Chapter 360 Each Has Its Own Dilemma
"The chief said that it was the right decision to let you go out and become a capitalist."

"In such a short period of time, you have provided so many reports to the country, especially the one on the loan exchange rate difference, which is really important."

Director Lu said with emotion at this moment.

He also understood some economic principles, and he saw the key points of the report as soon as he read it.

Although on the surface the book provides an interest-free loan, if the other party really requires the loan to be denominated in US dollars and repaid in Japanese yen, there will be a large exchange rate difference.

This exchange rate difference is not only the exchange rate difference between the US dollar and the Japanese yen, but also the exchange rate difference between the US dollar and the RMB.

If the two layers are superimposed, this interest-free loan may not be interest-free anymore.

"The chief asked me to ask you, is there any good solution to this problem?"

"We have also asked the financial team, and at present, there is no way to change the US dollar pricing."

"Because neither the Japanese yen nor the Chinese yuan is an internationally circulated currency, the exchange rate difference between the two sides is not recognized by either side, so there must be an intermediate currency for measurement."

"And the most convenient intermediate currency at present is the U.S. dollar."

"And you have to know that we don't have much say in this matter."

"Because now it is we who need the loan from the bank, not the bank that needs us."

Director Lu frowned at this time and said to Li Changhe helplessly.

One of their current difficulties is that the country needs a loan in Japanese yen. This is not just a foreign currency loan, but essentially a demand for technical support from Japan.

Interest-free loans are actually used to purchase the company's products and technologies, but the transaction is conducted in the form of interest-free loans.

Therefore, this book takes the initiative in this regard.

In this regard, the loan group did not dare to be too tough.

"Director Lu, I think everyone has overlooked one point, which is that we are not without confidence!"

"We have always believed that we need Japan's technology, but conversely, Japan actually needs our market now."

"market?"

When Director Lu heard what Li Changhe said, his face became serious and he said to Li Changhe seriously: "Go on."

"I don't know if the country has paid attention to a premise, that is, the United States and Japan have actually been engaged in trade confrontation."

Li Changhe said seriously at this time.

“Trade confrontation?”

"You mean?"

"I discovered this when I was researching currency exchange rates. After World War II, the yen-dollar exchange rate was maintained at 360 to 1. This ratio was very friendly to the United States at the time, but gradually, after the s, it became unfriendly."

"The Japanese yen is low in value, the US dollar is high in value, and the local currency is low in value, which is conducive to exports. Therefore, Japanese textiles and home appliances are rushing into the US market."

"And the American people can buy these things cheaply with dollars. As a result, Japan's light industry has quickly squeezed out the light industry in the United States."

"From then on, all walks of life in Japan quickly poured into the U.S. market, including many high-tech industries."

"But the United States cannot tolerate this situation, so it has been suppressing Japan's industrial products since the 1960s. In the past few years, both sides have imposed various trade restrictions to suppress Japan's light industrial products."

"So in recent years, many products of Japan's light industry, including textiles and home appliances, have been difficult to sell in Europe and the United States."

"But now that their domestic production capacity has been built up, if they can't sell to Europe and the United States, they will be piled up in warehouses, which will be a huge blow to their local light industry."

"So, what you mean is that it now needs our market to help them digest these light industrial products."

Director Lu's eyes lit up at this moment and he said in surprise.

"Yes, it must find a market for its products, and we, as neighbors with such a large population, are the best sellers, especially now that our relations with the United States have eased."

“What if we put pressure on them and they don’t care?”

Director Lu thought for a while and asked.

"Can you tell me how much money he loaned us in the first batch, leader?"

Li Changhe asked carefully at this time.

"There is nothing to hide about this. The two sides have currently agreed on the amount of 6.8 million yen in grant aid and 660 billion yen in low-interest loans."

Director Lu said decisively that this was not a secret.

"Just over 200 million dollars, then I know the number."

"Leader, we can definitely tell them that if they don't lend us money, there are other countries that will lend us money. It's just over 2 million US dollars, and I have it!"

"We will first use these dollars to purchase a batch of equipment. Many countries in Europe are experiencing poor economic conditions and many companies are facing bankruptcy. If we just show them, I think the Japanese will be troubled."

"For them, there is no better dumping market than us. We are close, our industry is backward, and there is demand for them."

“This is the best dumping market.”

"If the fat meat in their mouths flies away, I think the other party will definitely be anxious." "In this case, just release some false information to them, or at most add a bank deposit certificate. There are so many countries in Europe and the United States, let them guess."

Li Changhe said confidently at this time.

