Qian Hongming laughed when he heard this: “Haha, looks like you haven’t just ‘considered’ it. How about it? Will you do it? What percentage of margin do you need to put up now to open letters of credit?”
“Uh, I’d need to ask our unofficial CFO. A’San, how do we open letters of credit?”
Cui Bingbing, who was playing with Jia Li, Xiao Suihua, and Dandan, didn’t even look up as she said: “Family gathering – we only talk about feelings, not business.”
Once Cui Bingbing spoke, the two children parroted her words. Everyone laughed loudly and indeed stopped bringing it up, knowing Cui Bingbing’s personality meant what she said. The conversation finally turned to family matters. Liu Jun talked about why their family moved back to live in the city. Although the independent villa in the tech park was large and safe, little Dandan was beginning to understand the world, and they couldn’t place their child in an environment with only adults. Children needed contact with peers. After consideration, they decided to sacrifice the adults for the child’s sake and move to the city. Indeed, Dandan played very well with the neighborhood children. Soon, without much more time needed, she could attend the nearby kindergarten in the residential complex, which was very good and only accepted children from residents of the complex.
But Qian Hongming said, “No good. Your residential complex has too many mixed unit types. Although the city center location has high unit prices, the single apartments bring down the total price, causing too large a class gap among the complex’s residents. This might sound politically incorrect, but the fact is that when Dandan enters kindergarten and fights with those bad kids, you’ll understand the harm of too large class gaps. I still plan to move to the villa once it’s renovated. Xiao Suihua will continue attending bilingual kindergarten, with a driver picking her up daily.”
Liu Jun laughed: “Would our Dandan suffer losses? She wouldn’t agree with herself, and her parents wouldn’t agree either.” Just then, Dandan, wearing a little white T-shirt and small gray corduroy overalls, snatched the cod strips from Xiao Suihua’s hands and ate them in two or three bites. Then she wiped her little hands on her pants, looked at Sister Xiao Suihua with round eyes, and said extremely innocently, “Want more.”
Qian Hongming laughed when he saw this: “Indeed, she won’t suffer losses, just like you back then. Our Xiao Suihua is gentle – I won’t test her. Liu Jun, you mentioned last time about the alarm system you made yourself to catch thieves who broke into the R&D center. Did you make extras? Install a set for my villa too.”
“There are alarm systems for sale on the market. My set wouldn’t work for you – ours is connected to the central computer room with too high a security level. If you want one, I’ll help you pick one out on the street. What I use for my two factories’ finance offices would be about right for your villa.”
“Is there anything that both alarms and has some defensive function? Like low-voltage shocks or something?”
“If you’re moving to live in a suburban villa, installing alarms isn’t as good as raising two big dogs. Suburbs don’t restrict large dogs anyway. They could also keep Jia Li and Xiao Suihua company.”
“Jia Li is afraid of dogs. I’ll look for alarm systems myself later. I also made them in college – the principle should be similar. I want to install it myself to avoid too many people knowing. But if you have time to help me with this, I can be lazy, hehe.”
Liu Jun rolled his eyes, but felt some indescribable strange feeling inside. Qian Hongming seemed excessively cautious. He planned to discuss this with Cui Bingbing after going home when Dandan was asleep, but before he could speak, Cui Bingbing grabbed him by the chest. “Tell me, why did you make me the bad guy?”
Liu Jun laughed: “I knew you’d understand my meaning. Hongming always urges me to do letter of credit cash-outs with him. He means well, and I can’t refuse.”
Cui Bingbing nodded: “When he comes to me tomorrow, I’ll say I’ve already used your account to open letters of credit for cash-outs, doing stocks with your father. Speaking of your father, he probably won’t follow up. But you do a lot of exports now – doing import letter of credit cash-outs should be quite good. It’s like borrowing chickens to lay eggs. Besides, you always complain about tight funds. Cash-outs aren’t worse than pure loans, and raw materials have been rising these years.”
