Rebirth of the Industrial Tycoon

The discussion was still going on, and a staff member quietly walked up to the host and handed over a note.

After the host read the note, he said: "Chairman Li mentioned the possibility of large-scale quantitative easing in the United States. I would like to ask the experts, if this possibility occurs, what will happen to our country's economy? What kind of impact?”

The host asked this question after receiving the note. Obviously, this question was not asked by the host, but by the people listening in the audience. And the only ones who can hand the note to the host are the leaders of the ministries and commissions.

Obviously, the decision-making department wants to know what the consequences will be after the United States implements quantitative easing.

If this "Financial Rescue Act" can really restore the U.S. economy, then for countries around the world, it will be nothing more than business as usual. Everyone will act in accordance with the previous economic order, and policy-making departments will not need to study and introduce new policies.

But if it is true as Li Weidong said, the United States will carry out large-scale quantitative easing, which will definitely have an impact on the world's economy, and as a decision-making department, it also needs to introduce countermeasures.

So for the ministry leaders who attended the forum, they wanted to hear about different possibilities. If things continue as usual, there is no need to listen to these economists beeping nonsense.

The topic of quantitative easing came up temporarily, and several economists were obviously not prepared in advance. However, to be an expert, after all, you have a certain level of skill, and you can also make a few words on the spot.

Just listen to Professor Huang say: "Quantitative easing means that the currency will be released, and the increase in currency on the market will inevitably lead to currency depreciation. In other words, if the United States implements large-scale quantitative easing, the dollar will inevitably depreciate.

And this means that other currencies will appreciate against the US dollar. If the RMB appreciates against the US dollar, it will inevitably have an impact on our country's exports, and the specific situation depends on the extent of the US dollar's depreciation. "

Hearing that quantitative easing would affect exports, many people at the scene showed nervous expressions.

Professor Sun spoke: "I would like to add to Professor Huang, if the US dollar depreciates, other countries are likely to learn from the United States and carry out quantitative easing in order to stabilize their exchange rates. At that time, there will be a situation where everyone will release currency together, which is inevitable It will cause global inflation.”

Both professors gave relatively pessimistic answers, and the microphone fell into the hands of Dean Cai.

Just listen to Dean Cai say: "Let me talk about the impact of quantitative easing in the United States from a monetary perspective! When the U.S. dollar depreciates due to quantitative easing, other countries can also carry out quantitative easing by holding more of dollars to stabilize the exchange rate.

If more people hold U.S. dollars, there will be fewer U.S. dollars on the market, and the exchange rate of the U.S. dollar will naturally rise. As the main trading currency, the U.S. dollar is also the most important foreign exchange reserve of countries around the world, so holding more U.S. dollars is not a problem for countries around the world.

But this is equivalent to other countries absorbing the excess currency issued by the US quantitative easing, and it is also equivalent to the US passing on inflation to those countries that hold US dollars. If these countries want to obtain US dollars, they must exchange their goods. This is equivalent to the Federal Reserve turning on the money printing press and exchanging goods from other countries for Americans to use.

The U.S. dollars held by various countries cannot generate income when placed in the national treasury. On the contrary, they will shrink due to the depreciation of the U.S. dollar. Therefore, purchasing U.S. bonds will become the most reliable way to preserve the value of U.S. dollar assets. The United States also sells U.S. debt to allow U.S. dollars to flow back into the United States.

This means that the dollar traveled around the world and then returned to the United States. At the same time, the United States also received goods provided by the world. Countries around the world are lending money to the United States to allow Americans to consume in various ways. Even the goods sold to the United States are more like a credit than a sale! "

In 2008, the concept of US dollar hegemony harvesting the world's wealth was not well understood. The theory described by Dean Cai is still new to many people.

But it was new. After listening to this set of theories, everyone in the conference room couldn't help but frown. At present, everyone thinks that by selling things to Americans, they earn their dollars and earn foreign exchange through exports.

Now, listening to Dean Cai's analysis, I can imagine that someone printed a bunch of paper and then exchanged his goods for it. In the end, they even took back the printed paper. After working hard for a long time, I got a credit! It’s so heartbreaking!

The host finally looked at Li Weidong: "Chairman Li, you were the first to bring up the possibility of quantitative easing just now. So may I ask your opinion on quantitative easing?"