"That's a good idea."

"We can soften our attitude and have someone spread some false information to them, mixing truth with lies, and put pressure on them in disguise."

Director Lu nodded at this moment, but continued to ask Li Changhe.

“But the question remains: how do we pay back this intermediate currency?”

"We have to have a plan when we talk to them."

Li Changhe smiled and said, "From the perspective of currency, it is difficult for us to solve this situation because the currencies of both countries are not circulating currencies. Even if we evaluate in US dollars and then return them in US dollars, we will still suffer a loss. But I think there is one thing we will not lose."

The current situation, if coupled with the appreciation of the yen as a result of the Plaza Accord, can be said to be of no benefit to the country.

If you measure it in Japanese yen, 660 billion yen is equivalent to 2.5 million US dollars. When it comes time to repay the loan, repaying 660 billion yen is equivalent to repaying 5 million US dollars, because the yen has appreciated and the US dollar has depreciated.

On the other hand, if you borrow in US dollars and repay in US dollars, you will actually still lose money because the value of our currency will fluctuate.

Because we have no say in this. Once international trade begins, you have to follow the value of their currency. After all, the other party does not recognize our currency. Even if the country does not open up a free exchange rate, it still has to make appropriate concessions.

"You mean?"

"gold!"

"We can use gold as an intermediary. Internationally, there is a universal rate of US dollar to gold. This year, the price of gold has reached its peak. According to my prediction, the trend of gold will definitely fall sharply in the future."

"The price of gold is now $500 an ounce. I expect it to drop to around $300 and remain at this price for a long time."

"We can use gold as an intermediary."

Li Changhe said with a smile at this time.

"Gold? It's going to be troublesome to transport it!"

Director Lu said thoughtfully at this time.

"It's not a problem. There is a gold bank in Hong Kong Island, which is the same as London. We can buy the contract directly and hand it over to them when the time comes, or exchange it for gold bricks."

"If we use gold directly, I don't think the Japanese will agree. We can add this condition later. The reason is that our foreign exchange reserves are insufficient, so we can return it in gold later. After all, we have gold mines."

"Of course, we can actually buy it internationally. If they have $2.5 million now, it is equivalent to 50 ounces of gold. If the price of gold drops to $300 an ounce, we only need $1.5 million to buy it."

"In short, we put forward this plan. No matter whether the other party agrees or not, we will negotiate. If the other party does not agree, they must add a clause to the exchange rate difference, such as the exchange rate fluctuation cannot exceed a certain amount."

"Even if we make concessions, we must impose restrictions on the exchange rate difference!"

As for gold, it may not be possible to outsmart the financial experts in this country, so this can only be regarded as a plan. If it really doesn't work, we can only limit the exchange rate difference.

"That's the only way, but the gold one is indeed a solution."

Director Lu nodded helplessly. There was nothing he could do. Sometimes, when you are under someone's roof, you have to bow your head.

"By the way, the chief thinks your security company is interesting, but you don't need to inform us about it, just talk to Lin Yuan. As for the employment quota, don't think about it, the higher-ups won't allow it at the moment."

Li Changhe nodded. He also understood that it was impossible for socialist countries to send laborers to work in the capitalist world. People’s minds were not open to that extent, even for Hong Kong Island.

"But the leader did mention what you said before, that you wanted to invest 2 million US dollars to build a film and television city."

"This is theoretically possible, but it's not a good excuse to just invest in building a film and television city."

"Bad words? What do you mean?"

Li Changhe was a little confused.

Director Lu sighed: "It's because he has no real reason to be a master."

"The government can't ask you to invest in building a film and television city for no reason. This is neither a donation nor an industrial input."

"You have to come up with an argument to convince other comrades to accept your idea. There are some things that leaders cannot decide arbitrarily."

To put it bluntly, there has to be a proper justification for the launch of this project, both internally and externally. We cannot just accept donations from a Hong Kong company and let them build a film and television city without any reason.

There must be a reason for industry access. After all, the country currently has no plans in this regard.

Li Changhe frowned when he heard what Director Lu said.

Where the hell can I find an excuse to go there for a movie shoot in Hong Kong?
"Also, you need to communicate with the Film Bureau of the Ministry of Culture and the Federation of Literary and Art Circles. After all, some of the rights to movies are with them. You need to communicate well with these departments for your film and television city."

“Although the introduction of foreign investment has little to do with them, the film and television city is related to them.”

Director Lu reminded Li Changhe again.

When Li Changhe heard this, a flash of inspiration suddenly came to his mind.

There is a reason!

(End of this chapter)