Chapter 455 New Opportunities Brought by the Decline

Fortune Chapter 455: New opportunities brought by the decline

1997 was a very dramatic year. The most popular movie in the world is "Titanic" produced by Hollywood. It was the largest luxury liner in the world at the beginning of the 20th century that was said to be unsinkable. Sinking to the bottom of the North Atlantic Ocean amid elegant musical accompaniment and one after another frightening screams. They sank together. There is also the love between the young wandering painter Jack and the noble lady Rose.

When the Chinese audience walked out of the theater with mixed feelings. In the business world. Tragedy is unfolding. Sadness comes out of one.

The Asian financial crisis started in the summer. It lasted more than four months. It has had a significant impact on Asian countries and all industries.

The wealth of the middle class in the Philippines, Malaysia, and Indonesia shrank by 50%, 61%, and 37% respectively. Residential assets in Hong Kong, Singapore and China fell by 44%. Forty-three percent and 41 percent.

When the storm swept through Thailand. New York Times columnist Mas Friedman happened to be in Thailand. later. He described the scene with lingering fear in his best-selling book "The World is Flat". The Thai government announced the closure of fifty-eight major financial institutions. Overnight. The private bankers were ruined. He drove to a party on Aso Street in Bangkok. This is Thailand’s Wall Street. Most of the bankrupt financial institutions are here.

As his car plodded past these bankrupt rows. Every time I pass a house. The driver muttered to himself. It's down - it's down - it's down -. These Thai banks became the first dominoes in the first global financial crisis of the new era of globalization.

Even the most advanced country in Asia. Not immune to disaster either.

in Korea. Under attack, the Korean won has depreciated by 50% in more than two years. The country's economy is almost on the verge of collapse. The South Korean government has requested emergency assistance from the United States, Japan and the International Monetary Fund. The amount of borrowing was a global record of $55 billion. And was forced to promise to implement a strict economic stabilization plan and reduce the economic growth rate. Economic autonomy was lost for a time.

The South Korean government has issued a belt-tightening policy to all civil servants, requiring them to deposit at least 10% of their salary in banks. People donated gold and silver jewelry from their homes. In the storm. The unemployment rate in South Korea is as high as 11%, and South Korean companies have suffered losses in exchange differences of at least 30,000 won. Debt principal and interest repayments increased by 4 trillion won.

Many large companies in South Korea declared bankruptcy and were in dire straits. Among them is Daewoo Group, which was regarded as a target by Chinese companies in the past few years when the storm swept through. Zhongyu, which has been experiencing rapid expansion, is actually already heavily in debt. The company borrowed $20 billion.

Facing the crisis. Hanyu Group has adopted a series of contraction plans but at the same time doubled down on its automobile business. They successively took over Ssangyong Motors and Samsung Motors by raising US$13.5 billion in short-term debt funds through high-interest bonds and commercial paper from major banks.

And continue to advance its strategy of being an international automotive giant.

By the end of the year. Daewoo's lending bank refused to make further payments. Two years later, the company finally declared bankruptcy with debts of US$80 billion.

in Japan. Although the Japanese yen has not been directly attacked. But the turbulent austerity effects quickly spread to all industries. September eighteenth. The famous enterprise in this retail industry, Baban Company, went bankrupt.

This is a legendary company that Chinese consumers are very familiar with. Its founder, Wada Kazu, is a traditional Japanese woman who started working as a child at the age of ten. Started by running a small vegetable and fruit shop. After forty years, it has developed into a large multinational company with annual sales of US$5 billion and 400 department stores and supermarkets around the world. The Japanese TV series "Oshin", which was shot based on real life, once created the highest ratings record in China.

The end of 1995. When Shanghai No.1 Baban opened. A total of 1.07 million customers came in that day, setting a Guinness World Record.

Neighboring countries are taking turns to deal with the Asian financial crisis. The scene was so brutal that I was frightened. Financial capitalism and globalization have shown a fierce and powerful destructive side. This will naturally affect China's industrial economy and people's mentality. Amidst the global stock market crash. China's stock market, which had been quite active in the past, also fell into a downturn. The consumer market is even more depressed.

After several years of macro adjustments. Inflation pressure is gradually released. The inflation rate dropped to almost zero but the consumption over-scene emerged at the same time. According to a report from the National Bureau of Statistics. By the middle of this year, the country's total industrial inventory output will exceed 3 trillion yuan. Structural excess has emerged. More than 90% of industrial products are in oversupply.

