Jianguo Hotel. Main Conference Room!
Li Yi sat firmly in the chair of honor, flanked by Lan Xinyi, Cai Bingyan, Li Yunbao, Yang Qian, and others, while the remaining thirty or forty people were seated in order on both sides of the long conference table.
Glancing around the room, Li Yi cleared his throat and said, “Welcome everyone to Beijing, the ancient capital with a history spanning a thousand years. For a long time to come, your primary focus will be here, so you must all be mentally prepared to settle down in Beijing for the long haul!”
No sooner had he finished speaking than Lan Xinyi interjected, “Boss, with the exception of our colleagues in the legal department, we’ve already coordinated with everyone else. You can rest assured on that front!”
Li Yi nodded. “Good to hear. Today’s meeting is primarily to address three matters. First, we need to establish the mainland branch of Star Investment. Manager Lan, please introduce the team members.”
“Yes!”
Lan Xinyi then reported with confidence: “Boss, our team consists of 42 people in total. This includes 18 from the Investment Department, 10 from Administration, 4 from Finance, 2 from Legal, 2 translators, 4 office staff, and 2 from Public Relations!”
“Additionally, all team members were among the first to join the company, and they are all fluent in Cantonese and English; a few can also speak Mandarin.”
After listening to Lan Xinyi’s introduction, Li Yi said with satisfaction, “Very good. This staffing arrangement is excellent.”
“In that case, I’ll now announce the management appointments for the mainland branch. I hereby officially appoint Lan Xinyi as General Manager of the branch, An Hong as Deputy General Manager, Li Yeqiao as Chief Financial Officer, Yang Qian as Deputy CFO, Cai Bingyan as Head of the Investment Department, Wang Yanbin as Head of the Administration Department, Xu Changming as Head of the Office, Qiao Yan as Head of the Public Relations Department, and Li Yunbao as Interim Head of the Legal Department!”
These appointments were the result of Li Yi’s careful deliberation over the past few days. Although the branch office is primarily staffed by people from Hong Kong, it also needs to include personnel from the mainland.
After all, the main business operations would be based here in the future, so naturally, they couldn’t rely solely on staff from Hong Kong. That’s why Li Yi had arranged for An Hong and Li Yeqiao to be included in the team.
“Does anyone have any comments or suggestions regarding this arrangement?” Li Yi asked again.
Lan Xinyi spoke up first: “I have no objections, but I do have a suggestion!”
“Go ahead!”
“Boss, our branch office has just been established, and we’re not yet fully staffed or fully equipped in other areas. So I suggest that once we’ve determined our investment direction, we should first submit an application to the local government to recruit a batch of employees!” Lan Xinyi said.
Li Yi replied immediately, “There’s no rush on that. Your primary focus now is negotiating with the Beijing municipal government, which brings us to our second task: securing favorable terms!”
“I’m sure you already have a general understanding of the local investment incentives from your previous visit with the delegation, but that was just an overview. The specifics still need to be negotiated. Since I’m unable to attend the negotiations personally, General Manager Lan will be in full charge of them!”
“Yes!”
Then, Lan Xinyi looked at Li Yi and asked, “Boss, are you really not going to participate in these negotiations?”
“I won’t be participating, but I have a few non-negotiable demands. You must ensure the other party meets them!” Li Yi said.
“What are those non-negotiable requirements?” Lan Xinyi asked.
“First, we must ensure that the industries we invest in can compete fairly and on equal terms with local enterprises. There must be no differential treatment based on differences in ownership or affiliation.”
Li Yi continued, “Second, our company is willing to accept oversight from local government departments—covering personnel, projects, taxation, and other areas—and we’re even open to allowing them to establish a Party branch within our company.”
“But conversely, the local government must not interfere with our normal operations without cause, and especially must not obstruct us through administrative orders.”
“Understood. We’ll make this position clear during negotiations!”
Then Lan Xinyi spoke again: “Boss, regarding tax incentives, do you have any expectations or bottom lines in mind?”
“None. You can negotiate that with them yourselves!”
As for tax incentives, Li Yi didn’t have any particular preferences.
