Chapter 244 What Do Employees Want: The Fanaticism of Conversion

What do the employees of Hongxing Ribbon Factory want?

Yang Tao put herself in the other person's shoes and tried her best to think.

If we strip away the romantic sentiments, what else is there?

Money? Ha! Nobody dislikes money.

A job? Hmm, a stable, high-paying job, like Shougang, is definitely what employees want most.

Oh, and there's also the issue of job placement for their children.

Oh dear, although it is a common practice for children of employees in government units to take over their jobs, the problem is that the family planning policy was not truly implemented until the 1980s.

This has led to many families now having far more than one child of working age.

Moreover, dual-income families were not the mainstream of urban families during the planned economy era; they were the envy of others.

Because there are few job openings, and many families have only one working person (usually the male head of the household), who should get this job?

Well, thinking about it this way, the employees of the ribbon factory really do want quite a lot.

But we can't satisfy them all.

The boss is acquiring land to make money, not to emulate Lei Feng.

Besides, if we really wanted to do good deeds, there are many more people who need help, not the ribbon factory workers.

Yang Tao pondered for a long time, but still felt that she hadn't grasped the key point.

Seeing Xiao Gao come out for a smoke, she quickly went over to chat him up: "Brother Gao, you've been working hard."

Having worked with his female boss for a long time, Xiao Gao knew that non-smokers were extremely averse to the smell of smoke. Now, in front of her, he didn't dare to smoke, but he couldn't bear to put out the cigarette. So he simply took it out of his mouth, stuck it out of the corridor, and hastily replied, "It's just work, it's not hard."

Yang Tao stammered, "Um, Brother Gao, you said..."

Xiao Gao was inwardly groaning. He was afraid the cigarette would go out, and he was even more distressed that he hadn't even taken two puffs yet.

In Moscow, cigarettes are a form of hard currency. Russians typically buy them one cigarette at a time.

So, without hesitation, Xiao Gao replied, "I have nothing to say. I'm just a bodyguard. I don't know anything."

Then he looked at Yang Tao, and finally couldn't bear it, so he comforted her, saying, "Alright, what are you panicking about? The boss wouldn't have taught you if he didn't need you. The boss also said he would be understanding of your misconceptions."

As he spoke, he relayed a statement that women are not good at utilizing resources because they often cannot obtain them.

"The boss said that there are no rooms available for women at their parents' homes, and the company doesn't allocate housing to female employees, so female employees..."

"Stop!" Yang Tao suddenly shouted, "What did you just say?"

Xiao Gao was puzzled: "There's a reason why I said women aren't good at utilizing resources."

Yang Tao shook her head: "Not this one, go further!"

Xiao Gao blinked twice: "They said your parents' home doesn't have a room for you, and your work unit won't allocate you any housing either..."

Yang Tao suddenly realized: "That's right! Housing, no housing, no housing allocation for female employees!"

Although theoretically female employees can participate in welfare housing allocation, and in 1983 the state even issued the "Several Opinions on Strengthening Urban Housing Management", which clearly stipulated that female employee families and other employees' families in difficulty should be given appropriate priority in the allocation of welfare housing.

However, in practice, it is still very difficult for female employees to be allocated housing.

Her senior from university joined the research institute. With the same length of service, the male employees were allocated housing, but she, being a woman, was not on the housing allocation list.

So, in a fit of anger, my senior colleague resigned and is now working as a porter in South Africa.

Yang Tao began to rattle off the data: "We'll allocate housing to them. There are many female employees in the ribbon factory, and they have the final say. Once we've allocated housing to them, everything will be much easier."

Xiao Gao even forgot to smoke, suspecting that Xiao Tao was under too much pressure and had gone insane.

Housing allocation? How much does a house cost?

Houses these days are really not cheap at all. In Beijing, the cheapest ones, even in the remote area north of the Asian Games Village, cost 2,700 yuan per square meter. Other places, with prices around 3,000 to 4,000 yuan per square meter, are considered quite cheap.

A 2000-employee ribbon factory, one apartment per person? If the boss agreed, he wouldn't be coming to Beijing to acquire land, he'd be acting like a bodhisattva.