Li Weidong picked up the microphone: "The views of the three experts just now are all correct, and I agree with them very much. However, I am a businessman, so I am still used to looking at and analyzing problems from the perspective of the actual industrial structure. So my views are not like those of the three experts. Experts are so pessimistic.

In my opinion, if the United States implements quantitative easing, it may not be a bad thing for our country's enterprises. What I see is an opportunity, an opportunity for industrial upgrading!

Here we must first clarify how the excess currency will flow into the market if the United States implements quantitative easing. Is it through investment? trading? Financial system? Social Welfare? Or give money directly to people?

Just like the financial rescue bill proposed by the US government this time, it is to purchase derivatives of subprime loans, but who is holding these derivatives of subprime loans? Obviously financial institutions. In other words, the money flows directly into the financial institution.

Financial institutions get the money and its only use is to invest it. But now the United States is experiencing a financial crisis, the financial industry is struggling, and the real economy is shrinking. Are there any other areas worth investing in?

In addition to the United States, developed countries such as Europe and Japan have also been affected by the financial crisis. As far as I know, some European countries have already experienced problems with their sovereign debt, which is definitely not a good place for investment.

Other regions, such as Africa, South America, and India, have always been the sphere of influence of Western countries. If Western capital were willing to invest in these places, they would have gone there long ago, and there is no need to wait until now.

So I think there is only one place where Western capital investment can invest, and that is China. If the United States implements quantitative easing, a large amount of funds will inevitably flow into China. Since our financial system has strict restrictions on foreign investment, this capital will inevitably enter our real economy.

This is of course a rare opportunity for us, and what we have to do is to make full use of this opportunity, explore overseas markets, and more importantly, upgrade the industrial chain, build a complete industrial chain, and transform our manufacturing industry from Transformation from low-end to mid-to-high-end! "

Compared with what the previous three economists said about the impact on exports, inflation, and the harvest of US dollar hegemony, what Li Weidong said is obviously positive and good news. The leaders of the ministries and commissions sitting in the front row couldn't help but their eyes lit up.

However, Li Weidong continued: "But don't be too happy. In addition to investment, the inflow of Western capital will also bring competition. The West has brand advantages and technological advantages, and in many industries there are still regulations Advantages of rules.

When Western capital enters, it will bring all these brands, technologies, and rules to China. When the time comes, our local companies will inevitably be impacted, and many companies will be eliminated by then. "

The host then asked: "Chairman Li, if it is true, as you said, that Western capital brings brands, technologies, and rules to invest in the Chinese market on a large scale, how should our Chinese companies respond?"

"Two words, upgrade!" Li Weidong continued: "If companies want to upgrade their own technology and make more competitive products, it is best to compete with Western companies for the right to speak in the industry.

If we could make rules like the West, we would be in a good position to be invincible. If we want to become a rule maker, we need to build a complete industrial chain, so that we can have the ability to formulate rules. "

"It is easier said than done to formulate industry rules, but very difficult to do!" Professor Huang said from the sidelines.

Li Weidong responded: "The road to the rise of a great country is inherently full of thorns. If industry could be developed so easily, then there would be industrial powers everywhere in the world!"

Dean Cai said: "Chairman Li, it's great to be a rule maker, but I don't think it's necessary to build a complete industrial chain, at least not in all fields.

The globalization process has been implemented for so many years, and the division of labor among various industries on a global scale has long been mature. If we deliberately pursue a complete industrial chain, we will break the existing mature global division of labor.

Let’s not talk about whether building a complete industrial chain can be successful. The cost of building an industrial chain will definitely be much higher than using an existing industrial chain. Even if the industrial chain is completed, it will still face competition with existing industrial chains. From a cost perspective, this is not cost-effective. "

Li Weidong smiled slightly: "To be honest, I have never believed in globalization! Let alone the global division of labor. The concept of globalization was proposed by Americans. The Clinton administration at that time was pushing the so-called globalization.

But I think the reason why Americans promote globalization is because globalization is beneficial to the United States. As you just said, the U.S. dollar is the global currency. The United States can harvest the world through the U.S. dollar and U.S. debt, so Americans want globalization.

But what if one day globalization no longer benefits the United States? Will the United States continue to support globalization? Maybe by then, the United States will withdraw from various international organizations, abandon dialogue with other countries, and only engage in unilateralism, and this will be based on the premise of giving priority to U.S. interests.

