But although Cui Bingbing clasped her hands to Buddha all the way, when they arrived at the restaurant right on time, she still gave Shen Huadong considerable face by restraining the impulsive devil in her heart and not causing trouble. However, Chen Qifan didn’t give Shen Huadong any face. Just as Liu Jun and his party had seated themselves at a nearby table, she expressionlessly apologized to her friends, picked up her large bag, and left. Fortunately, Shen Huadong had thick skin, was very confident, and had strong intentions. He grinned and chased after her. Seeing this, Cui Bingbing was even less willing to bet with Liu Jun—strong women fear persistent men, an eternal principle.

Instead, when Qian Hongming heard that Liu Jun had returned home, he rushed over to join their table. Throughout dinner, he sat restlessly, muttering, “Why isn’t it time yet? Why isn’t it time yet?” Liu Jun was fine with it, but Cui Bingbing was extremely surprised. She had previously thought the Qian couple’s loving relationship was an act by Qian Hongming, a clever deception, but now she realized Qian Hongming truly had love. By the time they finished their meal, there was still no news from Jiali’s side. Qian Hongming very much wanted to keep Liu Jun company during this restless time, but Liu Jun had a major client calling—now that he was free, he hoped to meet because he had to fly out tomorrow. Qian Hongming could only let go.

Liu Jun’s major client came under special circumstances.

Among those who had left Tengfei over the years, several had started their factories making products similar to Tengfei’s, with varying degrees of success. One who had left a production management position was doing the best and had the boldest. They always used pricing strategies slightly lower than Tengfei’s to steal many of Tengfei’s clients. By last year and the year before, if company scale were determined by product sales volume, that company’s scale had already surpassed theirs. Early last year, that company invested huge amounts and expanded scale even earlier and more boldly than Tengfei, introducing large amounts of advanced imported equipment, intending to create an aircraft carrier-level manufacturing base. Today was the opening ceremony of that company’s new manufacturing base, inviting many related people to attend. Tengfei’s major client was naturally among them. But this major client knew how to handle relationships—after eating the celebration dinner there, he slipped out to reminisce with Tengfei’s CEO, Liu Jun.

Liu Jun didn’t want to go to this kind of reminiscing, which was practically having someone use the latecomer’s boldness to contrast his conservatism. But this was a major client, and he had to go. The major client was quite polite when they met. He was a private business owner who had grown large, pulling Liu Jun along and saying that he used products in three tiers: for exports, he used components made by Tengfei; for high-end domestic sales, he used Tengda’s; only for volume products did he use that of latecomers. He still trusted Tengfei’s products most, but he also had to consider costs.

Liu Jun smiled awkwardly. “But the third tier has the largest volume, which makes one psychologically unbalanced. Sometimes I admire them—how do they maintain costs at that price? I can’t do it, so I have to stick with high prices. You always say I won’t lower prices, but I really can’t.”

The major client said, “You could also do it. Two secrets: first, volume—with large volume, costs naturally come down; second, cutting corners. I believe if you wanted to cut corners, they wouldn’t be your match. Sometimes I’ve even explicitly told you this batch can cut corners, but you still won’t, though that’s also good—I put high-end processing with you and feel at ease.”

Liu Jun continued awkwardly, “Quality management is easy to relax but hard to tighten. Even if you’re willing to accept it, I don’t dare be lenient in the slightest. But calculating costs, do they have the capital accumulation to build such a large manufacturing base?”

“Borrowed, naturally borrowed from banks. I asked around—they only paid 20% down for the land, and all the money for construction and equipment was borrowed. I quite admire their boldness, especially now with banks repeatedly raising interest rates and loan rates staying high. I couldn’t quite do it myself.”

“What I most admire is that he could borrow money from banks. Banks are tight now—his kind of borrowing should theoretically be the first to be cut.”

“I also admire it, but from what I understand indirectly, they seem to have used quite a bit of private financing. You have wealthy people here, so borrowing is much easier than in our area. Did General Manager Liu’s new branch factory also use similar methods to raise construction funds? Generally, what methods can you use to borrow, what interest rates, do you need collateral, who guarantees, and roughly how much can you borrow at once?”

The major client asked a string of questions. Liu Jun smiled, “I only borrowed once when the company was just established. The interest rate was too high and felt somewhat unbearable. I don’t know much about current private lending rates. I’m too conservative—this time, building the heat treatment branch factory, I mostly used accumulated self-owned funds. When the branch started operations, my money was also used up, and I still owe the banks a large sum. I can only operate working capital carefully every day. The freezing rain earlier affected collections and nearly left me unable to patch the west wall because I couldn’t remove bricks from the east wall. It’s worrying and very much affects this year’s R&D investment. Speaking of which, I also admire their daring to start new projects with such high asset-liability ratios. I would have lost sleep long ago. My balance sheet is very restrained—I don’t dare exceed limits.”