Yang Tao, however, seemed completely oblivious to his shock, still immersed in her excitement, and kept talking: "We can build towers, 25 stories high, with a floor area ratio of 4.2, and build, um, about 4 of them."

Xiao Gao was completely dumbfounded.

Four 25-story buildings at once? Does this girl even know how much it costs? And what exactly is floor area ratio?

Yang Tao ignored his stunned expression and hurriedly said, "Brother Gao, you're busy!" before running away.

Looking at the extinguished cigarette in his hand, Xiao Gao thought, "Well, I came all this way for nothing. I didn't even get a puff of smoke. What was the point of all this?"

Inside the room, Yang Tao excitedly launched into a report: "We can use 12 mu of land to build staff housing."

After she rattled off a long explanation, Xiao Gao followed her into the room, only to hear the boss casually ask, "And then? How do you control costs?"

Xiao Gao almost burst out laughing on the spot, thinking to himself, "Here you go, the boss isn't going to be a spendthrift with you."

Wow, this girl is really lucky. Even after all that, the boss didn't get angry.

Little did Yang Tao know that she was completely unaware of the danger. After blinking twice briefly, she immediately offered a solution: "We can obtain a 1.8 times floor area ratio bonus under the name of 'dangerous building renovation,' and the staff housing can be approved according to the 'Urban Housing Cooperative Management Measures,' which can reduce the land transfer fee by 15%."

Xiao Gao was stunned when he heard this.

He subconsciously exchanged a glance with Xiao Zhao. Goodness, no wonder the boss still kept her despite her numerous mistakes.

A college student is a college student after all. Look at that head of hers! She hasn't even gotten the land yet, and she already has a head full of business ideas about how to build a house.

"With a plot ratio of 2.5, 200,000 square meters of residential space can be built. A 38-square-meter unit would cost 46,000 yuan, while the market price would be 120,000 yuan. Of course, if they still think it's too expensive, it can be used as public rental housing. The construction cost of public rental housing is even lower, and the rent, well, is about 30% lower than the market price."

Xiao Gao had already subconsciously reached for the calculator.

My goodness, this girl didn't even have a pen and paper, yet she managed to calculate all this data so cleverly using only her head?

Ha! No wonder they can get into prestigious universities.

Forty-six thousand? That's ridiculously expensive!

A normal housing price is 120,000!

Unlike decades later, when buying a house in the 1990s was widely considered as being as easy as buying cabbage, house prices are now really not cheap.

Those who supposedly obtained property ownership certificates for a mere ten or twenty thousand yuan—that ten or twenty thousand yuan was simply the expenditure for confirming property rights after the 1998 housing reform. Those who paid at that time were buying welfare housing already allocated to them by their work units.

If you were to buy a real commercial apartment, for ten or twenty thousand yuan, you couldn't even find a place to live in Beijing.

Wow, settling down for only 46,000 yuan is quite tempting for ribbon factory workers.

Wang Xiao smiled slightly: "Well, before doing anything, tens of millions have already been spent. Will the remaining 28 acres of land grow gold?"

Yang Tao blushed slightly and carefully tried to cover it up: "Well, we can do computer, um, electronics market. Applying for the 'Torch Program' that way will give us tax benefits, and the VAT on high-tech products will be refunded immediately upon collection."

She cautiously glanced at her boss out of the corner of her eye.

She was betting that she had correctly guessed her boss's thoughts.

When we were on Beida South Street, the owner said that in addition to opening a book cafe, we could also open a computer room.

We're almost in the 21st century, the information age. If you don't know how to use a computer, you'll be left behind.

Beijing has many universities and research institutions, and many professions require computers.

Besides, most Beijing residents don't have the mindset of buying commercial housing; they mainly wait for welfare housing or housing provided by their work units. But this doesn't mean they don't have money or that they're unwilling to improve their lives.

Owning a computer instantly changes the atmosphere of a home, and it's also an investment in your child's education.

Business is booming in Shenzhen's Huaqiangbei area; there's great potential in doing this.

Unfortunately, even after her subordinates had already written their own thoughts, the boss didn't give a clear answer, only asking, "Anything else?"

ah?

