Chapter 199 Why Not Hold a Trade Fair? (Bug Fix): If You're Going to Make Money, Do It Big!
Although Wang Xiao and Ivanov did not intend to argue with the bank, it did not prevent Ivanov from using this as an excuse to obtain more loans from the bank.
Look, are there any clients as easy to talk to as us? 1 billion US dollars, we said we'd let you make the money, and we didn't say a word against it.
So shouldn't you support the loan? After all, if we don't find a way to make money, the pressure from the original owners will always be weighing on us.
God, we can't guarantee we can hold out.
If they can't hold on any longer and come looking for you, there's nothing we can do.
After all, they had handled the procedures directly at the bank.
The banks have no choice. Besides, if they don't issue loans, how can they obtain high interest rates to maintain their normal operations?
So the bank, with a heavy heart, still issued a loan of 30 billion rubles, with a term of six months. The interest rate was very high, and after six months, they would have to repay 40 billion rubles.
Even the manager in charge of issuing loans couldn't help but joke, "Let's see if you guys outpaced the exchange rate, or if the exchange rate outpaced you."
If the rate of devaluation continues at the same pace as in the first half of the year, banks will definitely lose money at this loan interest rate.
But who knows? Maybe it fell so sharply earlier that it won't fall any further. In that case, the banks will be the ones who profit.
Ivanov and Wang Xiao signed a loan agreement.
They wanted this new loan not to develop agriculture, but to buy land.
Only by buying suitable land can a market be built.
The site recommended to Ivanov by Moscow government officials was located next to a metro station on the east side of the city, opposite the Sports Market in the southwest corner.
Like all the metro and train stations in Moscow, there's a spontaneous free market here, and it's quite crowded.
This summer in Moscow seems to have a particular fondness for rain. When they arrived by car, it started raining, and the vendors quickly dragged their carts towards the subway station to find shelter.
At the subway station exit, several plump elderly women stood, each stubbornly raising their hands to sell their goods.
Some were tomatoes, some were cucumbers, and there were also homemade bread and steamed buns.
Those buns were huge! They must have just come out of the steamer and were still warm, with a ring of white steam rising from them on that cold, rainy day.
Compared to these inexpensive, locally produced foods, the fruit vendors nearby seemed much more aloof.
Because he sells beautiful, large oranges, a subtropical fruit that Russia imports from Turkey, Egypt, and Morocco in winter and mainly from Latin America and South Africa in summer, the price is naturally high, selling for $2.1 per kilogram.
Even Wang Xiao felt it was unnecessary to waste money; she preferred to eat the watermelons and cantaloupes they grew on their farm in the suburbs, which were very sweet.
Their watermelons sell for only 500 rubles per kilogram, cheaper than small, sour locally grown apples. That's why they sell so well.
The old lady selling steamed buns was accompanied by a chubby-faced little boy. It was probably because it was summer vacation and no one was looking after him, so the old lady took him with her when she went out to do business.
The little guy's eyes were fixed on the orange, vividly demonstrating what it means to be drooling; his mouth was practically watering.
He pleaded with his grandmother.
The latter looked troubled, frowned, and carefully looked through his wallet.
Perhaps because her business had only recently opened, she hadn't made much money yet from selling buns that cost 100 rubles each; or perhaps because oranges were really too expensive. Anyway, after counting for a long time, she realized that the stack of rubles wasn't enough to buy even one orange.
The orange vendor kept shaking his head.
Ivanov couldn't stand it anymore and was about to roll down the car window to speak when Wang Xiao patted him on the shoulder first: "Go buy me half an orange and a steamed bun."
Ivanov first looked puzzled, then beamed with joy: "I am willing to serve you, my Empress."
He got off the bus, bought an orange from a vendor, broke off half of it, and handed it to the old lady: "Madama (Russian: Madam), could you give me a steamed bun in return?"
He pointed in the direction of the car, accepted the steamed bun with a smile, and then turned back excitedly.
As he boarded the bus, he couldn't hide his smugness: "She initially refused to switch, sigh, every Madame is proud. But—"
Ivanov blinked, clearly quite proud of his cleverness. "I told her that my wife is Chinese and is used to eating hot food."
