Those Years When I Was Forced to Top the Forbes List

Chapter 84 Taxes

……

During their visit to the construction site, Yu Chunyin and his companion Hong Yongqiang only glanced at the site before heading off to conduct their own inspections.

Chen Xuebing was also busy arranging Taobao work after the New Year, arranging for Huo Xiaowen and others to contact the new seller, Boss Yu, take photos, and list new products on Taobao.

I've had a busy day.

……

The following day, Luohu.

Chen Xuebing treated the two to dinner.

They were quite careful in choosing the location.

The China World Trade Center, which opened in 1985, has a revolving restaurant on the second-to-last floor, the 49th floor. The entire restaurant rotates once every 70 minutes.

During his Southern Tour in 92, the chief architect of reform and opening up visited this place. Looking out over Hong Kong's New Territories through the glass, he told the then-city officials, "We can't delay any longer! It's a good thing you want to build Shenzhen into a socialist 'Hong Kong,' and I hope you'll set a good example!"

Yu Chunyin and Hong Yongqiang chatted about these things while eating, their faces beaming with excitement.

Those who went into business in the 90s are all very grateful to him.

Chen Xuebing could somewhat understand this emotion, but those born after him would never understand the feeling of weeping bitterly upon hearing the news of the death of a person they had never met on the radio or television.

Yu Chunyin and Hong Yongqiang sat here, feeling the changes of the times.

Chen Xuebing sat here, feeling the changes of the times once again.

"I saw some data. In 92, when the Southern Inspection Tour took place, the average monthly salary of Shenzhen workers was 500 yuan. At that time, housing prices quickly soared to 6000 yuan per square meter. In the following years, housing prices actually dropped to around 5000 yuan. Only in the last two years have they returned to around 6000 yuan. Will there be such a big increase in the next few years? Tell your uncle, 5 years, 4 times?"

Hong Yongqiang asked Chen Xuebing a question.

Chen Xuebing had anticipated this question, and with a light tap of his finger on the table, he smiled casually:
"Uncle Hong, that's not how you see the problem. You shouldn't look at housing prices in one place, but at the overall level. From 92 to now, housing prices across the country have increased threefold, right?"

In contrast, Shenzhen hasn't seen much growth. So, will it catch up? And if it does, will the speed of that catch-up be astonishing?
In my opinion, the lack of price increases is actually an opportunity. Given Shenzhen's status, it is bound to catch up with the price increases.

What is Shenzhen's status in China?
As a pioneer of economic reform, a testing ground for policies, and an inland financial gateway, Shenzhen's economic status is self-evident, especially considering its two major stock exchanges, Shanghai and Shenzhen.

The stock market and housing prices have not only economic value, but also political value, and even a premium for security value.

Twelve years ago, our country ranked tenth in terms of total economic output; now it ranks sixth. Look back at the housing prices in the five major cities of those countries—what kind of price increases have they experienced?
We are still a fully sovereign country. Do you think our housing prices will rise as our global status improves?

Real estate prices are bound to rise; this is a historical mission bestowed upon it by its enormous share of the economy. In particular, housing prices in core cities are almost unaffected by population.

Anyone with basic economic knowledge can see that being optimistic about the value of real estate in a country's core areas is essentially being optimistic about that country's future.

I am optimistic about China's development. Currently, housing prices in China's core cities are far lower than those in leading countries. Let alone four times, even a ten-fold or twenty-fold increase wouldn't be unreasonable once a ten-year economic expansion cycle is complete.

Chen Xuebing's words cut off the throats of the two pioneers who had just been talking at length about reform and opening up.

"As long as you have basic economic common sense."

Doesn't this mean that questioning the rise in Shenzhen housing prices shows a lack of basic economic knowledge?

Hong Yongqiang coughed lightly: "Isn't that a bit too absolute? We are dealing with political economy, not just economic politics. If it's ten or twenty times... how are ordinary people supposed to live? Doesn't it become capitalist instead of socialist? What about people's livelihoods? We definitely have to intervene to regulate it."

Chen Xuebing smiled faintly: "If you can't live in a first-tier city, you can go back to a second-, third-, or fourth-tier city. I also believe in the Internationale. The ideal of communism will be realized sooner or later, but that's a long-term process that takes a century. Neither you nor we may live to see that time. What is reform and opening up? It's about recognizing reality, liberating our minds, and moving towards a path that is not bound by any ideology. Like Qian Xuesen's ballistic trajectory, the endpoint is there, but the trajectory must always be unpredictable so that no one can stop us."

Dumb.

"Tsk tsk." Hong Yongqiang couldn't help but look at Yu Chunyin: "Young people these days have really liberated their minds."

"Hey." Yu Chunyin chuckled dryly, "This kid's got guts. Back in our day, we wouldn't have dared to say things like that."

Hung Yung-keung waved his hand, indicating that he did not have a negative view.

