Chapter 214 Heavy Industry Plan

Monday, August 1987, 10.

Wall Street was shrouded in a dark cloud as the New York Stock Exchange began a new day.

After the stock market opened, everyone in the noisy trading hall had an ominous feeling in their hearts.

The Dow Jones Industrial Average fell 67 points at the opening.

In a blink of an eye, selling orders surged.

Under the pressure of the swarm of selling, all the red prices (falling) appeared on the screen, and no green wave (rising) could be seen.

There was panic in the exchange and the futures market was in chaos.

From 9:30 a.m. until 11 a.m., the Dow Jones Industrial Average continued to fall, and no one knew how to stop the deteriorating situation.

Although some people suggested closing the market, no one dared to make a decision.

The New York Stock Exchange, mindful of Wall Street's role as a "barometer" of the global stock market, had no choice but to persevere.

On that day, of the 1600 stocks listed on the New York Stock Exchange, only 52 stocks rose, and the rest all fell.

On that day, the stock market opened on time at 10 a.m. Hong Kong time.

As soon as the market opened, the Hang Seng Index fell in panic due to the influence of New York. It closed down 235 points at noon and fell a total of 420.81 points for the whole day, closing at 3362.39, a drop of 11.1%.

Affected by the sharp drop in the New York and Hong Kong stock markets, a domino effect occurred and stock markets in the Asia-Pacific region fell across the board.

As stock markets in various time zones opened one after another, it expanded to the European market and eventually circled the globe back to New York.

The Dow Jones Industrial Average fell sharply by more than 20% (508 points).

The offices of the Burj Al Arab.

Liu Zhicheng received news of the New York stock market crash early in the morning and came to the office early.

I was leaning back in my office chair, watching the TV opposite me, which was broadcasting stock market news.

That feeling is like someone hitting you with US dollars, it's painful and joyful!

Liu Zhicheng called Han Chunxi over and had a drink of champagne in the office.

If Liu Zhicheng had not been worried about the negative impact, he would definitely have held a party to celebrate.

Before leaving get off work, Han Chunxi said, "Mr. Liu, the Hong Kong Stock Exchange has sent back news that it has decided to announce that the stock market and futures market will be suspended for four days from October 10 to October 20 in order to clear a large number of unfinished settlements."

Liu Zhicheng said calmly: "It's just nonsense! A bunch of self-righteous guys."

Han Chunxi asked tentatively, "Boss, do you think a four-day market closure will cause greater panic?"

The original intention of the Hong Kong Stock Exchange is to reduce the drag of Wall Street on the Hong Kong stock market, but this often backfires.

Liu Zhicheng smiled and said, "What do you think? The Dow Jones fell more than 20% this time, and the Hang Seng Index fell more than 10% today. You thought that closing for four days would prevent further declines.

But let me tell you, the global decline will bring tremendous psychological pressure to investors. If this pressure continues for another four days, do you think it will cause "fear"?
Next Monday, once the stock market opens, I'm afraid people will flee like crazy. It looks like the Hang Seng Index is extremely pessimistic."

Han Chunxi asked: "This is a major stock market crash. I wonder how big of an impact it will have on Hong Kong's economy?"

Liu Zhicheng said: "There is no need to consider this. We have a huge amount of cash in our account. As long as we have confidence in the future of Hong Kong,

So for us, no matter it is a short-term crash or a long-term plunge, what we have to do is to be as steady as a rock.

What you need to do now is privatize the telephone companies, seize the moment and do it right away."

"Okay, boss!" Han Chunxi said quickly.

…………

But Liu Zhicheng had no time to enjoy this moment, as his private plane arrived in Beijing again.

This time, he was invited by Rao Bin of the Mainland Automobile Industry Federation to conduct an inspection in Beijing.

The Federation of Automobile Industries was restructured from the former Automobile Bureau (Automobile Industry Corporation). Its original purpose was to reverse the situation in which the automobile industry was stagnant and extremely backward.

Now the Automobile Federation has become a service-oriented organization, but it has always wanted to establish a real economic entity.

The next day, at the Great Wall Hotel, Rao Bing visited Liu Zhicheng.

"Sorry to have kept you waiting." Liu Zhicheng came out immediately after washing up and greeted with a smile.

I only saw a man who looked to be in his 50s wearing a Zhongshan suit. This kind of clothing was still very popular in that era, just like the jackets in later generations.

"Hello Mr. Liu, I am Rao Bing from the Automobile Federation." Rao Bing shook hands and introduced himself.

