"Socialism is good, socialism is good. Governor Liu, our generation has been singing this song since we were little. To be honest, we've been aiming for this goal. If I'm not mistaken, the opening of the market will attract a lot of venture capital, and may even turn the trade deficit into a surplus. With the increase in US dollars, shouldn't we gradually hold US Treasury bonds?" Xing Baohua asked, looking at Vice Governor Liu.
“Some of our colleagues have returned from overseas, bringing with them some advanced experience. The entry of overseas funds into the country can not only quickly boost the local economy and labor force, but also have a significant impact on the political landscape,” said Vice President Liu.
“I also have overseas experience. To put it bluntly, what they're after is our cheap labor and cheap land. Sending a few high-level managers to manage the middle management will help them earn more US dollars. They won't leave us with the core technology. Once production costs become too high, they'll look for regions with even lower labor costs, such as South Vietnam, India, or even the Philippines and Malaysia in South Asia!”
As soon as Xing Baohua finished speaking, Vice President Liu asked, "After saying all that, what is your point of view?"
"Regardless of how foreign capital enters, we will adhere to the principle of hedging with paper currency."
After a moment of silence, Vice President Liu said, "This policy will remain in place!"
"Isn't this opening the floodgates for foreign investment? We welcome it, but it has to be exchanged at the then-current exchange rate, which is almost six! So, six bills for one. You know, when the Americans get shameless, nobody can outmaneuver them. They run their printing presses at full capacity, and they'll give you as much as you want. What will this ultimately result in in our country? Will companies be paying wages in US dollars?"
"So the People's Bank of China (PBOC) shoulders all the pressure. Whether it's a company or an individual coming for tourism, they first go to the PBOC to exchange US dollars. Salaries need to be paid with our money. Whether it's 1:6 or 1:7, however much they come, we exchange that much for them. The country then uses this pooled money where it's most needed," Xing Baohua said.
"You're quite the sly one, claiming you don't understand economics. Tell me, once the market opens up, what will be the first to be impacted?" Vice President Liu said with a smile, pointing at Xing Baohua.
"You should already have an answer. There's no point in testing me like this." Xing Baohua smiled but didn't answer, and shook her head slightly.
"Do you have any advice on prevention? I want to hear some real advice."
"Your other position is Vice Chairman of the State Commission for Restructuring the Economic System, so you're in charge of macroeconomic and market economy matters, right?"
Xing Baohua asked, and Vice President Liu nodded slightly, which was considered an admission.
“I was happy that the government bond issuance approached me, but I could tell from this that the country is still facing some difficulties. Why issue such a large amount of government bonds if it's not facing difficulties? There are advantages and disadvantages. Fiscal and financial matters are inseparable and cause and effect are intertwined. The bad debt ratio of several banks is getting higher and higher, isn't it?”
Heh, once the market opens up, the first to suffer will be those factories with guaranteed jobs; at least half will collapse and disappear! If local governments stop allocating funds, how will they repay bank loans? They'll be insolvent! It's true banks print money, but they can't withstand this kind of turmoil! If it were a capitalist bank, it would have gone bankrupt long ago; there's no need to wait for government bailouts!
"What will your Huahong Bank branches in China do?"
"Huahong is too weak to withstand big storms; it serves Dami Technology. However, it will also lend money externally, but only with substantial collateral. Once those banks get past this hurdle, we can split up. We can all become joint-stock commercial banks and go public."
"You make it sound so easy. Just CITIC alone is enough to cause trouble, let alone all of them?"
Xing Baohua looked at Vice President Liu and wanted to say to him, "I once bought shares in ICBC and treated them as a fixed-term investment. Now they've become indefinite. Anyway, he'll never get out in his lifetime."
Unfortunately, I couldn't bring myself to say it.
During their meeting, Xing Baohua's cell phone rang again, and even his pager rang. Xing Baohua took out his cell phone to hang up and read the text message on the pager.
“If it’s urgent, you can go first. I’ll contact you again if I have any questions,” said Vice President Liu.
"It's nothing serious, just those financial reports from the University of Hong Kong."
"Is it easy to steal servers like you say?" Vice President Liu asked.
Xing Baohua put away his cell phone and pager and said to President Liu, "HKU's servers are undefended; there's no firewall. It's like a courtyard. A wall can stop a group of people, but without a wall, anyone can get in. There are different types of walls, designed for different types of people. If it's an important place, you need high walls, like those in prisons, which not only have high walls but also barbed wire and electricity, and there are guards on all four sides."
"Understood. I'll inform our people at branch A in Hong Kong to help you with espionage." After Vice President Liu finished speaking, Xing Baohua waved his hand and refused.
"I suggest that you senior management work hard tonight to review the speech drafts for tomorrow's event, and sort out what should and shouldn't be said. The overseas side wants the report, which is worth $50,000. I guess they want to get something out of our report?"
"Collapse theory?"
Upon hearing these three words, Xing Baohua chuckled. It seemed these three words were supposed to appear after the elder brother's downfall, so why were they mentioned earlier?
Whether it was mentioned beforehand or not, it already exists, which shows that those idle people overseas are keeping a close eye on it.
The collapse theory doesn't work, and with our national strength slightly stronger, it becomes the so-called threat theory.
Vice President Liu said, "You are most familiar with and understand modern technology, especially the internet. In a few years, the stock market and futures market will be established and will also use computers to operate, just like in the United States. How will we build and defend against them? We have no idea at all! How about you be the chief instructor?"
"I wouldn't dare accept that. How about this: you provide the funding, and I'll provide the technology to establish a training base?" Xing Baohua asked tentatively.
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