ebookland Chapter 239 Greed knows no bounds; what kind of capital game are you trying to play with me?
Chapter 239 Greed knows no bounds; what kind of capital game are you trying to play with me?
"Ruilong, have you thought of a way to make money?"
Gao Yuliang asked somewhat anxiously.
Although the development situation in Luzhou is already very promising.
But Gao Yuliang, eager for progress, wanted to add fuel to the fire.
He wanted to take advantage of the five years that Zhao Ruilong's father, Zhao Lichun, was in charge of Handong to achieve a two-level promotion.
Of course, more funds need to be raised in order to achieve political results faster and better; otherwise, how can progress be made?
but……
His question really stumped Zhao Ruilong.
Before the time travel, it was said that even in a major economic city like Luzhou, the top official couldn't make money...
Zhao Ruilong would definitely say that Gao Yuliang is simply making an international joke!
Build a plaza, construct a high-rise building, set up a school, and install a light rail line...
For political achievements, and for power-money transactions.
Many projects are started without proper permits or approvals.
They spent tens of millions or even hundreds of millions of yuan, and in the end, they became unfinished projects.
What's a little money compared to that?
In any case, they won't have to pay out of their own pockets to clean up the mess left behind.
Whether local government debt is in the trillions or tens of trillions, it doesn't really concern them.
For them, even if they go to jail, they've already enjoyed themselves enough and made enough money for their children and relatives.
And now.
Zhao Ruilong knew very well that Gao Yuliang was not joking.
The reason why power equals money in that world is because local governments have the right to raise funds and incur debt.
Originally, it was only intended to address the subprime crisis and boost the economy by opening a small loophole.
Once they tasted success, they couldn't stop.
The channels are getting wider and wider, and there are more and more local financing platforms that are similar to urban investment companies.
In order to meet the funding needs of infrastructure, education, people's livelihood, medical care, old housing renovation and other aspects, and in order to create impressive political achievements, local government debt is increasing.
After all, whether it's collecting taxes or imposing fines, the simplest and most direct way to make money quickly and in large amounts is by issuing bonds.
Whether or not I can pay it back later is a matter for the future. The most important thing is to borrow the money to cover current expenses and achieve a promotion.
Moreover, even if the debt keeps piling up and the income is insufficient to cover the expenses, new debts can be borrowed to pay off old debts. If the debt is truly unbearable, one can plead poverty and beg for a debt relief from higher authorities.
but……
The dragon kingdom of this world hasn't reached that point yet.
First of all, neither the Asia-Pacific financial crisis that broke out four years ago nor the bursting of the US dot-com bubble last year was as destructive as the subprime mortgage crisis in another world.
Secondly, the Dragon Kingdom in this world has not yet formally joined the WTO, so global economic fluctuations are unlikely to seriously affect the domestic economy. Even if foreign trade exports decline, it can be resolved through macro-control.
Finally, it is the most important point.
In the 1980s, many provinces and cities issued local bonds to raise funds for road and bridge construction.
At one point, the country engaged in reckless borrowing and blind construction, leading to an overheated economy, overcapacity, and continuous debt growth.
Seven years ago, the Dragon Kingdom implemented fiscal and tax reforms and passed the Budget Law.
Local budgets at all levels are prepared in accordance with the principles of living within one's means and balancing revenue and expenditure, and do not include deficits.
Unless otherwise stipulated, local governments no longer have the right to issue bonds.
Even in response to the Asia-Pacific financial crisis, proactive fiscal policies were implemented to stimulate economic growth.
The Ministry of Finance issues national bonds to fund infrastructure projects, including the Three Gorges Dam project.
It is precisely because provinces and cities do not have the right to issue local bonds, coupled with the fact that the top leadership now has strict control over the economy and has long been disgusted with extensive growth, that this is the case.
Therefore, even though Gao Yuliang was the top official in Luzhou, he couldn't set up a financing platform to quickly raise a large sum of money through bond issuance or mortgage loans.
In this regard.
