Extraordinary Genius
Chapter 887 – Problems with State-Owned Enterprise reforms
“Oh, Leader. I’m here to wish you a Happy New Year. Why do you look so unhappy?” Feng Yu carried his gifts into Zhang Ruiqiang’s house, but Zhang Ruiqiang showed him a gloomy face.
“Just ignore him. I told him to think of a way to transfer our son to a more relaxed position. See… he can’t even come back for New Year and still dare to tell us this is dedication. What year is it now? Who talks about dedications?!” Zhang Ruiqiang gave Old Zhang a stare. You have authority and don’t know how to make use of it. That is your own flesh and blood!
“Aunty Li, you might not know this. Not anyone can enter Tao Zi’s unit, and he can achieve results faster there. In the future, he might even exceed the leader’s position. If he is transferred, his prospect might be affected.” Feng Yu laughed.
“Really? Why don’t you tell me earlier? Xiao Feng, have a seat and eat some fruits. I will prepare tea for you.” Aunty Li grumbled and went to brew tea.
“Long hair, short-sighted.” Zhang Ruiqiang grumbled under his breath.
Feng Yu controlled his laughter. If you dare, say it out loud!
After Aunty Li brings a cup of tea to Feng Yu, she went to her bedroom to watch TV, leaving them alone.
Feng Yu saw Aunty Li left, and his face immediately changed. He looked at Zhang Ruiqiang from the corner of his eyes. “Leader, how come my father suddenly become a member of the Province’s National People’s Congress?”
“That’s what he deserves. What’s wrong? You want him to enter the National People’s Congress? This is not impossible. The Province will put his name up this year.”
“Hold it! You all might think this is an honor, but my father got to work for you all. He got to attend meetings and still have to report to work.”
Feng Yu was not pleased. You all might think this is something good, but not everyone feels like you. You should at least consult me first.
“Who says he needs to go to work? He can choose not to report to the office or attend meetings. He only needs to attend the annual general meeting once every year. Lots of people are begging for this position, and you are still unhappy?”
Feng Yu is satisfied with this answer and nodded. “That’s more like it. Thank you.”
“If you really want to thank me, help me settle a small problem.” Zhang Ruiqiang replied cunningly.
Feng Yu rolled his eyes. He knew this title is not given to his father for free.
“Tell me. Which department needs money? I need to be clear with you first. I am going to continue my donations to rebuild the dams, and I don’t have too much money.” Feng Yu had donated 500 million RMB last year and will be giving another 500 million this year.
“Stop talking about money. It sounds too crude. I want to ask you if you can take over our Province’s home appliances factory, semi-conductor factory, etc.”
Feng Yu put down the teacup immediately. “I had wished you a Happy New Year. I still have something on and need to go now.”
“Eh… what’s the hurry? Just lend us a helping hand. If we don’t settle our Province’s state-owned enterprises after the New Year, we can only retrench the workers.” Zhang Ruiqiang grabbed Feng Yu.
The Chinese government had given out orders. All the state-owned enterprises must adapt to the market economy, have clear property rights, clear responsibilities, and scientific management, and most importantly, there must be a clear line between the government and the enterprise.
Clear property rights and separating from the government is the hardest. In the past, the reforms had achieved good results by bringing in foreign investors and private funds. But because of the interferences from the local governments, all these state-owned enterprises start to go downhill. Those that did not were all converted to private companies.
It’s still okay in Bing City. Zhang Ruiqiang’s reforms had achieved good results when he was there. But in Longjiang Province, outside of Bing City, this problem is severe.
Zhang Ruiqiang is now a leader in the Province and cannot just look after Bing City alone.
“Just retrench those people. Bing City’s enterprises are doing well, and furthermore, if the reformed state-owned enterprises are going to be independent and self-sufficient, can’t you outsource those companies to someone else?”
In Feng Yu’s previous life, many governments did this. Although this is not according to the regulations, it is the transition period, and the local governments have no choice. At least, after they outsourced these enterprises, they will not end up bankrupt.”
“You think the local governments did not do this? The outsourcing works at first and made some profits. But the company denied and refuse to pay the local government. They even threaten to return the state-owned enterprise to the City Government and let the government pay the workers’ wages!” Zhang Ruiqiang replied angrily.
Feng Yu laughed. The leaders also have difficulties, and the biggest irony is these leaders know nothing about managing a company! They don’t even know how to hire a professional manager to manage their enterprises. They are just too weak!
“It’s simple. Just sell the enterprises to them. They don’t have money? Ask the banks to give them loans. They know whether if the enterprises can make money or not, and if no one really wants to take over the enterprise, just liquidate it and sell the land parcel. Just assign the workers to other factories, and those that you can’t assign just let them off.” Feng Yu said.
“This is your solution? Sell the factories and land? What about the workers? Where are we going to find the money to pay their retrenchment fees? What if they still come back to seek help from the government?” Zhang Ruiqiang roared.
“The government can provide training to those retrenched workers and help them get reemployment, or you all can also encourage them to start their own businesses. Even if they sell vegetables or set up a small eatery, they will not starve to death. As for their start-up capital, the government can help. Also, those enterprises are really not profitable. After these few years of reforms, most of them had started making profits. But because those enterprises had lots of debts, just the interest alone is a significant amount, and this will cause their losses to increase. The country has a policy that lets the creditors change their debts to shares? This way, enterprises will save a lot of interest.”
“You think we haven’t thought of this? The creditors don’t want shares and only want money! The banks do agree to this, but they are too slow and will take at least 2 to 3 years.”
“Ah… Just tell them that the enterprises are going bankrupt and can’t pay their debts. The creditors have two choices. They can get the shares and enjoy dividends, or sell the shares away, or wait and see how much the enterprise is worth after it’s bankrupted.” Feng Yu replied lazily. You all are the government, and you all can’t deal with those people?
“Can’t you help us this time?” Zhang Ruiqiang asked.
“Help? I had not helped you all? Last year, Bing City has a few bottling factories set up, right? I am the one who brings in this investment. I am the one who helps those unemployed workers get reemployment. Tai Hua Trading, Tai Hua Supermarket Enterprise, had hired how many workers and security? My brother-in-law’s Wind and Rain Logistic had also hired a lot of workers.”
“Those are all in Bing City. What about the other cities? You are refusing to help them?”
“Our reforms of the state-owned enterprises also state that we should combine our resources to increase competitiveness. What’s the point of merging those small companies? Even if I acquire some of these enterprises, I can only breakeven. It’s meaningless. More importantly, those enterprises have to depend on themselves. The small alcohol factories can be merged with Beidacang Group to produce Beidacang Baijiu and sell them in the southern provinces. You can also do the same for soft drinks, food products, etc. If I acquire all of these enterprises, we might have to compete with Beidacang Group in the future. You are sure you don’t mind?” Feng Yu smiles and asked.
Zhang Ruiqiang sighed. He is afraid of competing with Feng Yu. A province might be influential in China, but they are nothing compared to Feng Yu.
It seems like this time, the provincial government will have to suffer!
Translator’s note:
Market economy