Chapter 177 Yangcheng
In the afternoon, the group attended some company meetings and then left the factory.

Liu Zhicheng usually does not personally manage the specific operations of a manufacturing plant and only looks at the data.

This time I came here just to take a look. After all, this is my first large-scale joint venture project invested in the mainland.

This is just the beginning. As long as we expand the market in the mainland in the future, we will inevitably have to form joint ventures with other companies.

On the third day, at the invitation of the section chief of the Ministry of Transportation, Liu Zhicheng also went to a construction site in the southern part of Beijing.

Take a look at the Beijing-Tianjin-Tangshan Expressway that is officially ready to be built. Compared to a factory, this is a truly large investment.

But now everything has just begun, and the basic roadbed work has just begun.

In the highway project department, Liu Zhicheng was very interested and asked his assistant to take a few photos of the entire project.

After all, it is the first expressway that I have invested in the mainland, and it will have great historical significance in the future.

As the first large-scale infrastructure project of Mount Everest Infrastructure Company (Liu Zhicheng holds 6% of the shares and Hu Yingxiang holds 4% of the shares) in the mainland, Hu Yingxiang is also here.

"Mr. Liu, according to our plan with the mainland, this expressway will be open to traffic in 1986," Hu Yingxiang said with a smile.

"Five years is quite fast." Liu Zhicheng nodded after listening.

The construction of a highway is itself very time-consuming and usually takes several years to complete.

"Yes, although the Pingjin area is a plain, some sections of the road pass through areas with poor geology and require special treatment, which will take a lot of time," Hu Yingxiang introduced on the side.

"Mr. Hu, the Pingjin area is considered relatively good, with only a few bridges and a small number of tunnels. If you go to a mountainous area, you will see that there are many bridges and tunnels. I don't know how much money and time it will cost." Liu Zhicheng said with a smile.

"That's right." Hu Yingxiang nodded.

"Mr. Hu, what's the current situation with the demolition along the line? For such a large project, the amount of demolition should be quite large, right?" Liu Zhicheng asked again.

"Yes, preliminary estimates suggest that tens of thousands of families may be affected, but a solution has been found. The mainland government will provide some construction land nearby.
We will fund the construction of new houses to accommodate them, and we will increase the area of ​​each family by 20% as compensation.

At the same time, some supporting facilities will be built, such as wells, substations, roads, etc., to ensure the normal life of the people who are being relocated.

However, the farmland occupied along the line is a bit more troublesome, and the mainland government has no way to allocate new farmland to them.

We can only compensate them in the form of money and let them solve the problem themselves." Hu Yingxiang replied.

"This piece should be quite large. The farmers in the mainland have a strong attachment to the land. The land is their root. Asking them to give up the land would be like asking for their lives," said Liu Zhicheng.

For an agricultural country, land is the life of farmers, which is completely different from the perception decades later.

Moreover, the cost of demolition now is much smaller than in the future, so the farmers whose land is expropriated will suffer more.

But the most important thing is to complete the construction of this highway as soon as possible, and it is not just a matter of return rate.

Moreover, once the highway is built, it will be of great help to the economic development along the entire route.

"Mr. Hu, after the expressway is built, won't we need to recruit a lot of employees? In the future, try to recruit children of the landless agricultural population." Liu Zhicheng said.

After the highway is built, a large number of maintenance, cleaning and service personnel will be needed, who do not require a high level of education and are just suitable for these landless agricultural populations.

"There is no problem with this." Hu Yingxiang nodded and said.

Liu Zhicheng and Hu Yingxiang sat in a BJ jeep and began to inspect the construction sites along the line. Before they had driven for dozens of kilometers, a huge soil pit appeared in Liu Zhicheng's eyes.

Liu Zhicheng saw many construction vehicles pulling earth in and out, and he was very curious, so he asked, "Mr. Hu, what's going on?"

"Mr. Liu, we are transporting earth to build the highway foundation." Hu Yingxiang said calmly.

"Roadbed?" Liu Zhicheng asked somewhat confusedly.

"Yes. Mr. Liu, I just wanted to report to you that this is the first time that a highway has been built inland. During our field investigation, we found that from the perspective of flood control and in actual construction, a large amount of earthwork is needed to raise the roadbed.
If these earthworks are transported from other places, the cost will be too high and the time will be too long. Therefore, an idea was proposed in the mainland, which is to dig several large artificial lakes in the area of ​​Jingcheng or TJ City.

In this way, earthwork is available, transportation costs are low, and large-scale water storage can be achieved to avoid drought problems. "Hu Yingxiang said.

