Chapter 3 The second lecture on the nature of the international financial crisis

When the term capitalism is mentioned in economics, we immediately think of an economic and political system that exploits the surplus value of workers.Therefore, we have always avoided in-depth discussion and research on the capitalist system. It was once considered a hostile force to the socialist system. We really deal with capitalist society. In the political economy we have learned, the description of how the bourgeoisie brutally exploits the proletariat in capitalist society is chilling. The greed, cruelty, chasing money at all costs and life-and-death competition in capitalist society are also chilling. The periodic economic crisis that will be doomed to be buried will lead the masses into a situation of extreme poverty.

However, it is this kind of system that makes the European and American economies develop vigorously with each passing day.And with an extremely strong momentum, it will not fall for a hundred years.So, where is the mystery here? That is the soul of capitalism! What is the soul of capitalism is fiduciary responsibility.That is, the duty to trust and entrust, in our terms, what we call the duty of conscience. The enactment of laws and regulations is only a literal expression of conscience, but in the ever-changing economic dynamics, it is the role of conscience—the role of fiduciary responsibility—that really constrains the process of human development.

In the entire camp of capitalist society, the conscience monitor of fiduciary responsibility runs through both tangible and intangible. For example, the state assumes the fiduciary responsibility of the people, the banking regulatory agency assumes the fiduciary responsibility to depositors, the evaluation agency assumes the fiduciary responsibility to banks, and the venture capital bank bears the fiduciary responsibility to investors.Counsel, with a fiduciary duty to the client...blah, blah, blah. There are many things that cannot be handled by oneself, so they must be entrusted to other people to complete. Such trusted and entrusted institutions and people have this kind of fiduciary responsibility.

Just look at a list of cases of fiduciary responsibility in the British share reform to understand everything. During the period of Margaret Thatcher in the United Kingdom, the share reform was carried out, and Rothschild proposed the three laws of Rothschild's share reform. The first law is that a company undergoing shareholding reform must be run by professional managers with fiduciary responsibilities; The second law is that only companies with good performance can carry out share reform; The third law is that after the share reform, the government still retains a certain amount of gold shares, that is, it does not withdraw from the stock market.

The British and American imperialist countries attach great importance to marketization, but the intensity of their intervention in the stock market is beyond your imagination.The above three laws fully reflect the fiduciary responsibility for shareholders. Let people who have no sense of fiduciary responsibility become leaders and companies that do not have considerable performance carry out share reform and listing. The government is responsible for the loss of shareholders, especially the third law. As long as there is something that harms the interests of small and medium shareholders, the British government will come forward to exercise its veto power.Because as the government of the country, he assumes the fiduciary responsibility of all shareholders.The common people only think that the shareholding reform promoted by the government must be better in all aspects.

Therefore, the capital operation of capitalism is backed up, relied on, and guaranteed by the government as the trustee.Therefore, the people also trust the government very much, and they are very confident in the various market operations, capital operations, and financial operations promoted by the state.The powerful role of this kind of credit has made its capitalist development flourish for a long time. But Wall Street still has a problem!That is why, the reason, then what is the root cause of the Wall Street financial turmoil in the United States?In the final analysis, it is the loss of fiduciary responsibility.

We know that the U.S. dollar is the representative of the interests of the United States. The U.S. enjoys the benefits of overlapping the national standard currency and the international standard currency. That is, the world uses the U.S. dollar, the U.S. produces the U.S. dollar, and credit creates the U.S. dollar, because the U.S. dollar constitutes the core of U.S. financial hegemony.Especially after the decoupling of the U.S. dollar from gold, countries around the world continue to worship the U.S. for its wealth and trustworthiness. No matter how the U.S. struggles, the world always believes that the U.S. will never collapse. If the U.S. collapses, the world will be dark. Under the banner of extreme trust and resolute affirmation in the world, countries around the world have appointed, and the people of the world have appointed. In addition to the extremely indebted consumption of the United States, countless products produced by various countries have poured into the American market. Wow!The people of the world are amazed! "America is so rich"!It accounts for 3% of the world's population and consumes about 30% of the world's wealth (in exchange rate terms).Anyone who hears this number will open their mouths.

