mesbooks Chapter 524: Handing over light industry to the private sector
Chapter 524: Handing over light industry to the private sector
Zhang Chi nodded, and instead of showing displeasure at being questioned, his face held a hint of approval.
The two men's concerns are clear and powerful, with rigorous logic, and are entirely based on their deep concern for the country's fiscal health.
But they are not time travelers, they cannot see the script of history.
Zhang Chi thought for a moment and said in a sincere tone:
"Hongsheng, Zhenchuan, your concerns are absolutely valid and very professional. Based on the current information and common sense, your concerns are completely reasonable."
He stood up, walked to the huge world map hanging on the wall of his office, and placed his hand on the European region.
"However, you've overlooked a crucial variable—White Eagle's global strategic conspiracy." In their eyes, Zhang Chi seemed like a prophet. "You only see the pressure of the 24 billion dollars we owe White Eagle, but you don't see that White Eagle is currently unleashing, and will soon unleash, several times, dozens of times that amount of money worldwide."
He turned around and looked at the two core economic officials with sharp eyes:
"The war destroyed Europe and John's financial hegemony. To sustain the war, John had already over-issued currency. The credit and value of the gold pound are like a candle in the wind. It is only a matter of time before it is replaced. What does the White Eagle want? It wants to succeed John and become the world's only super financial hegemon. It wants the British pound to become the new world currency, the sole core of international trade, financial settlement, and reserve assets."
Zhang Chi pointed at a giant creature in the north on the map:
"In order to prevent the fragmented and devastated Europe from falling into the hands of the Red Bear and to pave the way for the hegemony of the Sword Music, what will the White Eagle do?
It will launch an unprecedented and massive economic aid program. It won't force people to pay their debts, but will instead beg them to borrow money. It will, like opening the floodgates, pour massive amounts of loans into Western Europe and into countries it believes need support.
Historically, the Marshall Plan spent more than 400 billion US dollars across Europe.
A small Japanese island, 50 years ago, during the occupation, the White Eagle Army spent 22 billion in free food aid. Later, private capital and the World Bank loaned another 40 billion, which led to the subsequent economic boom of the Japanese.
Even the smaller South Korea received 31 billion in aid and 125 billion in military equipment after the Korean War.
In South Annan, more than 300 billion US dollars were directly spent. The huge war expenditure almost burned out the White Eagle, which ended the lavish spending mode.
Zhang Chi can predict with certainty that the next 10 years will be the first time that White Eagle will become the world's boss and will buy everyone over with its "money power".
"Think about it," Zhang Chi said with a persuasive voice, "When the whole world is rebuilding and needs to buy machines, equipment, raw materials, and food, and most of these things need to be paid for with Dao Le, what will happen?
All countries need Dao Le and will try their best to borrow Dao Le. White Eagle hopes that everyone can borrow more, the more the better, because the more it borrows, the wider the scope of Dao Le's use and the more stable its hegemonic position will be.
Why would it demand repayment at this moment, destroying the foundation of its carefully constructed Daole Empire? It only wants us to borrow more, spend more, and become more deeply bound to its economic system.
Bai Hongsheng and Chen Zhenchuan were completely stunned. The picture Zhang Chi painted completely overturned their traditional financial thinking framework.
Bai Hongsheng is a PhD in economics and Chen Zhenchuan is a top financial expert, but Zhang Chi's strategic deduction based on future trends was so profound and forward-looking that it shocked them and... they suddenly felt enlightened.
"Sir," Chen Zhenchuan's voice was a little dry as he struggled to digest this grand concept. "You mean that not only will White Eagle not press for repayment in the short term, but it might... provide more loan facilities in the future? Because it needs us as its fulcrum in Southeast Asia, and even more so, it needs Daole to circulate and anchor here?"
"That's right," Zhang Chi said firmly. "We can't even rule out the possibility that, in order to more quickly restore our economic vitality and better win us over, they will proactively relax loan conditions for us, or provide some technical assistance to accelerate our industrialization process."
Just as Zhang Chi said before, the value of united front work in Nanyang is extremely high. As long as the White Eagle is not stupid, it will not force repayment.