He proudly handed the steamed buns to Wang Xiao, saying, "Here you go, my queen, here are the steamed buns you wanted."
Wang Xiao leaned back, firmly refusing: "You can eat it yourself, I'm not eating it."
“Your Majesty,” Ivanov urged, “you don’t need to diet; you’re already very slim.”
Wang Xiao still avoided the topic: "No, it's not tasty. Potato-filled buns are the worst I've ever eaten."
As she spoke, she couldn't help but complain, "I really don't understand, the potatoes are good, the flour is good, so how did I end up making buns like this?"
Honestly, unless she was starving to death, she would never eat these kinds of buns.
Ivanov laughed heartily. He didn't like it either, and he tried to sell it to the bodyguards and assistants in the car, but they all declined.
In the end, the boss had no choice but to bite the bullet and eat it himself.
What else could he do? There are hundreds of millions of people in this world going hungry, struggling to even get one meal a day. Did he really think he'd just throw the buns away? Even God wouldn't forgive him for that.
Seeing his troubled and aggrieved expression, Wang Xiao reached out her hand: "Give me half of it, I can't eat more than that."
The assistants were quick-witted and divided the remaining half among themselves.
Wang Xiao swallowed the steamed bun with difficulty, and sighed with admiration as she looked out the car window: "It has to be the old ladies. Look, they are always the most loyal to life. Drunkards stagger around them, living a life of drunken stupor, and they have already learned to sell their products."
This is amazing.
She remembers very clearly that two years earlier, although there were street vendors in Moscow, who usually sold homegrown tomatoes, cucumbers, and homemade sausages, they were all silent, like a flowing oil painting, and none of them would shout to attract customers.
Now, they have finally taken the first step of becoming businesswomen: speaking up.
Wang Xiao said earnestly, "Being able to earn money to support yourself and your family is a very honorable thing, there's nothing to be ashamed of."
She also teased Ivanov, saying, "You guys have been spoiled too much by the collective economy. Although China also had a collective economy before, it was basically a production team model, with almost no collective farms. So when the reform and opening up first started, Chinese farmers had no psychological burden at all when doing business. If it were an unemployed educated youth, even if they had lived in the countryside, they would feel ashamed and afraid to look people in the eye if they returned to the city to set up a stall."
Ivanov felt a little better and exclaimed, "That's why your township factories are developing so quickly. We have no trouble renting out our container stalls."
Because of the heavy rain and muddy roads outside, they did not get out of the car, but simply used the windshield wipers to observe the surroundings.
Moscow is huge, really, it's 10 times the size of Beijing, and it has forests within the city itself, so even a native like Ivanov couldn't possibly know every single inch of the land.
Looking at the surroundings, Wang Xiao casually replied, "No, I estimate that this time, state-owned factories will be the main force."
"Why?" Ivanov was genuinely shocked.
Although their customer base includes state-owned factories, such as Longhua TV Factory.
However, most of the merchants in the wholesale market are individual business owners; those who own their own factories are already considered large-scale businesses.
Wang Xiao said seriously, "Because previously, state-owned factories generally conducted normal business-to-business trade with Russia. But I estimate that they have suffered enough losses since the second half of last year, and they will most likely abandon the old way."
What can we do?
The ruble has plummeted from last year to this year. Honestly, the Russian manufacturers and retailers' inability to fulfill their contracts wasn't due to any malicious intent on their part.
But Chinese manufacturers certainly don't want to lose the Russian market.
In this situation, they were forced to abandon all pretense of dignity and enter Russia to conduct trade through illegal means.
Ivanov grinned mischievously: "Hey! Do they want to? This is about taking off, well, taking off their suits."
Wang Xiao laughed: "The physique of Chinese people isn't really suited to wearing suits anyway. Don't worry, they'll be happy with it. Didn't you ask last time why China, without abundant mineral resources or sufficient oil and natural gas, was still able to industrialize?"