“I’m very conflicted inside. Now it seems anyone who trades stocks can get rich, and mysteriously, they all earn better than we do running factories. Not to mention someone like Hongming with very sophisticated methods. I wanted to find answers from abroad and found that this is a universal phenomenon. Now it seems enterprises follow Wall Street’s baton, led by the nose by shareholder value, but I analyzed that they mostly achieve value appreciation through financial operations rather than creating wealth through innovation. Correspondingly, when I used to work, CEOs were all from technical backgrounds, very knowledgeable about their companies’ development, able to guide steady company growth single-handedly. Now I find that many CEOs of American listed companies come from financial backgrounds, studying business administration. Like Dongdong managing Shi Yiji – how can it compare to Mr. Song managing Donghai in terms of company quality? But interestingly, the stock market now favors companies like Shi Yiji with good financial operations. I haven’t figured out whether I should change course and shift my work focus to financial operations.”
Opening a company is to make money. However you make money, do it that way, as long as it’s not illegal. How simple. Am I, a liberal arts student, thinking too simply, or are you, an engineering student, thinking too complexly?”
“No, I always feel this phenomenon doesn’t conform to economic laws, but why does the whole world do this, and it’s been effective for so many years? Then there must be errors in my understanding of economic laws. Adam Smith’s definition of wealth creation might be outdated. If my understanding is wrong, I should change course now and do whatever makes money. But if I’m not wrong, I might very well follow Hongming now and be completely wiped out tomorrow, because the market can’t stay abnormal forever.”
“You’re too theoretical. I think your choice is simple – just do something to beat inflation. Friedman, who studied Adam Smith more deeply than you, said inflation is a monetary phenomenon. Although the state doesn’t admit it now, we’re already in inflation – no doubt about it. So, shouldn’t we start with currency to deal with inflation’s erosion of our wealth? OK, don’t glare at me – this is the result of my discussion with Sister Liang. Creating wealth is very necessary for you, but you also need to find ways to ensure your wealth’s monetary valuation doesn’t depreciate in inflation.”
“Damn, economics is more like humanities in the end. OK, I understand now.”
“And then?”
“Humanities is your strong suit, so naturally you should operate it. We can’t shamelessly say ‘brother’ and throw money at Hongming to operate. Hongming always refuses to charge me fees. After a long time, how can I keep taking advantage of him?”
“Taking advantage of me is OK?”
“You keep what you earn. How do you plan to operate? Stocks are already so high, housing prices are already so high – entering at this time seems wrong either way.”
“I can operate, but I don’t have a complete import-export network system. I have no overseas exporters to coordinate timing with me abroad, no companies in bonded zones or importers to take over domestically. The specific operations would still have to fall to your brother Qian Hongming. But Qian Hongming does things very opportunistically. If I cooperate with him on letter of credit turnovers, he’ll quickly find ways to get me to open large quantities of letters of credit for him, and then I’ll find it hard to refuse. Some things, as a high-level person, I understand clearly, but I can’t personally participate in operations. You understand?”
“I’ll think of solutions carefully when I have nothing to do on planes later. Speaking of Hongming, did you feel he showed anxiety about his family’s safety today?”
Cui Bingbing thought for a moment: “Yes, I hadn’t noticed if you hadn’t mentioned it. Even with lots of money, there doesn’t seem to be a need for such anxiety.”
“Looks like money lending has risks. Having risks that can’t be resolved through channels like your banks, there’s inevitably some borderline behavior, inevitably creating some grudges. And Jia Li is different from you. I have to worry about you and Dandan when I travel, let alone Hongming.”
“Let’s not talk about Hongming. Let’s still discuss inflation. It looks like this inflation won’t stop anytime soon. The state won’t raise exchange rates for fear of affecting exports, while large amounts of foreign exchange flow in from abroad, betting on appreciation. However much foreign exchange flows in, that much RMB is issued, which perfectly explains that inflation is a monetary phenomenon. I think we absolutely can’t hold RMB, no matter what – we must exchange RMB for things that beat inflation. After I talked with Sister Liang last time, seeing you never have idle money anyway, I didn’t bother. Anyway, you should pay attention – you can’t watch idle money depreciate. For the rest, let’s talk when you have idle money.”
“Letter of credit cash-outs – although very tempting, thinking about the risks Hongming takes, I can’t take advantage of him for nothing.”
Cui Bingbing hesitated to speak. It might not necessarily be Liu Jun taking advantage of Qian Hongming – the two would be mutually beneficial. But she was too risk-conscious from working at the bank and always dared not touch Qian Hongming’s business, so she secretly swallowed her words and didn’t mention it.