Chapter 207 Preparations for the Relocation of All Factories

Since Tony Dank mentioned the development of Shekou in his last report, and since it is now 86, foreign-owned enterprises can start building factories in the mainland this year.

Taking advantage of his free time now, Liu Zhicheng decided to visit the Shekou Industrial Park and feel the vitality of reform and opening up.

Accompanying Liu Zhicheng today are Yuan Tianfan and Assistant Han.

China Power is now investing heavily in the mainland. Its infrastructure investments include highways, and Qingshan Power Generation Company has invested in several power plants (thermal and nuclear).

Yuan Tianfan went to the mainland today to discuss the investment in Shajiao Power Plant B with the Pengcheng Municipal Government.

"China Power is quite popular in the mainland?" Liu Zhicheng asked in the car on the way to Pengcheng.

As the largest power group in Hong Kong, China Power Corporation had sufficient funds after being acquired by Liu Zhicheng. It invested more aggressively in the mainland than in its previous life and also snatched the opportunity that originally belonged to Hu Yingxiang.

All this stems from the golden finger of the 'prophet' Liu Zhicheng.

"It is quite popular. We often receive investment inspection invitations from the mainland through Xinhua News Agency." Yuan Tianfan nodded.

"Well, you have to handle it properly, but you must also firmly refuse what should be refused." Liu Zhicheng said.

"Okay, Mr. Liu."

"How is the Guangzhou-Shenzhen Expressway doing now?"

"The funding problem of the Guangzhou-Shenzhen Expressway has been solved, and it is now being built step by step, but the construction speed is far slower than that of the Beijing-Tianjin-Tangshan Expressway.

The thermal power plant we invested in Shanghu has also passed the approval, and the Huangpu Bridge in Shanghu, which we invested in, has also been opened to traffic. If you are interested, you can go and have a look. "Yuan Tianfan said with a smile.

"Well, I'll go and have a look when I go to Shanghai later."

It is not cost-effective to make a special trip just to see a bridge, but the country has now officially determined the strategy of "attracting foreign investment" and has relaxed the requirements for foreign investment a lot.

Starting this year, wholly foreign-owned enterprises will be allowed. Now is the best time to invest heavily in the mainland and utilize the large amount of domestic talent and cheap labor to develop several core industries.

And, incidentally, it can also create hundreds of thousands of jobs in the country, allowing ordinary people to live a better life.

Although we will only visit Shekou in Pengcheng this time when we come to the mainland, it is time to send people to conduct a comprehensive survey of the mainland.

His halo is too great, so it is impossible for him to personally inspect every project. Even if he goes there and does nothing, it may be hyped up by the media into big news. There is no need to create this trouble for himself.

“Although I am optimistic about investing in China, it takes a long time for these infrastructure investments to pay off.

Hong Kong is our base, and you must not relax your investment in Hong Kong. Only when we do well in Hong Kong can we obtain greater investment and benefits in the Mainland."

Yuan Tianfan is a smart man, so he naturally knows what Liu Zhicheng is thinking.

"Don't worry, Mr. Liu. Investing in Hong Kong is the foundation of CLP. I will not confuse the primary with the secondary."

"Well, there is one more thing. If you invest in infrastructure projects in the mainland and your mainland partners need funds, you can introduce them to Far Eastern Bank," Liu Zhicheng continued.

The acquisition of Far Eastern Bank was originally intended to serve its allies, suppliers and partners.

Because according to the Banking Act, funds in one's own bank cannot be used by one's own company. Not to mention a wholly-owned subsidiary, as long as one is a major shareholder, there will be great restrictions.

Therefore, I definitely cannot use the money from Far Eastern Bank.

Since Shanfeng Investment acquired Far Eastern Bank, under the arrangement of Liu Zhicheng, it had early gotten rid of a lot of bad real estate assets.

Although the economy of Hong Kong as a whole has begun to recover, Hong Kong is now in a banking crisis, and coupled with the halo effect of Liu Zhicheng, a large number of citizens come to Far Eastern Bank to deposit money.

Deposits are the bank's liabilities, while loans are the bank's assets.

As a result, Far Eastern Bank needs a few big customers to reduce its debt.

With the development of Pengcheng's economy, the Shekou Industrial Zone has huge economic production capacity and foreign exchange earning ability.

Several cement roads have been built from Pengcheng City to Shekou Industrial Zone. They were donated by the company itself, but because they are used for transportation by a lot of large trucks, they have also been renovated.

