Chapter 32 Contrast between Mou and Tang: How similar are the two generations of predators

In April 2006, Tang Wanxin was sentenced to 8 years in prison and fined 400,000 yuan for two counts of "illegally absorbing public deposits" and "manipulating securities trading prices".While serving his sentence in Wuhan, he allegedly "insisted on learning foreign languages ​​every day, and even applied for the Correspondence Archeology Department of Peking University". History always shows the magic of fate in a dramatic way.In the past 30 years, the two most prominent capital tycoons in the history of Chinese business have been imprisoned in prisons in Wuhan, and their ancestral home is Wanxian, Chongqing.An interesting hypothesis is, what would it be like to have a conversation between the two of them?

We did not find Tang Wanxin's commentary on Mou Qiqi, but we read the latter's comment on the former.After the collapse of Delong, when Mou Zhong answered written questions from the media in prison, he suddenly mentioned Delong—— The information I have seen about Deron in prison is very limited.This reminds me of a couplet in the "Wuhou Temple" in Chengdu: "If you can attack your heart, you will lose your side. It has been known since ancient times that soldiers are not good at war; if you don't judge the situation, you will be wrong about leniency and strictness. Later, you must think deeply about governing Shu."

In my opinion, the ups and downs of Delong's fate today are due to the domestic macro environment, that is, when the legal conditions, financial conditions, and moral conditions have not yet been met. , The result of being trapped in the tight siege of the planned economy can only be gathered and surrendered in the end.Therefore, although one thousand or ten thousand reasons can be found to explain Delong's dilemma, the most fundamental one is still "the relationship between enterprises operating according to the laws of market economy and the economic order organized according to the laws of planned economy." contradiction".Occasionally, Delong has some business performance in a small area, and immediately goes public to increase the value. He does not consider the risk of "semi-circulation" in the market, and deals with bank cash at an inflated value. He does not pursue corporate profits honestly, but only relies on the capital market Operation, want to seek miraculous development.And when I operate South Germany, I have "two iron rules", that is, corporate profits are the basis of capital operations, and capital operations without profits are speculative gambling behaviors; Financial circles and capital market exchanges".

Mou Qi's so-called "two iron rules" are obviously not the facts themselves. The root cause of the fall of South Germany is the speculative play on the concept of capital.However, his term "judging the situation" points out a certain essence of the Delong incident. Zhong Pengrong, an economist from Hubei who has had discussions with both Mou Zhong and Tang Wanxin, made a direct comparison between the two.His point of view is: "Although Mouzhong only proposed a theory but did not find a method, Tang Wanxin just turned Mouzhong's theory into reality." Comparing the practices of Mou Zhong and Tang Wanxin, there is indeed one thing in common, that is, they both focus on the industrial integration targets on the state-owned enterprises with backward mechanisms, and they try to activate them through financial means, and thus drive the development of the industry. The recovery of China's industrial economy.Mou Zhong once put forward a theory of "99 degrees plus 1 degree" for this purpose.The theory holds that decades of planned economy have left a lot of assets idle. Under the planned economy, a lot of water was burned, but they were all burned to 99 degrees, and South Germany wanted to add 1 degree to boil the water. .In Zhong Pengrong’s view, “Mou Zhong did not find the answer to how to add this 1 degree, but after a few years, Tang Wanxin, a younger generation, inherited and practiced this theory. Delong’s integration of the cement industry, electric tools The integration of China, auto parts, and other industries is doing the same thing.”In this sense, "Mou Zhong said too much, Tang Wanxin did too much".

Doing too much will lead to insufficient strength, insufficient management, and especially insufficient funds.Under such circumstances, it is impossible to avoid expensive funds, even some illegal funds.Because of this, Zhong Pengrong, who is sympathetic to Tang Wanxin, believes that Delong's problem lies in the current financing structure of Chinese enterprises.At present, the financing of Chinese enterprises is mainly debt financing, and the entire credit is concentrated in banks, which are all borrowing financing.Deron is no exception, mainly borrowing money from banks or private individuals.Such a relatively simple financing structure will become a very risky financing method once encountering turmoil, macro-control, and bank tightening loans, and no one can stand it.However, most of Delong's projects are long-term projects, which do not match the short-term financing system.Delong knew that he couldn't do it and forced him to do it, so he naturally "wronged with leniency and strictness", and could not escape the fate of failure.

Comparing the failures of Nande and Delong, two companies with a difference of 10 years, apart from the fact that they both targeted state-owned enterprises for integration and caused catastrophe financially, there are many striking similarities: They have all fallen into the trap of "making it bigger".Both Nande and Delong boast themselves as the largest private enterprises in China, and both have put forward the grand goal of entering the world's top 500. They have opened branches and subsidiaries all over China in a very short period of time. Their fragile management chains make enterprises After the crisis, it suddenly became a chicken feather.

They are all losers in diversity practices.Nande's projects range from Hot Pot City to launching satellites, and the span is dizzying; Delong has also been involved in more than 20 industries.American stock god Warren Buffett has a famous saying: "If you have 40 wives, you will never be able to know each of them." They have all fallen into the quagmire of multi-localization operation.The projects of the two companies are all over the country, and they have various entanglements with local governments.Because the company does not have deep connections in the political circles, and even has the intention of expanding and profiting when it enters, once the company's credit is shaken, the crisis is easily magnified quickly.

They are all believers in debt management.Both Nande and Delong are trying to achieve rapid expansion of enterprise scale through mergers and acquisitions. In terms of liabilities, both creditors are over-dispersed, debt costs are too high, and short-term loans are long-term. This is obviously a very dangerous financial model. They are all victims of utopianism.Both Mou Zhong and Tang Wanxin have a very complete theory of integration of industry and finance, and have been sought after by many economists.Nande has its own research institute and publishes its own academic journals; Delong claims to have 150 people specializing in research on industrial strategic investment.However, their theories were never really realized because they were too idealistic.What is sad is that after the two were in prison, although they had a lot of regret and reflection, they were still full of incomparable confidence and pride in their respective theories.

After the collapse of Delong, many scholars regard the defeat of Delong as an important sample worthy of reference by Chinese private entrepreneurs.Liu Jipeng, an expert in mergers and acquisitions, believes: "Evaluating Delong is to evaluate Chinese private enterprises, and it still raises the old question: Is growth always a hurdle?" A senior financial commentator wrote: "Reflecting on Delong is reflecting on our Reflect on the way of thinking and behavior of the Chinese business community, reflect on China's regulatory environment and the social foundation of economic rise." These words are conclusive and intriguing.