Chapter 552: The Fall of Baosteel

"Please invite the host of "The Same Song", Ziqi, and the special guest, Mr. Fan Wubing, Chairman of Fan's Investment Group, to sing "For Whom" for us." The host of this evening party announced the program arrangement loudly.

It must be said that only those who know the inside story know that there are too many shills in various performances held by CCTV.

Fan Wubing was very familiar with these situations because he had watched the rehearsal of normal performances, so when Ziqi and he were doing the interactive singing between the host and the guest, he was very calm, after all, it was not just the two of them who pulled the black bull.

After hearing the host's announcement, Ziqi came out, waved to the audience with the microphone, and then made an invitation gesture to Fan Wubing who was sitting in the guest seat below the stage.

On both sides of Fan Wubing were people of high status, including members of the Political Bureau and celebrities in the business world. The business celebrities who could sit here basically had a net worth of more than tens of billions, including many newly rich people in China, but now everyone didn't know them very well.

"Boss Fan, I'm calling you up." The people around knew how powerful Fan Wubing was. Seeing this scene, they all laughed and said to him.

Fan Wubing laughed and stood up, and then, without taking the ladder, he jumped directly onto the stage which was more than two meters above the ground below, which immediately caused a cry of surprise. Only then did people remember that Boss Fan was not only a business tycoon, but also a martial arts master. He had beaten two Japanese masters to death with one punch before.

So the audience suddenly remembered the warm applause, and everyone cheered.

Fan Wubing came up on the stage, waved to Sifang, and then took a microphone from Ziqi's hand.

The two looked at each other, more than two meters away, and then the lights dimmed, and then slowly lit up with the prelude of the music.

"Mud wrapped all over the trouser legs

Sweat soaked the back of the clothes

I don't know who you are

But I know who you are for

For whom

For the harvest in autumn

For the return of wild geese in spring

Singing out youth with passion and no regrets

Looking at the end of the world, I don't know when my comrades will return

Who are you

For whom

My comrades, when will you return

Who are you

For whom

My brothers and sisters don't shed tears

Who is the most beautiful

Who is the most tired

My fellow countrymen, my comrades

My brothers and sisters

Sisters——"

The two did not say much nonsense,

directly expressed their respect for the soldiers who participated in the flood control and disaster relief with their singing, but some more sensitive people noticed that the two people were two meters apart before singing, but when they finished singing, the two people had already held hands together.

In any case, this evening party was very successful. When it came to the second round of donations, it was the corporate donations. At this time, a wave of enthusiasm was set off. Many emerging companies began to donate enthusiastically. On the one hand, it was to show their support for the people in the disaster area, and on the other hand, it was to show their economic strength.

By the end of the event, the total amount of donations raised had exceeded 2 billion yuan. In addition, there were some off-site donations that were not counted, and it is estimated that the total amount could exceed 5 billion yuan.

This number was a bit beyond the organizer's expectations.

After the party, Fan Wubing went home with a little excitement.

Ziqi probably had a celebration party, so there was no chance to hang out with him, so the two of them went their separate ways after singing.

As soon as he got home, Fan Wubing's phone rang. It was news from the headquarters that Baosteel had raised prices.

"Baosteel has raised prices again?" Fan Wubing felt complicated after hearing the news.

Baosteel, which has always been regarded as a market weathervane, raised prices in this sensitive period. What kind of interest chain is hidden behind this?

Since last year, due to the impact of the Southeast Asian financial crisis, steel prices have plummeted. They were recovering before April this year. Since then, due to the speculation of steel futures, the price has increased significantly. After August, the ex-factory price has been in a state of decline until the recent price adjustment. Although there were signs before, it was just that the preferential treatment was cancelled at that time.

Baosteel's price increase itself is nothing, but the timing is indeed a bit sensitive.

Because soon, Baosteel will negotiate with iron ore suppliers about the import quantity and price of next year. The sudden announcement of price increase at this time is obviously not good for iron ore price negotiation. According to data, this is not the first time that Baosteel has raised prices before iron ore price negotiation.

Fan Wubing knows very well that Baosteel actually has a strong Japanese bloodline. At that time, Mitsui & Co., Ltd., the largest comprehensive trading company in Japan, had already seen that the Chinese market would drive up the spot price of iron ore, thus creating a community of interests among Nippon Steel, Mitsui & Co., Ltd., Mitsui OSK Lines, Shanghai Baosteel, and Vale of Brazil.

Mitsui's penetration of Baosteel can be traced back to the beginning of Baosteel's establishment. As early as 1977, during the planning period of Baosteel, technical equipment was introduced from Nippon Steel, the largest steel company in Japan. Mitsui & Co. owns 20% of the shares of Nippon Steel. At the same time, Toshiba and Ishikawajima-Harima Heavy Industries, the backbone enterprises of the Mitsui Group, cooperated with Nippon Steel to become equipment suppliers for Baosteel. However, from then on, Baosteel could only choose to import iron ore from Australia and Brazil.

