Reborn Industrial Tycoon

Seeing the "group of scholars" being humble to each other, Li Weidong was a little embarrassed. He simply took the initiative and said: "Professor Qian, why don't you say it first!"

"Well, I'll do my part!" Professor Qian cleared his throat and said, "Chairman Li, what you just said is that Thailand abandons the fixed exchange rate and the economy may fall into recession. This is indeed possible.

I agree that the non-performing loans caused by the bursting of the real estate bubble in Japan will have an impact on the Japanese financial market. However, I think it is a bit alarmist to say that an Asian financial crisis will break out.

In terms of various economic indicators, there are many countries in Asia that are much better than Thailand. For example, Malaysia is currently the richest country in Southeast Asia. They are backed by rich oil and natural gas resources and have a very solid economic foundation.

According to the data I have, Malaysia's savings rate has reached 38%, the inflation rate is only 3.8%, and the unemployment rate is less than 3.5%. This is negligible compared with their average annual GDP growth rate of 9.5%.

Malaysia’s economic foundation is very strong. Even if Japan withdraws investment, Malaysia will be able to stabilize its financial system. This situation in Thailand will never happen.”

As soon as Professor Qian finished speaking, Professor Liu also said, "I would like to add that although the situation in Indonesia is not as good as that of Malaysia, it is very similar to Malaysia. Indonesia has been developing peacefully for the past thirty years.

Indonesia's economic growth rate in recent years has averaged 7.3%, the savings rate is 32%, and the unemployment rate is less than 4%. Moreover, the Gu family's financial situation is very good, with a fiscal deficit of only 2.3%.

Judging from these data, Indonesia’s economic situation is also very healthy. Even if their financial system is affected by external shocks, there will at most be some losses, but it will definitely not collapse!”

Just as Professor Liu sat down, Academician Wu also expressed his opinion: "Malaysia and Indonesia, as emerging economies in recent years, may have imperfect financial systems and have some problems. But South Korea is different!

South Korea is the 11th largest economy in the world. In terms of per capita GDP, it is already considered a quasi-developed country. South Korea's economy is much stronger than that of Southeast Asian countries, and South Korea's financial system is also more complete than that of Southeast Asian countries.

Moreover, South Korea's manufacturing industry is very developed. They have several Fortune 500 companies, and they are second only to Japan in terms of technology. South Korea's economy is very high in terms of size and ability to withstand risks. It is impossible to

Financial crisis.”

These three people basically told everyone else's thoughts. After they finished speaking, no one asked any more questions for the time being.

Seeing that no one asked questions, Li Weidong said, "I'll answer Professor Qian and Professor Liu's questions first, that is, Malaysia and Indonesia. These two countries can be looked at together.

Just now, two professors introduced the economic data of Malaysia and Indonesia respectively. Judging from the data, the economies of these two countries are indeed very healthy. However, the economies of these two countries have three major weaknesses.

The first is that the financial deepening and liberalization of the two countries was too fast. This is very similar to Thailand. In just a few years, they both opened up their financial fields and the financial system also expanded rapidly.

In this process of expansion, there are insufficient financial managers and technical experts, and they cannot effectively manage the financial field. Many financial hidden dangers will inevitably arise. For example, bad debts caused by blind lending are a major hidden danger.

The opening of the financial system was too fast and did not proceed step by step, which also caused many loopholes in their financial system, which gave financial speculators the opportunity to take advantage of the loopholes.

The second weakness is high interest rates. The two countries are very similar to Thailand in this regard. Although the interest rates in Malaysia and Indonesia are not as good as those in Thailand, they are still over 10%!

Such high interest rates, coupled with open financial policies, allow foreign financial speculators to conduct arbitrage foreign exchange transactions just like they did with the Thai baht. If these two countries want to stabilize their exchange rates, they will have to use foreign exchange out like Thailand.

Generally speaking, these two weaknesses are mainly due to the double mismatch led by the banking system and foreign debt factors. This is also a common problem in emerging markets in Asia. This situation exists in many emerging economies, and everyone is in the same boat."

"You just said there are three major weaknesses. What is the other one?" Professor Qian asked.

"The other biggest weakness is at the structural level. Malaysia's prime minister has been in power for sixteen years, while Indonesia's supreme head of state has been in power for thirty years. In the process of this long-term rule, the two countries have also accumulated

There are a lot of disadvantages.”

Li Weidong continued: "Take Indonesia as an example. Their supreme head of state is a soldier and came to power in a military coup. Therefore, Indonesian soldiers control many important areas related to the national economy and people's livelihood.

This also gave rise to a vested interest group, which has controlled Indonesia's economy for thirty years, and has also exacerbated Indonesia's wealth loss and the polarization between rich and poor.