"The answer to this question is actually quite simple. Because the Chinese people have a stubborn streak in their bones, once they set their sights on a goal, they will try all sorts of things. For example, at the end of the Qing Dynasty, in order to save the country, the Chinese people from all walks of life tried every possible method. Scholars carried out the Hundred Days' Reform, merchants used industry to save the country, religious people started the Taiping Heavenly Kingdom, illiterate farmers also had the Boxer Rebellion, and those who went abroad to study wanted to copy the capitalism of Europe and America. They failed, but it didn't matter. They found another way. Later, they learned from the Soviet Union, and that's how the idea of daring to change the world came about (Note ①)."
"It's the same now when doing business here. If the middlemen can do it well, state-owned factories that want to do business will put down their airs and learn from them."
Ivanov remained somewhat skeptical.
The flaws of a planned economy existed in the Soviet Union, and they still exist in modern Russia.
Even when the economy was in dire straits, the sales clerks in state-owned stores were reluctant to show customers even a smile.
Wang Xiao presented facts and examples: "Don't you believe me? You know about the urban-rural divide in China, right? It's better now because grain coupons have been abolished. It was much worse in the 1980s. You can tell how much money was made from changing from rural to urban residents. But even in the 1980s, Chinese cities were learning from the rural areas and carrying out reforms."
Now, not only Ivanov and his men, but even the two native Chinese bodyguards, Xiao Gao and Xiao Zhao, looked bewildered.
Urban areas in China are learning from rural areas? How come they don't know that?
"In the first few years of reform, the focus was on rural areas, and the household contract responsibility system was successful. In 1984, urban reforms began, and in 1985, a comprehensive set of supporting reforms was proposed and implemented in 1986, but it did not last. In 1987, the household responsibility system was introduced."
She counted on her fingers, “The five major contracting systems—enterprise contracting, department contracting, fiscal contracting, credit contracting, and foreign exchange contracting—are all based on the experience of rural areas.”
Xiao Gao and Xiao Zhao blinked hard, suddenly realizing that it really was true.
Good heavens! They never imagined that the city had learned from the countryside.
Little Zhao, still clueless, asked, "Did you learn it successfully?"
Did it succeed or not? He didn't know.
Wang Xiao said helplessly, "What success? The price reform failed in 1988. How bad was the inflation? The amount of salt our family bought was enough to last forever."
Everyone burst into laughter.
Xiao Gao pondered for a moment: "Then why does it work in rural areas but not in cities?"
Wang Xiao really liked his subordinates who were diligent and inquisitive.
Because both Russia and China are currently in the early stages of developing their market economies.
It's difficult to recruit suitable managers in China through headhunting firms.
You can only trust someone to take on responsibilities if you personally train them.
She sighed: "Because cities and rural areas are different. Cities are more complex, with all sorts of contracted systems that are nested at different levels. There is no distinction between the political system and the market and regulation. The referee and the player are the same person, which distorts resource allocation and leads to pro-cyclical behavior."
However, her explanation only made things worse; Xiao Gao's expression became even more confused.
What is procyclical behavior? Why does procyclicality occur?
Wang Xiao rubbed his temples and made a decision: "I'll enroll you in a correspondence course in economics later, so you can learn some basic economic principles. Of course, what I said above is the official explanation. I also have a very rudimentary personal opinion."
"The reason why the household contract responsibility system in rural China was successful is that under the planned economy system, farmers did not receive much real benefit from the collective economy model. Compared with urban residents, their medical care (the role of barefoot doctors was limited) and education (they also had to pay tuition fees during the planned economy era) were not guaranteed. Therefore, once it was liberalized, the benefits they gained far outweighed the losses."
“It’s different in the city. Cities, which account for a quarter of the country’s total population, can be understood as the real beneficiaries of the planned economy. State-owned enterprise employees have guaranteed medical care, education, and so on. If you try to implement the rural system, it will affect their real benefits, and naturally it will not be able to be implemented.”
Even now, although rural reforms have succeeded and urban reforms have failed, the living conditions of urban residents are still far superior to those of rural residents. Rural residents' satisfaction is only relative to when things were even worse.
Ivanov tilted his head, seemingly lost in thought: "This is what you mean by why rural reforms in Russia are not progressing."
Wang Xiao nodded: "So, strategy can be sustained, but tactics always need to be adjusted. You have to keep trying in order to have a chance of success."
Ivanov's economic acumen was clearly superior to that of his two bodyguards, Xiao Gao and Xiao Zhao.
