The Industrial Giant Reborn.

Chapter 515 The value of the entire industry chain

Regarding the scale of Midea's industry in Hong Kong, as someone who is responsible for the domestic economy and has been to Hong Kong many times, he naturally knows it very well.

In Hong Kong today, the number of people directly employed by Midea may reach 4. These are just Midea's own workers. The number of upstream and downstream industry chain is estimated to be multiples of 3 to 5. However, in Hong Kong, there are no Under this condition, many of Midea’s downstream industry suppliers come from other places, such as Taiwan, Japan, South Korea, etc., except for a few parts and components, it’s not that Hong Kong can’t make them, but it’s itself The conditions are limited, or this is Midea's own choice to diversify the supply chain.

But that's not all. The Midea factory with 4 people is only part of the production capacity of this electronics industry empire. Much of the huge game console production is allocated to electronics factories in Taiwan and South Korea for OEM, and even because of orders The outbreak happened too quickly, and high-cost Japan was needed to OEM. This is also very rare in the history of global business, allowing factories in developed countries to OEM brands from non-developed regions.

But there is no other way. The demand for game consoles has exploded too fast.

Just from the data point of view, Midea's game console industry far exceeds its home appliance industry, and may even develop better in the future, because currently there are many new customers even in the European and American markets, not to mention , Electronic products are updated very quickly. In a few years, a new one will come, and a lot of old customers around the world will have to replace it again. At the same time, the upper limit of the demand for game cards is basically unlimited.

Midea has been able to grow to the scale it is today because 8% of its success is due to the gaming industry. Although the mainland is also very jealous, they also believe that Midea will always put its main production capacity in Hong Kong, and it is difficult for them to seize one of Hong Kong's major economies. At most, we can just find a way to get a share of the overflowing production capacity.

"Yes, Hong Kong's current labor costs are getting higher and higher, and it is not suitable for the electronics assembly industry." Chen Zhiwen said.

"Mr. Chen, Midea is very important in Hong Kong. If all industrial production capacity is moved out, will it have a bad impact?" Director Qi asked carefully.

For a large company like Midea to relocate its production capacity out of Hong Kong, it is a very big deal in itself, especially at this time. Although it is none of his business, the content of today's conversation must be reported, so I still need to ask. Otherwise, if the superiors find out about this, they will ask him to come and ask again.

"Please rest assured that we already have relevant compensation plans for employees, and even if we relocate, we will do it step by step." Chen Zhiwen said: "Actually, the most important thing is that Hong Kong is too small and has a small population. There are few professional talents and local It is also small, and it is simply impossible to build a complete industrial chain from top to bottom. With the current model, too many parts are purchased from overseas, and even the assembly parts are still in several different countries, which creates management problems. The cost is extremely high, and the quality risk is also high. According to my estimation, the global game market will expand at a rate of at least 30% every year in the future. Although other companies will enter the market, Midea cannot always maintain its current position. But in terms of absolute numbers, Midea's sales will continue to increase, and it is completely unrealistic to continue producing in Hong Kong."

"So that's it." Director Qi also understood. Indeed, the current Midea production capacity cannot be satisfied by the Hong Kong factory. If it continues to increase at a high speed, there will definitely be problems. This reason is relatively unassailable. Moreover, even if There is no reason. If someone wants to leave, there is nothing anyone can do.

However, if the electronic game market continues to develop like this, and Midea needs to build an entire industrial chain in a large and populous place, the economic value it will create may far exceed that of the color TV project. Although this step will definitely be very slow, It is not as direct as the color TV factory, but if the mainland misses this opportunity now, then the future may be lost.

After all, building an entire industrial chain is time-consuming and labor-intensive. Assuming that Midea has spent hundreds of millions of dollars and several years building the entire industrial chain in Wanwan, then when the mainland opens its market, it will probably only be treated as a dumping market.Not only did we miss out on an industry with a potential output value of billions of dollars and employment of tens of 10 people, we also missed the opportunity for the entire electronics industry to make further progress.

Besides, if Chen Zhiwen is right, as long as the electronics industry develops, it will inevitably face the problem of electronic games. Then it would be a pity to miss such an industry in just a few years.

"Actually, I still hope to invest in China, but Midea can't wait, because the European and American markets wait for no one. In the European and American markets, we also have a large number of competitors and insufficient production capacity, so it will be useless no matter how fun the game is. , so the mainland is requested to make a decision as soon as possible." Chen Zhiwen said again.

