The rise of a great power: starting with military industry

Chapter 46 Special Approval
"Everyone, please speak up." As the head of the Fifth Machine Department, Zhang Zhen looked around at everyone else.

This is not a trivial matter and he cannot make the final decision directly.

Only after reaching internal consensus can we decide how to deal with the issue.

Wang Baoguo took the lead and said, "I think this is a good thing. This is a large order worth 2467 million US dollars, which will create a precedent for our military weapons and equipment export trade."

"At the beginning of the year, the higher authorities required that we no longer provide free military aid to other countries, but instead provide paid assistance. At last year's meeting, the higher authorities had already set a strategy of internal reform and external development, with economic construction as the center. This time, Comrade Liu Tao negotiated this order, which can be used as a pilot and exploration."

"Didn't the leaders say that reform is like crossing a river by feeling the stones? Making mistakes is not scary; what is scary is not daring to make mistakes." Wang Baoguo had a clear attitude and supported Liu Tao.

After all, Liu Tao is one of their own, and Wang Baoguo is also very optimistic about Liu Tao. Besides, this order is right no matter how you look at it.

"10% compensation, there has never been such a precedent before, isn't it inappropriate? After all, this involves more than 200 million US dollars." A leader frowned.

When Liu Tao was reporting, he clearly stated that he needed to give the other party a 10% kickback.

After all, if you don't make things clear first, there will be a lot of trouble later.

Liu Tao said, "Leader, can I interrupt for a moment?"

"Comrade Liu Tao, please speak." Zhang Zhen signaled Liu Tao to speak.

"Leaders, in the international market, it is customary to give kickbacks for arms trade. The normal rate is 20%. Some of the highest rates are as high as 50% for our neighbor San Ge." Liu Tao said, "A 10% kickback is not high. It is relatively low."

Think about the 21st century, when India purchased 36 Rafale fighter jets for $88 billion, with a unit price of nearly $2.5 million, which was $35 million more expensive than the top-of-the-line F-35B and F-1C from the United States. At that time, Egypt purchased the Rafale at only half the price.

If there is no transfer of interests here, it would be really weird.

It is conceivable how high the kickbacks in arms trade are.

"This, this." The leader who was very disgusted with giving kickbacks felt that his three views were overturned.

"Since it is a custom, then give what should be given. There is nothing to say." Zhang Zhen said.

"Foreign exchange trading accounts are a big problem. According to regulations, Panshan Machinery Factory is not qualified, and neither is the Yunnan Provincial Defense Management Office." Another leader raised a question, "If you look deeper, Panshan Machinery Factory and the Yunnan Provincial Defense Management Office are not qualified to export."

Liu Tao looked helpless.

This is the reality of this era.

Even if he did it and did it privately, it would not be truly legal and compliant, but rather a gray area.

"This is easy. The department already has an account. We are also short of foreign exchange now," said a leader.

"No, this is not right!" Another leader shook his head and said, "This transaction is not suitable for us to handle, and the account is naturally not suitable. Besides, Panshan Machinery Factory is under the jurisdiction of the Yun Province National Defense Management Office, not under our direct jurisdiction."

Wang Baoguo frowned and said, "I have a suggestion. Let's see if it works. That is to approve a special account for Panshan Machinery Factory to conduct transactions. However, Panshan Machinery Factory is not allowed to use foreign exchange at will. How do you think?"

"That's feasible." Zhang Zhen nodded.

Just approve an account and strengthen supervision.

"I have a question. Can Panshan Machinery Factory complete so many orders? After all, there are still many troops on the front line waiting to be equipped." A leader raised a question.

It is urgent to replace the equipment of the front-line troops.

Although the "Red Dragon's Roar" military operation has ended, it is still urgent for the troops to replace their equipment. After all, fighting may break out again at any time.

Liu Tao stood up again and answered, "I don't think that's a problem. Our Panshan Machinery Factory has now been coordinated by the Yunnan Provincial Defense Management Office to have technicians from other third-line factories come to Panshan Machinery Factory. Our production capacity will be further increased, and there will be no problem in completing this order."

It was impossible to complete the order simply based on the original production capacity of Panshan Machinery Factory. However, when Liu Tao left Panshan Machinery Factory, the first batch of 100 workers had already arrived at Panshan Machinery Factory.

After Liu Tao returns, he will assemble the production line and the production capacity will naturally increase.

The meeting lasted for more than an hour and finally reached a consensus to support Liu Tao to complete the order.

Subsequently, the Fifth Ministry of Machine Building came forward and approved a special account for Panshan Machinery Factory. In the evening, with the assistance of the foreign affairs department, the order contract was drafted.

No. 25, Xiushui North Street.

"Mr. Al, Major Rashid, it's a pleasure to work with you!" Liu Tao extended his hand.

"Mr. Liu Tao, it's a pleasure to work with you!"

Al Rashid shook hands with Liu Tao with smiles on his faces.

The order contract has been signed and the account number has been established.

To celebrate this collaboration, Al held a cocktail party.

When Liu Tao left Xiushui North Street, he was already slightly drunk.

At five o'clock in the afternoon, at the Bank of China, staff were preparing to go off work.

At this time, a large sum of US dollars was transferred into the account of Panshan Machinery Factory. The amount of US dollars transferred was so large that even the Bank of China employees who had seen big scenes were shocked. What on earth did Panshan Machinery Factory do?

Since the beginning of the year, Bank of China has become a state-designated specialized bank for foreign exchange and foreign trade.

The staff immediately reported to their leader.

"What? Twelve and a half million U.S. dollars in foreign exchange has arrived?"

"From Iraq?"

"To Panshan Machinery Factory? Which unit is Panshan Machinery Factory? "

After listening to the staff’s report, the leader was stunned!

He kept thinking in his head, but he couldn't figure out which unit Panshan Machinery Factory was.

During this era, there were very few state-owned enterprises in China that could earn foreign exchange through exports, and they were undoubtedly large state-owned enterprises.

As for private enterprises, there were no private enterprises in this era, not even individual businesses.

Either a state-owned enterprise or a collective enterprise!
After a long time, the leader finally came to his senses.

The smile on his face could not be stopped. No matter which unit earned the foreign exchange, in the end the US dollars would remain in the bank.

Currently, the foreign exchange retention system is being implemented, that is, brilliant enterprises are forced to convert foreign exchange into RMB after earning foreign exchange through exports. Except for foreign-funded enterprises and some domestic enterprises, the foreign exchange income earned from the current accounts of enterprises and residents must be sold to designated banks. Enterprises retain foreign exchange at a certain ratio, and the rest belongs to the state.

The reason for doing this is to support the country's centralized use of foreign exchange funds and alleviate the difficulties of foreign exchange fund shortage!
There is no way. The country has too little foreign exchange, but too many units need to use it.

If we don’t do this, the country’s foreign exchange reserves will be exhausted in a few months, or even become negative.

Now the leaders want to know how much foreign exchange can be sold to banks, preferably 100%!
What banks lack is foreign exchange, not RMB!

He picked up the phone and started checking Panshan Machinery Factory.

(End of this chapter)