He quickly grasped the key point: "So, the reason why China is experiencing inflation is essentially because your five major policies haven't changed."
He dared to say that China was indeed experiencing a serious inflation problem because of his personal experience in Jinning during the Spring Festival.
Everyone's gone crazy, investing recklessly, because they're afraid their money will lose value and won't keep up with bank interest rates, so they want to make more money.
Ivanov continued his analysis, even sounding somewhat excited: "This problem wasn't obvious before. In 1989, you forcibly suppressed the overheating through administrative means. But last year, you liberalized the economy, so the problem has reappeared."
His eyes sparkled, even with a hint of excitement. "Your Majesty, am I right? So, are you going to continue pressing this time? Oh God, pressing for too long will cause problems."
Wang Xiao pressed his temples again: "No! Have you forgotten the 13 points we saw on Sakhalin Island? This is the Chinese government's strategy for dealing with this crisis. Strictly control currency issuance, stop banks from engaging in illegal lending, control the scale of credit, and raise deposit interest rates..."
She counted them off on her fingers one by one, then concluded, "China is about to undergo large-scale financial reforms."
When she was in school, she rushed through economics courses and wondered why the 327 Treasury bond incident happened in February 1995.
Now, truly living in this era, she realizes that this event was inevitable. Even without 327, there would have been 436.
Every major economic transformation, especially the financial industry upheaval, will cause countless investors to leave the market in disappointment, while countless new tycoons will emerge.
If it weren't for the fact that the winners of the 327 Treasury bond incident didn't all end up badly, and if Wang Xiao herself didn't have much interest in finance and was still praying to Mazu for protection, in a superstitious state, then given her mindset after losing 1 billion US dollars, she might have tried to force a share of the profits.
Xiao Gao suddenly blurted out: "If Russia stops printing rubles like crazy, won't the ruble stabilize?"
Uh, this topic really hits the nail on the head for the boss.
If things really stabilize, the boss will be even more furious.
Ivanov sneered, "If they had that kind of guts, they wouldn't have waited until today."
“It’s too late,” Wang Xiao explained. “The reason why the Chinese government can be so assertive is because China’s light industry system is relatively complete. Even if the styles are outdated and the quality is average, it can still meet the basic needs of the people’s lives.”
"The collapse of the Soviet Union had already severed the entire industrial system. The abolition of the ruble further exacerbated this rupture. When the people's livelihood could not be guaranteed, and the goods were not produced by themselves, the government was powerless to control prices. It dared not stop printing more money, otherwise the people would have no money to buy imported goods and would complain. But they also needed to win the support of voters."
"Therefore, even if they know that printing more money is like drinking poison to quench thirst, they lack the courage to call a halt."
"Communists haven't been completely crushed yet. For those in power, having power in their own hands is more important than the future of the country."
The economic situation is always linked to the political trend.
This is also why they dared to desperately obtain loans and bet against the ruble.
Wang Xiao pointed out the car window, "Hey, we need to build a building in the back. My idea is this: integrate living and business. Let's solve everyone's accommodation problem at the same time. Otherwise, if they rent houses, cultural differences can easily lead to conflicts."
A few days ago, a Chinese businessman encountered some trouble.
The couple cooked at home, making a stir-fried pork with chili peppers. Presumably, the smell was a bit too strong, and the elderly Russian couple upstairs sued them. When the police arrived, it was another round of trouble.
Ivanov had no objection.
The better their supporting facilities are, the more prosperous their business will be.
However, before that, the first thing to do in this planned container market is to solve basic problems.
For example, the open ground must at least be concrete; otherwise, it will definitely be ruined in rainy or snowy weather. Another example is the issue of insulation.
Winter comes quickly in Moscow, and doing business outdoors in October is already quite a challenge. And when it's rainy and gloomy like today, it's truly unbearable.
Wang Xiao's idea was to first copy the experience of Bucharest, building rain shelters and glass greenhouses so that vendors could do business indoors first. Later, he would gradually build indoor supermarkets.
Otherwise, there won't be enough time.
If we wait until all the houses are built before we start renting them out, it will be too late.
