District Government Office Building!
In the top-floor office, Jiang Longyin was hunched over his desk, processing documents.
When he finished reading the document in front of him, he couldn’t help but let out a sigh.
This was a funding request sent to the district by the Municipal Accessories Factory. With over 1,800 workers going four months without pay, the factory could no longer hold on and had no choice but to seek assistance from the district.
If it were just a single parts factory, Jiang Longyin wouldn’t have been so torn.
The problem is, this is already the third such application the district has received this month—some asking for as little as 30,000 to 50,000 yuan, while others are asking for as much as a million yuan right off the bat.
However, the district government is currently facing severe financial difficulties as well. The deficit is so high that even Jiang Longyin, the top official, is terrified—he simply dares not allocate funds to them.
As a result, the district government is currently caught between tens of thousands of workers crying out for help and the immense pressure of the fiscal deficit, leaving everyone on edge.
And the biggest problem is that the nearby factory certainly won’t be the last one to go under, nor will this be the last funding request they receive.
“Approve the allocation of 100,000 yuan!”
After writing his approval and signing his name, Jiang Longyin set the document aside.
But he had no heart to deal with other matters; he leaned back, resting directly against the chair.
It was now the third year of reform and opening-up, and Jiang Longyin simply couldn’t wrap his head around it. Reform and opening-up were supposed to revitalize the domestic economy, yet he now found that the vast majority of state-owned enterprises were struggling, and the situation had actually worsened.
To be honest, Jiang Longyin was feeling a bit lost…
“Knock, knock, knock!”
Just as Jiang Longyin was deep in thought, a sharp knock suddenly sounded from outside, snapping him back to reality!
Taking a deep breath and gathering his complex emotions, Jiang Longyin said in a deep voice, “Come in!”
“Squeak!”
As the office door swung open, his brother-in-law, Li Yi, strode in.
Jiang Longyin caught a glimpse of two young men standing outside the door, but they didn’t come in; he assumed they must have been brought by Li Yi.
“What a rare visitor! Why did you come over so early in the morning?”
Li Yi smiled and said, “The issue with the TV factory has been resolved, so I came to discuss the next steps with you, Second Brother!”
“Hahaha, I heard about that prize-winning sales campaign you guys ran. It was truly impressive. To be honest, I’ve never been impressed by anyone in my entire life, but you, brother-in-law, are the first!” Jiang Longyin said sincerely.
“You flatter me, Second Brother. Let me give you an update on the TV factory first!” Li Yi said.
“Alright, go ahead!”
Li Yi immediately continued, “Through this promotional campaign, we sold a total of televisions, generating sales revenue of 万 yuan.The cost of goods sold was million yuan. Adding the million in channel setup costs from the initial investment, our profit came to million yuan!”
“In addition, the factory currently owes the bank million, owes the electronics factory million, and owes the packaging factory million… After deducting all liabilities, there’s currently million left in the factory’s accounts…”
“That much?” Jiang Longyin asked in surprise.
Li Yi smiled and continued, “Besides the money in the accounts, through this marketing campaign, Yanjing TVs have not only gained nationwide recognition but have also established sales channels in over ten provinces, municipalities, and autonomous regions in the north. We’ve also won the public’s approval, so there won’t be any inventory backlogs in the short term. The task you entrusted to me, Second Brother, is now complete!”
Jiang Longyin was initially quite pleased to hear this, but he quickly realized the implication and hurriedly said, “Brother-in-law, are you planning to just walk away from this?”
“Yes, Second Brother. You originally asked me to turn the TV factory around, and now that I’ve done just that, it’s time to let go!” Li Yi replied.
“Brother-in-law, tell me—will the TV factory’s profits stay this strong?”
“No way!”
Li Yi continued, “As things stand, the Yanjing TV Factory can maintain decent profits for two years at most. Starting in the third year, profits will plummet, and by the fifth year, it’ll be barely hanging on!”
Li Yi wasn’t exaggerating. Two years ago, the country’s first color TV production line was established in Shanghai, and soon after, the First TV Factory in Beijing and the Jinling TV Factory both began introducing their own color TV production lines.
At present, color TV production is still limited, and prices remain high, so the impact on black-and-white sets isn’t significant yet.
Therefore, as long as black-and-white TVs continue to gain public acceptance over the next two years, sales and profits will remain substantial.
However, starting in 1985, color TV production skyrocketed, and prices plummeted accordingly.
Furthermore, starting in 1990, the domestic economy experienced rapid growth, and as more people became affluent, the public’s demand for televisions shifted from small-screen black-and-white sets to color televisions.
