Chapter 2392: Financing (Part 27)
"But this long-term plan absolutely needs to be done, and done properly. Get both the Finance Province and Administrative Affairs Yuan to approve it—the team can be understaffed, but we need to establish this framework first to avoid disputes later."
Chu He finally understood. So this "smooth operator" intended to stake a claim. Establish the framework first, mark the territory, prevent complications down the road.
"Brilliant thinking!"
"Hehe, I wouldn't call it brilliant. Just learned enough lessons over the years." Ren Youzi pulled out a box of cigars as he spoke. "Want one?"
"I don't smoke..."
Ren Youzi lit one for himself, took a deep drag, and slowly exhaled. Only after a while did he speak again. "You surely understand too, little brother. This securities exchange, stocks and bonds—essentially it's all about extracting money for the Senate and Nanyang Company. And this money? It's sitting under the beds of Guangzhou's old wealth. Our Senate particularly values face and won't hold bayonets to force them to part with it, so we came up with this softer approach."
"The problem is, this approach works well."
"Works well, sure—but this exchange..." Ren Youzi lowered his voice. "Honestly? Whether it exists or not doesn't really matter."
Chu He was startled, thinking: Don't go saying every thought in your head out loud! But since the other party had said this, he was clearly being treated as "one of us." He immediately stated his position:
"Brother, you're seeing things from a high vantage point. But as you just said, whether we can actually do it or not, we first need to establish this framework..."
The two exchanged knowing smiles. Ren Youzi continued:
"Actually, this fundraising—whether stocks or bonds—if you really set up a stall in this exchange to sell them, who the hell would buy! Even if some did, you couldn't move hundreds of thousands. When it comes to fundraising, we still have to take the old road! In Guangzhou city, Liu Xiang probably knows every wealthy person who can put up money. Get the list and run through them one by one—even now, investment banking requires roadshows. Don't find it troublesome; this is what's actually efficient. Besides, right now the wealthy households are anxious to establish relations with the Senate, to buy some peace. Purchasing a few thousand in bonds from you is like getting a certificate of allegiance. So they'll definitely buy; it's just a question of how much."
He paused. "As for ordinary people, we don't need to covet the middle and lower classes' meager savings right now—and with Great Ming's inequality, they don't have much money anyway. As for new money, I know you're probably eyeing the Zhang family of walnut pastry, thinking their family is the textbook example of rising under the Senate's support. You want to build on that success, give them some icing on the cake, create a spectacular demonstration effect. This isn't impossible, but in my view, this family isn't quite suitable: their money is basically all invested. They currently owe Delong loans. It's hard to get these people to invest money in the southern expedition. It's not that they're unwilling—they genuinely don't have the cash."
Chu He lowered his head in thought, then said, "I did have that idea. I genuinely didn't realize the Zhang family's liquidity was so tight—their business is thriving!"
During Guangzhou's epidemic, merchants had struggled, but Zhang Yu's family supplied the military and remained unaffected by the sharp decline in retail sales. Moreover, their new workshop sat right outside the Great World, escaped the lockdown, and had maintained steady production throughout the entire epidemic. Both production and sales proceeded uninterrupted.
Ren Youzi exhaled a puff of smoke. "This is the benefit of working in the Cheka. We can see Delong's monthly financial reports. I've been monitoring Delong's lending to Guangzhou city merchants over the past six months. The Zhang family has taken substantial loans—purely from a business perspective, the Zhang family's company couldn't possibly qualify for this much credit."
Now Chu He grew somewhat nervous. "Is there a problem with these loans?"
"If we're talking about problems, it's the lack of collateral. They're basically all policy loans." Ren Youzi said, "Jin Zhijiao specifically mentioned this to me, asking me to pay closer attention to the Zhang family's loan situation. So I investigated specifically. The usage is all normal—everything went toward building factories, purchasing equipment and raw materials, expanding production. Then I checked the specific approval process at Delong—basically all directed by Old Hong."
"So you're saying Old Hong..."
"Right, it's Old Hong's intention. Otherwise, how would the Zhang family have been set up as a model?"
"Damn—could it be that Zhang Yu has a good-looking sister? Or maybe Zhang Yu himself is rather handsome—"
"Not really," Ren Youzi looked at Chu He with slightly disdainful eyes. "Zhang Yu has no sisters, and he's just an ordinary young man. Nothing particularly handsome about him. Besides, Old Hong doesn't swing that way."
"Now I really don't understand. Old Hong is that selfless? And Zhang Yu's surname isn't even Hong!"
"Little brother, how did you survive in finance back then?" Ren Youzi's eyes glittered. "This Zhang family might very well be the white glove Old Hong set up for himself."
"How did I forget that!" Chu He made a "sudden enlightenment" expression and slapped his forehead. "Been away from the game too long."
