Rebirth of the Industrial Tycoon

Chapter 712 Take All

After 2008, the domestic real estate industry developed rapidly. A house is no longer just a place to live. Many people buy houses not for living, but for asset preservation or appreciation.

Houses have gradually acquired the characteristics of financial management products and will inevitably develop in the direction of monetization. With the expansion of the real estate market, China's economy is increasingly dependent on real estate.

Before 2008, although the domestic real estate market had reached a certain scale, real estate could not be regarded as the core pillar industry of the Chinese economy. At this time, the status of manufacturing was still the highest.

For local governments, real estate investment is like a one-time sale. In addition to earning a financial income when selling land, the taxes and fees related to real estate can only be collected once. .

Even if building houses can create some employment, it will only be temporary. After the project is completed, construction practitioners will have to find new projects to continue their employment, otherwise they will become unemployed again. Therefore, real estate needs to continue to expand in order to have so-called employment.

Investment in manufacturing is different. Manufacturing is continuous. No matter what product is produced, it is impossible to close the factory after just one batch is produced. As long as the factory continues to produce, it can bring continuous tax revenue and sustainable employment.

It is not uncommon for foreign manufacturing companies that have been rooted in a place for hundreds of years. Even in China, there are many manufacturing companies that are almost the same age as the Republic and have been driving a local economy for decades.

A real estate investment project can bring fiscal revenue to the local area in the short term, while a manufacturing investment project can bring prosperity to a city for decades.

Therefore, for the same amount of investment, one is investment in real estate projects and the other is investment in manufacturing projects. Local governments will definitely give priority to manufacturing investments.

Manufacturing investment also contributes more to GDP than real estate.

One yuan of investment in fixed assets can drive three yuan of GDP growth, and if it is invested in manufacturing, one yuan invested in ordinary machinery manufacturing can drive ten yuan of GDP growth.

If we move up to some high-end manufacturing industries, such as nuclear magnetic resonance, intelligent robots, photolithography machines, and commercial airliners, the impact of manufacturing industries with relatively high added output on GDP cannot be measured in numbers.

In that era of GDP-only theory, when Li Weidong offered to reinvest profits and 50% of the amount would be invested in the manufacturing industry, it was another bait that the local government could not refuse.

…

That afternoon, Li Weidong was invited to the city to be interviewed by city leaders.

After a brief exchange of greetings, the leader said, "Chairman Li, during the first round of bidding, you once proposed that you would not take away any profit from the project and invest it entirely in Shanghai. On behalf of the Municipal Party Committee, I would like to express my gratitude to you. We very much welcome developers like you who are willing to participate in the city’s economic development to invest in our city.”

"I should thank Shanghai City and all the leaders for giving me an opportunity to participate in urban development and construction!" Li Weidong said with a smile.

The leader continued to ask: "Chairman Li, in this second round of bidding, I have personally read Dongshan Real Estate's bid document, and you have added two more clauses, one of which is the reinvestment of project profits, and will not invest in real estate." , can you tell me your thoughts?”

Li Weidong replied: "That's right. Reinvesting the profits from projects will indeed play a positive role in promoting the development of the city. But if the profits from these projects are used for real estate investment, the effect will be much smaller. .

A city cannot rely on just one industry. If only one industry dominates, it will be very detrimental to the development of the city. Especially an international metropolis like Shanghai needs comprehensive and balanced development in various industries.

That’s why I proposed that when project profits are reinvested, I will not invest in real estate projects. I will invest the profits from real estate projects in other industries and promote other industries, which is beneficial to the balanced development of the entire city.

Of course, I also have selfish motives. The first selfish motive is of course that I hope to obtain more projects in this way; the second is that I am very optimistic about the future economic prospects here. As a capital investor, I am very willing to take root and operate here. . "

"I didn't expect Chairman Li to be so candid. However, your plan is indeed mutually beneficial for both of us." The leader nodded, and then said:

"Second question, the second clause you proposed is that in the process of reinvesting profits, the investment ratio in manufacturing shall not be less than 50%. I know that Chairman Li has many manufacturing industries, but I don't know what you plan to do. What manufacturing industries should we invest in?”

"I do have plans in this regard." Li Weidong paused and then said, "I plan to invest in the automobile industry and build a factory to produce automobiles in Shanghai."

"Car?" Excitement flashed in the leader's eyes.

Li Weidong continued: "Not long ago, I acquired Jaguar Land Rover from the Ford Group, and I plan to move Jaguar Land Rover's production lines to China. I think Shanghai is a good choice. There is already SAIC Motor here. , it also has a relatively complete automotive parts supply chain, coupled with the advantages of the port, it is very suitable for the development of the automotive industry.”

"Chairman, do you really plan to move Jaguar Land Rover's factory to our place?" The leader's face was already full of joy.

