Chapter 109 Discussion with the Prime Minister

Zeng Lingfeng smiled and said, "Uncle Zhu, don't worry, my father knows that the government's finances have not been well-off in the past two years, and he has not focused on it."

Prime Minister Zhu asked: "Then where did he make his mind?"

Zeng Lingfeng said: "For such a big project, only banks can finally solve the problem."

Premier Zhu just didn't talk.

Zeng Lingfeng didn't care and said to himself: "My father said that the municipalities can withdraw about 80 billion yuan in the past few years. If the national finance can support 20 to 30 billion yuan, he only needs to borrow about 100 billion yuan from the bank."

Premier Zhu said, "Well, 100 billion is only more than 10 billion US dollars, which is not a lot. I remember, don't you have a bank? This is a piece of cake for more than 10 billion US dollars. This is to support the construction of the country, help the elders of your hometown, or support your father's career. I think Ling Feng, you are very willing to do this with multiple goals."

Zeng Lingfeng rolled his eyes by Premier Zhu's words.

"Uncle Zhu, don't bully honest people like this?" Zeng Lingfeng shouted.

Premier Zhu looked serious.

"Uncle Zhu, you're too much. I have invested so much in China. No matter how rich I have, it's limited. How could I still have so much spare money? I think Uncle Zhu should also be very clear. This is also a taboo thing. You must know that this is related to the interests of the 30 million people of the new municipality. It really concerns the national economy and people's livelihood. Can the government really let me participate?" Zeng Lingfeng said.

Premier Zhu said: "Yes, this seems to be really inappropriate. But it's nothing. Didn't you say that this is a major event that concerns the interests of 30 million ordinary people. In the face of justice, no taboos are more important than that. I think everyone will agree."

Zeng Lingfeng shouted, "No, there is no negotiation. Besides, the four major banks in the country are so rich, and municipalities directly under the central government have mortgages. They will not lose a penny of interest and have great reputation. For such customers, the country does not lend money. Who are you planning to lend to? Why, do you want to stay and buy US Treasury bonds? Uncle Zhu, I advise you to save money, this business is not cost-effective."

"Ling Feng, you can't say this randomly," Premier Zhu said seriously.

"I know, the established policy," Zeng Lingfeng waved his hand disapprovingly.

What Zeng Lingfeng talked about is a phenomenon in the domestic economic field at present.

Since the reform and opening up, especially after the 1990s, from the central government to the local government, governments at all levels have been desperately encouraging export and foreign exchange earnings. Many preferential policies have been formulated for this purpose, such as export tax rebates. Even in some major coastal economic provinces, export foreign exchange earnings and investment promotion are two equally important indicators. In places where export foreign exchange earnings have achieved remarkable results, the top leaders of the party and government have been strongly commended, so there are many people promoted to more important positions. Once the export foreign exchange earnings decline, the top leaders of the party and government will be held accountable or criticized.

This rigid administrative measure has led to local governments rushing to engage in exports and trade surpluses every year.

It should be said that at the beginning of reform and opening up, the country's foreign exchange reserves and gold reserves were pitifully small, and its own currency could not enter the world circulation field, which seriously restricted our import of urgently needed materials and equipment abroad. It is very correct for the country to formulate such a policy to encourage exports and foreign exchange earnings. It is always necessary to have hard currency on hand to buy what they need.

This policy of export and foreign exchange earnings played a very positive role in domestic economic construction at the beginning of the reform.

However, the domestic economy has always had one drawback, which is that it always has the shadow of the planned economy, even though the State Planning Commission has now been renamed the National Exhibition and Planning Commission.

Things in pure economic fields will often develop abnormally once administrative means are intervened.

In addition, many people in China, including elite figures in various fields, are deeply influenced by thousands of years of agricultural economic awareness and have a special liking for storing wealth. The most vivid adjective is: if you have food in your hands, you will not panic in your heart.

From the perspective of preparation, this statement is very correct and very philosophical. However, it may not be the best strategy when applied to the economic field.

The country is desperately reserved foreign exchange and pursued its status as a creditor. There are often cheerful news in the newspapers, and our country has surpassed a certain traditional power and became the largest creditor in the world. It seems that in this way, we have a good mentality of being a "rich man". Thinking of the foreign exchange reserves of trillions of dollars in later generations in China, Zeng Lingfeng was sweating profusely on his back. Every percentage point of the RMB appreciated, the wealth lost by the country is a huge astronomical number, which really made Zeng Lingfeng feel extremely sad.

