Zhou Haijiang: How Does "Red Bean" Go Out?

It looks like heaven, earth and people. Red bean The grand course of investing in Kampuchea and reinventing a special economic zone has a rather complicated experience. Perhaps, it is more worthwhile for Chinese enterprises to go out of the way to learn from them.

The transfer of rich capacity, the avoidance of trade barriers, the diversification of origin and the cost migration. This has almost completely depicted the evolution track of Chinese enterprises' "going out" for more than 10 years. So in a sense, the business reporter is more likely to explore another way of survival for Chinese enterprises to "go out".

The journey from Shanghai in just 3.5 hours is like a reversal of time. It's not just an hour's jet lag. It's not just a return to summer and autumn, it's more like a reporter crossing China in the late 80s. An endless stream of "sudden" - a kind of transport similar to motorized tricycles, various buildings coexisting with tradition and modern times, and a motorized passenger who loudly touted business. This is the present Kampuchea.

In 2007, a group of Chinese people built a huge dream in this area. And this is the destination of the reporter's trip. Kampuchea Sihanouk Economic Zone 。

　　 "Go to sea"

In April 2007, when we took over the western port region, President of the red bean group Zhou Haijiang Frankly, "great pressure". His "sea going" road was originally only stationed in the West Hong Kong Special Administrative Region to set up factories overseas.

This is a typical pure processing export mode which only regards Kampuchea as a production base. This is due to the embarrassment of the entire domestic textile industry at that time: on the one hand, after the accession to the WTO, textile exports were reduced by quota constraints, and export capacity was released. On the other hand, the United States and the European Union, on the grounds of "disrupting the market", restricted the export of textile products to me. How long could they be choked by their necks?

Survival is undoubtedly a primitive impulse to root the hearts of enterprises. In order to avoid trade barriers, a large number of textile and clothing enterprises and footwear enterprises headed by Hong Kong enterprises and Taiwan enterprises have been fighting overseas, and Vietnam is the first choice. For a time, Vietnam has even become a bridgehead for Chinese enterprises to "go out". Zhou Haijiang, however, chose a new way to Kampuchea, which was close to Vietnam and was far behind Vietnam.

　 Why Kampuchea?

The relationship between Vietnam and China is not very close because of the border issue. But Kampuchea can be said to be China's most staunch ally in Southeast Asia. Secondly, Vietnam has developed rapidly for ten years, and the economic system is generally shaping up from another angle, that is to say, the development space is limited. Three, compared to Kampuchea, Vietnam's export to Europe and the United States will not be completely duty-free, while export quota restrictions are stricter.

Most importantly, Zhou Haijiang noted that in August 2006, the first round of bidding was established by the Ministry of Commerce in establishing an overseas economic and trade cooperation zone. A total of 8 units in the country won the bid, and the Kampuchea western port special administrative region is one of them. "As an important part of the" going out "strategy, the Ministry of Commerce has paid unprecedented attention to the 8 major foreign economic and trade zones. According to the bidding documents, the winning foreign trade and economic zones can get up to 2 billion yuan of preferential loans and other incentive policies to go out. Not only that, especially the West Hong Kong Special Administrative Region. Shortly after winning the bid, Hong Sen, Prime Minister of Kampuchea, personally met the 3 CEOs of the item company in the West Port Region, and even arranged a deputy prime minister to coordinate the resolution of specific problems, and the level of cooperation between the two sides continued to improve.

It is said that this is a good way to enjoy the cool with a big tree. But I didn't expect it to be easy.

Originally, the West Hong Kong Special Administrative Region was invested by three enterprises in Wuxi, Jiangsu. The registered capital of the project was 80 million yuan, because the shares were quite equal. On many decision-making issues, once the three sides disagreed, they could not agree, so that the project of the West Hong Kong Special Administrative region (HKSAR) was progressing slowly or even stagnating. As a result, the Jiangsu provincial government was anxious, which was the only successful foreign economic and Trade Zone in Jiangsu province at that time. They began to search for a strong local firm.

The red bean group, a local leading enterprise in Wuxi, has been pushed to the front desk.

Red beans do have this qualification. In 2006, the red bean group's annual turnover amounted to 14 billion 300 million yuan, and the industry spanned clothing, rubber, locomotives, real estate and biopharmaceuticals, and already had many overseas enterprises in the United States and other places to do business, with an annual export volume of more than 100 million dollars. But at the same time, the transformation from the customers to the investors in the park is still disturbing.