Zhao Ruilong, of course, felt the same way.
Because his father, Zhao Lichun, had made it particularly difficult to persuade the Railway Administration to join forces with Tianhai City to establish a company and invest in the construction of the first phase of the Yanhu High-speed Railway at his suggestion.
The establishment of the Yanhu High-speed Railway Company alone required a great deal of effort. Handong Province benefited from becoming a pilot area for high-quality economic development, which allowed it to establish the Handong Railway Industry Investment Group.
Then the group raised enough funds by selling some shares to social capital, including Huilong Group, and by pledging related assets; otherwise, the high-speed railway could not have started construction.
The main reason why Handong Province has so many high-tech projects is certainly not because Handong Province offers good preferential conditions for investment attraction, nor because Handong Province attaches great importance to the business environment under the leadership of Zhao Lichun.
The main reason is that Huilong Group is really rich!
There's no need for Handong Province to issue local bonds; Huilong Group can easily throw hundreds of millions, billions, or even tens of billions of yuan into the market.
There are big spenders willing to burn money like crazy, and plenty of money to spare.
Everyone is happy to cooperate with Handong, whether it's developing chips, software, or airplanes and high-speed trains.
Anyway, they don't have to pay for it, and they can share the research results and product profits. Where else can you find such a good deal?
In short.
In 2001, the Dragon Kingdom did not need to delegate power to local governments to issue bonds, frantically stimulate growth and boost domestic demand, nor did it have trillions of yuan in massive monetary easing to usher in a booming era of large-scale infrastructure construction.
Gao Yuliang didn't have many ways to make money.
Currently, there is a vigorous campaign to rectify the work style at the grassroots level, so naturally everything must be legal and compliant.
Therefore, we cannot arbitrarily increase taxes or impose arbitrary fines.
They could have sold more land, earned land transfer fees, collected various related taxes, and made some money.
As a result, Handong Province has now strictly regulated the real estate market, suppressing its land revenue.
Even though Gao Yuliang was once a law professor at Handong University.
Even a seasoned politician with considerable political insight and skill.
He is now also in a situation where "even a skilled cook cannot make a meal without rice".
If you want to make a lot of money in a short time, you have no choice but to ask for help.
Moreover, Gao Yuliang specifically mentioned that a higher interest rate was acceptable.
This proves that he actually just wanted to borrow money.
Instead of asking his father for help, he applied to the General Affairs Department in the name of Handong Province to issue special bonds for the construction of major engineering projects.
While this method is feasible, the various reporting and approval processes are far too slow. Even if the money is raised, it can only be used for its designated purpose, and the audit process is difficult to pass.
In comparison, borrowing money is faster and easier.
As for how to borrow it...
Of course, it's not like Gao Yuliang, representing Lüzhou City, could sign a loan agreement with his Huilong Group or a bank, specifying the amount, term, and interest rate; that would be no different from issuing local government bonds.
The type of loan Gao Yuliang wants should be similar to a PPP project.
By using open bidding, private enterprises and social capital can fund the construction of hospitals, schools, parks, roads, sewage treatment plants, and other facilities.
Then, Luzhou City pays a certain fee every year, and when the agreed time comes, the ownership of these projects that have already been built and put into use will be transferred to Luzhou City.
Simply put, it's like having someone else pay for the construction, with Luzhou City paying in installments.
This way.
It not only accelerated the pace of urban construction, but also served as a means of attracting investment, without adding too much financial pressure.
however……
There is no such thing as a perfect thing in this world.
The downside of doing this is that it can easily increase local hidden debt.
It's just like those who don't have much money but buy houses and cars in installments through mortgage loans.
They quickly acquired a house and a car, and enjoyed a wonderful life that others envied.
But behind the seemingly glamorous facade, they actually have to bear a considerable amount of mortgage and car loan expenses every month.
Even though mortgage and car loan payments seem small compared to monthly income.
But this is money that must be spent every month without fail.
What if you lose your job, your business goes badly, and your income drops?
For Gao Yuliang, who was eager to make progress as quickly as possible.
