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Chapter 2614 Sense of Security

After making several phone calls, Director Hou simply flew to Beijing and paid a personal visit.

Zhuangzhuang received prior notice and scheduled Director Hou's visit for Suning that afternoon.

When Director Hou arrived, Zhuangzhuang personally greeted him in the lobby downstairs.

Director Hou was wearing a dark jacket and carrying a briefcase. His expression showed a marked increase in urgency compared to the last time they met.

Zhuangzhuang led Director Hou to Suning's office, poured him some tea, and then quietly closed the door behind her.

After sitting down, Director Hou didn't exchange many pleasantries. He took out a document from his briefcase and handed it to Su Ning on the table with both hands: "President Su, this is a newly drafted investment incentive plan from our city, specifically for the Tianchao Automobile Huangdao Base project. Please take a look."

Suning took the document and began to read it carefully.

This proposal has been significantly improved compared to the initial negotiations.

The supporting fees for industrial land have been reduced to almost a symbolic level, the exemption period for corporate income tax has been extended by two tiers, and the proportion of local retention of value-added tax has also been increased.

The most eye-catching addition is a clause that states that supporting parts suppliers of Tianchao Automobile's Qingdao base will enjoy the same preferential policies.

This is essentially a package deal to bring together upstream and downstream companies in the Chinese automotive industry, demonstrating a great deal of sincerity.

Seeing that Su Ning had finished reviewing the proposal but hadn't immediately given his opinion, Director Hou looked at Su Ning nervously and emphasized again, "President Su, I hope you can understand our concerns at the time. You know the public opinion back then; newspapers were saying every day that Tianchao Auto was a scam, and experts were questioning it one after another on television. The pressure on the city was indeed immense. Anyone in that position would have to be cautious. But I can tell you from the bottom of my heart that Qingdao has never given up on this project from beginning to end. So many companies have inquired about that land in Huangdao, but we haven't budged. We're just waiting for Tianchao Auto to come back."

Su Ning closed the discount offer and placed it on the coffee table. Then he looked at Director Hou and said, "Director Hou, I see your sincerity, and the offer is indeed very attractive."

Director Hou, unable to decipher Su Ning's cold attitude, said, "President Su, Qingdao genuinely wants to do this project. You know best about our port advantages; Qingdao Port has closer shipping routes to South Korea and Japan than Dalian. Furthermore, you've previously investigated the parts supply chains around Qingdao. Many Korean automakers have joint venture factories in Shandong, so the supply chain infrastructure is already in place. These advantages were mutually agreed upon when we first discussed this. The previous setbacks were simply misunderstandings caused by information asymmetry. Now that your cars are on the road and the Times Square promotional video has been seen worldwide, all misunderstandings have vanished. Do you think we can restart the Huangdao base's development process? Our city has stated that as long as Tianchao Auto returns, the approval process will be expedited, and we'll expedite the procedures for you as quickly as possible."

Suning leaned back on the sofa and remained silent for a moment.

He wasn't putting on airs; he was weighing something that wasn't directly related to Qingdao itself.

When I decided to locate the commercial vehicle base in Qingdao, I valued the port's advantages and the supply chain.

Baize buses and Chongming bird trucks are mainly targeted at the commercial market and have great export potential. Placing them in port cities can save a lot of inland transportation costs.

But that was a consideration in 1996.

By 1997, the situation had changed.

The investment promotion efforts of several southern provinces are unprecedentedly strong, and the conditions offered are much more favorable than those offered by Qingdao back then.

More importantly, he had a clear understanding of the differences in the business environment between the North and the South.

Why is the economy in the South developing so well?

The main issue is the continuity of the Southern Policy; generally, there won't be an awkward situation where "one general issues one order."

“Director Hou,” Su Ning began, getting straight to the point, “I have never doubted Qingdao’s sincerity. From our first meeting until now, I have always kept your personal support for Tianchao Auto in mind. But now I have a new consideration that I hope to discuss with you frankly.”

"President Su, please speak."

Suning unfolded the map of China on the coffee table and pointed to the Yangtze River Delta: "I've been doing research on the Yangtze River Delta recently. The concentration of the auto parts supply chain in the Jiangsu, Zhejiang and Shanghai area is much higher than in the north. Within a radius of 200 kilometers, you can find more than 70% of the parts suppliers for a truck. Qingdao really can't compare in this respect. That's one aspect."