"This is a good thing. Young people have ideas and depth, which is better than what we had back then."

This was the first time Chen Xuebing had discussed macroeconomics with someone since his rebirth. He was actually more comfortable with this kind of conversation. Men, when they reach a certain age, always take having the world on their mind as a hobby.

However, he also knew that thinking and doing are two different things.

Thinking can be boundless and soaring, but when it comes to doing things, one must be focused on the goal and grounded in reality.

"Uncle, where did you go all day on the inspection?"

Yu Chunyin smiled and said, "It's related to something else you mentioned. I went to the Shenzhen Stock Exchange with you. Your Uncle Hong came for this. The market has been falling for several years, so it's a good opportunity to buy at the bottom... Oh, I just heard you talking about housing prices and the stock market. You seemed to know a lot about them. Do you know what the stock market has been like these past few years?"

Upon hearing this, Chen Xuebing laughed.

"Uncle Hong, you've heard about the stamp duty reduction, right? Don't worry, it hasn't hit rock bottom yet. The Shenzhen market is at 3000 points right now, and the Shanghai market is at 1250. Let's wait a while longer until the policy bottom is announced. If you really want to play, I'll take you there."

He knew the historical lows clearly: 2590 for the Shenzhen Stock Exchange and 998 for the Shanghai Stock Exchange. He also kept a close eye on stock market news.

Before the Lunar New Year this year, the stamp duty was reduced from 0.2% to 0.1%.

Don't underestimate this amount of money. Stamp duty and brokerage service fees are tolls in the stock market, and they are charged for every transaction. Stamp duty is 0.2%, and brokerage service fees are about the same these days. Together, they amount to 0.4%. What does that mean?
25 transactions equal 10%, and even a limit-up price only equals 10%.

Therefore, the reduction in stamp duty is definitely a positive for the stock market.

Upon hearing this, the two felt that Chen Xuebing was acting a bit strange.

"You know about the stock market? You're so knowledgeable about it?" Yu Chunyin's eyes widened.

Chen Xuebing smiled and feigned arrogance: "How can you claim to care about the economy if you don't understand the stock market? The current stock market has one price for non-tradable shares and another for tradable shares. The ownership structure is completely separate, making it a casino of emotions. There are no fundamentals to speak of. Sentiment and stock prices will only continue to roll downwards. Without a proper reform, it won't recover. A stamp duty policy only shows that the government values ​​this matter and has taken an attitude. Let's wait and see what happens next."

Today, the stock market is dominated by state-owned enterprises (SOEs). SOE equity is not allowed to circulate. This was a safety net established in the early days of reform and opening up to prevent large amounts of state-owned assets from being manipulated and priced by capital.

However, this also led to the issuance of a small number of shares during the IPO becoming a toy for shareholders. Over the years, these shares have been manipulated and have long since become completely detached from the company's fundamentals.

Therefore, the "share structure reform," which will soon allow companies to truly invest their equity in the stock market, is tantamount to opening up a real stock market in China.

From that point on, China truly had a capital base.

"Tsk tsk." Yu Chunyin looked at Hong Yongqiang: "My sister and brother-in-law had two children. The younger one is a genius, and the older one was simple-minded when he was young, but now that he's grown up, he's becoming more and more of a genius."

Yu Chunyin also couldn't understand how Chen Xuebing had transformed, but with Chen Xuejin as a shining example, it seemed that Chen Xuebing's gradual transformation into a prodigy could be explained.

Chen Xuebing was speechless, but Uncle Hong's desire to invest in stocks did give him some inspiration, so he didn't dwell on it.

"So you only went to the stock exchange all day and didn't even ask about the land?" he said, with a slightly reproachful tone, as if scolding a playful child.

Yu Chunyin glanced at him: "I asked! Let me tell you, don't have too many illusions about that 30. The district has a tax requirement for this land, 100 million a year! The previous owner sold it because he felt he couldn't meet that requirement. The government is putting it up for sale again to attract investment! With 100 million in taxes, how much profit can you expect? I think if you want to buy it, 30 might not be enough to cover the costs. You'll have to carefully consider the expenses."

Tax revenue per mu (unit of land area) was a basic requirement for attracting investment and allocating land in later generations. It was promoted very late. However, according to my uncle, they did not calculate it per mu, but per unit of land.

"100 million..." This number made Chen Xuebing ponder.

Given how cheap the land is, it's normal for the government to have some requirements.

He took out his computer and pressed a button.

The main tax for businesses is value-added tax (VAT), which is 13% of the profit from the sale of products, i.e., the added value. 100 divided by 0.13 equals 769.

Tsk tsk.

A gross profit of 769 million is needed to achieve this.

Based on Taobao's profit margin on mobile phones, they must sell 30 million mobile phones a year!