"The premise is that I can get enough projects in this bidding." Li Weidong smiled slightly and then said: "I use the profits from the projects to reinvest. Only with enough profits can I have sufficient funds to build here. factory."

"I understand!" The leader took a deep breath, and then said: "Thank you, Chairman Li, for supporting Shanghai's economic development. Regarding the project bidding, the city still needs to discuss it before making a decision."

Li Weidong said, "As for the construction of the Jaguar Land Rover factory, if the city is not at ease, we can sign a supplementary agreement. If I can get all eight projects, then within the next three years, the Jaguar Land Rover factory will be built." The project will definitely be implemented.”

…

When Li Weidong took out the project profits and reinvested them, he already thought that other developers would follow suit.

Although real estate developers are not philanthropic, they will definitely do charity in order to get more projects.

In the infrastructure construction of various cities in later generations, such as road projects, bridges, factories, pipeline projects, etc. in the city, many were funded by real estate developers, and in exchange the developers would receive some projects.

There are also some renovation projects in shantytowns. The local government does not even have to spend a penny, and it is all completed by developers. All they have to pay is to set aside a part of the land for developers to build commercial properties.

There are many examples of developers directly investing in poverty alleviation. The top real estate giants allocate hundreds of millions to poverty alleviation work in impoverished areas every year.

Of course, there is a saying that if you don’t make a profit, you can’t afford it. If the money is spent, it will be regarded as public relations expenses, and it will be much easier to use the land for projects in the future.

In order to obtain land for projects, real estate developers really dare to give money to poor areas. So how can developers be reluctant to invest in the Yangtze River Delta region, one of the two major engines of China's economy?

Therefore, the reinvestment of project profits may deter some real estate companies with tight capital chains, as well as those from Hong Kong that only focus on short-term profits, but it will definitely not deter those who are willing to take root in China and are also optimistic about the Yangtze River Delta. Economic development developers.

So Li Weidong came up with the second trick, which was differentiated investment.

If other real estate companies use project profits to reinvest, they will definitely invest in real estate. Let them invest in other industries, but they don't know how to do it.

Li Weidong started out in manufacturing, so he can use the profits from projects to invest in manufacturing. This is Li Weidong's biggest advantage over other real estate companies.

More importantly, Li Weidong now owns Jaguar Land Rover, a luxury car brand. Although Jaguar Land Rover has been losing money for many years, it is a very good thing for the city.

The automobile industry is an important industry among industries. The automobile industry has high added value, can absorb a large number of jobs, and can drive a relatively large number of industrial chains. Its energy consumption is not high, and the pollution is not serious.

In contrast, the added value of low-end manufacturing is too low, the energy consumption of the materials industry is often high, and the chemical industry inevitably has pollution problems.

As for the manufacturing of high-precision products, it is impossible to gather an industrial chain, and the employment opportunities are limited.

Take the nuclear magnetic resonance machine, for example. Although it is a high-end manufacturing industry, only a few units can be produced or sold throughout the year. Although the added value is high, it cannot actually feed many people.

Moreover, high-end manufacturing has a low demand for required parts. For example, a factory can produce a thousand units of nuclear magnetic resonance machines a year, which is considered very good. Some of the small components used in it can only be added to a thousand units. It can be packed in a courier box. How can this kind of demand form any industrial cluster?

As for automobile factories, they can easily produce hundreds of thousands or even hundreds of thousands of units a year. It is not a problem to feed thousands of people by itself. Coupled with the supply of upstream parts and components, it is more than enough for an automobile factory to support a fourth-tier city.

Therefore, no matter whether it is a developed or developing country, no city will refuse the establishment of an automobile company. What's more, it's a luxury car brand like Jaguar Land Rover.

Regardless of the reputation of a luxury car brand, the quality is there. The introduction of a production base of a luxury car brand into a city will give it a face-to-face appearance, or at least make it look taller.

While Li Weidong was still negotiating with Ford, he was already thinking about moving Jaguar Land Rover's production lines from the United States.

The cost of production in the United States is really too high, and the automobile union often stirs up troubles. If it is not to compete with the American market, there is really no need to produce in the United States.

Even if you have to fight against the US market, there is actually no need to produce in the United States. There is Mexico next to the United States. Although the security in Mexico is poor and the efficiency of workers is average, it is much cheaper than in the United States.

If the automobile production line is moved, the best place to relocate is of course China.

China has a complete supply chain system, infrastructure to meet any industrial production, convenient logistics system, and cheap labor. More importantly, China will be the world's largest automobile market in the future. Even if you simply want to sell more cars, you should move your factories to China.

The Yangtze River Delta region already has a complete supply chain system for automobile parts and has a world-class port, which is very suitable for the development of the automobile industry. Moreover, the economy here is developed and the demand for luxury brands is also greater. For example, Tesla in the future will settle in the Yangtze River Delta region.