Just like international trade, the United States no longer abides by WTO agreements. Instead, it negotiates separately with more than 100 WTO members and reached more than 100 different bilateral agreements. And with the strength of the United States, this bilateral-only model will obviously gain more benefits! "

"How is this possible! Free trade is the value of the United States, how could the United States give up its own values?" Dean Cai curled his lips.

"The value of the United States is only interests!" Li Weidong shrugged, and then said: "Of course, what I said are just predictions now. Predictions, some are accurate and some are inaccurate. It will take time to see whether my prediction is accurate. inspection.”

Dean Cai nodded. He felt that Li Weidong's mention of the word "prediction" at this time was tantamount to taking a step back and finding a step down. There was no need for him to add insult to injury.

However, Li Weidong continued: "It's just that my predictions are not inaccurate yet. So here, I also remind all entrepreneurs to leave an extra backup in the supply chain.

You can’t build the entire supply chain, but you must at least ensure that if the supply chain encounters a malicious interruption one day, substitutes can be found so that the company can survive! "

…

The outbreak of the subprime mortgage crisis accelerated the relocation of U.S. industries overseas, and the biggest beneficiary of the relocation of U.S. industries is naturally China.

In the early 21st century, China could only make some hard-earned money through low-end manufacturing. But by 2010, China could already dominate parts of the international supply chain.

And when the United States completely resolved the subprime mortgage crisis in 2012, they suddenly discovered that China's position in the international supply chain was no longer something the United States could handle on its own.

So after the *** government entered its second term, it began to promote the TPP and wanted to form gangs to deal with China. In the era of understanding the king, it was simply a big stick of trade war and sanctions to directly help China promote industrial upgrading.

The accelerated relocation of U.S. industries abroad is inseparable from the four rounds of quantitative easing.

During the subprime mortgage crisis, the United States had four quantitative easings. The first was to lend money to the U.S. government to purchase subprime financial derivatives. The second, third, and fourth times were to purchase U.S. Treasury bonds. Treasury bonds are issued by the government, which is equivalent to The Federal Reserve prints money and lends it to the U.S. government.

All the money from QE1 went into the pockets of financial institutions. When financial institutions received the money, they would naturally reinvest it. At that time, the United States and Europe were in deep financial crisis, and there were no suitable projects for investment, so the money was just Being able to invest in developing countries also promotes the relocation of American industries overseas.

Part of the money from QE2 to QE4 was used for wars, such as maintaining military missions in Afghanistan and Iraq, the war in Libya, the war in Syria, and fighting ISIS. These all cost money.

Another part is used for the economic policy of the Japanese government, which is the so-called "American Recovery and Reinvestment Act", including reform of the financial system, reform of education and medical care, increased investment in infrastructure construction, investment in the energy field, etc.

Everyone knows the final result. Apart from achievements in the energy field, the United States has developed a shale oil industry and achieved oil self-sufficiency. Almost nothing has been accomplished in other aspects.

Take infrastructure investment for example. Dozens of major infrastructure projects were set up at that time, and then we started discussing them. However, the discussions ended with no results until the end of President Xi Jinping's term.

The Communist Party of China has the ambition to build 20,000 kilometers of high-speed rail for the United States. However, it took fourteen years to demonstrate just one high-speed rail in California. In the past fourteen years, China has built nearly 40,000 kilometers of high-speed rail.

And this demonstration alone cost 5 billion US dollars. After all 5 billion US dollars was spent, not a single railroad track was seen.

In the end, the money from QE2 to QE4 also entered the U.S. financial system, and was then used by financial institutions to invest in some profitable industries.

It is also for this reason that although the Japanese government's quantitative easing has stabilized the U.S. economy, it has not been positively evaluated because the money went full circle and eventually fell into the hands of capital without the people seeing it.

In contrast, the unlimited QE carried out by the Sleeping King government has a much higher evaluation, because a lot of money in the unlimited QE is directly distributed to the people in the form of cash. At that time, it was reported every day in the news that the United States was giving out money again. A person's salary was several hundred dollars, and he used this money.

Although a large part of this money also flowed into the stock market and real estate market, pushing up the Nasdaq index and sending Tesla stock to sky-high prices, according to economists' estimates, at least one-third was converted For the direct consumption of ordinary people.