An hour later, Liu Zhicheng's motorcade arrived in front of the office building of Shekou Industrial Zone. At this moment, a group of people were already standing in front of the gate.

"Hello, Mr. Liu, welcome to Shekou Industrial Zone for inspection." Director Yuan, the district director of Shekou Industrial Zone, walked forward with a smile and said.

As the proposer and operator of the Shekou Industrial Zone, Director Yuan knows that the current achievements of the Shekou Industrial Zone are mainly due to the people before him.

It was this man who initially requested the expansion of the Shekou Industrial Zone, and his continuous increase in investment led to today's results.

It is no exaggeration to say that Liu Zhicheng started out as just a simple fan, but last year its production capacity reached 700 million units.

It has also attracted a large amount of Hong Kong capital to invest in building factories. Now a large number of factories are either producing fans or fan parts.

It has formed a scale effect and has become a famous fan production base in China and even the world. At the same time, it has also driven the employment of tens of thousands of people.

In addition to electric fans, there are many household appliances, such as radios, kitchen appliances, and a small number of refrigerators and air conditioners.

Among them, Chigo Motor's annual production capacity has reached 25 million units, which are not only sold in the mainland (mainly to the fan manufacturer in Shekou and the joint venture factory in Beijing), but also exported to other places.

Among them, the fan-specific motors are very famous in Southeast Asia.

Of course, this is due to the rapid development of the fan industry in Hong Kong and the Mainland.

"Director Yuan, you're too polite." Liu Zhicheng also smiled and said politely.

Director Yuan smiled and began to introduce several people around Liu Zhicheng, all of whom were members of the development zone's management.

The development zone was naturally prepared for the reception of the important guests. After a welcome ceremony was held in the conference room, they checked into the hotel.

This is a three-star hotel invested by the Huangpu Group, and this is Liu Zhicheng's first time to dine here.

In the afternoon, accompanied by Director Yuan, Liu Zhicheng briefly visited some fan factories and motor factories. Such simple assembly processes naturally did not arouse his interest.

But as a people-friendly business owner, I had to communicate a little with the employees here and found out that the treatment here is not bad.

As foreign-funded enterprises, they are much better than general mainland enterprises in terms of salary, employee benefits and care.

There are usually dinner parties during traditional festivals and employee birthdays, bonuses at the end of the year, and benefits for starting work at the beginning of the year.

These are welfare systems that originated from Hong Kong, and are also intended to improve employees' work motivation, sense of belonging and happiness.

“Stay in a big hotel, eat in a small restaurant!”

In his previous life, Liu Zhicheng often heard his colleagues talking about how some people thought the food in small restaurants was more authentic and could give a better taste experience. When he first traveled through time, he did go there to experience it, but in the past ten years, Liu Zhicheng simply couldn't go to a food stall to eat.

Not only is it easy to be photographed by reporters, but it is also very unsafe. Now that I have arrived in the mainland, I no longer have this worry.

At night, Liu Zhicheng chose a food stall near the factory and brought Director Yuan here.

This is a restaurant invested by Hong Kong people. It has many special snacks, including stinky tofu, braised lamb, steamed dumplings, roast duck, etc.

The price is higher than in Shanghai and Beijing, but much lower than in Hong Kong.

In the Shekou Industrial Zone, there are so many Hong Kong factory owners and managers from Hong Kong, and their spending power is still good.

"The taste is very good, with flavors from both the north and the south." Liu Zhicheng also praised.

"I heard that the head chef of this restaurant came from Hong Kong, and he also found several chefs for specialty snacks from all over the country. It is now the most popular restaurant in Shekou." Director Yuan said with a smile.

"When the domestic economy develops in the future, this kind of food will probably be everywhere," said Liu Zhicheng.

The Chinese people's pursuit of delicious food can be said to be the best in the world, and their various cooking techniques are much better than those of the West.

The Hong Kong owner of this restaurant is also very smart. He knows how to seize this opportunity. It can be seen that the future is bright.

Of course, there will be fierce competition in the future, it all depends on his luck.

"I hope this day will come soon." Director Yuan smiled and continued, "Mr. Liu, Shekou Industrial Park is preparing to expand its scale again. We would like to get further investment support from Mr. Liu. What do you think?"

"Do you want to move the production of products of my companies to Shekou?" Liu Zhicheng asked.

"Yes, we have done a survey. Although the economy of Hong Kong has recovered, the development of tourism has attracted a large number of employed people, resulting in an increase in labor costs.
We have statistics that show that the labor cost is more than ten times higher than that in Shekou. Secondly, the cost of land is getting higher and higher, which has caused the cost of expanding production capacity to rise sharply.