In any case, for the red bean, the "sea going" of the midway change is already in the firing line because of the eagerly anticipation of the bilateral government.

　 The second venture

It is difficult to understand the huge gap between the rich and the poor in Kampuchea. It is one of the 21 poorest countries in the world. But Lexus LX570, who is walking along the streets of the capital, Phnom Penh, seems to be telling you again that there is no shortage of rich people in this country. In fact, 70% of the rich people in this country are Chinese.

Sihanouk, named after the king of Kampuchea, is the second largest city in Kampuchea. It is 210 kilometers away from Phnom Penh, the capital. Because there are no expressways in the country, it takes at least 3.5 hours to drive from Phnom Penh to the south. On the way, there are low hanging towers and endless fields, and scattered cattle on the fields.

What will Zhou Haijiang think of countless times on the road?

Although the red bean is a physical enterprise developed by product development, it is completely different from the industrial park. The angle of view, vision and even talents need to be adjusted. But he firmly believes that since big enterprises such as red beans have their own urgent needs to go out to Kampuchea and push themselves forward, other labor-intensive industries must also have this demand. So the West Hong Kong Special Administrative Region (HKSAR) is an offshore investment development platform built for domestic enterprises who want to go out, that is its value.

It looks as if Kampuchea, China at the end of the 80s, is now surging in Zhou Haijiang's heart like the passion of his first venture.

This is the second venture. Obviously, compared with the imitation of China's brilliant Vietnam, the red bean has to face a more unfamiliar social system and human environment, and also face possible policy risks and legal risks. This road is very difficult. Red beans can only be explored step by step.

The urgent need is equity conversion. The warning is placed there. Since the answer is taken, red beans will have the right to speak. Through the equity conversion, 85% of China's shares were collected under the banner of the red bean, and the original three shareholders share only 15%. At the same time, red bean further established its exclusive position.

The second thing is to find the Kampuchea government's policy. It's not difficult. Kampuchea is a very underdeveloped country. It enjoys the preferential treatment system granted by 28 countries such as the United States, the European Union and Japan. For example, the import of textiles from Kampuchea, the United States gives preferential policies such as looser quotas and exemptions from import tariffs, Canada's exemption from import tariffs, etc. on the other hand, Kampuchea urgently needs to shake off poverty, and the policies for foreign investment enterprises are particularly favorable. For example, the production equipment, building materials, spare parts and raw materials used for production are exempted from import duties. Enterprises can enjoy 9 years' tax exemption period according to the type of products, profits from reinvestment, exemption from income tax, export exemption from export duties, no foreign exchange control, and free access of foreign exchange funds. On the one hand,

The most important part of starting work is enclosure. In front of Zhou Haijiang, there were five plots to be selected. Five take the first place. What Zhou Haijiang most valued is the superior location and convenient transportation.

The West port area that the reporter sees now covers an area of 11.13 square kilometers. It is the largest special economic zone approved by the government of Kampuchea, and the only special economic zone built by the Chinese people. It is located in the town of Sihanouk in Kampuchea. It is only 12 kilometers from the port of Kampuchea, the only deep water port in Kampuchea. It is only 4 kilometers away from the West port airport. At the same time, it is close to the best road across the whole country and directly to Phnom Penh, No. 4 national highway.

Of course, the cost of acquiring this land is not bad. The other four plots are relatively smooth. Only this block of rock, marsh, and hills are crisscrossed and uneven. The difference between the highest and the lowest is more than 60 meters.

Moreover, the 11.13 square kilometers of land are all measured by the red bean people. After April 2007, Dai Yuee, general manager of the West Hong Kong Special Administrative Region company, came to Kampuchea with a team of 5 people. What kind of world are they suddenly facing in the "land of fish and rice" in Wuxi?

"At that time, I really felt thrown into barren hills." Dai Yuee recalls. What is more valuable is that they insist that such a day is not overnight. Because of the privatization of land, the plots selected by Zhou Haijiang belong to more than a dozen landlords. The 5 of them lived in Sihanouk city in the evening. Every morning they ate breakfast and they pulled a pickup truck to the plot. When they looked for water, there was no road. Just after April, it was the hottest days in Kampuchea. The sun was hot and spicy on the head, and the women comrades were not able to drink more water because they were inconvenient. In order to save time, everyone will eat some dry food at noon. Every day such a mark is inserted, the area is measured, and sometimes we have to measure again and again, checking the area with the landlord repeatedly. Once someone accidentally stepped on the mine - that was left during the civil war in Kampuchea. Dai Yuee said, "fortunately, it didn't explode."