However, after a period of time, ordinary people will still have to bear the consequences of inflation caused by the money distribution. It’s not just the United States. Countries that distributed money to everyone during the epidemic have all experienced severe inflation more than a year later. This is also a sequelae of the money distribution.

In the face of inflation, the rich certainly don't care. Daily necessities have doubled, which is just a drop in the bucket for the rich. They are all driving Bentleys and Rolls-Royces, and they still care about the 10 yuan a liter of gas. Money? 98 can be refilled directly without much beep!

However, for the poor, it is an unbearable burden of life. It hurts to spend ten yuan more for a tank of oil. The hundreds or even thousands of dollars that were issued back then were all thrown out by inflation, and they still had to pay back a sum.

Closer to home, the process of four quantitative easings during the subprime mortgage crisis accelerated the transfer of American industries. At that time, there was a sovereign debt crisis in Europe, and it certainly could not accept the transfer of industries.

The economies of countries such as South Korea and Mexico are insufficient and they can undertake very few industries. Southeast Asian countries such as Vietnam and Indonesia lack sound infrastructure. As for India, everyone knows that it is a pitfall.

Therefore, the only destination for American industrial transfer is China. China also used this period to establish a complete supply chain system.

By the time low-end intensive manufacturing has moved to Southeast Asia, China has already controlled the upstream supply chain, and countries such as Vietnam and Bangladesh can only supplement China's supply chain.

For example, Vietnam has worked hard for half a year to achieve a trade volume of 370 billion U.S. dollars. It claimed that the trade volume increased by dozens of percent. However, when the accounts were calculated, it only had a surplus of 700 million U.S. dollars, and the total profit was less than 0.4%. You can earn more than this even if you go for volume promotions like Xixi.

This is because Vietnam is engaged in low-end processing of supplied materials and does not have a complete industrial chain. The upstream is controlled by raw material suppliers and the downstream is controlled by market sellers. It has no pricing power at all.

If we follow Japan's flying geese theory, in the process of industrial specialization, the countries undertaking the industry should be dispersed. The United States, the leading goose, left behind some of its core industries and gave them to Western Europe, Mexico, Japan and other countries.

Western Europe then distributed the eliminated industries to Central Europe, followed by Eastern Europe, Mexico spread its industries to Latin America, and Japan distributed its industries to the Four Asian Tigers, and then from the Four Asian Tigers to the Four Asian Tigers, and then spread to other countries in Asia.

In the end, the developed and wealthy countries will retain high value-added industries, while the poor and backward countries will accept low value-added industries. All countries combined form a complete industrial chain, forming the so-called globalization.

However, this theory does not work when it comes to China. China is large enough to absorb the entire industrial chain. Therefore, when the industrial chain arrives in China, it becomes digested within China, and eventually a complete industrial chain is formed.

But this is not the most critical thing. The most critical thing is that while China has formed a complete industrial chain, it has also formed a huge domestic demand market for terminals.

Therefore, when the United States wants to remove its industrial chain from China, it will face two problems. One is that it cannot find a country to undertake such a huge industrial chain, and the other is that capital can no longer do without the Chinese market.

The first question is that the Japanese government launched the TPP and brought in a large number of Pacific countries, hoping to use the entire Pacific countries to take over China's industrial chain.

As it turned out, after King Wang came to power, he withdrew first. Instead, China wanted to join the TPP and make other TPP countries become vassals of China's industrial chain.

The second problem is that there is really no solution. It is simply impossible to keep capital away from the market.

For example, in order to suppress China's chip industry, the United States spent more than 50 billion U.S. dollars in subsidies and enacted the "Chip Act." One of the contents is that companies that receive my subsidies will not be allowed to invest in China within ten years. This makes it clear that companies are allowed to choose one side or the other.

However, the first one to jump out to oppose this clause was not South Korea's Samsung, nor the other side's TSMC, but the United States' Intel.

Intel not only sells tens of billions of dollars in chips in China every year, but also invests in industries such as cloud computing, big data analysis, Internet of Things, smart devices, wearable technology, smart robotics, drones, Internet of Vehicles, virtual reality and other industries. , Intel is planning ahead in these industries in order to gain more market share in the future.

In order to get billions of dollars of subsidies from the U.S. government and give up a market worth tens or hundreds of billions, do you really think that Intel is a stick?