lcionline Chapter 254 The Subprime Crisis Is Unstoppable? I, Zhao Ruilong, Will Defy Fate!
Chapter 254 The Subprime Crisis Is Unstoppable? I, Zhao Ruilong, Will Defy Fate!
Chapter 254 The Subprime Crisis Is Unstoppable? I, Zhao Ruilong, Will Defy Fate!
Jingzhou Huilong Hotel.
In the bathroom of the luxury private room.
Upon receiving Wu Chunlin's call, Ding Lehui, the secretary who was initially a little tipsy, suddenly sobered up.
Because Wu Chunlin didn't use his work phone to make this call; he used a PHS phone.
"Okay, I will verify the names of the people on the promotion list one by one through other channels and methods as soon as possible to ensure that nothing goes wrong."
"Okay, I understand. My dinner is almost over. It's been so many years since we last met, and we had a great time chatting. Well then, you should get some rest. Goodnight, Minister Wu!"
After hanging up the phone, Ding Lehui put away his mobile phone.
"Just who is Luo Shanhe, who was parachuted in? How could he scare Minister Wu like this?"
"Even if a new broom sweeps clean, he wouldn't dare to extend that influence to our Organization Department!"
"The people on the list were all recommended by their subordinates and preliminarily approved through relevant procedures. Even if there are problems, they can't be blamed, right?"
Ding Lehui, the secretary, thought it over and over and felt that Wu Chunlin was still too timid.
Wu Chunlin has managed to get to where he is today not only because he is good at reading people and changing his stance according to the prevailing winds, but also because he is extremely cautious.
But sometimes, he was overly cautious, and particularly timid.
Even though he is honest and doesn't take anything, and there's nothing wrong with him, he's still afraid of making mistakes at work.
So when Luo Shanhe was parachuted in, he was terrified.
Don't they realize that no matter how capable Luo Shanhe is, he's only here to be the clerk in charge of Han Dong, not the top leader?
With the backing of Zhao Lichun Shuji, who has a deep-rooted foundation in Handong, how could he be afraid of Luo Shanhe?
Ding Lehui washed his face at the sink.
He was really happy tonight.
But it wasn't because he met Xiao Jinhua, an old classmate from Yenching University, many years ago.
Xiao Jinhua was born with a silver spoon in his mouth and, as a child prodigy, skipped grades to enter the prestigious Yenching University.
Ding Lehui, on the other hand, came from a poor family in a remote rural area. Through hard work and diligent study, he ranked first in the county and was admitted to Yenching University.
Because of their different family backgrounds and the fact that they didn't share a dorm room, their relationship wasn't very good during their time at school.
We were the kind of people who went our separate ways after graduation, and if it weren't for a chance encounter, we might never have seen each other again in our lives.
What truly made Ding Lehui happy was that Zhao Lichun's beloved son, Zhao Ruilong, hadn't forgotten him.
The two had only met twice before.
It was because Wu Chunlin was reporting to Zhao Shuji that the two chatted while waiting outside.
Unexpectedly, Zhao Ruilong actually remembered him and knew that he was a graduate of Yenching University.
Tonight, Zhao Ruilong is hosting a banquet for Xiao Jinhua, who is visiting Handong for investment and inspection, and has invited me to have dinner with him at Huilong Hotel.
Ding Lehui certainly couldn't refuse such a good opportunity to improve his relationship with Young Master Zhao.
With his "old classmate" accompanying them, the dinner party was indeed more enjoyable.
After washing his face, Ding Lehui frowned as he looked at himself in the mirror.
They were both top students from Yenching University.
Xiao Jinhua has amassed a fortune of over 30 billion yuan and was recognized as the richest man in China last year.
And what about yourself?
I'm currently just a secretary in the Organization Department.
Even if they come from a poor family background, their parents in the remote mountain village can't help them.
But I should also try my best to get close to Young Master Zhao so that I can make progress faster!
"By the way, didn't Minister Wu say he wanted to verify the names on the list through other means?"
"Then I might as well give this list to Young Master Zhao and let him check whether they are obedient and usable people."
"The right to conduct verification has been handed over to him, which is equivalent to giving him the power to appoint personnel!"