"..." Director Hou pushed up his glasses but didn't say anything.

Suning continued, "On the other hand, the market reach of the Yangtze River Delta covers the entire East and South China. The main customers of commercial vehicles, logistics companies, passenger transport companies, and engineering construction units, are more densely located in the southern market than in the north. Our vehicles are manufactured in the Yangtze River Delta, making it convenient to ship south, west, and east, and the overall logistics costs are lower than shipping from Qingdao. Moreover, the port cluster in the Yangtze River Delta, such as Shanghai Port and Ningbo Port, has a throughput that is no less than that of Qingdao Port, and export channels are not a problem."

Director Hou's expression changed slightly.

But he was a veteran in investment promotion, having worked at the China Merchants Group for most of his life and seen all kinds of situations. He didn't show his disappointment on his face, but his voice was noticeably deeper than before: "President Su, do you mean we should reconsider the positioning of the Qingdao base?"

Instead of answering the question directly, Suning continued with a candid remark: "Director Hou, let me be honest with you. Tianchao Auto is a private enterprise, and Mingju Real Estate is also a private enterprise. We don't have the backing of the system, and no local government to bail us out. If a multi-billion yuan investment goes wrong, no one will come to our rescue; we'll have to bear the consequences ourselves. That's why my requirements for the investment environment are much higher than those for state-owned enterprises."

He paused, his tone becoming more candid: "The business environment is something you can't see or touch normally, but when things really happen, it's more important than preferential policies and land prices combined. I have a principle in doing things—I don't touch things that are uncertain. Qingdao is indeed a good place, with a good port, a strong industrial base, and you're easy to deal with. But I have to consider one factor, which is the continuity of policies. I've invested billions in Qingdao to build a base today, but if the local environment changes in three to five years, or if there's another media storm, will the approval process be blocked again? Will loans suddenly shrink? Will local banks demand loan repayments early? I can't say for sure, but as a businessman, I have to factor in the worst-case scenario. This isn't just about Qingdao; it's a risk I assess for any investment I make."

"Moreover, this incident fully demonstrates that Qingdao has no trust in Tianchao Automobile, which is a very dangerous signal."

Director Hou remained silent for a long while.

The office was so quiet that you could hear the ticking of the second hand of the quartz clock on the wall.

He understood the hidden meaning in Su Ning's words.

When Tianchao Auto was besieged by public opinion, Qingdao chose to stop, deny, and wait and see.

This decision was entirely understandable given the pressure at the time...

Which local government would dare to confidently say that there are no problems with a project that has been criticized by the national media?

However, from Suning's perspective, this hesitation itself is a risk signal.

Today you suspend approvals due to public pressure, but tomorrow you might renege on your promises due to other pressures.

Trust in business investment takes years to build, but only a single hesitation to destroy.

Director Hou placed his briefcase on his lap, remained silent for a moment, and then said, "President Su, I understand what you're saying. Our handling of the situation at the time was indeed too conservative, leaving you with a bad impression. I bear responsibility for this." Su Ning waved his hand, "Director Hou, please don't say that. In that situation, anyone in that position would have done the same. I'm not trying to assign blame; I'm making a business judgment. Business judgment only considers two things—returns and risks. Qingdao's advantage lies in the returns, but I need to reassess the risks. This is something any company would do before making a major investment; it's not directed at you personally, nor is it directed at Qingdao."

Director Hou nodded, stood up, straightened his collar, and extended his hand: "President Su, it's already a great honor for you to speak to me like this today. I'll go back and report to the city again to see if we can come up with a plan that will give you more confidence. We can further strengthen our policies, and the city is constantly improving the business environment. I hope you can give us a chance, even if it's just to build a small pilot production line first."

Su Ning stood up and shook his hand, her tone sincere but unwavering: "Director Hou, you can send the plan over at any time, and I will continue to evaluate it. Regardless of the final outcome, I understand the friendship between Qingdao and you personally. I'm not trying to solicit benefits or policies from Qingdao; my main concern is a risk issue. To put it simply, it's like two people dating. Qingdao wants to marry Tianchao Auto, but this makes Tianchao Auto feel insecure. No matter how much dowry Qingdao offers or how sweet their words are, it's useless. Tianchao Auto can't just hand over its entire future."