This is one of the reasons why we expanded the industrial park, which is to take over the industrial capacity in Hong Kong.”

Director Yuan’s analysis makes sense to a certain extent, but with the expansion of reform and opening-up efforts in the mainland, economic development zones across the country can all build wholly foreign-owned factories, and Shekou is also under pressure to attract investment.

Now that Hong Kong's largest business owner is in front of him, Director Yuan must seize the opportunity to attract investment.

“Director Yuan, the relocation of Hong Kong’s industries is definitely inevitable, but the most important issue at the moment is the lack of talent.

Although labor costs in Hong Kong have risen, there is still a certain talent and technical foundation, which is a very realistic problem.”

Although Liu Zhicheng had already prepared for the transfer of Hong Kong's production capacity, moving it to the mainland was definitely the only choice.

Although the talent problem in Shekou has been greatly improved, it is still far from keeping up with the development of Shekou.

The reserve and training of talents cannot be accomplished overnight.

In the past, TSMC’s success was inseparable from the Taiwan government’s support for the electronics industry and the cultivation of a large number of talents over the past decade.

"We are indeed lacking in this area, but we can definitely attract talents from other cities. Mr. Liu may not know that
There are many talented people who are willing to work in Pengcheng, and Shekou is the most attractive place." Director Yuan said.

"Director Yuan, if you want us to transfer production capacity here, this is actually not a big problem.

We have always had this plan, to move our production base to the mainland, and even move our R&D base here. The main thing is, what preferential policies can you give me?"

When an enterprise invests in a place, it also means that it is optimistic about the place and believes that the place has the various infrastructure, talent pool, transportation environment, and preferential investment policies that the enterprise needs.

Instead of investing first and then gradually improving the local area to meet the needs of investors, no company in the world can do this.

Unless it is a very low-end industry, a labor-intensive industry that can be run only requires people and some electricity.

This is an unavoidable choice because labor cost is the most important cost of the entire product.

Products such as electric fans and radios actually fall into this category.

When labor costs and factory rental costs increased in Hong Kong a few years ago, the need to move outward emerged.

The mainland was just undergoing reform and opening up, and the Shekou Industrial Zone allowed for wholly-owned factories to be built, so it became a good choice.

It’s different now. You can set up a sole proprietorship anywhere in the mainland. It all depends on the conditions.

"In terms of taxation, we can offer greater concessions, what do you think?" Director Yuan said after thinking for a while.

“In fact, even if you move all the production of electronic products to Shekou, you can only assemble them.
The core printed circuit board production and chip manufacturing are high-tech processes, and it is impossible to transfer them all at once."

"That doesn't matter. We'll do the assembly first. At the same time, we can also help you introduce supporting factories." Director Yuan said with a smile.

"These are not problems. If I transfer all my production capacity to the mainland, can I sell all our products in the mainland?" Liu Zhicheng asked after thinking for a moment.

Originally, Chigo International's fan products in Beijing could already be partially sold in the mainland market.

However, other electronic products cannot be sold domestically yet and still rely mainly on exports.

Its own home game consoles, handheld game consoles and other electronic products are all prepared for the European, American, Japanese and parts of Southeast Asian markets.

If you can enter the domestic market and occupy the mainland market, why not do it?

Since the country wants its own production capacity, it should not be too much to naturally propose that it needs the domestic market.

Because the mainland can earn a lot of foreign exchange, we can also earn foreign exchange (by intercepting profits through Hong Kong trading companies).

"This may be a little difficult!" Director Yuan said with a frown.

"Is it not possible to maintain foreign exchange balance?" Liu Zhicheng said.

"Mr. Liu, I can only report to my superiors. I cannot make the decision on this." Director Yuan said with a smile.

With foreign exchange reserves now almost dropping to zero, all parties on the mainland naturally want to earn more foreign exchange.

The same is true for the Shekou Industrial Zone, which is also the forefront of reform and opening up, and people from all over the country are paying attention to it.

Liu Zhicheng does not mind moving some production capacity to the mainland, which can create foreign exchange and employment for the mainland and reduce his own costs.

But Liu Zhicheng also knows the mainland's ability to counterfeit products. Even if he does not enter the mainland market to sell his products, there will still be mainland counterfeit products.

It seems that we still need to continue to strive for the mainland retail market and realize the sales of the entire product line as soon as possible.

"Director Yuan, there is no problem with the investment in Shekou. You can contact Mr. Wang and Mr. Niu, and I will talk to them."

(End of this chapter)