As for Jaguar Land Rover's production lines in Europe, Li Weidong has no plans to relocate. Jaguar Land Rover's European factory is located in Liverpool. After all, the UK is Jaguar Land Rover's main market, and the parent company and R\u0026D institutions are there, so it is not easy to move away.

In fact, locating factories in the UK is not a good choice. It is not that the UK's industrial capacity is insufficient, nor that British workers are too expensive, but that the UK will leave the EU in the future, which will be a serious blow to British manufacturing.

After the UK leaves the EU, it has become much more difficult to sell industrial products made in the UK to the European continent, thus giving opportunities to Germany and France, two traditional industrial powers. In continental Europe, sales of German and French cars have increased to a certain extent.

Historically, Jaguar Land Rover CEO Ralph Speth's strategy to offset the impact of Brexit was to build a new assembly plant in Paris, France, and sell French-made Jaguar Land Rover on the European continent.

However, as soon as the factory was built, it encountered the European flag of restricting carbon emissions. It planned to ban the sale of fuel vehicles and began to promote new energy vehicles. Jaguar Land Rover had no technical accumulation in this area, but it could only follow up forcefully.

Then the epidemic broke out again, and the market demand for luxury cars dropped sharply. Two years later, Europe chose to lie down in the face of the epidemic. Seeing that the market was about to recover, it encountered the Russia-Ukraine conflict again, and luxury cars still could not be sold. In short, if a person is unlucky enough to drink cold water, his teeth will be blocked.

But in terms of results, Jaguar Land Rover's decision to bet on the European market is obviously wrong, but they should not change it. After all, the owner behind Jaguar Land Rover is India's Tata Group.

The confident Indians have been colonized by Europeans for too long. Even if they lose billions every year, they still have to show their glory to the Europeans!

…

Li Weidong proposed new conditions, and city leaders met again to discuss them. Li Weidong didn't know the specific discussion, but only three days later, the city leader responsible for attracting investment personally held a dinner party, invited Li Weidong, and introduced a lot of cadres responsible for attracting investment.

Next, the group of cadres responsible for attracting investment began to talk to Li Weidong about introducing the Jaguar Land Rover factory.

At the negotiation table, Li Weidong said bluntly: "Director Chen, of course I know that you really hope that I can build a Jaguar Land Rover production plant in Shanghai as soon as possible, but the time to build the Jaguar Land Rover factory depends on how much money I have. .

If you hand over all eight projects this time to me, then I can make profits faster, accumulate funds faster, and the time to build the factory will also be shortened. If the land approval for building the factory goes smoothly, I predict that construction will start before 2011 and the new factory will be put into use in 2012. "

"2012? That's four years." Director Chen, who was in charge of the negotiations, fell into thinking.

Li Weidong said: "This also depends on the speed of building the factory. If the construction goes well, the first car will be able to roll off the assembly line in early 2012. In total, it will take more than three years."

Director Chen pondered for a moment and then said: "Chairman Li, it may be difficult to entrust eight projects to you. We also have to consider the reactions of other companies. What's more, if we put all the eggs in the same basket, we will also have to face There’s a lot of pressure, so I’ll give you six projects at most.”

"I can understand. After all, many of the companies participating in the bidding this time have had projects in Shanghai, and you have also cooperated with each other. I want to take all eight projects in one go. It is indeed a bit difficult for you. Even if you give me all eight projects, it’s hard for you to explain.”

Li Weidong smiled slightly and then said: "Well, for the sake of your explanation, I can make another concession. In addition to Jaguar Land Rover, I can invest in the design and manufacturing industry of semiconductors and integrated circuits."

"Invest in semiconductors and integrated circuits?" Director Chen was stunned. The span from automobiles to semiconductors was quite large, and he really didn't realize it for a while.

Li Weidong continued: "I know that your city in Shanghai has been advocating the development of high-tech industries. I have also done a survey and found that there are many small companies related to semiconductors and integrated circuits here.

I can invest in these companies, and also integrate the industries in this area, so that they can scale up and industrialize as soon as possible. This is very helpful for the development of the entire high-tech industry in Shanghai and the rapid formation of competitiveness. of.

Moreover, investment in this area does not need to wait until the project is profitable, nor does it need to wait until 2011. As long as Dongshan Real Estate wins these eight projects, I can start investing immediately. "

"Does that mean you can invest this year?" Director Chen asked immediately.

"Yes, you can do it this year!" Li Weidong nodded solemnly.

There is a big difference between futures and spot. Having an investment that can be cashed out that year is obviously very tempting. At least it can stop other developers from talking about it.

Thinking of this, Director Chen said: "Okay, I will report to the leader immediately!"

…

The project director of Hengtai Real Estate was walking around in his office, looking anxious.