"Well. Is there any problem?" Liu Zhicheng couldn't help but ask when he saw Hu Yingxiang's report was so detailed.

"The problem is that we seriously underestimated the budget. There was no budget for this in the initial investment plan, so we need to increase the scale of our investment.
The mainland is probably worried that spending a lot of money to dig a large artificial lake will cause dissatisfaction on our side.
After all, this artificial lake is a public project and will not generate any revenue, so they came to ask for our opinions. They wanted to ask us what we think?" Hu Yingxiang said.

"Artificial lake?" Liu Zhicheng thought for a moment and said, "Then we can dig an artificial lake, and the funds will be borne by the joint venture company."

Liu Zhicheng shook his head. This place was not too far from Kyoto City. If he could acquire a piece of land near the artificial lake and then develop a lake view hotel or some tourism projects, it would be a good project.

But now that the reform and opening up has just begun, building a factory requires a joint venture, and it is impossible for individuals to buy and sell land.

"Mr. Hu, just tell them that we have priority in developing the land around these artificial lakes in the future."

"Okay." Hu Yingxiang said with a smile.

After all, Hu Yingxiang was also a big real estate developer and he knew what Liu Zhicheng meant, but he just couldn't see the future direction of mainland policies.

...............

Liu Zhicheng did not stay in Beijing for too long and flew directly to Guangzhou on a private plane.

The person who welcomed Liu Zhicheng at Baiyun Airport this time was Niu Guangli, because the negotiations on the implementation of the Chigo International Motorcycle Project had recently entered a critical moment.

Liu Zhicheng hurried over from Beijing to promote this project.

On the second day after arriving in Yangcheng, a director in charge of investment promotion in Yangcheng came to the hotel to visit Liu Zhicheng.

"Mr. Liu, this is Director Bai who is in charge of investment promotion in Yangcheng City. Director Bai, this is Mr. Liu Zhicheng." Niu Guangli introduced the two parties.

"Hello, Director Bai." Liu Zhicheng greeted first.

This was a scheduled meeting, and the location was in the hotel suite where Liu Zhicheng was staying. In the development history of the entire domestic motorcycle industry, Guangzhou can be said to have a glorious history.

Starting from Wuyang Bicycle, to Wuyang Motorcycle, and then Wuyang Honda, the Wuyang brand should be a household name.

"Hello, Mr. Liu." Director Bai said with a smile after entering the room: "It's nice to meet you today."

"Director Bai, you are too polite." Liu Zhicheng also shook hands and said.

Director Bai Zhan is currently in charge of Yangcheng City's investment promotion work. Due to the restrictions of the reform and opening-up policies, the pressure to attract investment is relatively high.

Earlier this year, he heard that Hong Kong-owned Chigo International was interested in investing in Yangcheng, so he made a special trip to Hong Kong to visit it. Of course, he did not meet Liu Zhicheng.

"I'm so happy to be able to visit Mr. Liu today. I hope you don't mind." Bai Zhan said with a smile.

"Director Bai, please take a seat." Liu Zhicheng nodded and motioned Bai Zhan to sit down.

Afterwards, Chigo International staff made tea for everyone. Although there were no tea sets like those in Hong Kong, Guangdong people love to drink tea, so simple tea sets were still available.

After taking a sip of tea, Bai Zhan was the first to break the silence and said, "Mr. Liu, you should know why I came here. There is a big gap between China and foreign brands in the motorcycle industry.
Therefore, we want to introduce advanced foreign technology and jointly produce motorcycles. In return, these motorcycles can be sold domestically under certain conditions.

Your company Chigo International now has a complete motorcycle technology reserve, and we have also gone through several rounds of technical negotiations. What do you think? "

"From my personal perspective, I am naturally willing to cooperate with the mainland. Chigo International has also had some contact with the mainland recently, and I know a little bit about it.
Since Director Bai is here today, we can discuss a few major issues. Regardless of whether we can reach an agreement, we also need to know your specific ideas. "Liu Zhicheng nodded and said.

Ostensibly, the purpose of this trip to Guangzhou was to investigate the Guangzhou market and the Guangzhou-Shenzhen Expressway project, but in fact, the basic purpose of this trip was to discuss motorcycle joint ventures with the bigwigs in Guangzhou.

"Mr. Liu, please feel free to ask any questions you have. If I can answer them in person today, I will definitely answer them in person. If I cannot answer them in person, I will definitely answer Mr. Liu in writing." Director Bai said with a smile.

"Director Bai, you should know more about the progress of this project than I do. Please tell me.

I am here to express my opinion today. You and I can basically represent both sides of the negotiation. I think as long as it is not a matter of principle, it should be able to be resolved. "Liu Zhicheng said with a smile.