June. The Ministry of Economy, Trade and Domestic Trade, the Ministry of Foreign Trade and Economic Cooperation and others jointly established a national inventory commodity swap center. In order to increase the circulation of corporate goods.

sick financial team. In addition to lending 200 Hong Kong dollars to the Hong Kong Monetary Authority to support Hong Kong dollars. The gains on the Hang Seng Index are quite fruitful. Soros and others were caught off guard. Unexpectedly, Fan Wubing shorted Heng in advance. Stock markets plummeted. Making them confused. The Hang Seng Index fell directly from 18,000 points to 9,000 points. Fan Wubing then used the huge amount of funds gained from various markets. Comprehensively hunt for the bottom of the Hong Kong stock market. Hong Kong stocks slowly heated up. Finally it stabilized and stopped above thirteen thousand points.

all in all. Speculators suffered heavy losses. Although the losses for investors are not small. But overall, under this global trend. It's still bearable.

The Hong Kong Monetary Authority worked closely with Fan Wubing. First, it used its huge foreign exchange reserves to absorb Hong Kong dollars. Second, it raised interest rates and tightened money supply. After a series of attacks, stocks stopped falling and began to soar strongly. This was mainly due to the support of the government. Chinese and foreign funds entered the market. Twenty-four red-chip listed companies repurchased shares from the market, pushing the market up. China Telecom returned to a level above the IPO price. It also had a certain stimulating effect. Red-chip state-owned enterprises took a breather and rebounded. In addition, the interest rate cut in the motherland also became a theme for the market to rise. These factors caused the Hang Seng Index to rebound sharply.

Of course, Fan Wubing's funds entering the market were huge. He almost targeted all the stocks with good performance in Hong Kong stocks at low prices. Under the strong rebound, the Hong Kong dollar exchange rate also returned to stability.

If Fan Wubing is more constructive than destructive to Hong Kong stocks, his methods in several Southeast Asian countries are quite sharp. Anyway, Soros's Quantum Fund took the blame. It would be too foolish and naive not to fish in troubled waters and enjoy the fruits of others' labor. Especially the actions in Korea. He made a lot of money. The depression caused by the Koreans before was swept away.

So much so that Fan Wubing smiled and was very friendly when he saw Koreans for a long time. There was no other reason. These were all fat sheep walking upright in his eyes.

At the beginning, he was just trying to get some money in Thailand. Small Thailand did not have much oil to make. But Korea was different. After all, its economic strength was still good. As the saying goes, there are few turtles in shallow water, but there are many turtles in deep water. The water in Korea is naturally much deeper than that in Thailand.

The Asian financial crisis brought another far-reaching impact to Chinese enterprises. It completely shattered our impression of the Japanese and Korean conglomerate business model. The famous Korean conglomerates that fell in the financial crisis include the 14th largest enterprise in Korea, the second largest steel company Hanbo, the 19th largest enterprise and the largest brewer Jinro, the 8th largest enterprise Chae Kia, the 12th largest enterprise Halla Group, and the 2nd largest enterprise Sammi Group. and the 34th largest enterprise, Dailong Group.

In particular, the predicament of Daewoo Group, which was regarded as a model for imitation, made the decision-makers rethink the way of cultivating large enterprises.

The "grasp the big" strategy that was just formed last year has changed its course.

The "grasp the big" idea at that time was to be led by the state and focus on supporting a number of advantageous enterprises to develop into a consortium model. Make them giant companies with international competitiveness and represent China's strength.

However, the fragility of Japanese and Korean consortiums exposed in the financial crisis made the central government completely lose confidence in this path. Even companies like Daewoo could not resist the attack of international financial capital. Then can China's Daewoo-like companies escape this fate?

So. A new strategy of state-owned enterprises withdrawing and private enterprises advancing has emerged. Its basic idea is that state-owned capital withdraws from the field of perfect competition on a large scale. Experts suggest that state-owned enterprises should resolutely withdraw from competitive industries and at the same time strengthen the monopoly structure in upstream energy industries. These industries include steel, energy, automobiles, aviation, telecommunications, electricity, banks, insurance, media, large machinery, military industry, etc.

In these areas, the government will do its utmost to exclude competition from private and international capital and ensure the interests of state-owned enterprises by strengthening monopoly. As the owner of state capital, its role is not weakened but strengthened. Of course, there is another happy thing that Fan Heng finally entered the Politburo at the 15th National Congress held in September and became a member of the Politburo at the age of 56.

Although Fan Heng is very young to enter the Politburo at this age, it is still relatively young in comparison. If there is no unexpected situation, there is no problem staying in this position for ten years.

The only problem is that after Fan Heng became a member of the Politburo, he still stayed in the position of governor of Nan Province. This problem is a bit strange and bizarre. It seems that this situation has never happened in all these years.

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