Chapter 1541 [Answer to solve industrial overcapacity]
Because of the rise of Qunxing Group, the entire economic market of Dongda University is equivalent to 2O25 compared to Fang Hong's previous life. This has also brought about a new problem, that is, how to digest the huge production capacity that needs to be solved urgently.
You know, in 2019, Fang Hong’s previous life, Dongda’s industrial output value accounted for about 30% of the world. With this proportion, its overcapacity problem cannot be ignored.
In the current world, it directly accounts for more than 41%. How to digest this huge amount of production capacity is also a major matter and something that cannot be avoided.
In order to avoid excessive involution, the answer is to go out.
Guo Jia's senior management had thought of this as early as ten years ago, so the One Road, One Belt strategy came into being.
It’s just that the top management did not expect that in ten years’ time, the industrial scale output value would account for more than 41%, and that through the One Belt and One Road strategy, it would go global and transport huge amounts of production capacity to areas along the One Road and One Belt route.
The areas along the Belt and Road are in urgent need of development, and there is a huge demand for industrial manufacturing products. The population has reached about 3 billion, and Iraq alone has a population of 1.5 billion.
To put it bluntly, this huge population of 3 billion is also eager to survive, develop, and live a better and higher-quality life, but they themselves have no industrial capabilities and are even in turmoil.
If you want to live a modern, high-quality life, you will inevitably need a large number of industrially manufactured products.
Moreover, most of the countries along the Belt and Road are resource-based countries, but they have no industrial capabilities themselves, while the big eastern countries are the largest industrial manufacturers in human history.
The two are perfectly complementary.
Dongda exports its own manufacturing products to areas along the One Belt and One Road. If the locals don’t have money but they have resources, they can sell them for money by exporting industrial raw materials and other natural resources to the big eastern countries. If they have the money, they can buy them directly from the big eastern countries.
Industrial manufactured goods.
Don’t have start-up capital for development? It doesn’t matter, just go to Dongda University and lend it to them.
Don’t have the ability to exploit resources? It doesn’t matter, just cooperate with Dongda’s companies.
On the one hand, there are resources and a huge demand for industrial manufacturing goods. On the other hand, there is overcapacity of industrial manufacturing goods but a huge demand for resources, energy and industrial raw materials. These two complement each other.
Therefore, One Belt One Road is the answer to solving industrial overcapacity.
Dongda's own market size is indeed extremely large, but such a huge production capacity problem cannot be absorbed by its own internal circulation alone. It must have internal and external dual circulation. The main line of external circulation is the One Road, One Belt strategy.
Anyone who dares to stumbling on the strategy of "One Road and One Belt" will be killed. All resistance and stumbling blocks will be ruthlessly eradicated by Dongda. It will not be easy for anyone to do it, not even Ah Mei, even if Ah Mei comes.
Because this is a fundamental interest, a core interest, and there is no possibility of compromise. Sooner or later, Ah Mei will be kicked out of the Middle East, and this day is not far away.
Otherwise, with the huge production capacity of Dongda University, if we don’t open up the road and the belt, our own companies will be bankrupt.
To truly activate the internal circulation, there is only one real answer, which is to increase people's income, whether it is raising wages or increasing property income. In short, it is to make people's wallets bigger.
When people have no money in their hands and their wallets are dry, they will cut back on spending, refrain from consumption or even stop consumption, and consumption downgrades will become inevitable.
If everyone restrains consumption or even does not consume, goods will not be sold. Enterprises or merchants will reduce prices in order to destock for promotions. However, this kind of price reduction is not a dividend brought by technology and productivity improvements, but rather enterprises and merchants sacrificing their own profits to reduce losses and stop losses.
Behavior.
As a result, the price war has become a red ocean, and prices have been raised like crazy. In this environment, companies will expand production capacity, or even shrink production capacity. Once production capacity shrinks, they will no longer have as many employees, so they will lay off employees.
If employees lose their jobs, they will be even less afraid to consume. As a result, goods will no longer be sold, and companies or merchants will shrink production capacity, lay off employees, and reduce expenditures. This leads to a vicious cycle. If it does not change and is allowed to evolve, the final result will be
It's deflation, which is worse than inflation.
But if ordinary people have money in their hands and bulging wallets, it will be a different world and a different situation.
When you have money, you will inevitably upgrade your consumption. When you earn 3,000 a month, you have to be careful about everything you buy. If you buy a mobile phone, you have to pay in installments. When you earn 3,000 a month, as long as you are not buying big-ticket items such as houses and cars, general consumer products will not be purchased.
Don’t deduct details from the budget, but focus on the experience and whether you like it or not. If you like it, just buy it.
When you earn 3 W a month, you can buy top-end versions of STAR mobile phones worth tens of thousands of dollars, MIX headsets, or products from Xingyu Technology without blinking an eye. This is consumption upgrade.
There is no upper limit to people's needs. If you are better, you will definitely want to do better, but the premise is that the wallet in your hand can support it.
Therefore, increasing people's income is the right answer to activating the internal cycle.
When everyone has money, the quality of life will inevitably improve, and consumption will inevitably upgrade, and people will buy all kinds of things. Enterprises or businesses will not fall into involution, and they will not cut costs and lay off employees.
In fact, the big property market bubble is not a problem, nor is the rise in house prices. The root of the problem is that the income growth of ordinary people has underperformed the rise in house prices.
The price of a house has increased tenfold in the past ten years, but if the income has increased twentyfold in the past ten years, even if the price of a house has increased tenfold, you can still afford it without much financial pressure.
It is no exaggeration to say that the economic growth rate in the past two years has returned to double-digit growth for the first time in nearly ten years. The word "stars" is absolutely unavoidable.
In the past ten years, due to the birth and rise of Qunxing and the transformation and upgrading of the science and technology industry, the number of employees in Qunxing enterprises is calculated in units of "tens of millions". Behind tens of millions of families is a population of hundreds of millions.
Employees of Galaxy Group generally have high incomes. This is actually a salary increase, which means an increase in one-time distribution income.
Moreover, Qunxing Group is not just a small workshop, its influence and role on the entire economy has reached a decisive level.
In addition, the birth of the SGX market cannot be ignored. It has directly brought about a significant result, which is an increase in the property income of the majority of people, especially since the second half of 2018.
You know, Big A has 165 million shareholders, and now it should have 170 million shareholders, and behind this are thousands of families.
In the past four years, the NSE 50 Index has risen from 1,000 points to over 6,000 points now, allowing more than 70% of the investors in this market to make profits, greatly increasing the property income of ordinary people.
This is equivalent to a redistribution of wealth, allowing most people to enjoy the dividends released by technological transformation and industrial upgrading.
Without the rise of Qunxing Group and the birth and great success of the SGX market, could the total national consumption reach 50 trillion in 2019? Can GDP return to double-digit growth after ten years? Or will it still maintain volume?
And maintain quality growth?
Today, Qunxing Group has become the weather vane and barometer of the entire economic market.
It is no exaggeration to say that if today's Qunxing Group sneezes, the entire economy will tremble. It is so powerful.
But what has to be said is that it is very crucial that Guo Jiatui holds more than half of the shares of Qunxing Group. Without this prerequisite, Qunxing would not be able to develop to the scale it is today.