"Agricultural consciousness is not good." Zeng Lingfeng picked up the teacup, took a sip, and shook his head in a worried manner.

Premier Zhu's expression became even more serious, he pondered for a while, and said slowly: "What is the reason?"

Premier Zhu is well versed in the economy and is a top elite. He naturally understands what Zeng Lingfeng refers to as “agricultural consciousness”.

"This has a problem with consumption concept..." Zeng Lingfeng chose his words and said cautiously. It was not because he was worried about Premier Zhu's misunderstanding, but because Premier Zhu, as the Prime Minister, Zeng Lingfeng must try to express these things clearly when talking about them. He should not be ambiguity.

"Let's talk about it in China as an example. Let's talk about Shenzhen City, which has created a miracle in the history of economic exhibitions, and also created a proper term called 'Shenzhen Degree'. Uncle Zhu believes that why does Shenzhen's economy fly like this?"

Premier Zhu replied lightly: "Build Shenzhen nationwide"

Such a problem is definitely not difficult for Premier Zhu. Shenzhen's regular exhibitions have many reasons, such as policy inclination, superior geographical location, open people's thoughts, etc., which are all very important factors. However, from a purely economic perspective, these factors are not the most important. All of these factors add up to create a good environment for Shenzhen to utilize funds. Shenzhen's regular exhibitions cannot be separated from the most fundamental support - large amounts of funds, or even massive amounts of funds. Because Shenzhen has an excellent capital utilization environment than other cities, the funds invested here can generate the highest benefits at the fastest level. Therefore, not only foreign funds pour in, but funds from all over the country also rushed to Shenzhen. Massive funds were concentrated in Shenzhen in a short period of time, and this city could not do without high performance.

Premier Zhu condensed this phenomenon into five national construction Shenzhen

Zeng Lingfeng smiled and said, "It's very insightful."

"What else?"

Premier Zhu continued to ask lightly.

Since it was said, Premier Zhu would not just give it a try. Although he didn't know why Zeng Lingfeng was still a child and had such a thorough understanding of the general economic trend, he understood that Zeng Lingfeng's views were indeed very unique.

"The United States has grown into a great power, and its model is similar to the exhibition situation in Shenzhen. Money from all over the world is attracted by the United States and waiting for the world to help the United States build. The world's most powerful economy and the largest debtor country are not a question worth pondering?" Zeng Lingfeng said.

"So, I do not agree with the current foreign exchange reserve policy of the country," Zeng Lingfeng said bluntly: "Foreign exchange reserves should have a safe limit. It is of course dangerous to have a low limit. However, excessive foreign exchange reserves may not necessarily be a good thing. These reserves are just to cope with the needs of time, but in normal times, they are idle and have no effect at all. Tens of thousands of companies across the country are desperately trying to export and earn foreign exchange, and the money they exchange for is not to be collected and not used."

Premier Zhu fell into deep thought again. It was obvious that he had been moved by Zeng Lingfeng's words.

"Japan is such an example." After a while of contemplation, Premier Zhu murmured.

Zeng Lingfeng smiled and knew that Premier Zhu had thought of the idea. This was not an unimaginable issue. Premier Zhu just didn't consider it before. Now Zeng Lingfeng mentioned that he was introduced to other things, so Premier Zhu naturally figured it out quickly.

Japan has been trying hard to accumulate wealth and has long occupied the throne of the world's largest creditor country. For a period of time, the Japanese government and citizens have been very excited by this feeling of wealth. They have worked hard to invest in the United States and buy US Treasury bonds, thinking that this would be impregnable. In the bones, they are using their own money to support the construction of the United States. When the United States reaches a bottleneck, they will create a financial crisis, plundering the wealth accumulated by Japan over the years.

Poor Japanese people are obsessed with it. When they heal, they forget the pain. Once they recover a little vitality, they have some savings in their hands, and they can't wait to give it to the United States. Even in Zeng Lingfeng's memory, China has done the same thing in Japan. In another time and space, since two years, the RMB has been constantly appreciated for several years, and is essentially the same as the financial crisis that Japan once suffered.

"In fact, the United States is like a bank. It absorbs funds from the world and pays low interest. Then lends it out to generate greater economic benefits. However, the target of lending is their American citizens. We are now desperately absorbing US Treasury bonds as a means of preserving value. However, it is obvious that the interest on Treasury bonds will definitely not keep up with the level of inflation. Our money is getting more and more, but the actual purchasing power is declining. We are paying money for others to use."