Liu Zhicheng smiled and said, "Mr. Rao, please take a seat."

Rao Bing, the founder of the mainland automobile industry, is hailed as the "Father of Mainland Automobile" by domestic and foreign media.

He founded the famous FAW and Second FAW in his previous life. After the reform and opening up, he was also responsible for presiding over the negotiations with major companies such as Germany's Volkswagen and the United States' Ford, and successfully introduced the Santana project.

The two of them sat on the sofa in the living room together. The assistant brought them tea and they started chatting.

Rao Bing asked, "I'm sorry, we just found out that Mr. Liu is interested in establishing a joint venture with the mainland to produce trucks.
It turns out that Mr. Liu has already acquired a truck factory in the United States. This is a mistake on our part. We didn’t know about this major industry event in advance.”

Liu Zhicheng smiled and said, "It's nothing. After all, the truck industry is not as influential as the sedan industry. Not to mention the mainland, even in Hong Kong, few people know about it."

Rao Bing nodded and asked, "Since Mr. Liu's truck company wants to cooperate with the mainland, how do you plan to cooperate with us?"

Liu Zhicheng nodded and said, "The cooperation between the mainland and Volkswagen is now 50-50, so let's run it as a joint venture."

"Yes, that's right." Rao Bing nodded and confirmed that this was not a secret and both parties had already announced it.

Liu Zhicheng said: "We can also cooperate with the mainland in this way."

"But we have already introduced Steyr heavy-duty truck technology. If we set up another joint venture, it would seem like duplication of introduction and would not lead to overcapacity." Rao Bing said.

Liu Zhicheng nodded and said, "I have also thought about this issue. In the United States, Mack Trucks mainly produces super-heavy trucks.

However, given the current demand in the mainland, it is difficult for such heavy trucks to be widely popularized, so I proposed that we jointly produce special vehicles that are not available in the mainland.
For example, large tractors, fire trucks, container trucks, etc. Of course, we can also produce various light trucks and heavy trucks of about 10 tons, and Mark also has complete technical reserves. "

In the 80s, the entire mainland automobile industry could be described in seven words: "lack of heavy vehicles, few light vehicles, and no sedans." There was actually no need to worry too much about the problem of overcapacity.

In the early days of reform, the only trucks that could be manufactured in the mainland were 4-ton Jiefang trucks and 5-ton Dongfeng trucks. In terms of automobiles, there were only a few Hongqis and thousands of Shanghai sedans that could be produced each year.

Although there are 120 automobile manufacturers in the entire mainland, this actually includes data on tractors and motorcycles.

It can be said to be negligible in the entire global market. The output of the entire mainland is not even as good as the monthly production capacity of its neighbor Toyota. This is also the main reason why the country intends to vigorously develop the automobile industry.

"Mr. Liu, I wonder if Mark Company can provide a full set of truck production technology?"

Rao Bing was most concerned about this. Negotiations with Western devils were extremely difficult, and now that there was an opportunity to negotiate with the Chinese, he naturally would not let it go.

"If I provide a complete set of production technology, what can the mainland give in exchange?" Liu Zhicheng asked with a smile.

Rao Bing said: "Of course it is the market. We can open up the mainland market, and the joint venture with Mark can sell its products domestically."

Exchanging market for technology is a product of this era. In fact, in the past, domestic light trucks and Audi 100 business cars were localized based on this idea.

Liu Zhicheng asked: "Doesn't the mainland already have Steyr Truck Company's technology?"

Rao Bing nodded and said, "Yes."

"I want to build a joint venture in the mainland, mainly to produce special vehicles. As for truck technology, I also have my own difficulties, mainly the engine technology is limited. I think Mr. Rao should understand."

Rao Bing didn't think so much about it. After thinking about it, he realized that it was indeed a bit difficult, so he asked, "Then how do you think we can solve this problem, Mr. Liu?"

Liu Zhicheng thought for a moment and said, "As long as we have the management rights of the joint-stock factory, we can provide drawings and technology for light trucks and 10-ton cargo trucks in addition to engines."

If doing a favor now can bring better development prospects for the joint venture, it would be worth it.

As long as they can enter the market normally and survive until the 90s when they can compete normally, relying on Mark's R&D capabilities and Liu Zhicheng's financial resources, they will definitely be able to enter the automotive-related fields in the future.

Now the mainland is not only short of cars, but also of buses. In fact, this market was much larger than the car industry in the 80s and 90s.