Yang Tao was bewildered.

What else could it be?

There are only 40 acres of land in total. 12 acres will be used to build staff housing, and at least 10 acres of the remaining 28 acres will be used for a logistics center. Otherwise, the electronics market shops built on 18 acres of land will not be able to operate.

This isn't like Huaqiangbei in Shenzhen, where the shops are located in the front and the factories in the back, so the requirements for logistics and warehousing aren't high.

Wang Xiao's head started to hurt again.

She pinched the bridge of her nose, and like any teacher who is frustrated with their students' lack of progress, she gave a final, exasperated reminder: "Think about it carefully again. What do the workers at the ribbon factory want? What are our advantages?"

Sigh, the answer is right under our noses, how can we not see it with such big eyes?

ah?

Yang Tao looked bewildered once again. What else could it be?

Xiao Gao and Xiao Zhao exchanged a glance, then trembled with fear.

Good heavens, what else could it be? They were both completely baffled, with absolutely no clue what to do.

Wang Xiao waved his hand, impatiently looking at this group of silly quails: "Think carefully, use your brain."

Unfortunately, the brain isn't something you can easily use whenever you want. Otherwise, so many people wouldn't sit in the exam room and almost burst into tears.

Anyway, just like Xiangling, Yangtao was obsessed with learning poetry all night, and finally appeared on the breakfast table with two blank eyes, still clueless.

Wang Xiao put down the newspaper in his hand, saw her staring blankly, and said expressionlessly, "Let's eat first."

Yang Tao glanced at the newspaper again and found that the boss was reading the arts and culture section, which was full of entertainment news, such as the behind-the-scenes story of "A Native of Beijing in New York", the next movie of "A Chun", and "Bai Xiumei" becoming a welder.

Sigh, it's all because of "A Native of Beijing in New York." That show aired in the latter half of last year, and it was incredibly popular. Even the hotel coffee shop was playing the theme song from the show: "Thousands of miles away, I'm searching for you..."

Thank goodness, the boss wasn't looking at any social news or national policies.

The boss seemed even more displeased and urged, "Hurry up, everyone. Go to the ribbon factory again today."

Yang Tao nodded quickly, then secretly exchanged glances with Xiao Gao and Xiao Zhao.

Underachievers always seem to have a knack for spotting each other in a crowd and then quickly banding together.

Three equally clueless underachievers were collectively filled with anxiety at this moment.

They were about to enter the exam hall, but they all knew they had a question they couldn't answer, and now they couldn't find anyone to ask for help.

Yang Tao looked pitifully at Liu Ba, who shrugged and gave an innocent look.

Yang Tao then cautiously turned her gaze to the other Russian bodyguards and assistants, but they were all chatting and laughing around Ivanov, discussing how delicious today's breakfast was.

As for the male boss himself, forget it. His amused smile clearly showed he was watching the show with amusement.

Feeling uneasy, Yang Tao followed the boss to the ribbon factory and then, steeling herself, went up to the podium to explain the housing resettlement plan to the employees.

Just as she had initially envisioned, the audience immediately erupted in uproar.

Yes, the 1990s was an era of state-provided housing and collective housing construction. However, there were far more applicants than available housing, so the units that could provide housing first had to be profitable themselves in order to afford to build houses.

The ribbon factory can barely pay wages now, so how can it have the resources to manage employee housing?

For 46,000 yuan, you can get a 38-square-meter house.

Don't think it's small. Nowadays, there are many families where three generations of a family are crammed into a dozen square meters, sleeping in cupboards or hallways at night.

In "The Happy Life of Zhang Damin," the two brothers and their spouses sleep in bunk beds, a scene that reflects the reality of life for many ordinary people in the capital city.

Against this social backdrop, a 38-square-meter detached house within the Second Ring Road is so desirable it's practically irresistible.

Many people showed excitement, never expecting that they would still have a chance to get a house after living to this day.

With this 38 square meters, my family can move out of my in-laws' house and no longer have to hate each other with my sister-in-law.

When my son gets married, we can easily partition a room out of 38 square meters. My daughter-in-law won't end up like I did back then, without even a wedding room.

