Chapter 283: Working Hard
What is the privatization of China's state-owned enterprises like?

Recently, Zhang Yunqi has been trying hard to recall.

After the symposium that day, he devoted his energy to writing a report to Yang Jiarong on the property rights restructuring of the Longjingyuan Cannery to revitalize state-owned assets.

It is not easy to write this report because he must first fully explain or prove the legitimacy and necessity of the property rights system reform. After all, since China began its reform and opening up in the 80s, there have been many different opinions and endless debates on the basic ideas of the reform of public enterprises (mainly state-owned enterprises). The most critical and sensitive topic here is whether the reform of state-owned enterprises must "touch" property rights.

Since the 80s, the reform of state-owned enterprises has been trying to avoid touching property rights. Policymakers hope to focus on internal management mechanisms and incentive mechanisms to revitalize enterprises without changing the fundamental system of enterprises. The once popular "contract system" is a concentrated embodiment of this effort.

Is there anything wrong with this idea?

This was absolutely not true before 2008. At that time, most people were enjoying the dividends brought by the large-scale marketization of state-owned enterprises through property rights reform.

After 2018, right and wrong became a matter of opinion. When the demographic dividend disappeared, exports hit the ceiling, real estate could not continue, and the export-oriented economy encountered obstacles, everyone criticized "996 blessing" and "people's rich", and everyone was reminiscing about the golden days when the people's enterprises were run by the people.

As for the process of continuous trial and error in the reform of state-owned enterprises in the early 90s, it was even more difficult to judge right or wrong, because the direction of reform was unclear at that time. No one could be sure whether to revitalize enterprises by taking the radical path of property rights reform or focusing on internal management mechanisms and incentive mechanisms, which is a relatively mild and conservative path. But now the ambitious Yang Jiarong is obviously inclined to the former and wants to vigorously promote the privatization reform of Jiangchuan City's state-owned enterprises. Therefore, he must logically establish a sufficient argument for this direction.

Zhang Yunqi sorted out the experience of later generations and gave the following arguments: With the deepening of reform and opening up, the degree of competition in China's domestic market has continued to increase. Public enterprises are unable to adapt to the fierce market competition due to their inherent defects in the property rights system. The soft budget constraints of public enterprises have constituted an increasingly heavy financing burden on the government departments in charge. The finance and state-owned banks are unable to continuously "transfuse blood" for a large number of public enterprises in terms of funds. To "revitalize enterprises", they can only rely on private funds. To mobilize private funds to enter enterprises, it is impossible to rely on administrative coercion, but only on the system that protects the rights and interests of private investors. Therefore, restructuring the property rights structure of enterprises and introducing institutional arrangements that meet the needs of private investment entities have become the inevitable choice for many public enterprises in terms of development and even survival.

At this point, Zhang Yunqi gave the core argument: "The reform of the property rights system of China's state-owned enterprises is an inevitable requirement for the marketization and competition of China's economy, and it is a reflection of the market competition calling for a corresponding corporate system form."

Zhang Yunqi knew that this argument would cause a strong reaction from public opinion and be criticized in this era, but he could only write it this way, and he had to write it this way, even if deep down he might not agree that property rights reform was the best solution. It was not for a commoner like him to dictate the direction of national economic development. He had no intention of trying to please Yang Jiarong and make personal capital in this way. But as a human being, as one of the 1.3 billion people of the Chinese nation, what else could he do besides doing this?

I remember that many years ago, when he was still in junior high school in Longwan Town, his class teacher once said to him, "Your path is very clear. You will be the top scorer in the junior high school entrance examination and the college entrance examination in one go. You will enter Tsinghua University and Peking University to become a top talent and contribute to the four modernizations of the motherland."

After the weekend holiday, he walked more than ten miles back home. His mother said to him with red eyes, "The town wants to pay the levy, and I can't pay it, so they took the New Year pig away."

This was his life.

This is also the current life of hundreds of millions of poor people!

He was poor, so poor that he became mentally dissociative.

He never had the chance to experience the so-called fairness and youthful spirit, which also cultivated the most pragmatic side of his character, talking less about some doctrines and doing more practical things.