This is not a lie. Now that the Western economy is gradually coming out of the trough, the development of the electronics industry has also made many people understand this industry, including computers and game consoles. The sales of Midea game consoles are also gradually increasing, and Midea has begun to undertake Games from third-party game developers are selectively put into the market. With such a large base, although it is difficult to hit the market, there are also a lot of games with good sales. As long as they develop well, the combined sales will not be lower than the hits. "Mario", besides, Midea also has several games ready to be released.

The production capacity problem has actually been bothering Midea for some time. There is really no way. The factories in Wanwan are too busy and they can only spend money to hire Japan and South Korea. Although the cost is higher, compared with the profit margin of the game industry , is also temporarily acceptable.In fact, this is normal. Historically, many game companies in Japan also encountered such problems after launching hit games, and they also looked to the electronics factory in South Korea to solve them. But now Midea only looks at the game industry. But it is even stronger than the Japanese companies of the past.

In order to ensure the stability of production capacity and quality in the future, Midea must spend a lot of money to re-build an assembly base similar to that in Hong Kong, with an even larger scale. By the way, it must also arrange related industrial chains nearby to ensure high-efficiency production.They have tried their best in Hong Kong before, but due to various reasons, the results were not ideal. Now, because labor costs are getting higher and higher, related industries are preparing to move first, which will further reduce the efficiency of Hong Kong factories. , unless Midea provides subsidies to allow them to stay.

It's a pity that there are no factories like Foxconn at present. Otherwise, it would be much easier to just leave everything to them.

"Okay, I will also report this matter." Director Qi nodded and said. Although large-scale investment is not started now, it is the starting point, or test, of larger-scale investment in the future. If the mainland does not give this The opportunity will be gone in the future.

"Okay, that's all my requirements. If the central government agrees, we can continue to follow up with Mr. Lei on subsequent cooperation negotiations." Chen Zhiwen nodded and said.

From the perspective of his boss, the mainland is almost the only choice for Midea. As long as the industrial chain is successfully built here, then there is no need to worry too much in the next few decades. Of course, in the late 90s, perhaps companies like Foxconn will rise, and by then Sometimes it will also be contracted out.

It is absolutely impossible for other countries. Such a huge benefit, if placed in a small country, might be able to boost the GDP of the entire country, giving outsiders an advantage.

That's fine in Wanwan, but the problem is that Wanwan's real estate market will soon, like Hong Kong, enter a ten-year period of rapid development. Although it is not as exaggerated as Hong Kong, by the mid-90s, it was basically There was no room for the assembled electronics industry. At that time, Foxconn and a bunch of electronics OEMs entered the mainland to invest, not because they wanted to help the development of the mainland, but because they had no other choice.

However, even if it is placed in the country, such an industry is very huge. Although the majority of the profits are still on its side, the benefits the industry itself brings to the mainland are immeasurable. Then open up the mainland market and allow your own products to fully enter. That's right. It's not that Chen Zhiwen wants to suppress domestic brands, and even if he doesn't enter, overseas brands will still come in through imports and even smuggling in the next ten years. If you can't suppress them by suppressing them, you might as well rely on the market. to replace this huge market.

The game console itself is exclusively for rich people and has little to do with ordinary people. Of course, there are also some people who will find ways to open game arcades to make money from ordinary people.

As for other conditions, such as the size of the land, tax incentives, deployment of highly talented personnel, and the matching of related infrastructure facilities, naturally they have to be left to a professional team. Chen Zhiwen doesn't understand either. In this process, he only needs to have a proper understanding. , including the final decision.

"Is the entire game console industry going to move out of Hong Kong?" That afternoon, a white-haired man about 60 years old said in surprise in an old office building in Yanjing City.

"Yes, these are Chen Zhiwen's exact words. I just made a phone call to Hong Kong. The labor costs in Hong Kong are basically more than 1000 Hong Kong dollars. The salary of Midea workers is higher, and every year If it continues to rise, it is indeed not a long-term solution for large factories." Director Qi said that after talking to Chen Zhiwen in the morning, he immediately made an appointment with senior leaders to report in the afternoon.

"Except for all his requests, except for the full entry of game consoles into the domestic market, he can agree to them first. I still need to discuss the game console matter with other people." The big leader nodded and said: "It is a big company like Midea. The complete withdrawal of factories from Hong Kong is still very important at present."

(End of this chapter)