"So you see, never mind that the Zhang family doesn't have money right now. Even if they did, they shouldn't be allowed onto this hot stove."
"Unless Old Hong comes forward himself..." Chu He said.
"If Old Hong really comes forward himself, that face must definitely be given." Ren Youzi said, then suddenly remembered something and added, "Also, the exchange's rules must be fair. I don't believe an exchange established with harvesting leeks as its aim can do well long-term. If you really want to make quick money, just open a casino, run horse races, or at worst operate a lottery. But if you want to play the long game, you need to let the first batch of investors make money—create a demonstration effect, let the wealthy landowners from all over Guangdong and Guangxi see the opportunity and pour in to invest. If they have concerns during the first fundraising, we can also structure it in tranches, with priority and subordinated shares. Senators put up the subordinated; give the local tycoons priority protection. That way, even if it's just for face, they'll put up the money."
"Naturally. Even farming requires fertilizer."
The "First Guangzhou Exchange Work Meeting" concluded successfully. Chu He saw Ren Youzi off, thinking: since such a special person as Zhang Yu had been mentioned, why not visit his shop? Zhang family walnut pastry was quite famous now. He'd long admired its reputation. Whether or not their family could ultimately participate in the stock offering, it wouldn't hurt to do some research first.
The research wouldn't be difficult. Zhang Family Walnut Pastry had a store in the Great World, and their workshop wasn't far away either.
Since obtaining Delong's loan, the Zhang family had sought to expand production. The main shop sat in a bustling market area, and even after relocating their residence, space remained limited. By comparison, the storefront at the Great World was much larger, with abundant vacant land outside available for development. So they had purchased land outside the city for their workshop, shifting the center of production beyond the walls.
"Little Piao!" he called.
Park Jihyun immediately appeared at the doorway. "Chief!"
"Do you know where Zhang's shop is?"
"It's right in the Great World. I bought some just a few days ago. The taste is really good." Park Jihyun saw him asking and added, "If Chief wants some, I'll go buy it right now."
"No need for you to buy. I want to see the shop myself."
"I'll arrange contact right away!" Park Jihyun said, turning to find Manager Gao.
"Hey, no need for that. Just the two of us will go take a look." Chu He examined his own clothes. "Bring me one of your cadre uniforms."
He was wearing the Senator-exclusive uniform specially provided by Store 82. Although the style was no different from what naturalized cadres wore, the materials were worlds apart—a special fabric woven from cotton thread blended with wool, comfortable and impeccably crisp. The tailoring was also bespoke, not mass-produced by a garment factory.
"Chief, you're going incognito?" Park Jihyun's mind worked quickly.
Chu He laughed. "Clever! If I walk into the Great World dressed like this, it won't be very convenient."
"Even if you wear my clothes, once you enter the Great World, people will still recognize you as a Senator—the bearing isn't something ordinary people possess. Just as the moon stands out among the stars..."
"Alright, stop flattering me in new and creative ways." Chu He said this, but his heart still enjoyed it. "Don't say more, just hurry and bring me a set."
After changing clothes, Chu He and Park Jihyun emerged from the special passage of the "Inner World" into the "Outer World." The "Outer World" of Zhang's Great World had originally been designed according to another spacetime's shopping mall model. Except for insufficient steel and cement—resulting in fewer floors and no vast hollow atrium—the basic business model was entirely the same.
The only operational difference was that although the shops in the Great World were leased out, more than half of the various establishments inside were Senate-owned. Beyond selling goods, their greater purpose was cultural and commercial promotion—"new life," "new culture."
They exited through an inconspicuous small door and arrived at the "Outer World"—the Great World's outer plaza. A four-story brick-and-concrete "giant" with a clock tower and large glass roof stood at the plaza's center—the Great World Department Store.
However, Zhang's Pastry Shop wasn't inside this mall but in the three-story long building that encircled the entire plaza. This building had originally served as the Great World's wall. The first floor on the outside had no windows; all doors and windows faced the plaza. Only the second floor and above had outward-facing windows. Merchants could only operate within the first-floor storefronts, not access the upper floors. However, with Guangzhou's liberation, the Great World's military significance had become minimal, and the second floor and above could now also be leased.
The outer plaza was nearly deserted—Guangzhou hadn't fully recovered from the disaster, and commerce remained depressed. Without spare money, naturally no one had the mood to come see "Australian scenery."
"The market is still sluggish." Chu He observed the sparse crowds and couldn't help worrying privately. A sluggish market would seriously undermine commercial confidence. People would be reluctant to spend money—not only consumers but investors too.
In this atmosphere, both stock offerings and bond issuances would face severe tests. If his group's optimistic projections ended up as empty noise while financing ultimately failed—forcing them to resort to mandatory apportionment—that would be a profound embarrassment.
(End of Chapter)