The client pondered for a moment. “I asked colleagues not to follow precisely because I wanted to talk with General Manager Liu alone. So many small export factories in the south have closed, mostly reportedly because they can’t get business. My company is the same—the foreign orders we’re doing now are all from last year, and we’ll run out by the second half of this year. It’s not that there are no new orders, but they’re small. Previously, I wouldn’t even look at such small orders, but seeing this year’s situation is uncertain, I’ve told them to take even small orders, with the only requirement being advance payments. I don’t even dare trust letters of credit much, afraid foreign parties will find excuses to refuse payment…”

“My high-end complete machine sets have already encountered one cancellation. Fortunately, there were advance payments, so the loss wasn’t too severe. But those three cancelled machines are already finished and can only be greased and sealed in the company warehouse—temporarily unsellable. I heard several companies encountered similar situations, including some of my foreign parts suppliers going bankrupt. I originally thought there wouldn’t be many problems domestically, but now it seems Europe and America’s financial crisis might transmit to our country through import-export markets.” Liu Jun intentionally added, “I’ve recently been strictly controlling cash flow and don’t dare act rashly.”

“That’s exactly what I’m worried about. Those borrowing from banks now fear banks can’t roll over loans—banks have tightened credit this year. I want to ask General Manager Liu, what’s the recent situation here for borrowing from private individuals? General Manager Liu, it’s just the two of us—please speak freely. I just signed a contract with a 30% advance payment. After seeing their new factory scale today, I’ve been hesitant to send out the advance payment. Who in our industry doesn’t know everyone else’s background? With their huge debt load, if their foundation gets pulled by banks or private lenders, won’t they use my advance payment to patch the west wall?”

Liu Jun immediately understood clearly—so the client had been beating around the bush to investigate the latecomer’s background. He smiled, “I really can’t conveniently speak ill of people behind their backs. Let me tell you where private lending money comes from here, and you can judge for yourself. Some is raised privately at high interest, then lent out at even higher rates to profit from the interest difference. This portion of money is relatively stable and temporarily won’t be affected by credit tightening, but such money is limited in quantity. Some comes from enterprises or even government agencies with good returns that have large amounts of cash on hand. They’re unwilling to get such low interest from bank deposits, and some enterprises that easily get bank loans also have money. They generally deposit money at designated banks through intermediaries, then have banks designate these deposits as loans to downstream borrowers…”

“This type would easily be affected by this credit tightening. The quantity isn’t small—those tobacco companies and power bureaus, where does their slush fund money come from? They all depend on this.”

Liu Jun nodded. “There’s also trade financing playing with letters of credit—opening forward letters of credit. Generally, if operated well, you can get use of this money within about 90 to 180 days. Usually, what they import is mostly bulk commodities, where China lacks advantages, easy to liquidate. Some can even be cashed out in futures markets to further compress trade financing costs. Many foreign trade companies can open substantial letters of credit even without very high registered capital. They can use this money themselves or provide disguised financing to other enterprises through agency import methods.”

“This time, banks are watching this financing method closely, right? We also have some, mostly from well-known foreign trade enterprises in your developed coastal import-export regions, and most have state-owned foundations.”

“Some people already can’t open letters of credit—banks began being vigilant about this false financing at the beginning of this year.”

The client nodded. “Money borrowed through this method has already been used in places like today’s opening factory. If old letters of credit can’t be renewed after they mature, won’t this private lending capital chain break in the middle?”

“Yes, some people on this capital chain are already very anxious. There are quite a lot of people along the coast using this method for loans.”

This time, the client looked at Liu Jun and nodded deeply, deeply, deeply. “You southern people are creative—you can exploit any loophole to the extreme. Thank you, thank you. Next time General Manager Liu comes to our area, I’ll toast you three cups first. Finally figured out your situation here. Some things I knew you were doing here, but there was always a veil between us. I couldn’t find the right direction and didn’t know how far you’d progressed. Now it’s clear. General Manager Liu has studied it thoroughly.”

“I’m not well-informed, but even so, being in the situation at least gives me the duck’s early awareness of spring river warming.”

The client said, “I now suspect why foreign order volumes are small—they might also fear problems on our Chinese side and would rather sign fewer contracts at once to avoid risks.”

Liu Jun and the client looked at each other, both understanding the situation. Liu Jun estimated the client would find the latecomer tomorrow morning, tear up the contract, and re-sign, finding various reasons to break large contracts into small pieces to effectively avoid risks. He also reminded himself that he should do the same in the next phase—partly for risk considerations, partly to reduce inventory as much as possible and ensure cash on hand, not letting the capital chain become too tight. Because seeing this credit tightening momentum, who knew what move banks would make next? If they also recalled one of his twenty-million loans, he’d be finished. Although he had A’San as backup, he worried that arms couldn’t twist the thigh of national policy—A’San would also be powerless.

However, what Liu Jun didn’t expect was that the major client, who should have been flying in the sky the next afternoon, actively took a taxi to find Tengfei, broke up the contract originally signed with the latecomer into small pieces, gave one small piece to Tengfei, and honestly signed according to Tengfei’s quoted price. Liu Jun was somewhat surprised but also felt it was reasonable. He immediately called Luo Qing to tell him about this, asking Luo Qing to use similar strategies in future negotiations.