But some people are worried: "Forty-six thousand! That's so expensive, we can't afford that much money."

The excited people nodded slightly. Yes, 46,000 is indeed cheaper than commercial housing outside.

But like luxury goods in the Yansha Shopping Mall, commercial housing is not meant to be sold to ordinary people. Even if the price is only one-third of what it is, it is still a heavy burden for everyone.

Who could be so wealthy as to suddenly come up with 40,000 or 50,000? They certainly don't have that kind of ability.

Yang Tao quickly reached out and pressed down, signaling everyone to quiet down: "We've considered everyone's difficulties with the house payment. How about this, the down payment is 10,000 yuan, and the remaining 36,000 yuan will be deducted from everyone's future salaries."

"Great!" The factory director was the first to stand up and applaud enthusiastically.

He was so excited! He was incredibly excited.

The employees have solved their housing problems and no longer need to chase after him every day, begging the leaders for help to solve their difficulties.

But this is just a minor issue, because the factory cannot solve the housing problem for its employees, nor will it affect the normal operation of the factory.

What the factory manager really considered a major issue was that the remaining 36,000 yuan for the housing would be deducted from the employees' future wages.

What does this mean? It means that Boss Wang must ensure that the factory workers receive their wages.

36,000 yuan, and you have to pay 3,000 yuan a year, that would take 12 years!

The factory manager was so happy just thinking that the factory would be able to pay wages for the next 12 years.

Oh well, he'll be retired in 12 years anyway. Let's leave the problems that this generation can't solve to the next generation.

The factory manager's hands were red from clapping, and just as things were getting lively, someone suddenly jumped out and disagreed: "I don't want the house!"

This sound was truly earth-shattering.

The factory manager was just short of personally removing the monstrous creature.

What's wrong with you? If you want the house, get the hell out of here! You're just looking for trouble for no reason!

However, he was not the only traitor.

After the first person jumped out, dozens more people stood up one after another and shouted directly at the podium: "We don't want houses, we want to go abroad!"

The meeting room erupted in chaos. The older employees stared wide-eyed, as if they couldn't believe their ears; the younger employees were all incredibly excited. Even those who had been planning how to use their 38 square meters of space turned red-faced, their eyes wide, and they shouted, "Yes, we don't want houses, we want to go abroad!"

Wow, going abroad! Going abroad is so great! The moon is bigger and rounder overseas!

Look at "A Native of Beijing in New York," the New York setting is so beautiful.

Wang Qiming washes dishes at a Chinese restaurant and earns $900 a month. Is that bad? Bad my foot! That's equivalent to a year's salary in China.

Yang Tao was dumbfounded.

She knew about the craze for going abroad.

She works at the trade city, so she knows all too well about the craze for going abroad.

But those were generally unemployed people with no other choice but to become traders. Are factory workers in Beijing really this crazy?

Yes, it's insane.

The expressions and tones of these people in the venue were as if they were performing some kind of conversion ceremony, full of magical realism and absurdity.

Yang Tao strained her dry throat and repeated, "Going abroad—"

A unified shout rang out from the audience: "Yes! Go abroad!"

Indeed, at this moment, she even felt the fervor of the Cultural Revolution era, which she had never experienced.

Before Yang Tao could react, Liu Ba went up to the podium and put down two faxed documents.

What does that document say? It's about the immigration policies of South Africa and Tanzania!

Yang Tao was shocked.

She finally understood why her boss was frowning.

Her mind immediately conjured up the image of her boss's face, the one that said, "You should have thought of this."

Oh my god! She's thinking of digging a hole and crawling into it again.

She should have thought of that.

"A Native of Beijing in New York" is so popular.

In 1993, the Third Plenary Session of the 14th CPC Central Committee clearly stipulated in its document: support for studying abroad, encouragement for returning to China, and freedom of movement.

The enthusiasm for going abroad is so high now. As long as it's overseas, no matter what country it is, everyone sees it as a hot commodity.

Yang Tao cleared her throat and began reading the key points from the document: "If you want to go abroad, you now have two options: South Africa and Tanzania."