Look at those middle-aged people who have been engaged in mechanical labor for many years and are now abandoned, those women who used to live in the factory but now make a living by picking up rotten vegetable leaves in the vegetable market, and those young people who cannot receive education because their parents were laid off... Zhang Yunqi is unwilling and has no right to pity them, nor is he stupid and arrogant enough to think that he can save them. It's just that now he has such an opportunity to look at this ups and downs of reform with a future perspective, summarize the advanced experiences of the past life, and provide reference for decision makers. Let the camera pay a little attention to those who have been abandoned by this era. He has no reason not to do so.

Based on the core argument that most state-owned enterprises should be revitalized through property rights reform, he took the Longjingyuan Cannery as an example and raised four core issues. The first is the main problems and basic conditions facing the transformation of my country's state-owned enterprise system, such as the possibility of restructuring legacy debts and placing redundant employees, the two most prominent constraints; the second is the main forms of property rights reform, such as shareholding reform, shareholding cooperative system, joint ventures with foreign investors, leasing operations, transfer of part of state-owned shares to employees, bankruptcy reorganization, etc.; the third is how to avoid the loss of state-owned assets due to property rights reform. He proposed a major approach that had no precedent before 96, which was to reform the state-owned enterprises below by setting up state-controlled shell companies, thereby preventing the loss of state-owned assets in advantageous industries and curbing the blind development of commercial real estate in local areas; the fourth is the social significance and prospects of privatization, such as rebuilding the basic social incentive mechanism, laying the foundation for the national economy, reforming the economic and trade system, and realizing a market economy. Therefore, he concluded that China will join the WTO in the early 21st century and become the world's largest manufacturing country and an export-oriented economy.

These prospects, which were realized one by one in later generations, were shocking in the 90s. Zhang Yunqi wrote with great enthusiasm, and became more and more energetic as he wrote. He lost a lot of hair and did not watch the World Cup. The title was very long and big, "Some Basic Judgments and Prospects on the Evolution of the Privatization of China's Public Enterprises - Based on the Innovative Property Rights Reform of the Longjingyuan Canning Factory in Jiangchuan City to Revitalize State-owned Assets."

While he was working hard on this report, the Longjingyuan Cannery was particularly noisy.

A lot of people attended the symposium that day, and the idea of ​​Zhang Yunqi to build a processing base in Yunxi Village soon spread. Liansheng's employees were better off, sitting back and relaxing. They were all white-collar workers, and it was easy to understand that they would definitely stay in the headquarters. How could they conduct business in such a remote place?

The employees of the Longjingyuan Cannery felt very differently. Their boss was making a fuss and wanted to build a new processing base in Yunxi Village. All the production lines would have to be moved there, so they, the assembly line workers, would have to go to the countryside to work. But they were all city dwellers with families in the city, and it was difficult for them to mentally accept being suddenly transferred to work in the countryside.

Of course, these are all gossips without any connections. There is no definite method or notice, so people are not panicking. Everyone is still waiting and watching. Besides, the factory is doing well now, and everyone is living a good life. They heard rumors that the wealthy boss spent more than two or three million yuan to promote their canned food, and even started a food program on Xiangnan Satellite TV, which was broadcast non-stop from morning to afternoon and into the early morning. As a leader among provincial TV stations, their influence is truly top-notch. In addition, their overwhelming ground-based advertising has also entered various cities and counties. The canned food produced in the factory became popular all of a sudden, and sales soared.

The factory workers naturally did not know the specific sales volume of canned food, but they had not seen the bustling scene of large trucks carrying goods lined up in long queues in the factory for many years. It was really rare. Moreover, compared with the factory, the headquarters was even more prosperous. The headquarters was always packed with customers who wanted to negotiate business, and there were several order meetings every day. It was rumored that the customer service phone line had almost never been closed and was always busy.

Longjingyuan’s production capacity can no longer keep up.