Liu Jun thought he was strategizing from within the tent and winning victories thousands of miles away, feeling somewhat pleased with himself. But almost before he could smile, news came from a neighboring city that a well-known large group that frequently appeared in newspapers had collapsed under debt burdens. While he was just beginning to act, someone was already crisis-ridden. Liu Jun immediately thought of Qian Hongming—the loan rollover failures and letter of credit rejections Qian Hongming encountered recently weren’t isolated cases but were happening widely around them, spreading rapidly and striking deeply. He thought of a client who had business dealings with that well-known large group, regularly providing spare parts to them, so he called to inquire about details. The details were actually as expected: explosive development led to mounting debt, heavy interest drained existing profits, plus a bank suddenly recalled nearly two hundred million in loans. The capital chain broke, and suddenly all problems exploded together.

This well-known group’s collapse implicated many private lending people and the individuals and collectives providing funds behind them.

Liu Jun wanted to call Qian Hongming to ask if he was involved, but terrifyingly, Qian Hongming’s phone was turned off for the first time. Even more terrifying, Qian Hongming’s cell phone remained off from afternoon to evening. The more Liu Jun called, the more worried he became. Even when going home to shower, he left his phone on the living room table so he could hear it ring.

Cui Bingbing came home with her daughter and saw her husband’s phone ringing as soon as she entered. She naturally answered it. Liu Jun peeked out to see that Cui Bingbing had answered and continued showering behind closed doors. The call was from Jiali, who also couldn’t find Qian Hongming and was very anxious. Unable to endure it any longer, she could only ask Liu Jun. Cui Bingbing wasn’t clear what was happening, but she resented Jiali coming to Liu Jun with trivial matters, so she said Liu Jun was out and had forgotten his phone at home. She would inform him when he returned, ending the conversation in a few words. When Liu Jun came out, she only told him it was a call from Jiali that she had handled. Liu Jun was busy dealing with Xiao Suihua pouncing on him affectionately, and didn’t think much of it. Only when the family of three finally settled down did he remember to call Qian Hongming again, but now it showed the line was busy. He left a text message and stopped worrying.

Hearing Liu Jun say this, Cui Bingbing slapped her forehead, remembering that when she came home earlier, she had seen Qian Hongming’s Bentley parked on the roadside in their community—big and sturdy, too conspicuous for her to ignore. Liu Jun grabbed his phone and hurried downstairs to look. Sure enough, he found Qian Hongming’s Bentley parked on the community roadside, occupying a pretty good parking spot. He walked to the car and called Qian Hongming again, clearly hearing ringtones from inside the car. Looking closer, the window was cracked open just a tiny bit. Soon, the rear door opened, and Qian Hongming said listlessly from inside, “Liu Jun, get in.”

Liu Jun joked, “Hey, not having a tryst in there, are you?”

“If I were having a tryst, I wouldn’t come to your community—wouldn’t that be walking into a trap? I was just looking for you. Perfect timing.”

“Why didn’t you answer your phone all afternoon?” Liu Jun got in but sat in the driver’s seat, smelling strong cigarette smoke in the otherwise nice new car.

“I was sleeping here, waiting for you to come home.” Qian Hongming fumbled around in the darkness and handed Liu Jun a thick package. “Liu Jun, take a look. These are property deeds and land certificates for houses I’ve bought since starting work that haven’t been mortgaged, including the city apartment I’m currently living in. I’m short on money recently and hope you’ll buy these houses.”

Liu Jun received the large package. “I just heard XX Group collapsed, with creditors blocking the entrance. It’s not related to you, too, is it?”

“This isn’t directly related to me, but I’ll be swept up in the aftermath.”

“How difficult is your situation now? How much can I help you? Don’t give me the houses—I won’t take your collateral.”

“I roughly know how much cash you have on hand—you can’t help me. I’ve been trying to salvage the situation recently. Buying this Bentley was to gain trust and prove strength. But unexpectedly, policies keep tightening. The hole I’m trying to fill keeps getting bigger, while the money I’ve lent out becomes increasingly difficult to recover. I see that continuing this way, even if I were chopped up and sold, it wouldn’t fill this deficit. Now I have no other assets—some went with Jiali to Australia, not much. What’s left are these houses. I only dare liquidate them through you. If I went to others, I might be finished off tonight by people who got wind of it…”

“Are you planning to flee with the house money?”

“That’s the worst-case plan. But as I discussed with you, I still believe the country can’t keep credit this tight forever. I’m waiting for the day when loans reopen. I’ll use the money from selling houses to get by temporarily while waiting. As long as the situation improves, I can immediately turn things around. Only by putting these houses in your name can I still live in them every day without anyone knowing they’ve changed hands. When the situation improves in the future, I can also redeem the houses. Only you can help me keep these.”

“Take the property deeds back. I’ll give you the money anyway.”

“No, you must have the property deeds. If I lose everything, at least I can still ask you for a place to live. Moreover, if I become deeply in debt, creditors will go after my house first. If they’re in your name, they can’t touch them. These aren’t very valuable properties anymore, except for the one I’m currently living in. The two villas have long been mortgaged to banks, and the Shanghai house is also mortgaged. Only these few houses remain. Go up and discuss with A’San—I’ll wait for your answer tomorrow. I’m leaving now. Get out.”