A deafening roar erupted from the audience: "We want to go to South Africa!"

In the early 1990s, South Africa, like Japan, was seen as a land of opportunity.

Once you're in South Africa, are you still worried about not making a fortune?

Yang Tao had no choice but to press down again: "Be rational. Sending you to South Africa is a small matter. But what will you do in South Africa? Will you have jobs? If you don't have jobs, how will you make a living?"

However, nobody cares about this at all.

The fanaticism of conversion means that a person is completely overwhelmed by emotions and cannot think about specific things at all.

Thankfully, some veteran employees from the ribbon factory stood up and shouted at them: "Don't make a fuss! The boss is seriously planning your future, so listen carefully."

Seriously, they're all such a handful.

Staying at home is always good, but going out is always difficult; there's no such thing as an easy life.

I wasted my time watching "A Native of Beijing in New York." All I saw were people going out to eat meat; I didn't see them getting beaten up at all.

Taking advantage of the brief silence, Yang Tao quickly read the plan on the faxed document.

South Africa can pursue a model of labor export combined with employment in commercial cities.

South Africa now has a relaxed immigration policy, and those who have worked for three years can obtain permanent residency in South Africa, and their family members can accompany them through a "dependent visa".

Tanzania's economy is not as developed as South Africa's, so it needs to start with modern agriculture and infrastructure.

Just as she was about to explain the plan in more detail, the employees in the audience, who were eager to go abroad, interrupted her once again impatiently: "Alright, alright, we all understand. Hurry up, when are we scheduled to go abroad?"

The factory manager hadn't had a chance to speak since they started shouting slogans, but now he finally got his voice: "Going abroad?! The factory doesn't have any quotas for going abroad, so don't even think about it!"

He said this because in the 1980s and early 1990s, it was basically government-funded overseas study, which was a joint training program between two countries.

Those who take the TOEFL or IELTS exams on their own, apply to schools independently, and then study abroad after receiving scholarships are currently considered to be studying abroad at their own expense.

The workers burst into laughter, and the young people even looked at the factory manager with pity.

They loudly recited the current policies on going abroad, sympathizing with this person trapped in a shell, completely out of touch with the times.

They go abroad on their own, of course.

When the factory manager glared at them and asked, "Don't you want your jobs anymore?", everyone proudly puffed out their chests.

What a load of rubbish! They've all gone abroad. Whoever wants this crappy job at the ribbon factory can have it!

The older employee, who had been advising his younger colleagues not to act impulsively, fell silent upon hearing this.

Well, they'd better not interfere with someone's future, lest they get scolded later for ruining their prospects.

Besides, if these people quit, won't there be a lot of vacant jobs in the factory? Sigh, I can just talk to the boss and ask them to bring in my own little rascal to work here.

Otherwise, if you can't find a job and just wander around aimlessly all day, you'll get into trouble sooner or later.

An impatient older worker quickly stopped the factory manager, saying, "Alright, alright, everyone has their own destiny. Being able to go abroad is a good thing, so don't worry about it, you can't control it."

Yang Tao stood on the podium, surveying the diverse faces of the audience, her language skills completely failing her.

She didn't even know how to describe her feelings.

When an overseas relocation program was proposed, less than half of the employees were willing to stay.

She strongly doubted whether her plan to use 12 acres of land to build staff housing was too much.

But after a brief moment of surprise, she quickly realized that she hadn't stepped down from the podium yet, and hurriedly announced the requirements: "Since everyone's demands are different, let's fill out the employee opinion survey first. Those who want to take the house, those who want to go to South Africa, and those who want to go to Tanzania, choose one of the three. Please have the factory help us collect the statistics, and then we will make the next arrangements."

The employees, already lured by the prospect of going abroad, shouted impatiently, "What are we waiting for? Start the statistics now! Call those who aren't in the factory over right now!"

The venue was so noisy that you couldn't hear people talking.

Therefore, it wasn't until General Manager Zhou of the district government development company personally led a group of people to the factory director that the latter realized that a leader had come.

