Traveling back to 1977

Chapter 611 Expectation
Chen Fan looked at Zhou Yali, paused for two or three seconds, and then said with a strange expression, "Last time you came, you said you knew about the foreign trade monopoly system in China. How come you're talking nonsense today?"

Zhou Yali's face stiffened, she pouted and remained silent.

She had just forgotten this point: foreign trade monopolies naturally require all goods to be traded through import and export companies in the mainland. Even if she wanted to sell goods in the mainland, she could only negotiate with foreign trade companies.

But wouldn't the trading company negotiate directly with the manufacturer? Why would they let you make a profit in the middle?
Failed.

Chen Fan chuckled twice and said, "Currently speaking, American electronics are indeed more advanced than those in China, but compared to Japanese products, they have a significant disadvantage."

Zhou Yali sighed, "I understand, theirs is cheaper."

She suddenly pouted, "I just don't understand why we made up with the little notebooks? We still spend so much money on their products every year, just because they're cheap?"

Chen Fan coughed lightly. "That's not something we need to consider."

Then, changing the subject, "However, to be honest, Japanese products do have a price advantage compared to American products. Especially for big-ticket items like electronics and cars, although their products aren't top-notch, they're not much worse than American ones, but the prices are much cheaper. In terms of cost-effectiveness, they really can't compare to them."

The world's leading electrical appliance company is still Whirlpool Corporation of the United States. They invented many household appliances, such as the world's first washing machine.

However, it did not lose out to domestic home appliance companies in the competition for small notebooks, but it was defeated by domestic home appliance companies and gradually became a second-rate enterprise.

Zhou Yali nodded gently, then sighed, "That's true. Even Whirlpool is suffering setbacks in the US domestic market due to the Japanese products. Ford and GM have been pushing for high tariffs on Japanese cars, but unfortunately, their public relations expenses are not as high as the Japanese ones. Toyota is still opening more and more car factories in the US."

Back when Ford was producing 8000 cars a day, Toyota could only produce 40, and Toyota even had to learn from Ford. Now it's a case of the apprentice teaching the student while the master starves. In short, a whole bunch of messy things have happened.

Chen Fan pursed his lips, "You seem to have a lot to worry about."

Zhou Yali chuckled, "We're studying international trade, so we definitely need to understand the ins and outs of it."

Jiang Lili and Jiang Tiantian sat to the side, listening to the two of them chat. It felt like listening to gibberish; they could only understand a part or two of each sentence, and had no idea what the rest was saying.

Chen Fan glanced at them, grinned, and the two sisters returned the smile, which inexplicably calmed him down.

Zhou Yali continued, "After World War II, the world economic landscape underwent significant changes, especially industrial relocation, which became a key focus for both new and old capital."

Among the Asian hotspots was Savannah. In order to rebuild Savannah and reduce production costs, the United States transferred a large number of production lines from its homeland to Savannah, which directly promoted the economic revival of Savannah from the 40s to the present. Now, Savannah has even become the most favored investment destination in the world.

Meanwhile, in Europe, West Germany, with its strong technological reserves and capital aid from Europe and the United States, along with Japan, became one of the most shining economic twin stars…

As Zhou Yali recited the knowledge points from the textbook, Chen Fan smiled and asked after she finished, "So tell me, where will the next industrial relocation site be?"

Zhou Yali said without hesitation, "Southeast Asian countries will be one of the next industrial destinations because they are close to Singapore, control the important sea route of the Strait of Malacca, and have a very abundant supply of cheap labor. I am more optimistic about Malaysia and Singapore."

Chen Fan looked at her with a half-smile, "Did you really figure that out yourself?"

Zhou Yali's face stiffened slightly, and she chuckled dryly twice, "Although it was taught by the teacher, once I've memorized it, it's mine, isn't it?"

Chen Fan nodded slightly and smiled, "Your teacher's analysis is pretty good, but he missed one factor."

Zhou Yali looked at him, puzzled. "What factors?"

Chen Fan smiled and shook his head. "Civic quality."

Zhou Yali's eyes widened, filled with confusion. "Huh?"

Chen Fan explained, “Citizen quality includes several aspects. First, it includes the level of education; second, it includes personal habits determined by religious beliefs, cultural customs, and so on; and finally, it includes the local business environment.”

What you just said is very true. After 30 years of rapid development, due to its narrow geographical limitations, Japan has reached the point where it has to expand its industries overseas. Therefore, it must consider the regions that will receive these industries. Southeast Asia is a key region to choose because it can be reached directly by sea and controls a major sea route.