Therefore, even though Indonesia's economic data is very impressive, it is a small number of privileged classes who ultimately enjoy the economic results. The four words "the country is rich and the people are poor" can be used to describe the situation in Indonesia.

The situation in Malaysia is better than that of Indonesia, but the country is also rich and the people are poor. Capital is in the hands of a small number of privileged classes, and the main beneficiaries of economic growth are also a small number of privileged classes.

The gap between the rich and the poor is large, wealth is concentrated in the hands of a few people, and the ability of ordinary people to resist risks is relatively low. In this kind of economic structure, it is very fragile, and it is still unknown how effective those eye-catching economic data can be.

Perhaps when the financial crisis strikes, the first to run away are the privileged classes who hold wealth. They convert their wealth into US dollars and transfer it abroad, while the ordinary people are the ones who suffer!"

Li Weidong said, then looked at Academician Wu, and continued: "As for South Korea, the economy is indeed very developed, but South Korea has a fatal flaw, and that is the debt problem of enterprises.

The history of South Korea's economic development is certainly familiar to everyone. During the Park Chung-hee era, South Korea adopted an extremely radical 'bank-industry' integrated development model. Led by the government, banks provided loans to enterprises, thus driving the development of the overall economy.

This development model allowed South Korea to achieve economic growth in the short term and gave birth to many large companies. However, banks' excessively lenient loans to companies have kept these large companies with extremely high debt ratios.

However, South Korea's economic policy has enabled the South Korean government and banks to fully support large companies, which has also allowed South Korea's large companies to operate and invest on a large scale without worrying about risks.

Although South Korea's economy is very developed, its financial system and capital market are not developed, because corporate funds are provided by the banking system. South Korea as a whole is more like a company with a high debt ratio, but this company does not care about risk management

.

In the past few years, in order to join the Organization for Economic Cooperation and Development, South Korea quickly relaxed financial controls and implemented financial liberalization, which caused a large amount of capital to begin to intervene in the financial field.

The largest capital in South Korea is naturally those large enterprises. When the capital of large enterprises intervenes in the financial field and begins to own or control commercial banks and securities companies, it is not the enterprises themselves who have the final say in lending to enterprises!

Since the company itself has the final say on loans, the debt has not skyrocketed! As far as I know, among Korean companies, the average debt is more than 5 times the net equity!

The figure for the United States is 1.5 times, and that for Japan is 1.9 times. It can be said that except for South Korea, no country in the world has an industrial cluster with such a high debt ratio.

Net equity is a highly liquid part of assets and can be quickly liquidated. The current situation in South Korea means that once a financial crisis breaks out, companies will not be able to repay their loans even if they sell off assets quickly.

If the debt cannot be repaid, the company will have no choice but to go bankrupt, which will also drag down the entire banking system and trigger a national debt crisis. If both the company and the bank collapse, then the country's economy will be doomed!

It can be said that the problems that South Korea has are also structural problems. The radical development model they adopted back then, although they achieved rapid economic development in a short period of time, also laid the foundation for disaster."

"According to this analysis, Malaysia, Indonesia, and South Korea do have their own problems, but these problems can be solved slowly, the financial system can be improved, and the debt can be digested, and it does not necessarily lead to a detonation.

A financial crisis! The talk of an Asian financial crisis is still too alarmist!" Academician Wu continued.

"Academician Wu, I haven't finished speaking yet! What I just said are only the internal problems of each country. In addition to internal problems, external problems are equally important." Li Weidong said.

"What are the external problems?" Academician Wu asked immediately.

"International financial speculator!" Li Weidong replied immediately.

When mentioning international financial speculators, Academician Wu and others immediately frowned. The previous attack on the Thai baht by international financial speculators had already made these economists realize the power of national financial speculators.

Li Weidong continued: "Whether it is international investment banks or hedge funds, they have begun arbitrage foreign exchange transactions very early. In the process, they have figured out the shortcomings of the financial systems of Southeast Asian countries.

Thailand has the most serious financial problems and the most loopholes. It is naturally a breakthrough point in the eyes of international financial speculators. Therefore, since the second half of last year, international financial speculators have launched three tentative attacks on Thailand.

After Thailand announced that it would abandon its fixed exchange rate, the baht depreciated by 17% on the same day, and the current depreciation rate has exceeded 30%. This depreciation rate is definitely abnormal, and there must be shadows of international financial speculators."

As Li Weidong spoke, he deliberately glanced at Zhao Jinshan, who was listening. Zhao Jinshan shrank his neck subconsciously.

Li Weidong continued: "It is obvious that international financial speculators are attacking the Thai baht. If Thailand cannot resist it, international financial speculators will make billions of dollars in profits in Thailand.