His office is in a good location, with large floor-to-ceiling windows overlooking the scenery outside, but the director has no time to appreciate it at this time because today is the day when the bidding results are announced.

Hengtai Real Estate has three projects shortlisted for the second round. However, they do not intend to win all three projects. Instead, they have set a goal of "guaranteing one and competing for two". As long as they win one of the projects, it will be considered a victory!

There was a knock on the door, the director said "come in", and the assistant hurried in.

"Did you win the bid?" the director asked hurriedly, but before the assistant could go home, the director had already gotten the answer from the assistant's disappointed expression.

"Didn't you hit any of them?" the director asked anxiously.

The assistant nodded helplessly: "None of them hit!"

"Why!" The director blurted out instinctively, but he also knew that the assistant could not give an answer to this question.

"Who won the bid for the project we were interested in?" the director asked again.

"It's Dongshan Real Estate." the assistant replied.

"Why is it still Dongshan Real Estate?" The director continued with some annoyance: "Didn't we also propose to reinvest the profits from the project? Everyone's conditions are the same. Our strength is obviously better. Why is it that Dongshan still wins the bid? estate!"

The assistant continued: "Not only the project we are interested in, but all eight projects, the winning bidders are Dongshan Real Estate!"

"What? Dongshan Real Estate won all eight projects!" The director showed a shocked expression.

This time, there were so many top developers participating in the bidding, including real estate companies with state-owned enterprise backgrounds and Hong Kong investment giants. In the end, they were all taken by an unknown developer. This result was indeed difficult for the director to accept.

"Secret operation!" These four words popped up in the director's mind, but they were instantly rejected by him.

With so many people watching such a big project, even if he had the courage to do so, he would not dare to operate it secretly.

"Dongshan Real Estate must have given better conditions!" Thinking of this, the director immediately asked: "Go and find out, what are the final bidding conditions of Dongshan Real Estate?"

"No need to ask, it has been announced in the news." The assistant sighed and said, "Shanghai City has signed an investment letter of intent with Li Weidong. In the future, Li Weidong will build a Jaguar Land Rover production plant in Shanghai."

"Jaguar Land Rover's factory? I remembered it. I read the news not long ago that Li Weidong acquired Jaguar Land Rover!" The director nodded with sudden realization.

Although he is not engaged in manufacturing, he also knows that a car factory is a delicious fruit that no city can refuse.

The assistant continued: "There is also news that Li Weidong's promised reinvestment of project profits will be partially implemented this year."

"The project has not even started yet, and the investment has started? This Li Weidong is spending too much money!" The director finally showed a helpless expression. He knew that he had lost this battle without complaint. If it were replaced by another developer, it would definitely be the same. There is no doubt that they will lose.

The real estate industry and the manufacturing industry are competing to see which investment project is better. There is no reason for the local government not to choose the manufacturing industry, not to mention that they still make cars.

However, the director was also very calm about this result. The real estate industry is full of all kinds of exchanges of interests when it comes to getting projects. It is common to be defeated in the exchange of interests, especially when the conditions given by others are better than yours. This is also A crime of right and wrong.

The director accepted the failure calmly and began to think about how to report to the headquarters when the phone on his desk suddenly rang.

The director picked up the phone. It was the person in charge of the Beijing project of Hengtai Real Estate.

"Mr. Huang, I heard that you are bidding for a project. Why did you call me when you had time?" the director asked.

"Don't mention it. I went to attend the bidding briefing today. People from the Land Bureau asked me face to face how much of the project profits we planned to use for investment. I was confused! Later I inquired and found out, where are you? When participating in the bidding, it was said that none of the profits from the project would be taken away and all would be invested locally. Is this true?" Mr. Huang asked.

"That's what happened." The director said helplessly.

"How can you offer such conditions! Isn't this a violation of the rules? You are considered an old man in this industry. Don't you know that once this gap is opened, when you get land in the future, everyone in the local area will rush to follow suit? We want to invest!”

Mr. Huang then complained: "In that case, our cost of acquiring the land will increase significantly. I say this is too unethical of you. In order to get the land for yourself, you sold us all!"

"Mr. Huang, please listen to my explanation. In this bidding, not only we did this, but also Yike and Biguiyuan did it. You can't just blame me!" the director explained quickly.

"Are you all crazy? Haven't you considered the consequences of doing this? How can our capital chain sustain such a torment! If the capital chain breaks, we will go bankrupt even if we have land in our hands! This is simply drinking poison to quench our thirst. !" Mr. Huang said.

"Mr. Huang, don't worry, the capital chain will not be broken." The director sighed and added: "Because we didn't get the land at all! We didn't get any of the eight projects!"

"What? You have used the project profits to reinvest, but you still can't get the land?" Mr. Huang was completely stunned on the spot.

Are all real estate people involved in involution these days?

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