They spent ten months in such a day. During the period, Dai Yue had to return to Phnom Penh and Sihanouk city to keep in touch with the government of Kampuchea, and to bring drawings back to China for planning and design. To this day, she told reporters in a calm tone, "at that time, I didn't know what to think, so I stuck to it."

In February 23, 2008, all preparations were finally ready. Hong Sen, Prime Minister of Kampuchea, attended the foundation laying ceremony in person, declaring the establishment of the western port special administrative region. As an example, the textile enterprises of the red bean group took the lead in signing the contract. {page_break}

　　 Chess to disk

Before that, only the Pakistan Haier Rumba economic zone and the Zambia China Economic and trade cooperation zone were listed in the 8 major foreign economic and trade zones. A head of China's overseas economic and Trade Zone in Russia admits that "this speed can not be fast, but not slow". After all, such large-scale overseas operation mode has no precedent for Chinese enterprises.

Because of this, the original Zhou Haijiang plan is faster, but chess to the plate, red bean has encountered many difficulties that have to face.

The first thing to do is land leveling. Dai Yuee told reporters that "Kampuchea has only two seasons in a year, half of it is dry season and half of it is rainy season". Because half of the year is full of rainwater, a road in the West port area will take a year of natural settlement, and this half of the rainy season can hardly be completed. This dragged the whole project back. No way, red beans can only adjust their own planning, comply with the "time".

The second is the development concept of the local government in Kampuchea. It is a fact that the latecomer countries are eager to invest. Especially in Kampuchea, China has always regarded China as its "big brother" and wants to learn the economic development mode of China. However, up to now, there is no specific legal division of labor in Kampuchea, especially in terms of laws and regulations concerning economy, commerce and trade. The enterprises that invest in the enterprise can not be based on the company law. The most widely applied contract law in business activities is formulated in 1988. Specific to how to support enterprises, what exactly should the Kampuchea government do? They can be said to be ignorant, or know that it is difficult to know: for example, land, domestic industrial parks and investment promotion, the local government has the ability to give preferential conditions. "As long as you come, I will give you", otherwise, Kampuchea will not be able to do so, because land is almost entirely private. For example, customs offices, Wuxi, where the red beans are located, will serve the enterprises 24 days a week, seven days and seven days. On the contrary, Kampuchea customs will not be able to do so.

At first, this is just like the red bean that is used to the domestic mode. It is just like the Dragon bank shoal, which is intolerable. Many times, in order to get a specific policy, they must also play the role of "preacher", which increases the burden and hidden cost of red beans and is very tired.

To this end, under the push of red beans, Wuxi and Sihanouk city became friendly cities. Red beans periodically invite Kampuchea government officials, especially Sihanouk municipal government officials, to exchange, study and even train in Wuxi. In the words of the red bean people, "let them open their eyes first and let them understand that they are not enough to support our business."

The third is the weak infrastructure. The start of Kampuchea's economy started in 1998, but until 2005 and 2006, large enterprises such as Korea, Japan and Singapore poured into Kampuchea to build factories. They began to really enter the period of great development, so their electricity, water supply and road traffic remained extremely backward. Up to now, even the capital city Phnom Penh has a considerable number of urban roads without hardening, not to mention the rural areas outside Phnom Penh, and in the evening, most of them can only rely on oil lamps. An industrial park planned by a Japanese enterprise near Vietnam can only import electricity from Vietnam.

This is what red bean has foreseen. To this end, the red bean has only chosen the land resources of the West Hong Kong Special Economic Zone, which is rich in freshwater resources. Now, the 2000KW diesel power plant has been put into operation in the special zone to ensure that the enterprises in the area can provide enough water and electricity resources. It is expected that a thermal power plant will be built in 2011 to further reduce the cost of electric power. Of course, it takes time.

In addition, because there are few industries in Kampuchea, the industrial chain is very imperfect. Take the textile and garment industry and shoemaking industry, although it accounts for more than 80% of Kampuchea's industry, there is no matching upstream industry. Accessories such as cloth, clothing accessories, lines, zippers and buttons still need to rely on imports. Obviously, this is only a red bean enterprise, only relying on an industrial park in the West Port, unable to solve it.

