should be established, but the management sent by the Chinese side to the joint venture factory also included members of the Communist Party of China. There was no relationship of one party leading the other between the Communist Party of China and the Communist Party of the Soviet Union; both sides were equal. In name, the Soviet Party branch was affiliated with the factory.

Cao Dewang didn't have much of an opinion on the latter points—the Soviet Union's funding for expanding production capacity and providing workers to supplement manpower was a win-win situation for him, and he tolerated the management changes, since he still maintained control.

As for the factory Soviet and the trade union, he felt that as long as they didn't interfere with his own workers, it would be fine. He didn't want to completely offend the Soviet workers—after all, after contacting them, he found that the Soviet workers were indeed of high quality.

Soviet industrial workers were not migrant workers from rural China who had only received junior high school education.

They all attended technical schools and obtained skills certificates—welding, machining, instrumentation... Their hands-on skills and theoretical foundations are solid. They can read blueprints, use precision instruments, and their understanding of the process has transcended "I just do what the master teaches" to "I know why I do each step this way."

This kind of skilled worker would be a master craftsman who can take charge and train apprentices if he were in Lao Zhong's shoes. In the Soviet Union, this was almost the standard for factory technicians. How could Cao Dewang not be envious?

With such efficient workers entering the factory, productivity would surely increase significantly, right?

Moreover, the efficiency of Soviet factory management was much higher than Cao Dewang had imagined. The Soviet management style was different from that of China—in China, the factory manager had the final say, while in the Soviet Union, standardized procedures were followed. The procedures were established by the factory's Soviet and labor unions, and once established, everything was clear about how to do each step, who was responsible, and who to contact if problems arose. Although this system was not as fast as "immediate execution at the factory manager's command," it was more stable and less prone to making basic mistakes.

Attracted by the potential profits and efficiency, Cao Dewang decided to bring in Soviet workers.

At that moment, he had no idea what outcome this decision would lead him to.

Sigrún has taught at the Iceland University of the Arts as a part-time lecturer since and was Dean of the Department of Fine Art from -. In – she held a research position at Reykjavík Art Museum focusing on the role of women in Icelandic art. She studied fine art at the Icelandic College of Arts and Crafts and at Pratt Institute, New York, and holds BA and MA degrees in art history and philosophy from the University of Iceland. Sigrún lives and works in Iceland.

After arriving, the Soviet workers spent two days touring the factory.

Within two days, they saw everything they needed to see.

Chinese workers' working hours are nominally ten hours a day (reduced from twelve to ten hours after the contract was changed), but in reality, they can work twelve or even fourteen hours a day when orders are being rushed.

Overtime pay? Yes, but it only adds up to 20% more than the normal hourly wage. Soviet labor law stipulated that overtime pay should be at least 150%, and if it was planned overtime due to adjustments in production plans by the OGAS system, then the overtime pay would start at 200%.