He certainly wouldn't care too much about how much long-term debt Luzhou City would incur in the future.
He just wants to produce impressive political achievements as soon as possible, and people who are eager to get married will take out loans to buy a house for their wedding.
Besides.
Of course, Gao Yuliang also had another way to quickly 'borrow money,' which was to use land as a medium.
While it's not feasible to directly mortgage land to private capital for loans, official credit can be used as a guarantee to auction off land that is currently worthless at a high price.
Social capital is certainly not stupid.
They paid high prices to buy land that hadn't even been properly paved with roads, let alone connected to water, electricity, or gas, so naturally they wouldn't develop it.
They can wait for the land to appreciate in value while simultaneously reaping benefits in other areas, thus earning a high 'interest' return.
There are many similar operations, but in the end, they are nothing more than a game of capital.
Now that Gao Yuliang was eager to ask, Zhao Ruilong naturally didn't have time to think too much.
"There must be a way. Isn't it easy to make money?"
"However, we'll discuss the specifics of how to get things done properly and without any future problems when I return to Luzhou in a couple of days."
Gao Yuliang was naturally overjoyed to hear Zhao Ruilong say that.
“Good, I’ll clean up the mess left by the Huang brothers in the next couple of days.”
"Okay, I'll call you in advance. See you later."
After Gao Yuliang hung up the phone, Zhao Ruilong put away his phone and sighed inwardly.
What does it mean to be insatiable like a snake trying to swallow an elephant?
Gao Yuliang, eager to make progress, is now the most accurate portrayal of this.
He not only initiated numerous high-tech investment projects in Luzhou.
He wanted to change the high-speed rail plan, and we even helped him change it, integrating the high-speed rail station and the airport into one.
To facilitate the rapid development of the development zone and ensure the high utilization rate of Luzhou Airport in the future, a supporting aviation industrial park was also built for it.
Furthermore, the first major project in the industrial park, the aero-engine research and development base of Longguo Aero Engine, is under construction day and night within the industrial park.
With all that, what more could one ask for?
In just two or three years, the high-speed rail will be completed and open to traffic, and the Luzhou Airport will be completed and open to air traffic.
Many high-tech companies engaged in the manufacture of semiconductor equipment and aero engines have also started production and operation.
Compared to its current state, Luzhou's economy could at least double, and it would definitely rank among the top in the province, or even second only to the provincial capital, Jingzhou.
In contrast.
His political rival, Li Dakang, fared much worse.
Li Dakang is still busy in Lincheng diverting water to create a lake and managing the subsidence areas caused by excessive coal mining.
Since the subsidence area has not yet been properly managed, there is neither a high-speed rail nor an airport, and its transportation advantages are not obvious.
Therefore, the work of attracting investment in the ecological agriculture and internet software industries has not been smooth.
Even though Li Dakang was far behind, Gao Yuliang was still not satisfied and wished he could achieve results in one or two years.
They were willing to borrow money to get things done quickly and efficiently.
Doesn't he realize that the game of capital is not something that can be played easily?
Playing the capital game and making money is quite easy, but if you're not careful, it can leave hidden dangers.
In the original drama.
Gao Yuliang approved the food court project in violation of regulations, thereby using the Zhao family's connections to rise to prominence.
However, he was ultimately implicated and brought down by the downfall of the Zhao family.
What you gain through this, you will surely lose through this too.
Zhao Ruilong never expected this.
After transmigrating, he didn't use the food court project to bind Gao Yuliang.
Gao Yuliang, however, also wanted to play the capital game with himself in order to advance his career and thus achieve a binding of interests.
"The means to achieve progress are unscrupulous!"
"How high does one have to be to be considered a high-ranking official?"
Looking out the window, Zhao Ruilong couldn't help but sigh.
I remember this line was also said by Gao Yuliang in the original drama.
At this moment, Zhang Shuhan stepped into the car.
Hearing Zhao Ruilong's remark, I couldn't help but ask with a smile:
"What's wrong, Mr. Zhao? Has someone asked you for help?"