For international financial speculators, this is equivalent to accumulating a batch of ammunition. With this batch of ammunition, they will attack other markets, such as the Philippine peso, Indonesian rupiah, Malaysian ringgit, Korean won, and even the Hong Kong dollar!

"

At the mention of Hong Kong dollars, Secretary Chen suddenly raised his head and looked at Li Weidong seriously.

Li Weidong continued: "Don't forget, international financial speculators can use leverage. During the attack on the Thai baht in May, international financial speculators used 300 million US dollars to leverage Thailand's 10 billion in foreign exchange.

If international financial speculators have three billion U.S. dollars, does that mean that it takes 100 billion U.S. dollars to repel international financial speculators? Among Southeast Asian countries, which country can afford 100 billion U.S. dollars? Put them aside

All added up, you can’t afford so much money!

Therefore, it is a foregone conclusion that Southeast Asia will be harvested by international financial speculators, and this will also make the international financial speculators' funds more abundant and their bullets more abundant, and they will then attack South Korea.

If the above countries have a healthy financial system, good debt situation, abundant foreign exchange reserves, and stable economic development, they can still withstand the attacks of international financial speculators.

But the fact is that these countries have all kinds of problems. Once they are attacked from the outside, their weaknesses will be exposed. By then, they will definitely not be able to withstand international financial speculators, and an Asian financial crisis will inevitably break out."

Before anyone else could speak, Secretary Chen took the lead and asked, "Chairman Li, you just said that international financial speculators will also attack the Hong Kong dollar?"

Li Weidong nodded: "Of course, Hong Kong Island is the financial center of Asia. What a big piece of fat it is. It is bigger than the entire Southeast Asia combined. Naturally, it will not be let go by international financial speculators.

So let’s go back to the second question you just mentioned. What impact will Thailand’s abandonment of the fixed exchange rate have on Hong Kong Island? My conclusion is that Hong Kong Island’s financial system will be affected to a certain extent. This includes international finance.

Speculators’ attack on Hong Kong Island.”

After hearing this, Secretary Chen frowned fiercely.

Li Weidong said: "However, the situation in Hong Kong Island is different from those in Southeast Asian countries. The financial industry in Hong Kong Island has developed step by step, and the financial system is complete;

In terms of debt, Hong Kong Island's situation is also relatively healthy; and Hong Kong Island has hundreds of billions of dollars in foreign exchange reserves, more than the entire Southeast Asia combined.

The most important thing is that Hong Kong Island has the support of the central government! With the strength and wisdom of our population of more than one billion, we will definitely be able to repel international financial speculators!"

"Chairman Li, what do you think will be done if the national financial speculators attack Hong Kong Island? Will they short the Thai baht like they did when they attacked Thailand? When will they launch an attack?" Secretary Chen asked.

Li Weidong thought for a while and said: "Hong Kong Island's linked exchange rate system will indeed become the primary target of attack by international financial speculators. I think the attack by international financial speculators will come soon."

"How soon will it be?" Secretary Chen asked immediately.

"Three or four months! I won't wait until next year." Li Weidong continued; "But we don't have to worry about it for the time being. I guess this is just a tentative attack, just like the attack on Thailand in May.

If Hong Kong Island changes its current exchange rate system, then subsequent attacks will come immediately. And if Hong Kong Island does not change its current exchange rate system, international financial speculators will immediately withdraw.

Hong Kong Island's financial system is still complete and healthy, and Hong Kong Island still has sufficient foreign exchange reserves and has no obvious weaknesses. If international financial speculators want to attack Hong Kong Island, they must accumulate enough bullets.

What we really have to worry about is that after the international financial speculators have looted Asia, they have enough funds in their hands. Now they will attack Hong Kong Island. That will be the time for the real decisive battle.

Moreover, when the time comes, international financial speculators will have sufficient funds, and they will not be limited to attacking the linked exchange rate system. The stock and bond markets of Hong Kong Island will also become their targets, and it will definitely be a financial war!"

"Then how do you think we should respond to this situation?" Secretary Chen asked again.

Li Weidong laughed and said: "It's very simple, just throw money! If international financial speculators attack the currency market, we will support the exchange rate; if they short the stock market, we will push up the stock market; if they attack the bond market, we will buy back bonds."

In short, it's just a sentence: take out the foreign exchange and throw it where there is a shortage of money. The two sides compete to see who has more money. This is like gambling and placing chips to see who can't hold it first, so they will naturally withdraw!"

"It sounds very plain and simple!" Secretary Chen looked questioning. He didn't believe that the financial war would be as simple as Li Weidong said.

Li Weidong looked around and then said, "I'm an industrialist, not a financial speculator. I only know how to throw money. There are so many economic experts here. If they want to fight a financial war, they must be better than me!"

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