As for how to find tenants, Wang Xiao wasn't worried.
Their trading company holds a high position among wholesalers and has extensive connections, making it easy for them to spread the word and attract vendors who want a fixed stall.
Ivanov pressed further: "Didn't you say you wanted to attract state-owned companies to conduct cross-border direct sales? Are you planning to advertise on Chinese television, or what?"
Wang Xiao shook his head: "No, no, no, that would be too costly. TV advertising fees are quite high now, especially for CCTV."
The rain stopped, and there was a cement road ahead. The two of them got out of the car to observe the surroundings.
Almost the instant the car door was opened, a rainbow suddenly appeared at both ends of the sky.
One end of it rests on the overpass at the station, where the black wrought iron railings and European-style streetlights with lampshades are illuminated by the rainbow, refracting a dazzling array of colors.
The other end stretches forward, embedding itself behind trees and tall buildings, forming a rainbow of colors.
It directly illuminated an entire area.
Wildflowers grow along the roadside. Muscovites aren't keen on clearing weeds, so even along city roadsides, all sorts of wildflowers that should only be seen in the wild grow.
The petals, glistening with dew, shimmered with a rainbow of colors. At first glance, it resembled a magical seven-colored flower from a fairy tale.
Some people stopped to watch, while others raised the cameras hanging around their necks, trying to capture nature's bounty.
This is Moscow, the amazing Moscow.
Whenever you're driven crazy by gloomy, dreary weather, it always manages to bloom with miraculous beauty.
Let me tell you, it's not that bad.
If you wait patiently, your trip will not be in vain.
Wang Xiao's mind was filled with only one poem: "Red, orange, yellow, green, cyan, blue, and violet, who holds the colorful ribbon dancing in the sky? After the rain, the setting sun casts a slanting glow, and the mountain passes are shrouded in mist." (Note ②)
She doesn't know if there are any typos or spelling errors.
Upon hearing the translated version of "Bodhisattva's Charm: Dabodi," Ivanov immediately corrected him: "Your Majesty, it's not the setting sun now, it's morning. The setting sun will come in the afternoon, near dusk."
Wang Xiao suppressed the urge to roll her eyes and said expressionlessly, "Come on, you recite a poem."
Unfortunately, while the Russian nation produces great poets, Ivanov was an uneducated playboy, so he could only awkwardly change the subject: "Then how about advertising in the newspaper? I don't think it will be as effective as television."
“No advertising.” Wang Xiao wasn’t exactly a cultured person, so he skipped the topic. “Advertising costs money. Right now, I just want to make money off them. I’m going to organize a large-scale China Commodity Fair, get them to pay to exhibit, and they’ll send me money. After they finish exhibiting, I’ll bring them over to see our container market. Want to rent a booth? First come, first served, no exceptions!”
Ivanov's eyes widened, and he burst into laughter: "King, King, King, you truly are worthy of this!"
Wang Xiao rolled her eyes: "What's so funny? I'm thinking of holding a Turkish trade fair and making some money from the Turks too."
Ivanov laughed even harder: "It's okay, when they open, we'll go over there and put out flyers, that'll definitely attract tenants."
In the late 1980s and early 1990s, Türkiye began to transform its import-substitution development model into an export-oriented industrialization strategy.
It's been quite effective. Turkey's economy is developing rapidly, and its light industrial products are currently very popular in the Moscow market. For example, leather jackets and socks—Chinese goods would have a hard time competing with them if they didn't have a price advantage.
Wang Xiao nodded reluctantly: "I hope so."
She felt a pang of heartache if she didn't earn more money.
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Notes ① and ② are both poems by Chairman Mao.
Additionally, the original plan was to write about bananas, but Akin's obsession with details kicked in. According to the research, in the summer of 1993 in Moscow, apples cost $1.45 per kilogram, pears $1.80, oranges $2.10, peaches $2.25, and bananas were the cheapest, with the best ones costing $1.25. A banana weighs 100-150g, which works out to about $0.125-$0.30 per banana, equivalent to 125-300 rubles, roughly the price of one to three steamed buns. Therefore, Akin switched to the more expensive oranges. Moscow's oranges are mostly imported, and there's always been a habit of eating oranges.
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