"Who is obedient, reliable, and worthy of promotion is entirely up to him. How could he not remember my favor?"
Upon realizing this, Ding Lehui immediately wiped his face and went out.
In the box.
Xiao Jinhua, who was having a good time tonight, has started to overindulge.
Young people who achieve early success are bound to become arrogant and conceited.
Once emotions run high, one will inevitably become arrogant and lose one's sense of proportion, and will involuntarily engage in grandstanding and pontificating.
His face was flushed with wine, and his eyes were unfocused.
With a cigarette between his fingers, he put his arm around Zhao Ruilong's shoulder and began to talk fluently.
"...Looking at the West over the past century, the main internal factor for its rapid economic growth has not been the technological breakthrough that brought about incremental growth, but rather quantitative easing and debt-driven economic growth."
"Therefore, in the West, led by the United States, the way countries issue money determines who will be the pig in the wind, and our Dragon Country was originally about to follow this path, which is to stimulate the economy by issuing bonds."
After taking a puff of his cigarette, Xiao Jinhua glanced at Ding Lehui.
"Lehui, tell me, am I right?"
Ding Lehui paused for a moment, then laughed awkwardly:
"Sorry, I was on the phone just now and didn't hear what you were talking about."
"However, the West's continued quantitative easing has indeed kept the economy quite vibrant."
"Especially in the United States, the bursting of the dot-com bubble had a significant impact. It is estimated that the United States will further relax real estate-related policies and allow banks to issue more subprime loans."
Xiao Jinhua laughed heartily.
"We'll talk about the US subprime mortgage crisis later. Please have a seat!"
“Ruilong, let’s continue our discussion about the money-giving model. The way things are done in China is different from the West.”
"Fifty years ago, in order to win the war completely and complete basic industrialization, we briefly issued national bonds. Later, our thinking changed, and we did not want to borrow money for development, so we paid off all foreign and domestic debts ahead of schedule until we opened up to the outside world."
"More than 20 years ago, after we opened up to the outside world, in order to complete modernization as soon as possible, we gradually issued bonds in the international market. The economy developed rapidly, but the massive debt led to overheating of the economy and inflation, which resulted in the failure of price reform."
"Four years ago, the Asia-Pacific financial crisis broke out, and foreign trade and the economy were severely affected. We once again issued special treasury bonds, raised funds on a large scale, and implemented a series of major infrastructure projects in order to promote employment, absorb excess capacity, and revive the economy."
At this point, Xiao Jinhua looked at Zhao Ruilong with a smile.
Have you noticed a pattern?
"Our country is very cautious about issuing bonds and borrowing money to stimulate economic growth."
"Without a severe economic crisis, there will be no issuance of bonds to borrow money to stimulate the economy, let alone quantitative easing or massive money printing."
Zhao Ruilong nodded slightly.
"Borrowed money always has to be repaid!"
"Our country, China, has a weak foundation, unlike the United States, which has a very solid economic foundation and can be very flexible in its economic policies. We must be extremely cautious about our debt."
"Preventing local governments from setting up financing platforms to issue bonds is to avoid undisciplined and reckless actions, such as redundant investment and construction, vanity projects, and overcapacity in low-end industries."
"That's right!"
Xiao Jinhua responded in a loud voice.
The hand holding the cigarette pointed in the air.
"Therefore, for a long time to come, local governments will not have the authority to issue bonds."
"The top leadership's economic development strategy is that we should act like a sponge and engage in counter-cyclical operations with the West."
"That is, when the West loosens monetary policy, we resolutely refuse to loosen it and frantically absorb it. When the West tightens monetary policy, we loosen it."
"As we are about to join the WTO and the West continues quantitative easing, we must try every means to attract investment as much as possible."
"With our relatively cheaper labor and raw materials, we manufacture a large number of high-quality and inexpensive industrial products, becoming the world's factory."
"Once the West stops its quantitative easing and its economy begins to shrink, or even an economic crisis breaks out, we will issue bonds again and use debt to drive sustained high-speed economic growth."
Zhao Ruilong nodded silently.
Relying on debt to drive economic development is both a trump card and a last resort.
It is naturally not something that can be easily used unless absolutely necessary.