Zhao Ruilong glanced sideways at Zhang Shuhan.
He thought to himself, "Was this guy eavesdropping outside the shuttle bus just now?"
"It's nothing. A relative wants to do more work, but is short on funds and wants me to help them think of a solution."
Zhang Shuhan chuckled.
"Isn't this simple? Just get a loan from a bank. The loan-to-deposit ratio of the four major banks is too high right now. They have a lot of deposits but few loans, and they're almost going crazy. As long as your credit is good enough, you can get a loan of any amount of money, and the interest rate won't be too high."
"If you don't want to take out a loan, you can raise funds by buying a shell company and listing it on the stock exchange. That is, you acquire a listed company with poor revenue, integrate resources, restructure assets, and the stock price will skyrocket, and the money will come in like a tidal wave."
Zhao Ruilong looked at Zhang Shuhan with great interest.
Knowing that this wealthy businessman from Beijing's elite circle must mean he's a master of the capital game.
Especially since he has the powerful and influential Wei Yun behind him.
That guy studied finance in the US and then worked at Gosen Capital after graduation.
Now that he has successfully completed his studies abroad, he will return to China to work in financial investment...
Therefore, people like Zhang Shuhan and Wei Yun.
They are undoubtedly the ones who love playing the capital game the most, reaping huge profits.
They are eager to engage in massive monetary easing and infrastructure construction, allowing local governments to borrow recklessly and drive up land and housing prices.
They don't care whether it will lead to massive debts in various regions, leaving countless people struggling to make ends meet.
In any case, they have already made a fortune through a series of capital operations, so much money that their descendants could not spend it all in several generations.
"Old Zhang, I don't think the two methods you mentioned are exciting enough. Have you heard of supply chain finance?"
Zhang Shuhan was stunned.
"What does this mean? What kind of operation is this?"
Zhao Ruilong said with a sneer:
"Simply put, it's about using large companies and platforms to complicate the supply chain."
"For example, if you were originally my supplier, you would supply me with goods and I would pay you. But because the accounts receivable period is relatively long, you might have trouble making cash flow. So you would take the supply contract, bank statements, and tax payment certificates to the bank for a loan. The bank would see that you are doing legitimate business and would definitely be willing to lend you the money."
"If we change the arrangement, you supply the goods to Xiao Qin first, then Xiao Qin supplies them to Wei Shao, and then Wei Shao supplies them to me. The goods remain the same and the money doesn't decrease, but Xiao Qin and Wei Shao will have built up their business. They will also have supply contracts, bank statements, and tax payment certificates. Wouldn't they be able to get a loan from the bank?"
Upon hearing this, Zhang Shuhan's eyes lit up.
"Wow, Mr. Zhao, that's a really trendy way to do it!"
"Moreover, it's highly feasible, and the arbitrage potential is quite substantial!"
Zhao Ruilong smiled slightly.
I'm a time traveler, how could I not know how to play the game of capital? Do I need you to teach me?
If we really wanted to do it, we have plenty of more advanced and complex operations available, and we would be absolutely ahead of the rest of the world today.
However, playing the capital game only benefits the powerful and wealthy, while causing immeasurable harm to society.
He wanted to help his father, Zhao Lichun, improve so that he could defy fate.
Of course, we must adhere to the principle of prioritizing the real economy, with finance serving only as a supplementary tool.
No one should try to drag themselves down with them, engaging in a disastrous capitalist game that harms the country and its people in pursuit of exorbitant profits!
"No matter how trendy the game is, you can't just play it carelessly."
"When we're out doing things, we still need to have a conscience and a bottom line, don't you think?"
Zhang Shuhan was stunned in embarrassment, and after two seconds he nodded repeatedly.
"You're right, we really need to have a conscience and a bottom line!"
Zhao Ruilong turned his head and looked to his side.
A large cargo plane fully loaded with Huilong MP3 players flew to the United States.
After a long run and acceleration, it finally took off and soared into the blue sky...