In fact, tax incentives available to foreign-invested enterprises are not standardized. Typically, they offer tax exemption for the first two years starting from the year profits are generated, followed by a 50% reduction for the next three years.
However, some local governments even offer super-generous incentives, such as tax-free status for the first five years followed by a 50% reduction for the next five.
Exactly how much Lan Xinyi and her team could secure from the Beijing municipal government depended on their skills; Li Yi wasn’t particularly concerned about it.
After all, he was already doing everything he could to raise funds for the state—he’d already contributed hundreds of millions, even over a billion—so why would he get into a heated argument with others over a few tax breaks?
If anyone was going to negotiate, it would be Lan Xinyi, Li Yunbao, and the others; Li Yi would absolutely not get involved.
And that was the main reason he wasn’t participating in the negotiations. After all, he’d already handed over the whole chicken and the whole fish—why bother haggling over a mere drop in the bucket?
Moreover, Li Yi had always felt that granting preferential treatment to foreign businesses and capital was inappropriate and unfair to domestic enterprises.
It is often said that fair competition is one of the cornerstones of a market economy, but the current tax incentive policies for foreign-invested enterprises clearly run counter to this principle.
After all, the total income tax burden for foreign-invested enterprises is less than one-third of the actual tax burden rate for domestic enterprises. Such a stark disparity in tax burdens hinders fair competition between domestic and foreign-invested enterprises and the rational allocation of resources.
It also hinders domestic enterprises from engaging in economic exchanges with foreign counterparts under broadly equal conditions, severely undermining the nation’s interests.
“I understand, boss!” Lan Xinyi replied immediately.
Li Yi nodded and continued, “Next, let’s discuss the third matter: which industry sector to invest in!”
Upon hearing this, everyone in the room instinctively sat up straight.
Li Yi cleared his throat and said in a solemn tone, “The mainland is different from Hong Kong, and even more so from countries in Europe and America. There are no financial markets here to invest in, so we have only one investment direction: real industry!”
“As things stand, I’m leaning toward the electronics and semiconductor industries—including home appliances like refrigerators, color TVs, and washing machines, as well as cutting-edge technologies like cameras and computers!”
No sooner had he finished speaking than Lan Xinyi frowned and said, “Boss, the industries you mentioned are indeed all emerging sectors, but we are merely an investment firm and lack the necessary technical expertise. Wouldn’t it be too risky to rush into such fields?”
Li Yi nodded and said, “I’m glad you’re thinking this way, but you don’t need to worry about that. Although we lack technical expertise in these areas, we have capital—and more importantly, we have the vastest market!”
“The market?”
“Exactly. There are a billion people on the mainland, and the demand for electronic products here is growing by the day. Even if we simply purchase less advanced technology from Western countries, the products we manufacture will still be well-received in this market.”
Li Yi continued, “With such a vast market behind us, we’re fully capable of supporting our own R&D team to conduct cutting-edge research!”
Li Yi was well aware that these high-tech companies were money-guzzling behemoths. Given their current lack of both talent and technology, investing in such an industry was simply not feasible.
But he had no choice. A mindset of “better to buy than to make, better to rent than to buy” had already taken hold domestically, and many projects were either already being scrapped or on the verge of being scrapped.
To avoid being held hostage by others in the future, Li Yi had no choice but to proceed this way.
Fortunately, just as he said, with such a vast market to rely on, there was still a chance to catch up—even if they had to start from scratch.
Wasn’t it thanks to the vast domestic market and the support of the people that Mr. Ren was able to take Huawei from humble beginnings with just 2 million yuan in capital and build it into the tech empire it is today?
There’s no reason why Li Yi, with 20 billion, couldn’t achieve what someone else did with just 2 million!
Li Yi added, “In addition to that, we must also invest in local industries—this is currently our top priority!”
“Moreover, I have already reached a cooperation agreement with the Yanjing Television Factory in Beijing. You must dispatch a team to take up residence at that factory as quickly as possible!”
“Yes, sir!”
“In a few days, I’ll provide you with a list of high-quality local enterprises. You’ll then visit each one on the list, acquiring those you can and taking equity stakes in the rest!”
“Yes…”
……..