In addition, the regions along this route from the small notebook to Southeast Asia should all be within their scope of investigation.

So your teacher's analysis isn't wrong, but this area is very large, including more than a dozen countries and regions.

Now, if you also consider civic virtue, think carefully, who has the best chance?

Zhou Yali frowned, silently pondering which countries and regions were in this area, and what the similarities and differences were in their customs, culture, and government policies. She became engrossed in the thought.

Chen Fan raised an eyebrow and gestured to the two sisters. The three of them, each carrying a chair, tiptoed out.

The two sisters cooked dinner together, with Jiang Tiantian assisting and Jiang Lili in charge of cooking, while Chen Fan provided technical guidance.

When the food was served, Zhou Yali came out, clutching her head. "It's too difficult. I'm not familiar with many places, and I don't know where to start."

Chen Fan pulled out a chair and sat down, saying irritably, "Why didn't you come out earlier? You could have come out as soon as dinner was served."

Zhou Yali sat down opposite him and chuckled, "I can't cook anyway, so it's good that I'm not helping you guys."

Jiang Tiantian couldn't help but grin and chuckle, placing the bowl and chopsticks in front of her. She said with a smile, "Everyone has their strengths and weaknesses. Although you can't cook, you understand economics. I didn't understand anything you and Xiaofan were discussing just now."

Zhou Yali held her hand and pulled her to sit down beside her. "Sister Tiantian understands me best."

Chen Fan took the rice bowl from Lili, picked up his chopsticks and looked at her, "I know how to cook too, it just depends on whether you're willing to learn."

Zhou Yali pouted, "I don't talk to aliens."

Chen Fan rolled his eyes and waited until Jiang Lili sat down before giving the order, "Let's eat."

Holding her rice bowl, Zhou Yali acted nothing like a rich young lady from a wealthy family. Instead, she seemed to have never eaten a proper meal before, wanting to try every dish.

Jiang Lili was very cooperative, constantly serving her food and introducing the names and cooking methods of the dishes, which made Zhou Yali very impressed.

When the three of them usually ate together, Chen Fan would talk to them separately about their studies and work. But today, with Zhou Yali there, he didn't talk about those topics and instead focused on Zhou Yali.

However, after chatting for a while, Zhou Yali was still thinking about the question Chen Fan had thrown at her earlier.

After eating until he was about 70% full, he looked up at Chen Fan and asked, "Brother, what's your answer? I mean, the one about industrial relocation."

Chen Fan continued eating at a leisurely pace. After swallowing what was in his mouth, he glanced at her and said, "It's very simple. So-called civic virtue is nothing more than valuing education and morality."

"Along that line of countries and regions, those within the Confucian cultural sphere have the potential to become the most sought-after destinations for industries."

Upon hearing this, Zhou Yali immediately put down her chopsticks and counted on her fingers, saying, "South Korea is one, Taiwan, which is still in a state of flux, is another, Hong Kong is one, and Macau? Macau is too small, not suitable."

At this point, she suddenly looked up, "In the end, only Singapore is left?" Besides these places, there is also Vietnam, which belongs to the Confucian cultural sphere, but now everyone knows that Vietnam closely follows the Soviet Union, so naturally it won't flirt with Japan.

As for other regions and countries, they are basically former Western colonies, and their situations are complicated. It may be difficult for them to seize this opportunity.

Chen Fan gave her a thumbs up, "Indeed."

He then said, "Of these places, South Korea should be the most autonomous. The Miracle on the Han River has laid a solid foundation, and it is also the place with the best foundation."

And the most promising place, can you guess where it is?

As he said this, he sighed inwardly. In another year, Park Geun-hye should have been removed from his post. Otherwise, it's hard to say what South Korea would have become.

Upon hearing Chen Fan's words, Zhou Yali couldn't help but mutter, "Here we go again."

But she still thought about it carefully: Taiwan? Singapore? Or Hong Kong?
After a few seconds, she turned to look at Jiang Tiantian and Jiang Lili, who were sitting on either side of her. Seeing that the two sisters were frowning in thought, she asked in a low voice, "Have you thought of anything?"

Jiang Tiantian frowned slightly, and said thoughtfully, "I guess, could it be Hong Kong?"

Jiang Lili nodded slightly, "I guessed so too."

Zhou Yali thought for a moment, a hint of confusion in her eyes, "Why not Singapore?"

Nobody's guessing about Taiwan. Everyone knows there's an unresolved issue, and who knows when it might be resolved.