At this time, Zhang Yunqi adopted two countermeasures. One was to ask Li Jilin to speed up the introduction of production lines. According to his idea, he did not have that much money and it was not realistic to introduce them from abroad. So he set his sights on some large state-owned canneries in China with poor performance. They used to be wealthy and had introduced large-scale advanced production lines. When the performance was not good or they needed to transform, they would naturally sell them at a low price. The second was to let distributors at the city and county levels pay advance payments.

Liansheng adopts an interactive two-level dealer network, without regional and provincial dealers. Zhang Yunqi did this for three reasons: first, to avoid the situation where the dealers control the market and restrict the dealers in the future; second, this is a more suitable market entry model for consumable products; third, the cost of maintaining this dealer network is not high. One or two diligent ordinary sales staff can maintain the dealer network of the entire province.

Logically speaking, the transaction between distributors and manufacturers is that the manufacturer first ships the product to the distributor, and then the distributor pays. Now that production capacity is tight, Zhang Yunqi doesn't want to do this anymore. He requires all distributors to "pay cash on delivery, and ship after payment". Perhaps this was almost "impossible" in the past, but it is different now, because the relationship between manufacturers and distributors is always a dynamic confrontation and cooperation. When business is not good, the distributor is the boss. When the product is selling well and everyone is making money, the manufacturer will do whatever the manufacturer tells them to do. Look at the distributors who are now sleeping on the floor at the Longjingyuan Canning Factory. Let alone asking them to take the advance payment first, it is not a problem to call them father.

As a result, Zhang Yun received a large advance payment without any bloodshed, and combined with the bank loan promised by Yang Jiarong, he had sufficient funds to introduce two advanced production lines and build a processing base.

The construction of the Longjingyuan canned food processing base is also under coordination and research. Under the instruction of Yang Jiarong, this matter has received great attention from the Fengyang County Party Committee and County Government. In the 90s, attracting investment has always been the government's top priority.

The negotiation was led by the experienced and capable Li Jilin, who led Niu Fen and Wang Guibing to negotiate with the two levels of government of Longwan Town, Fengyang County on issues such as land allocation, processing base project planning, and support for local characteristic industries to increase farmers' income. As a result, he was so busy that he could not go home all day.

This afternoon, after school.

Zhang Yunqi went to his eldest sister Zhang Qiulan's house for dinner. It was his eldest nephew's third birthday. When he was hailing a taxi not far from the school gate, he met Li Yufei who was riding a bicycle.

Li Yufei stopped the car and asked him: "Where are you going?"

Zhang Yunqi said: "Cannery."

"Then let's go together. You ride." Li Yufei got off the bicycle, patted the seat with her hand, her pretty face facing the sunset. Her tone was sweet, simple and direct, as if she was talking about an ordinary thing.

Zhang Yunqi grabbed the handlebars and jumped on. Li Yufei sat diagonally in the back. Zhang Yunqi kicked the bike with his feet and drove Li Yufei, who was holding a pink schoolbag, into the street corner of Jiangchuan at dusk. There was wind at that time, and the shady camphor trees retreated one by one. The girl's skirt fluttered and fell, and the afterglow of the setting sun was cut into strips of warm silhouettes.

“You are amazing.”

"Are you talking about driving skills?"

"Silly~ I said cannery."

“What happened to the cannery?”

“Business is really good right now.”

"This is your father's credit. I don't care."

"You are very modest, Zhang Yunqi. Longjing Garden is what it is today, and everyone in Longjing Garden should thank you. But you have exploited my father a little too much."

"How do you say this?"

"My mother works in the provincial capital, and my father is so busy that sometimes I don't see him for many days. Now I am alone after school, eating, reading, sleeping, and going to school."

"It's great, life is pretty regular."

"You're asking for a beating. You're so dishonest. Where did that obedient and motivated top scorer in the high school entrance exam go?"

"Actually, I also feel that I have changed a lot. It may be because my family is poor and I am afraid of poverty. But seriously, Yufei, as a friend, tell me, am I better now or before?"

Li Yufei thought for a moment and said, "I'll tell you later."

******
P.S. There are still a few chapters to go before this volume ends.

(End of this chapter)