Countercurrent 1982

Chapter 1550 Joint Venture Factory
"This number is really impressive..." Hearing this, Cohen couldn't help being a little surprised.

"IBM has had agents in China before, and they should be the first PC manufacturers to enter China. In the past two years, the number of formations has been increasing every year, and many other manufacturers in our country use IBM's chips and components. , although it is not as good as the North American, European and Japanese markets, it has great potential in the future, after all, China is a country with a population of 10 billion." Duan Yun added.

Duan Yun knew in his heart that for these European and American manufacturers, it is difficult for Chinese technology products to arouse their interest, and what attracts them the most is China, a market with huge potential.

However, since China has always implemented a very strict protective tariff system, importing goods from abroad requires approval documents, which makes it difficult for many European and American multinational companies to enter the Chinese market. There are only two ways left for them, or use technology If they want to change markets and set up joint ventures in China, they will have to bear huge tariffs, which will greatly weaken their market competitiveness in China.

"China is indeed a very big market. Your economy looks good. When I came to Shenzhen this time, I saw that the construction here is very prosperous, no worse than some of our small cities in the United States." Cohen pondered for a while, and then said: " So if I want to seek your Tianyin Group's agent for my product, I wonder if Mr. Duan is interested?"

"Of course the agency is fine!" Duan Yun was waiting for Cohen's words.

"Then we can consider handing over the agency rights in China to your company." Cohen replied bluntly.

"Mr. Cohen, I think the best way for Western Digital to enter the Chinese market is to set up a joint venture in China. Our Chinese government's consistent policy for foreign companies is to exchange technology for markets. As long as you are willing to bring capital and technology to the mainland , I think the benefits you will get in the future will definitely satisfy you..." Duan Yun said seriously.

Duan Yun wants to make his own domestic computer, but it is impossible to achieve complete localization in the short term. It also needs to introduce some advanced foreign technology and equipment to form a complete industrial chain and eventually occupy the leading position in the domestic computer industry.

In addition, although Duan Yun has now been able to develop and produce flash memory chips, which can be used to make SSDs, but before the storage capacity of flash memory chips has made a significant breakthrough, most of the computer hard drives commonly used in the world are mechanical hard drives. It is difficult for mechanical hard drives to be eliminated in at least the next ten years.

Although Western Digital's hard drives are not the most advanced in the world, they have very high cost performance, low price, and good quality, which can fully meet the needs of domestic consumers. From this point of view, if Duan Yun can act as an agent for their products , and learn some techniques from it, is the best choice.

However, there is a problem with this, that is, imported components and complete machines, the tariff set by the state is extremely high, as high as 100%~200%. Hold the position of boss firmly.

Because the tariffs are too high, some people choose to smuggle, but in fact, the smugglers are basically units with a certain policy background. They can get the approval and mix the normal approval with the smuggled goods to make the customs troublesome. It is clear that many domestic companies that want to buy components can buy them from the black market at a much cheaper price, so naturally many people buy them.

Speaking of which, Shenzhen was also a city developed by smuggling in the early years. Through some special channels from Hong Kong, a large number of cheap smuggled parts entered Shenzhen, including some computer components such as chips and hard drives. The prices of these components are also quite high. cheap.

So if Duan Yun wants to act as an agent of Western Digital's hard drives, he must first solve the issue of approval documents, and then he has to endure huge tariffs. In this way, he will definitely lose money, because the hard drives represented by regular channels must be cheaper than smuggled hard drives. It's much more expensive.

It is precisely because of this that Duan Yun suggested Western Digital to set up a factory in China. In this way, it can not only obtain cheap products, but also obtain related hard disk production technology, and prepare for the localization of hard disks in the future. For Duan Yun, It kills two birds with one stone.

"To set up a factory in China?" Hearing what Duan Yun said, Cohen frowned.

"That's right, as long as you are willing to come to China to set up a joint venture factory, you don't have to consider the issue of tariffs, and our country is very caring for foreign companies, such as the German Volkswagen AG, which invested in China five or six years ago After setting up a factory, it can now sell more than 2 vehicles in China every year, and the sales volume is increasing year by year. It is estimated that after three years, the sales volume should increase to 5 to 8 vehicles..." Duan Yun said.

Duan Yun tried his best to persuade Cohen to come to China to set up a joint venture factory. In fact, in later generations, Western Digital’s production organization set up branch factories in Malaysia and Thailand in addition to its native California, USA.

Compared with Malaysia and Thailand, Duan Yun feels that domestic policy support, human resources, and Shenzhen’s local supply chain are no worse than them, and even have certain advantages.

However, there are also some problems, that is, Western Digital has set up factories in Malaysia and Thailand, and foreign companies can completely own them, but in China, at least 51% of the shares must be given to the Chinese party.

Therefore, whether Western Digital will set up a joint venture in China depends on the market. If the Chinese mainland market is large enough, Western Digital can give up part of its shares and profits.

"I still need to discuss this matter with the company's board of directors after I return to China." Cohen said after a while.

Setting up a joint venture in China is not a trivial matter, and requires a lot of capital, technology and equipment investment. In addition, investing in a socialist country also has certain policy risks, so Cohen dared not make promises to Duan Yun easily.

"Our Tianyin Group has a very strong sales and after-sales network in China, which can quickly sell your products to all parts of the country." Duan Yun glanced at Cohen, and then said: "Another point is that although our company is a Private enterprises, but in fact, our local government departments and central enterprises also have shares, so you don't have to worry about policy risks at all. In addition, our labor costs in China are very low, and we also have a complete electronic product industry chain. Looking at the whole Asia is very advantageous.”

In order to persuade Cohen, Duan Yun even pulled out the state-owned enterprises that had not yet completed the share transfer, in order to eliminate his worries.

(End of this chapter)