Moreover, value-added tax is paid at each level. If you make pirated mobile phones in Huaqiangbei, there is probably no tax from the source of the materials. How can the processing layer pay taxes?

"What if you fail to meet your promise? Will you have to pay the outstanding taxes?" Chen Xuebing asked.

“Yes, make up half of the difference.” Yu Chunyin nodded with a dark face.

Chen Xuebing's expression relaxed slightly when he heard "halfway".

Damn it, a request is an opportunity.

Raise your hand.

"Buy it or not? If you want to, give me 30 yuan. Give me a few days, and I'll take care of it."

……

Back at the hotel, Chen Xuebing immediately made a phone call he hadn't made in a long time.

"Ake, Happy New Year!"

After a moment's hesitation, the person on the other end smiled and said, "Happy New Year, Mr. Chen. How's business lately?"

"As your platform gets better and better, so do I. That's why I've been worried about the future development of your platform lately."

The person on the other end hesitated again, then said, "Mr. Chen, do you have any other suggestions?"

"It's not really a suggestion, but my income has been increasing recently, and I've been thinking about some things. I feel that as one of the first sellers on Taobao to reach a million in sales, I should be responsible to the platform."

"...Million? That can't be right. We have statistics on stores that have reached a million in sales. I just checked your store a few days ago...I remember your sales were less than 40, right?"

Chen Xuebing smiled and said, "Of course, there are no more stores. I have created a traffic matrix on your platform. Now I have two crown stores and six blue diamond stores. The total turnover has reached 740,000. I plan to open a few more stores and continue to develop the traffic matrix. At the current speed, reaching one million this month is definitely not a problem."

Chen Xuebing's words surprised the other party.

Transaction volume of one million.

Traffic matrix.

Ake had seen people who owned several stores before, but the other person seemed to have his own theoretical system, and every word he casually uttered made her eyes light up.

"Traffic matrix... Mr. Chen is a marketing genius." Ake was amazed again, then, remembering what he had just said, she asked:
"What was it you were talking about?"

"Tax risks".

"…Um?"

"Taobao hasn't interfered with sellers' tax payments, has it? Even though my two crown-level stores only have a profit margin of 10%, which is far above the income threshold for taxation, I haven't received a single tax payment reminder so far."

"..." Ake didn't dare to answer easily.

Chen Xuebing pressed on, "Your platform's CEO, Mr. Ma, works hard to be a public figure and a spokesperson for Taobao. He gives so many interviews. If the media suddenly asked him this question, he probably wouldn't even be able to give an example of how his merchants pay taxes, would he?"

The voice on the other end suddenly became alert.

"Mr. Chen, what do you mean?"

“Of course it’s not what you think.” Chen Xuebing chuckled. “What I mean is that I’m willing to set up a company, bring all my stores under it, pay taxes voluntarily, become a role model for Taobao stores, and become an example to make Mr. Ma stand up for himself.”

"Um... what do you mean?"

The words were almost the same, but the tone was completely different.

"Hey." Chen Xuebing's fangs gradually emerged: "Shouldn't the platform give some rewards to merchants like me who proactively operate with integrity?"

"... "

"I need data."

"... "

"Ideally, I should be featured on the homepage, or even given an online interview."

The other party finally spoke.

"Um... Mr. Chen, you've already used up so much data, isn't that enough?"

"I have many shops."

The sound of typing came from the other end of the line.

"Mr. Chen, you want to be interviewed about the mobile phones sold in your store... Are the sourcing channels legitimate?"

Chen Xuebing smiled and said, "I didn't expect your platform to care about this. Then don't bother with the interview, just give me the traffic."

"... "

"Oh, I need you to provide me with a proof of turnover."

……

……

This was not an easy task; we prepared for it for several days.

Ren Ying and Jiao Gui took the train to Shenzhen on the ninth day of the lunar month.

I rented a computer.

Ren Ying stayed in the hotel helping Chen Xuebing with accounting and writing reports.

Jiao Gui went to Huaqiangbei to buy a computer, which was to be shipped to Chongqing.

Chen Xuebing called Tan Maoshui to tell him that he couldn't go back for the time being and asked him to hold his place. He would call Tan Maoshui from time to time to check on the construction progress and arrange work.

In addition, the mobile phone supplier has changed, so Lu Yiwen and Huo Xiaowen need to coordinate and adjust the products in the Taobao store.

Fortunately, both the construction site and Taobao are on track, and he no longer needs to handle everything himself.

Although he was staying in the hotel, life was still busy. Ren Ying brought him a lot of questions, so in addition to coordinating things, he also had to read books and do practice questions.

When he had free time, he would accompany his uncle and Hong Yongqiang to explore Shenzhen, have meals, and chat. His rich knowledge would occasionally amaze the two of them, and Hong Yongqiang also became quite familiar with him.

On the twelfth day of the first lunar month, a feasibility report was finally completed in Ren Ying's hands.

(End of this chapter)