Although buses and trucks are different, they actually have a lot in common. In the past, you could see videos on Tik Tok of Pakistan using truck chassis to build buses.

Rao Bing frowned and thought for a while, then said, "Mr. Liu, I personally don't have the right to say whether I agree or disagree with your request. We need to go back and hold a meeting to study it."

Although the mainland operated under a planned economy in the 80s, as reform and opening-up deepened, all regions began to focus on economic development.

The neighboring leadership only controls in the general direction, so local governments have the right to act independently on many issues.

For example, in the mid-80s, the famous "one dragon gives birth to nine sons" incident occurred in the refrigerator industry, which also showed that at that time, each place had its own import rights and purchasing options.

"Then I'll wait for Mr. Rao's good news." Liu Zhicheng smiled and said.

Liu Zhicheng and the current mainland senior officials can only set basic rules, but the real cooperation between the two parties involves too many issues, which requires the real technical personnel from both sides to sit down and negotiate.

However, Liu Zhicheng could not wait too long. Volkswagen wasted a lot of time because of a bunch of small details, as the talks lasted from 78 to 84.

As for the patent issue, Volkswagen has already solved it and can solve it on its own as well.

Rao Bing nodded and said, "One last thing. Where does Mr. Liu want to build this factory?"

Liu Zhicheng said: "Go to Shanghai!"

"Why did you choose Shanghai?" Rao Bing asked with a smile.

Volkswagen's production factory is also in Shanghai. Of course, the mainland wants to set up factories in other places so that one industry can drive the local economy.

"Currently, the three cities in the entire mainland with the most complete automobile supporting facilities are Wuhan, Changchun and Shanghai. Shanghai is close to the sea and has convenient transportation, so it is naturally the best choice." Liu Zhicheng replied.

But the core reason is hard to say, which is that they want to take advantage of SAIC Volkswagen to establish their own automobile industry supporting factory.

Although many parts of trucks and cars are different, we will have the advantage of importing a large number of precision processing equipment from abroad and get a share of the localization of Volkswagen parts.

It can also lay a solid technical foundation for your future automotive industry.

Therefore, it has the opportunity to become the largest supplier of SAIC Volkswagen in China.

In the future, with the development of domestic automobiles, it is possible to become a leader in the entire mainland auto parts industry.

After the motorcycle industry battle, Liu Zhicheng realized that Hong Kong, as a city with a stronghold, could not provide the market and technology needed by the automobile industry, and it was impossible for him to build an automobile industry in Hong Kong.

Now, taking advantage of the opportunity of trucks entering the mainland market and intervening in Volkswagen's parts supply is a good way to enter the automotive industry.

In the past, some powerful parts companies, such as Bosch, Aisin, and Magna, were not much worse than some second-tier car companies in terms of comprehensive strength.

For example, automatic transmission and engine technology, I wonder how much money foreign companies have made in this area.

.........

It was impossible for Liu Zhicheng to wait for Rao Bing and others' reply in Jingcheng City, so he started his next inspection trip.

Two days later, I went to Shanghai, Hongqiao Airport.

Hongqiao Airport is located in the western suburbs of Shanghai, about 13 kilometers from the city center. It was built in 1907 and has gone through several dynasties and renovations.

Before the construction of Pudong International Airport, this was the air transportation center of Shanghai.

When Liu Zhicheng and his delegation arrived in Shanghai, they felt the enthusiasm here and the officials' minds were more open.

As soon as I got off the plane, I felt the grandness of the scene. It might be because they already knew about my investment plan in the automobile industry.

It’s hard to describe the rank of the reception staff (it’s 404), and every aspect of the reception was very grand.

"Mr. Liu, welcome to Shanghai for inspection again." As soon as Liu Zhicheng got off the plane, he was warmly greeted by a group of people.

Liu Zhicheng smiled and said, "Thank you all for your hospitality."

After a few pleasantries, we headed to the Peace Hotel.

The 80s was an era of passion and striving. The Shanghai market at that time was not as extravagant as it is in later generations, and people’s clothing was simple and unpretentious.

Shanghai is still the most populous city in the entire mainland, and its economy is also ranked first in the mainland, but the roads are not as spacious as those in the previous life.

But Liu Zhicheng's motorcade drove smoothly into the Peace Hotel, one of the oldest hotels in Shanghai.

That evening, the Shanghai Stock Exchange held a welcome dinner and agreed with Liu Zhicheng to hold investment talks the next day.

The welcome dinner was certainly grand, but not luxurious.

(End of this chapter)