General Manager Zhou greeted him with a beaming smile: "Oh, your factory is having a big meeting? That's perfect, I've come over to tell you all something. The district government has already planned the land for the weaving factory. This Mr. Zheng from Singapore is going to invest in building a grand hotel. It's going to be bustling here from now on. So, everyone, hurry up and move to the new factory as soon as possible so we can resume normal production."

There happened to be a megaphone in front of him, and the factory manager didn't turn it off after he finished speaking, so his voice was heard by the workers present.

ah?

Everyone was stunned.

When will another Mr. Zheng, who builds hotels, appear?

Who will take care of their 38-square-meter house and their trips abroad?

————————

The data mentioned in the article regarding building floor area ratio and tax incentives for high-tech industries are based on actual policies at the time. Furthermore, the overseas travel boom of 1994 was real, and so were the high housing prices.

Here's some information from an article titled "A 25-Year History of Housing Prices: From a Stunning Birth to Nationwide Anxiety" published in the 2017 China Real Estate News, by He Kexin.

In 1992, housing prices in Haikou were astronomical. Wangfujing Building and Depais Building were priced at 8,000 yuan per square meter, Haiwai Building at 8,000 yuan per square meter, residential buildings in Zhujiang Plaza at 9,000 to 10,000 yuan per square meter, and Nanyang Building at 12,000 yuan per square meter. At its peak, prices soared to 20,000 Hong Kong dollars per square meter, which would still be considered high prices today.

Looking at the national housing price situation at the time, the average price per square meter of commercial housing in 1992 did not exceed 1,000 yuan. According to the "Overview of the Average Price and Increase of Domestic Commercial Housing since 1987" published by the National Bureau of Statistics in 2013, the national average price per square meter of commercial housing in 1987 was 408 yuan, and before 1992, it basically maintained a pace of increase of about 100 yuan per year.

Beijing. Looking back to 1987, Beijing's housing prices were subject to government-mandated pricing by district. After 1992, Beijing's commercial housing prices entered a period of deregulation. At that time, Beijing's real estate industry developed rapidly, and the market price system was not yet fully formed. Commercial housing prices rose at an average annual rate of about 30%, reaching an average price of 4,400 yuan per square meter in the city by 1996.

1992 marked the beginning of Beijing's Central Villa District. Leveraging the momentum of foreign-sold properties, this area, which would later dominate Beijing's villa market for a long period, officially launched. Villa prices and rents both continued to rise.

Shanghai. In 1992, there was a product and its price that people have forgotten today: foreign-sale housing. The concept alone is difficult to understand, but there's a good story behind it. Tong Chun-chung, the first Hong Kong actor to film television dramas in mainland China, made his mainland debut with "The Outsider Girl." He later recalled that all his investments in mainland China failed, with real estate being the biggest loss. In 1992, he bought property in Shanghai, where foreign-sale housing in the city center was incredibly expensive, costing over 10,000 yuan per square meter. By 2001, the price had halved, "now worth just over 5,000 yuan, a drop of half."

At that time, the price of domestic housing in downtown Shanghai was around 5,000 to 6,000 yuan per square meter. Compared with housing sold to foreign buyers, this price was considered very cheap, but for Shanghai residents, it was already a psychologically high price.

Guangzhou. In 1992, housing prices were driven up. Apartments in developments like Taojin Garden and Overseas Chinese Paradise along Taojin Road in Huanshi East reached prices of 6,000 to 8,000 yuan per square meter. The Tianhe North area also saw a surge, with prices for properties for non-local residents reaching 8,000 to 12,000 yuan per square meter. The main customer base consisted of people from Hong Kong and Macau, returned overseas Chinese, and a small number of Guangzhou residents who had become wealthy through entrepreneurship.

Shenzhen. In 1992, Luohu District had the most expensive housing market, with a unit price of around 4,000 yuan per square meter. On June 6, 2017, the transaction price for commercial housing in Luohu District was 98,581 yuan per square meter. Compared to domestic sales, Shenzhen's foreign sales prices were staggering. In May 1992, when the Tianan International Building next to the Guomao area in Luohu was launched, the highest price for commercial and residential units reached 20,000 Hong Kong dollars per square meter, setting a record for the highest price for domestic and foreign sales at that time.