Such words are completely deviant from the foreign exchange and financial policies implemented by the central government at that time, and can be called "deviant".

"What should you do in your opinion? Could it be that you should keep the money at your own home?" Premier Zhu has basically accepted Zeng Lingfeng's point of view, but he still has to get to the bottom of it.

"You, you are just a bank president or an administrative official. If you want to do business, you will not make money." Zeng Lingfeng "strike" Premier Zhu without hesitation. Looking across the country, there should be only a handful of people who have the courage.

Premier Zhu didn't care and said with a smile: "So I don't do business."

"We can completely learn from the experience of the United States, invest in industries, invest in the world's energy market and mineral market. Judging from the current GDP growth in my country, our energy will not be sufficient in the future. My personal opinion is to maintain a safe foreign exchange reserve, and the remaining money should be turned into equipment, technology, and introduced to the country. Instead of blindly purchasing US Treasury bonds or investing in their financial institutions. Only in this way, the foreign exchange we have worked hard to create is valuable and can truly become profits. It is living money, not dead money."

"I will discuss with them." Premier Zhu nodded solemnly.

Zeng Lingfeng naturally knew what Premier Zhu said about the discussion. However, he didn't want to give up just like that, and smiled and said, "Uncle Zhu is not just a discussion, but a struggle based on reason. The major affairs of the country cannot be slackened."

Premier Zhu was depressed. If you gave him three points of color, you really dared to open a dyeing workshop, but you actually taught the Prime Minister a lesson.

"By the way, Ling Feng, you just mentioned that you have let the country invest in the energy market and mineral market. It really reminds me. In recent years, the consumption of energy and minerals in my country has increased very quickly, and the energy crisis and resource crisis have begun to appear. And according to reliable information, Rio Tinto and BHP Billiton are planning to raise prices for minerals, especially iron ore and iron ore. Ling Feng, you know that China's two ores have a lot of reserves, but their quality is not high. With China's development, China will face great pressure in this area in the future. Ling Feng, your mining group is also considered the world's four major mining giants, Hanyu Mimon Group, and they should have had a deep exchange. Do you think you will discuss it with them and let them think carefully?"

"Uncle Zhu, I will exchange opinions with them. However, this is not the fundamental solution. Although the mining group under Hanyu Mimeng Group is also a mining giant, in the entire mining field, it also has to abide by certain rules of the game. Therefore, to solve this expected huge pressure, it still has to consider it from other areas." Zeng Lingfeng said.

"Tell me specifically." Premier Zhu looked at Zeng Lingfeng and said.

"It can be solved from two aspects. The first aspect is naturally what I just said, to increase investment in mining abroad and master mineral reserves. The second is domestic macro-control." Zeng Lingfeng said.

Premier Zhu laughed for a while and frowned and said in a deep voice: "Ling Feng, the first point you said is relatively simple and easy to operate, but the second point is not simple. The steel industry has huge investments, which often involve dozens or tens of billions of yuan, and it is difficult to make up your mind."

Zeng Lingfeng could fully understand this. It is precisely because the steel industry involves a huge network of interest groups. The relationship between the complexity of the network of interest groups once it starts to implement macro-control will be very huge. In addition, it does involve many issues related to people's livelihood. Even if it is strong, Premier Zhu cannot easily make up his mind.

In some places, a large steel company often invests tens of billions of dollars. However, only a small part of it is the funds owned by the corporate legal person, and more are the funds brought by the construction unit and the funds raised from the society through various means.

It should be said that investing in steel companies is a voluntary act of the masses without compulsory force. However, the reason why the masses voluntarily invest in shares is very direct related to the vigorous publicity of the local government and steel companies. The government and steel have described a beautiful blueprint to the masses, and in addition, they even promised the masses that a certain amount of fundraising can solve a recruitment target. After the steel company is officially operated, you can go to the steel factory to get your salary.

This is very attractive to the masses. Although the country's economic situation has undergone earth-shaking changes in the past 20 years of reform and opening up, it is still very tempting for most people to serve. After all, not everyone can do business, and not everyone can do business. In this world, there are only a few bosses, and the vast majority of people who work.

The investment amount and scale of the steel company are so huge, you can imagine that once it is completed and put into production, the benefits will definitely be good. What is the steel plant?

So most of the demolition people did not receive the compensation but obtained a certificate of investment. Some families even had more unemployed young people who borrowed money and invested it in the stock market. In order to get an additional recruitment indicator.