"Understood! I will convey Mr. Su's concerns to the city leaders."

"Then I'll have to trouble Director Hou!"

Xiao Zhao waited at the door and escorted Director Hou downstairs.

Director Hou walked out the door much slower than when he arrived.

Just before getting into the car, Director Hou turned around and shook hands with Xiao Zhao, sighed and said, "Assistant Zhao, if I had insisted a little longer and withstood the pressure from above to push the approval process through, things would be different today."

Xiao Zhao didn't know how to respond, so he just said, "Director Hou, there will be other opportunities in the future. After all, the automotive industry is a huge industrial system. Even without a commercial vehicle production base, there will be other collaborations."

Director Hou smiled, but there was a particularly bitter taste in his smile.

I know that China Automotive has almost given up on building a commercial vehicle production base in Qingdao...

But who can we blame? It's because Qingdao made Chinese cars feel unsafe.

Director Hou patted Xiao Zhao on the shoulder, then turned and got into the car.

The car drove out of the gates of the Tianchao Automobile headquarters and merged into the traffic on the streets of Beijing, its taillights gradually blurring in the twilight.

……

After seeing Director Hou off, Su Ning sat alone in his office, zoomed in on the map of China, and looked at the location of the Yangtze River Delta.

His fingers traced circles back and forth between Shanghai, Suzhou, Kunshan, and Ningbo.

The auto parts industry in this area is growing at an extremely rapid pace, and its supporting capabilities are no less than those of Qingdao, and in some aspects even stronger.

Moreover, the logistics reach of the Yangtze River Delta extends to the Yangtze River Economic Belt. Commercial vehicles manufactured in the Yangtze River Delta are cheaper to ship inland via the Yangtze River waterway or southward via the coastal expressway than those shipped from Qingdao.

Most importantly, the business environment in the Yangtze River Delta region is excellent. Perhaps it's because of the efforts to build Shanghai into an international metropolis that there are almost none of the petty squabbles found in smaller places.

But Suning still didn't make a decision immediately.

While the Yangtze River Delta region has its advantages, it also has its problems.

Land costs are higher than in Qingdao, labor costs are higher than in Qingdao, competition for investment among cities is fierce, policy terms are varied, and the complexity of negotiations is much greater than negotiating a base in Qingdao.

Moreover, the local governments in the Yangtze River Delta are all very shrewd, and it's impossible to get the same level of preferential policies as Qingdao without putting in some effort.

However, Suning considers these issues to be "soft problems" that can be solved with money and a team.

Compared to certain "hard risks," it's not a big deal.

Zhuangzhuang knocked on the door and came in, placing the last batch of documents to be signed that day on the table.

Seeing that Su Ning was still staring at the map, she asked, "President Su, has the matter with Director Hou been settled?"

Suning said, "It's not decided yet. Put Qingdao aside for now. Have Xiao Zhao inform the investment department and engineering department that he'll come with me to the Yangtze River Delta next week for an inspection tour. We'll visit Shanghai, Suzhou, Kunshan, and Ningbo one by one."

Zhuangzhuang nodded and wrote it down, then asked, "President Su, what you said to Director Hou about policy continuity, was that really your main consideration, or is it because they blocked our approval process before, and you still have a grudge?"

Su Ning looked up at her and smiled, "What do you think?"

Zhuangzhuang thought for a moment, "I think it's both."

Suning neither denied nor admitted it.

He simply folded the map and put it aside, saying, "Running a business is like being a person. If someone chooses to stand by and watch when you're at your lowest point, you'll have to reconsider when things are going your way. This isn't about holding a grudge; it's about learning a lesson."

"Mr. Su, do you think Qingdao will give us enough promises?"

"I don't know! The main thing is that the sense of security is a very mysterious thing. I don't even know what true security is."

"Uh? Mr. Su, aren't you making things difficult for me?"

"How can this be considered difficult? This is a comprehensive consideration! Any unexpected event could cause us heavy losses."

"..."

...(End of this chapter)