During this period, the welfare housing system, which lasted for more than 40 years, served as a protection and barrier for most Chinese people, and people did not have much awareness of housing prices.

Two "Black Swan" Events and Regulation

The first frenzy in housing prices and real estate on this ancient land with five thousand years of history was born in 1993 amidst the desire for accelerated development.

The situation at the time was later described by Ling Zhijun, a senior editor and veteran reporter at the People's Daily, in his book "Changes: A True Record of China, 1990-2002": When the First Session of the Eighth National People's Congress convened in 1993, the atmosphere of vigorous and rapid development was undeniable. He wrote in the book:

However, the disagreements continued to widen. On April 1st, the central government leaders, setting aside the delegates in the Great Hall of the People, summoned all the provincial governors to Zhongnanhai, ostensibly to brief them on the economic situation, and to request that they "actively, correctly, and comprehensively understand Deng Xiaoping's important remarks and the spirit of the 14th National Congress of the Communist Party of China, seizing opportunities and accelerating development while paying attention to stability and avoiding losses, especially large losses." Everyone understood the underlying message. So everyone started talking past each other. Guangdong said, "Looking at the whole province, we're not hot." Fujian said, "Even Guangdong isn't hot, so we're even less so." Jiangsu said, "Only a few cities in our province are growing faster, but that's mainly due to foreign investment." The implication was that this growth rate was different from what Zhongnanhai was saying. The governor of Hainan province seemed to be looking around and avoiding the question, never actually saying whether their province was "hot" or "not hot." Guangxi said, "We're just getting started." Jiangxi said, "We don't even have a temperature here." This means that they are in a land of ice and snow, so how could there be heat? As for the western provinces, Gansu, Ningxia, Xinjiang, Shaanxi... they all said that they were being left further behind and couldn't catch up! Everyone said that 1993 would definitely be a "year of great work and rapid progress," and that they should achieve even more than in 1992.

Hainan is a microcosm of the whole. "To make money, go to Hainan; to get rich, speculate on pre-sale apartments." In the prevailing climate of getting rich, the four major state-owned banks, large state-owned enterprises, township enterprises, private companies, and Hong Kong companies like Kumagai Gumi flocked to Hainan to participate in real estate development. The number of real estate companies instantly reached 18,000.

Then came the policy adjustment in 1993, which led to a sharp contraction in national credit, the withdrawal of funds, the end of the first wave of the real estate boom, and the collapse of the Hainan real estate bubble. This emergency regulation dealt a severe blow to Hainan's economy. Hainan, with only 0.6% of the national population, was left with 10% of the nation's unsold housing stock, and bad debts at the four major state-owned banks alone reached 30 billion yuan. The impact extended to cities including Beihai, Zhuhai, Shenzhen, Guangzhou, and Shanghai. In 1994, housing prices in downtown Shanghai fell to 3,000 yuan per square meter, and the market was in a slump. In 1995, the lingering effects of the Hainan bubble burst, coupled with excessive supply, caused Shenzhen housing prices to fall by 30%.

The butterfly effect of such a major bubble collapse occurred again in 1997. The Southeast Asian financial crisis, which originated in Thailand, swept across the country, severely impacting the domestic real estate market. Even the traditionally stable Guangzhou real estate market fell into difficulties, with the foreign-sold properties in Guangzhou suffering the most.

This study uses Guangzhou, a city at the forefront of opening up, as a microcosm. Its housing price changes over the next 10 years represent the broader logic of housing prices nationwide. At its peak in 1993, the average price of residential housing in Guangzhou reached 7,568 yuan per square meter, while Tianhe North was around 9,000 yuan per square meter. In 1994, due to national macro-control measures and tightening monetary policy, the average price of residential housing in Guangzhou fell to 5,132 yuan per square meter. Subsequently, it continued to decline until the SARS outbreak in 2003, reaching a low of 3,888 yuan per square meter.

Therefore, quite a few people lost money buying houses in the 1990s.

If you were to travel back to the 1990s, be extremely cautious when buying property. However, if you could afford a commercial property back then, your earning power must have been exceptional. Even if you lost money initially, you could surely earn it back.