But now my dream has suddenly shattered. The savings of my hard work have been wasted. You can imagine how angry the people who learned the news soon will be.

And those units that brought huge sums of money to participate in the construction will not give up.

The government's meeting is facing an extremely severe situation.

Such a thing is something that no official in charge dares to ignore, so the pressure of macro-control can naturally be imagined.

"Uncle Zhu, it is necessary to endure some pain to maintain the sustained and stable economic development of the country under the premise that the market economy is not yet perfect." Zeng Lingfeng said seriously.

"Yes, the steel market is getting more and more chaotic. All parts of the country are rushing to make steel. The repeated investment is serious and has caused a lot of waste. International mining groups have taken the opportunity to choke and suffer great losses." Premier Zhu's eyebrows were even tighter and almost twisted into the character "chuan". Premier Zhu would be very devoted when talking about work.

Zeng Lingfeng smiled and said, "I personally think that it is more appropriate to concentrate the steel industry in a few cities with convenient transportation, and it is more appropriate to do it by a few powerful giant enterprises. Strong steel companies can reduce costs through large production and counter overseas mining companies through large-scale procurement. At the same time, they can avoid excessive vicious competition among domestic steel companies to give outsiders the opportunity to defeat them."

"It makes sense" Premier Zhu nodded frequently: "Macro regulation is not about reducing steel production, it is just about reducing the number of steel companies."

Zeng Lingfeng smiled and nodded.

Premier Zhu seemed to suddenly think of something and said, "Ling Feng, Japan seemed to have a note to the Ministry of Foreign Affairs not long ago. I heard it is related to you."

"It has something to do with me? How do you say this?" Zeng Lingfeng was a little stupid. When did he mess with the Japanese?

"I don't know much, either. It seems to be related to your group's rectification of the domestic rare earth industry." Premier Zhu said uncertainly.

Zeng Lingfeng remembered. Two years ago, after Zeng Lingfeng reached a rare earth franchise agreement with the country, it took a whole year to finally complete the initial integration of the domestic rare earth industry, which was considered to have mastered the pricing power of rare earth mines.

For the sake of his own and his country, Zeng Lingfeng ordered the Hanyu Mimon Group to increase the export price of rare earth mines, but it was unanimously opposed by Japan, South Korea and other countries.

Zeng Lingfeng used his ultimate move, which was to temporarily close most of the domestic rare earth mines in the name of rectifying the domestic rare earth industry, causing the world's rare earth production to plummet by 70%.

Before closing the rare earth mine, Hanyu Mimon Group tore up the rare earth mine purchase agreement signed with Japan, South Korea and other countries, and paid the compensation in full with a double compensation agreement.

Japan and South Korea's rare earth companies naturally agreed with Hanyu Mimeng Group's behavior and happily received compensation. They think that since Hanyu Mimeng Group is operating China's rare earths, it always needs to be exported. The export targets are naturally countries with high demand for rare earths.

Since they are customers and follow the custom that customers are God, the Hanyu Mimon Group will eventually make concessions and reduce the price of rare earth mines. And they have received double compensation in vain. How could there be something better in the world than this?

Who knew that just when they were proud of getting high compensation, Hanyu Mimeng Group suddenly announced that it would temporarily close 80% of the domestic rare earth mines.

In recent years, China's rare earth exports accounted for 90% of the world. This is equivalent to the reduction of the world's rare earth output by more than 70%. China's rare earth output supply is not enough, and it has to be imported from abroad. In this way, the world's rare earth prices naturally rose sharply. Within a month, it rose from less than 30 yuan per kilogram to more than 140 yuan per kilogram, which has doubled more than quadrupled.

However, things have not ended here, and Hanyu Mimon Group has not announced the time to reopen China's domestic rare earth mines.

Japan and South Korea panicked and began to compete for rare earth mines all over the world.

However, the current rare earth mineral production is really limited, and the price of rare earths naturally rose in this snap-up. By June last year, the price of rare earth minerals in the world, with cerium oxide with a purity of % had risen to 50 US dollars per kilogram, which is about 410 US dollars per kilogram. It rose by more than fourteen times before the Cold Rain Mimon Group closed its domestic rare earth mines in China.

Japan and South Korea are still insisting on it. In their opinion, since Hanyu Mimeng Group is a commercial individual, it is naturally seeking wealth and will not fight with them. In the end, they will still open up domestic rare earth mines. At that time, they will naturally have the opportunity to lower the price.
To be continued...