Just like a person who has a stable job and income and lives a peaceful life, there is no need to borrow money to invest.
Only when jobs are insecure and life is precarious will people think of borrowing money to invest or even just to make ends meet.
Borrowing money may feel good for a moment, but repaying it will bring tears to your eyes.
The same applies to nations and individuals; they all need to be trustworthy.
If you borrow money and don't pay it back, your credit will be ruined, and you won't be able to survive anymore.
Therefore, as long as life is still manageable, China cannot engage in debt-driven development.
We will firmly control the approval authority for local government debt and special-purpose bonds, and will not allow local governments to borrow money for development without authorization.
Even with low interest rates and relatively good tax revenue in some provinces and cities, which may seem to provide sufficient repayment capacity, it's not as simple as just borrowing whenever you want.
Ding Lehui, who had just sat down, frowned slightly and said:
"I am worried that this economic cycle may not last long."
"Once our Dragon Country officially joins the WTO, the wave of economic globalization will reach its peak."
"The Americans are responsible for printing money like crazy and spending it, while manufacturing continues to flow out of the country, making them a financial empire. We, on the other hand, are responsible for producing like crazy, constantly improving our manufacturing strength, and becoming an industrial power."
"In just a few years, production capacity will be saturated and consumption will weaken. Moreover, the US allows people with poor credit and low income to buy houses through subprime loans, which will definitely lead to a crisis in the future."
Upon hearing this, Zhao Ruilong looked at Ding Lehui with some surprise.
No wonder he's a top student who graduated from Yenching University!
It was only 2001, yet the subprime mortgage crisis in the United States was already brewing.
Do you think the US will experience a subprime mortgage crisis?
Ding Lehui nodded emphatically without hesitation.
"I think it's very likely, and it might explode in the next two years."
Zhao Ruilong laughed and said, "That's hard to say. What if someone challenges the hegemony of the United States and incites the United States to launch a large-scale war?"
Zhao Ruilong certainly wouldn't say that in less than two months, the United States would suffer a terrorist attack, followed by a massive counter-terrorism war.
Ding Lehui and Xiao Jinhua, standing before them, clearly could not have foreseen that the United States would be attacked, let alone imagine that the militarily powerful United States would be so deeply mired in the war on terror.
"Even if war breaks out, it will only postpone the subprime crisis!"
"Letting people without the means to buy houses with mortgages is a game of musical chairs, and it will inevitably collapse sooner or later."
"Once housing prices stop rising, and once the economy declines, causing some people to lose income and become unable to repay their loans, it could quickly trigger a domino effect."
"Once the number of people defaulting on their mortgages increases, banks will inevitably auction off properties to recoup their losses. As more properties are auctioned off, housing prices will inevitably fall, and the decline in housing prices will further exacerbate the wave of defaults."
"This vicious cycle will inevitably lead to a subprime crisis in the United States, which will then affect the real economy and spread rapidly throughout the world, causing a global economic recession!"
As soon as Ding Lehui finished speaking, Xiao Jinhua burst into laughter.
"A recession is good!"
"If the US really experiences a subprime mortgage crisis within a few years, leading to a global economic recession, wouldn't that be our opportunity in China?"
"At that time, we will definitely start a debt-driven mode, allow local governments to issue bonds, set up financing platform companies to raise funds, and use trillions of yuan to stimulate economic growth."
"At that time, not only will Americans be begging us to buy their treasury bonds and insist on using the US dollar as the international trade settlement currency, but a large amount of Western capital will also compete to negotiate cooperation with us under the drive of interests."
"We can take advantage of this opportunity to help the West overcome the economic crisis, while simultaneously acquiring technology and industrial transfers at low prices, launching a new round of large-scale infrastructure construction, and becoming an engine of global economic growth!"
Zhao Ruilong smiled faintly and did not reply.
History doesn’t simply repeat itself, but it does rhyme.
Although they are different worlds, the trends of historical development are strikingly similar.
The 08 subprime mortgage crisis, trillions of dollars in massive monetary easing, the era of infrastructure boom...
In those short few years.
Not only have crisscrossing high-speed railways, extensive highways, and communication base stations spread throughout urban and rural areas been built,
Taking advantage of the global financial crisis, they purchased the world's most advanced technologies at extremely low prices, laying the foundation for industrial upgrading.