Jiang Tiantian turned to look at Chen Fan and said softly, "Xiao Fan said before that Hong Kong's prosperity is basically supported by the mainland. Now that policies are showing signs of relaxation, if the mainland focuses on development, wouldn't Hong Kong have a brighter future?"

Jiang Lili nodded again, "Yes, that's why too."

Chen Fan put down his chopsticks, picked up a handkerchief to wipe his mouth, looked up and smiled, "Yes, that's the reason."

He paused for a moment, looked at Zhou Yali, and smiled, “Actually, Singapore is not bad either. Their government policies have a high degree of execution and consistency. In such a place, no matter how weak the foundation is, as long as you persevere, you will definitely develop very well.”

However, they have an unavoidable weakness: a lack of strategic depth. As a port city-state, no matter how powerful they are, their strength is limited, and they may reach their limit one day. It would be good if they could just maintain their current status.

Hong Kong, backed by the mainland, has a huge population and market to support it; this geographical advantage is unmatched by any other region.

He stopped abruptly at this point.

I won't say much more about what happened next.

Fortunately, Zhou Yali wasn't one to pry into things. Instead, she thought of another question: "According to you, the most suitable place for development should actually be the mainland, right?"

Chen Fan chuckled and looked at her meaningfully, "Otherwise, what was your dad doing when you came here last time?"

Zhou Yali's eyes darted around slightly. "So you were already planning to invest in the mainland all along?"

Chen Fan pointed at her and said, "When you get back, ask your dad. When he starts investing, you can put your idea into practice."

Zhou Yali looked blankly at her. "What are you thinking?"

Chen Fan blinked, speechless.

Jiang Lili, standing nearby, laughed and said, "Cousin, you forgot? You just said you wanted to import American electronics. Although there are foreign trade monopolies that make it inconvenient to do trade, you can buy production lines in the US and then invest in and set up factories in the mainland."

The wages here are extremely low, averaging only about 30 yuan a month, which is less than 20 US dollars. Moreover, most of them are educated and literate, so they learn very quickly and can start working after only one or two months of training.

Regardless of whether your factory's products can be sold in mainland China, or even if they are re-exported to the United States, your labor cost advantage alone will give you a significant advantage.

Zhou Yali looked at her in surprise, "You came up with this?"

Jiang Lili was still a little shy in front of outsiders. Her pretty face immediately turned slightly red, and she turned to look at Chen Fan, whispering, "I heard it from Xiao Fan."

Chen Fan remained calm and composed, nodding gently without batting an eye.

If he remembers correctly, it seems that after exercising once, he hugged Lili and talked about a lot of things, including this part.

She's actually a little shy.

Zhou Yali, of course, couldn't see through his thoughts. She squinted and thought for a moment, then nodded seriously. "Hmm, if the stability and continuity of the policy can be guaranteed, this project is quite good."

I just couldn't help but sigh to myself that the wages here were really low.

The median income of industrial workers in the United States is currently around $17000 per year, which is a little over $1400 per month.

But in China, it's only $20. Wow, that's a huge difference! Even after deducting shipping costs, they'd still make a killing.

I'm really looking forward to the day when the project is successfully invested in and the factory is built!
After dinner, Zhou Yali, despite not knowing how to cook, still actively participated in washing the dishes.

The result was that I broke two plates, three bowls, and cut my finger.

Looking at her great achievements, Chen Fan felt very fortunate. "Luckily, I didn't use 7501 porcelain, otherwise I would have been heartbroken."

Upon hearing this, Zhou Yali immediately raised her head, "By the way, little brother, what about the ceramics my dad wanted?"

Chen Fan coughed lightly, "Well, everything is ready. I've prepared a set of tableware and tea set for you, a total of 5 or 60 pieces, which you can take with you when you go back."

Zhou Yali had no idea what the secret was, nor did she understand why she was only allowed to take so few of the 1200 items back. She still nodded and said, "Okay, my dad will definitely like it."

After a pause, she added, "Oh, and bro, how about you come with me to the housing authority tomorrow?"

Chen Fan frowned slightly. "What? Even when your uncle went there in person last time, they still didn't agree to you buying a house?"

Zhou Yali pursed her lips, "It's not that I didn't agree, but I didn't really agree either. I just said I'd study it. It's been a month or two now, they should have figured it out by now."

Chen Fan clicked his tongue. Why did that sound like an excuse?

However, he didn't say much, just nodded and smiled, "Okay, I'll go with you to ask tomorrow."

(End of this chapter)