Liu Zhicheng is the boss of Chigo International. As long as he does not agree to outrageous conditions, the management of Chigo International will basically not object.

As for Bai Zhan, he must have reported and discussed with his superiors at the meetings many times, and he basically had a plan for what kind of conditions could be agreed to.

If the two of them decide on something, the direction is basically determined.

"Okay, if we can reach a cooperation intention today, I will do my best to make this happen." Bai Zhan nodded and said.

Although this joint venture has some difficulties, it is normal as the joint venture between the two parties cannot be accomplished overnight.

Both sides need to offer tangible benefits. Foreign capital should offer technological patents and US dollars, and domestic capital naturally also needs to provide something to attract foreign capital.

"Mr. Liu, in fact, our negotiations have reached a lot of consensus, but there are differences in the localization of parts, engine technology, domestic sales ratio, etc...."

"Director Bai, the general form of cooperation is that Chigo International will provide the funds, patented technology, vehicle model drawings and other information, and China will provide the land and factory.
Subsequently, Chigo International will also use its latest research results to improve the technology of the joint venture company, and the joint venture ratio will be 51:49 as stipulated by mainland laws.

As for the price, let a professional financial officer calculate it, how about that? " Liu Zhicheng thought for a while and said.

In fact, Liu Zhicheng doesn’t care about the issues that many large companies are concerned about. What he needs to do is to establish the brand in the country first.

As for any problems that may arise during future operations, we will find ways to solve them, because as reform and opening up deepen, the conditions for foreign investors will become better and better.

As the reform and opening up deepens, Liu Zhicheng will enjoy more and more benefits.

As a prophet, he knew that the reform and opening-up policy would continue, the domestic economy would get better and better, and the motorcycle market would begin to explode in about ten years.

Therefore, he only needs to enter the market early and make preparations early. After all, motorcycles are an industry that requires a lot of market testing and accumulation of experience. Chigo International also needs to work with the mainland for a long time before it can achieve a perfect state of cooperation.

"These are not problems. As long as the intention of cooperation is reached, we will soon invite Chigo International to come to Guangzhou to start work and find a suitable factory site," said Bai Zhan.

"Just find a place with convenient transportation in Yangcheng." Liu Zhicheng nodded and said.

When investing in a factory, Liu Zhicheng still cares about the choice of location, because in the future the mainland will implement the "empty cage and replace bird" policy, which will also be the source of the factory's profits.

Of course, if you can choose a good one, you should try to choose a better one, otherwise how can you be worthy of your "prophet" golden finger.

"In terms of transportation, we will definitely choose the best location, with priority given to the old factory in Yangcheng." Bai Zhan nodded and continued, "If the cooperation is like this for the time being, then the second issue is the localization of parts."

“Localization of parts is indeed a big issue. I am very willing to promote localized production, which will help reduce the cost of the entire vehicle.

But the motorcycle industry concerns the life safety of customers, so it has relatively high standards for parts and components.

Although we have certain rights to ask our existing partners to come to the mainland to cooperate with our work,
But it is very difficult to get them to build factories in the mainland. My suggestion is to implement a step-by-step strategy and achieve localization in about ten years. "Liu Zhicheng slowly expressed his thoughts.

Why does the mainland want foreign-funded industrial enterprises to settle down and produce in the mainland? In addition to wanting to learn production technology, it also wants to drive the development of the entire industry.

Of course, the higher the localization of spare parts in the mainland, the better, but under the current industrial foundation, it is absolutely impossible.

However, importing large quantities of parts and simply assembling them domestically is, firstly, too expensive, and secondly, it deviates from our original intention.

It is impossible to achieve the effect of developing one industry and driving the development of a whole area.

If various parts can be produced by ourselves, a large amount of foreign exchange can be saved and domestic industrial capacity can be strengthened.

"Mr. Liu, according to our senior officials' meeting, in the initial stage, the joint venture factory can produce in a CKD manner.
However, it must be gradually localized within 3-5 years, reaching at least 50%, and the issue of foreign exchange balance must also be taken into consideration.

We need to have solutions to these issues now, otherwise, it will be difficult for senior officials to agree to this cooperation project. Bai Zhan said with some embarrassment.

In fact, these problems were also the reason why Volkswagen’s negotiations were in a desperate situation in the previous life, and there were also strong opinions about this within Volkswagen.

Not only are there requirements for localization of parts, but there are also restrictions on the shareholding ratio of joint venture factories, and it is also necessary to maintain foreign exchange balance. Such investment conditions are really rare.

(End of this chapter)