Then, the mobile internet era arrived.
Thanks to their well-developed infrastructure and massive consumer base, internet giants have risen rapidly.
It's not just mobile phone manufacturers that are fiercely competing; internet companies are also launching a money-burning war to win over users.
As a result, investment was exceptionally active and technological progress was rapid during those years.
Developed transportation infrastructure and rapid urbanization.
This led to a surge in the price of previously remote and barren land, resulting in a booming real estate economy.
Countless ordinary people felt that it was particularly easy to make money in those years, not to mention that many people became rich overnight through land expropriation without doing anything.
As for those entrepreneurs who benefited from the era's dividends, even those from humble backgrounds quickly became billionaires and enjoyed immense success.
As the mobile internet economy comes to an end, and the era of massive monetary easing and infrastructure construction comes to a close.
Many people have started to miss the past, the days when there were more opportunities to make money and everyone lived a good life.
As for now...
In the United States of this world, the subprime mortgage crisis is still brewing, and terrorist attacks have not yet broken out.
But Zhao Ruilong, who wants to defy fate, has been trying to change the plot and alter the course of history.
Although changing history is difficult, and I never thought of preventing the United States from suffering terrorist attacks, it is essential to prevent my brother-in-law from being killed.
As for the Dragon Kingdom...
Xiao Jinhua hoped that the subprime crisis would erupt so that China could purchase advanced technology from the West at low prices, thereby achieving industrial transformation and upgrading.
But Zhao Ruilong couldn't wait any longer.
If you don't have money, get it from abroad.
If you lack the technology, invest in research and development yourself.
They didn't need to wait for the subprime crisis to break out; they had already started a high-quality economy in Handong.
They started developing electronic information, high-speed rail, aerospace, new materials, new energy...
If a subprime crisis were to erupt in the future, it would lead to a global economic recession.
The Dragon Kingdom had no choice but to implement debt-driven growth in order to maintain economic growth, protect people's livelihoods, and ensure employment.
That's a case of keeping the benefits within the family; it's not up to the West to make a fortune off China and escape the crisis.
Handong is well-equipped to undertake the important tasks of implementing large-scale infrastructure projects, upgrading industrial technology, and expanding domestic consumption.
In other words.
The dragon nation of this world will never risk its life to save the global economy after the subprime mortgage crisis.
We must not allow ourselves to end up like in another world, where we helped the West out of its predicament only to be met with ingratitude and a barrage of suppression and sanctions.
At that time, China will not need to issue too much debt or inject too much liquidity to complete economic stimulus and industrial upgrading, thus reducing the need to rely on debt to drive potential and prepare for the next economic crisis.
As for the US wanting to get out of the crisis quickly, it can implement larger-scale quantitative easing, printing money like crazy and flooding the market. Anyway, issuing tens of trillions of dollars more in national debt is no big deal for them.
In any case, if the US loosens monetary policy, China tightens it, and vice versa.
If we don't target the US and instead engage in frantic counter-cyclical operations, how can we quickly complete our development?
of course.
Zhao Ruilong was well aware that all of this was predicated on the successful development of a high-quality economy in Handong.
Not only can it avoid spending money to transfer technology from the West, it can also drive China's industrial upgrading.
On the contrary, it can export high-tech products and seize the global market for Western mid-to-high-end industrial products.
Only in this way can we avoid bearing humiliation and hardship, and stand tall and earn money while maintaining our dignity.
With such outstanding achievements, how could we not help my father, Zhao Lichun, advance even further?
The clever Ding Lehui knew, of course, that Zhao Ruilong had lofty ambitions and great aspirations.
They didn't want to wait for the subprime crisis to erupt; they wanted to make Handong the engine of China's economic development.
Otherwise, why would we have spent over 200 billion US dollars to vigorously develop high technology in Handong Province?
I glanced at Xiao Jinhua, who was slumped on the table after drinking too much.
Ding Lehui got up and poured Zhao Ruilong a cup of hot tea.
"Relying on heaven or earth is not as good as relying on yourself!"
"We must take our own destiny into our own hands, right, Brother Long?"