Nevertheless, given the large number of small fourth- and fifth-tier counties and vast rural areas in the country, there remained a significant demand for black-and-white TVs among ordinary people. Consequently, although profits for manufacturers of black-and-white TVs plummeted during this period, they were still barely able to survive.
However, by around the year , China was on the verge of becoming the world’s largest producer and exporter of televisions. By this time, color TVs had completely become the mainstream in the domestic market, and the era of black-and-white televisions was drawing to a close.
Although Jiang Longyin didn’t know the reason behind Li Yi’s statement, he was well aware of his brother-in-law’s capabilities.
Since he said the Yanjing TV Factory could last at most five years, it certainly wouldn’t make it intact into the sixth year!
After a moment’s thought, Jiang Longyin said in a solemn tone, “Brother-in-law, you know that what I want isn’t just for the TV factory to survive a few more years, but for it to remain a thriving enterprise.”
Li Yi paused briefly before replying, “Second Brother, if you want the Yanjing TV Factory to become a major, influential enterprise, you’ll have to upgrade their products—and that will cost far more than you can imagine!”
“Isn’t those twenty million enough?”
Li Yi shook his head. “It’s not enough. Do you know how much a color TV production line costs?”
“I don’t know!”
“50 million US dollars. At the current exchange rate, that’s 300 million yuan!”
“Whoa!”
After hearing Li Yi’s words, Jiang Longyin couldn’t help but gasp.
“Is industrial upgrading really necessary?”
“Absolutely. If you want our TV factory to compete on equal footing with similar companies in other provinces, we have to produce color TVs. They don’t have to be better than others, but they definitely can’t be too far behind!” Li Yi said.
“Brother-in-law, is there any other way?”
“Yes, two!”
“Two?”
“Right. The first option is for the TV factory to bypass official channels when ordering production lines—and not order new ones at all. Instead, we’d go through middlemen to buy production lines from foreign TV factories on the verge of bankruptcy, then smuggle the equipment into the country. That should save us a huge chunk of money!” Li Yi said.
“Smuggling? Is… is that even possible?”
“In theory, there’s no problem with it. Besides, this is the only way out for the Yanjing TV Factory—unless…”
“Unless what?”
“Unless the State-owned Assets Department and the district can raise 100 million yuan in industrial upgrading funds to purchase brand-new production lines through official channels. Otherwise, we’ll just have to watch the Yanjing TV Factory gradually decline and fall into ruin until it goes completely bankrupt!”
Jiang Longyin shook his head with a wry smile and said, “The district doesn’t have the money, and the State-owned Assets Department won’t cough up that much either!”
“Then I’ll have to try the second option: raising funds!” Li Yi said.
“Financing?”
“Right. The TV factory can seek financing from foreign companies and convert it into a joint venture. That way, we’ll have the capital needed for development!”
Joint ventures were no longer a novelty by now. As early as last November, the first Sino-foreign joint venture—Beijing Aviation Catering Co., Ltd.—had been approved for establishment.
Subsequently, the first batch of approved Sino-foreign joint ventures was announced, including Schindler Elevator Co., Ltd., Tianshan Wool Textiles Co., Ltd., the Jianguo Hotel, the Great Wall Hotel, and the Jincheng Dynasty Winery.
So converting the TV factory into a joint venture is entirely feasible!
“Brother-in-law, I can’t make this decision on my own. Let me report this to the district authorities, okay?” Jiang Longyin said.
“Alright, but you know my situation, Second Brother. I can’t keep serving as an advisor to this run-down little factory forever!”
Li Yi continued, “If the district still wants me to lead the ongoing reforms at the Yanjing TV Factory, they’ll have to agree to two conditions!”
“What are the conditions? Go ahead,” Jiang Longyin said.
“The first condition is to reshuffle the leadership of the TV Factory. Aside from Sun Feng, replace all the current plant managers and deputy managers!”
Li Yi continued, “The second condition is that if the district and the State-owned Assets Department intend to secure financing, they must give priority to my companies in Hong Kong!”
“Alright, I’ll report your ideas and conditions to the relevant leaders as soon as possible. I’ll contact you immediately as soon as I have any news!” Jiang Longyin said.
“Hmm, and one more thing—now that the TV factory has been revitalized, shouldn’t the district fulfill the compensation they promised me?” Li Yi asked.
Jiang Longyin chuckled and said, “So, brother-in-law, you’re here today to collect what’s owed to you, are you? Don’t worry—you’ll get every penny we promised!”
“Good to hear. Well then, I’ll be heading back now!”
“Alright…”
………