　 Way to break through

If we say that from the beginning of the park into the main body of the construction, there is a rush to get started, then in the face of problems and then strive to solve problems in the process, red beans have been rooted in this barren land, slowly mature.

In less than three years, the red bean has invested about 71000000 US dollars, and has already built the 1 square kilometers core launch area of the West Port, which is relative to the development of 7 other overseas economic and trade zones. Red beans have entered Kampuchea with such a pioneering mode of operation. The speed is amazing. Moreover, in the more than 20 special economic zones established by various enterprises in Kampuchea, the West and Hong Kong Special Administrative Region has won the first prize. Its solid and perfect planning and construction has even been regarded as a model national promotion by the government of Kampuchea. We should know that the other more than 20 special economic zones have been stationed in Kampuchea for seven or eight years earlier than the red beans.

Because of this, the HKSAR is based on China and faces the world. So far, it has attracted 7 Chinese enterprises, 2 European and American enterprises and 1 Japanese enterprises, including clothing, footwear, luggage, steel structure and other industries. In addition, more than 30 enterprises have initially reached a cooperation intention. With the construction of the first 5.28 square kilometers of the park in the next three years and the total budget of US $320 million, the data of the admission enterprises will continue to expand.

But obviously, red bean is more than that. After a firm foothold, it also began to explore its own way of breaking through.

Over the past two years, three major events have taken place: first, Vietnam's economic crisis has erupted, and the inflation rate has exceeded 8%, and the Vietnamese government has continued to depreciate. A large number of Chinese enterprises in Vietnam have struggled to turn their sights on Kampuchea, which shows red beans' foresight. Two, the domestic production costs have risen sharply, forcing more Chinese enterprises to look overseas, and comprehensive accounting. Kampuchea has built up factories. Its extremely low labor cost is not only enough to offset the logistics cost generated by the import of raw materials, but also has huge surplus space. Therefore, after Vietnam, Kampuchea is becoming a hot investment "holy land"; the three is the January 1, 2010 China ASEAN Free Trade Area, which is officially opened. This is the largest free trade area in the world composed of developing countries, covering 1 billion 900 million of the population -- what a huge market.

All this brings about the transfer of rich production capacity, the avoidance of trade barriers, the diversification of origin and the cost migration. This is the first reason for red bean to invest in Kampuchea, and it is also the image of Chinese enterprises going abroad. But how long can this pattern last? The development of the market will eventually be as amazing as that of China at the beginning, and Vietnam at the same time. When one day, Kampuchea's cost is high and its trade is limited, where will Chinese enterprises go?

Height determines the way out. Unlike other local special economic zones in Kampuchea, which blindly introduce labor-intensive industries, red beans should not only introduce industrial chains, but also strive to introduce investment in energy, oil, natural gas, water conservancy, health care and financial projects of Chinese enterprises, which is based on Kampuchea's future "gold" market, which can really grasp Kampuchea's economic lifeline.

And red beans are not profitable. At least in the next five years, they will not consider making money through the western port special administrative region. They give the park enterprises the most preferential policies and the lowest cost price. This "selfless" investment is the hope that in the next 8~10 years, more than 100 enterprises will be settled in 50 thousand parks. By then, red beans will be able to build relevant commercial facilities in planned areas.

"The largest capacity of the whole west port is 150 thousand people," Chen Jiangang, vice president of the red bean group, told reporters. "Now there are only 80 thousand people in Sihanouk City, plus a total of about 200000 people in the surrounding villages. We are equivalent to rebuilding a West port city."

This is not just a joke. It is also an ambitious ambition of an enterprise in a foreign country to promote urbanization by industry. As prime minister Hong Sen of Kampuchea has said on many occasions, "building up the special economic zone of Sihanouk port is my dream for many years." in mid December 2010, he will go to China to finalize a framework agreement. This is the first time that the bilateral government has issued an agreement for the Industrial Park built by an enterprise to clarify the legal status of the West Hong Kong Special Administrative Region. "Both sides provide support and convenience for the construction, management and operation of the West Hong Kong Special Administrative Region".

After the five day's interview, the business reporters left the western port, and the sky was getting late. It is thought-provoking that the red bean people are rushing to the nearby countryside for free teaching. "Because more and more Chinese enterprises are being recruits, the local leaders come to ask us to teach their children to learn Chinese. They used to learn English only."

Still, deep water may change quietly.