As early as the 1940s and 1950s, Mitsui & Co. began to collect information and purchase iron ore extensively overseas. It further invested in mines by signing long-term contracts with foreign countries, and finally became a member of the board of directors of mining companies. Mitsui & Co., Ltd. has accumulated rich experience in iron ore trading, and has formed a community of interests with mining companies through many means such as long-term trade contracts, investment, equity participation, establishment of joint ventures, and participation in operations.

Nippon Steel Corporation and Mitsui & Co. are a community of interests, with mutual shareholding and joint investment. Secondly, Brazil's Vale and Australia's two companies have also been firmly bound and become part of Mitsui's global layout.

According to the information available to Fan Wubing, the inventory of construction and plate materials in major cities across the country has doubled year-on-year this year, and the inventory remains high. Logically speaking, Baosteel has no reason to increase prices.

But he also noticed that Baosteel's price increase is mainly determined by the supply and demand relationship of products. There is strong demand from downstream sectors such as automobiles and home appliances. At the same time, costs drive up prices. Under the expectation of rising prices for iron ore, coke, etc., Baosteel's prices Rise in advance to absorb costs.

The most unpleasant thing is that after the Japanese chaebols took control of domestic steel companies, not only did the country's access to iron ore become restricted, but Baosteel also had a Mitsui pedigree in the maritime logistics sector. Mitsui O.S. Lines transported more than 10 million tons for Baosteel every year. of iron ore.

It can be said that since the day Baosteel was born, its dependence on Mitsui's technology, talents and logistics has been deeply ingrained. Its main production equipment and core technologies all come from Nippon Steel.

As for the domestic steel processing bases jointly operated by Mitsui & Co. and Baosteel Group, as well as the production bases under construction, although Baosteel has a controlling stake in the joint venture due to policy restrictions, Mitsui's power is not limited to this.

In some companies, although Baosteel's investment ratio is 51%, the chairman of the board is appointed by Mitsui & Co., and Baosteel Group's guaranteed loans are also guaranteed by letters of guarantee provided by Mitsui & Co.

Mitsui controls Baosteel in China, POSCO in South Korea, and the Tata family in India. Its layout in various places is through joint ventures and cooperation with the largest local companies to graft capital, industry, information, circulation, etc., and ultimately Control the entire industrial chain. This situation makes Fan Wubing rather worried.

Since the 1990s, under the influence of the "Going Out" strategy, it has become a mainstream trend to learn from the Japanese and Korean models and make Chinese enterprises bigger and stronger. During this period, a wave of research on integrated trading companies emerged.

However, with the rapid development of China's economy, the inflation rate reached 21.7% in 1994. The Chinese government began to shift to the U.S. economic model in 1995, using macroeconomic management methods to control interest rate levers and monetary policy to implement intervention measures in the economy. The deposit interest rate once rose to about 12%, and value-preserving savings with a maturity of more than five years can also get a value-preserving interest of about 12%, which means that the interest rate on long-term deposits is almost 25%. This kind of high interest rate is probably rare in the world. The result of a series of policies was the withdrawal of currency and the disappearance of inflation, which also caused a sudden brake on economic development.

Abnormal changes in China's macroeconomic situation have not attracted much attention from Japanese companies. As a comprehensive trading company, one of Mitsui & Co.'s important functions is to assist the consortium's affiliated companies to enter overseas markets. At this time, since the Chinese market has not really opened up, many companies of the Mitsui Group are investing in Southeast Asia on a large scale, but the target is still the Chinese market. At the same time, Mitsui & Co. has led Japanese companies to establish a number of joint ventures in China.

Beginning in 1992, Baosteel was the leader in the pilot work of clearing working capital debts, and then the triangular debts of key enterprises were cleared in four industries: coal, electric power, forestry and non-ferrous metals. However, the triangular debt reached 800 billion yuan by 1996. At this time, the triangular debt caused enterprises to blindly expand production, resulting in product surplus, which gave birth to an economic crisis.

At that time, after many large state-owned enterprises adopted Western accounting systems, they were exposed to be insolvent and were indiscriminately forcibly cleared of triangular debts, which eventually led to heavy blood loss and bankruptcy. Moreover, China's independent industrial system was due to the symbiotic relationship between enterprises. destruction and disintegration.

At this time, pillar enterprises like Baosteel lost the support from many domestic enterprises after the triangular debt was cleared, and even formed a severed relationship with domestic foreign trade, shipping, finance and other enterprises. Instead, they created opportunities for industrial organizers such as Mitsui & Co. Bring opportunities.

It was also at this time that Baosteel began to fall into the hands of Japanese companies.