Bai Hongsheng took a deep breath, his eyes filled with a complex light, shock, admiration, and a hint of relief:
"So, you insisted on focusing national resources, including Nanhua Group's investment, on heavy industry during the first five-year plan. Was this to... seize this brief strategic window, take advantage of the White Eagles' eagerness to 'release water', and quickly build our own industrial backbone?
Even if there are huge economic pressures and foreign exchange shortages in the short term, in the long run, as long as we can get through the first few years, once our steel mills, chemical plants, machinery plants, power stations, and arsenals achieve economies of scale, we will be able to truly control our own destiny and no longer be controlled by others.
"That's right." Zhang Chi walked back to his seat, tapping the plan with his fingers. "Heavy industry is the backbone. Without it, light industry is like a castle on the beach, unable to withstand any storm.
The nation, including Nanhua Group, must focus its resources on prioritizing these strategic and fundamental industries, which require significant investment, long development cycles, and high risk, yet are crucial to the nation's destiny. These industries include steel, heavy machinery, large-scale chemicals (fertilizers, acids and alkalis), power generation equipment, the military industry, and even... the cutting-edge projects we are secretly pursuing (nuclear and rocketry). These are our lifeblood and must be firmly controlled by the state.
He changed the subject, his gaze sweeping across Bai Hongsheng and Chen Zhenchuan. "But I never said we should neglect light industry. Quite the contrary. Light industry is life, it's the driving force. It's the key to creating jobs, improving people's livelihoods, and accumulating wealth. This huge market shouldn't, and can't, be completely taken over by the state."
Next, Zhang Chi explained his hybrid concept to the two of them in a clear and concise manner.
First, the Nanyang National Bank was responsible for issuing the legal tender, the Nanyang dollar, and purchasing government bonds from the Ministry of Finance based on national development plans and market liquidity needs. This was the source of base money.
The licensed commercial banks then use their own capital or public deposits to purchase the government bonds held by the central bank. This is one of the main channels for the central bank to inject liquidity into the commercial banking system.
Commercial banks obtain low-cost, relatively stable funding (bond interest) by purchasing government bonds. Their primary mission is to lend this funding, along with public deposits, to private businesses, small and medium-sized enterprises, and self-employed individuals at market-based interest rates and risk management measures.
Private capital that obtains loans will dominate light industrial sectors such as textiles, garments, food processing, shoemaking, furniture, plastic products, daily chemicals, and cultural supplies.
The state is only responsible for setting rules and standards, providing infrastructure, establishing protective tariffs, and transferring some non-core, non-confidential civilian technologies. Meanwhile, through Nanhua Group's controlling or equity stakes in strategically important leading light industrial enterprises, the state provides guidance rather than leadership.
As for the funds needed for repayment, they mainly come from the foreign exchange earned by export companies, most of which must be forcibly converted to RMB by the central bank at the official exchange rate in exchange for Nanyang dollars for domestic circulation.
Finally, Zhang Chi simply concluded: "This is about concentrating resources to accomplish major tasks. As for the rest, we must trust the vitality of the people."
Bai Hongsheng and Chen Zhenchuan were overwhelmed with emotion after hearing this. Their previous doubts and concerns disappeared in the face of Zhang Chi's grand and logically clear blueprint for mixed ownership.
The two even felt that if Zhang Chi could delve deeper and refine his research, he could write books in the field of economics and might become a figure like Adam Smith or Hayek.
----
Soon after, silence returned to the office.
Zhang Chi rubbed his eyebrows. Even he felt a little tired from the continuous high-intensity thinking and decision-making.
Secretary Liu walked over lightly and placed a cup of floral tea with mint and ice cubes next to him.
When she leaned over, a faint and elegant fragrance penetrated Zhang Chi's nose, and a breathtaking touch of snow-white was faintly visible at the neckline of her white dress.
"Are you tired?" Her voice was gentle and full of concern.
Zhang Chi did not answer.
Secretary Liu stretched out her hands, placed them on top of Zhang Chi's head, and started massaging his scalp to relieve his fatigue.
"Oh, right." Zhang Chi narrowed his eyes slightly, enjoying his lover's service. "Marshall will be here soon. Remember to arrange the reception and let him stay where he can see the Russian diplomats..."
This is Zhang Chi's little trick. Occasionally, Nanyang also wants to be green tea, to let Baiying see that the sweetheart he is pursuing has other lickers...