These have created the prerequisites and conditions for the United States to do whatever it wants and toss about it arbitrarily. When the U.S. financial system realized that they could live a good life only by printing a lot of money, the U.S. financial industry developed and the investment industry developed. It was called the most developed investment bank and capital market in the world at that time. The dominant financial system, the top 10 commercial banks are almost monopolized by the United States.Sometimes they call the wind and shake the rain, manipulate the pricing power of bulk commodities, and monopolize the economic discourse power with one hand.

Capital and finance dominate the main artery of the economy. Marx said: "There is as much freedom as there is capital." The United States began to be free without restraint. Greed robs them of their fiduciary duty.In this crisis, the US financial system found that almost the entire loss of fiduciary responsibility.An institution that loses the bottom line of conscience is more terrifying than nothing. Those who are virtuous are mediocre, and those who are talented but not virtuous are thieves! The intensification of Bank of America, coupled with the laissez-faire supervision of the U.S. Treasury Department, under the temptation of heavy salaries and huge interests, mercenary has the upper hand. The fiduciary duty of the surety department, et cetera, everything is gone.Credit, this core value no longer exists.

Therefore, people call this crisis a credit crisis. Looking at the world with prejudice and suspicion, all you see is traps.Not to mention how far the trust has been lost. Great changes have taken place in the form of responsible consumption in the United States. This is the evil result of losing the soul of capitalist fiduciary responsibility! Fiduciary duty is very important.Why is our state-owned enterprise reform unsatisfactory in the end?I found that the bosses of many state-owned enterprises, if the company does not do well, they say it is a problem with the system, blame the country, and take credit for the company's success.Many of our media and even many scholars say that it is right for the bosses of state-owned enterprises to do poorly. Why?Because the money is too little. In the first half of 2008, the "large and small" issues hit the Chinese stock market and stimulated the majority of stockholders. Under the situation of stock prices falling sharply, many executives of our listed companies actually sold a large number of stocks.I would like to ask, where is the fiduciary duty of these people?Do they have a little bit of trust responsibility to the country, the nation, small and medium shareholders or ordinary people like these 120 rich Americans?

Let me ask you one more question, as many of you are entrepreneurs, do you know what your current pain is?Let me tell you: first, you may lack fiduciary responsibility; second, your employees also lack fiduciary responsibility.What kind of concept has been instilled in our common people over the years?Only when something is your own can you do it well, if you don’t own it, you can’t do it well.For example, state-owned enterprises, because the ownership is not yours, so they can't do well.So how can we do it well?Just send it to you and you'll be fine.What is it called?This is called a manager buyout.You have to know that this concept is completely contrary to the fiduciary responsibility, and the ultimate victim of this concept is our private enterprises. Think about it, although the company is yours, you have the motivation to do well, but what about the employees?Does the company belong to employees?Is it your vice president?Does it belong to your manager?Is it your worker?Neither belong.Let me ask private entrepreneurs one more question, since the company is not theirs, can they not do well?Let me tell you, one of the biggest problems of private enterprises is the lack of fiduciary responsibility of employees.The biggest problem for entrepreneurs is the lack of fiduciary responsibilities to employees, and the same lack of fiduciary responsibilities to the country and the nation.This is why many private entrepreneurs are scolding every day, saying that employees never think about him, and he cannot communicate with employees.Why all this?It is because of the lack of fiduciary responsibility as the foundation and soul. When I said these words before, some people thought that I was making a high-profile statement. When the economy really enters a recession and you have really experienced all this, you will find that we have indeed ignored the soul of capitalism for so many years.Speaking of this, I believe that everyone already has a certain foundation and knows why this financial crisis occurred.The real reason is that those in power on Wall Street lacked fiduciary responsibility and were too greedy, which resulted in a heinous disaster. Please note that this is not the first time that something like this has happened. I myself experienced it once in 1990, which was called the US junk bond crisis.What are Junk Bonds?American bonds are all rated, preferably three A, two A, one A or three B, and only bonds with this rating are called investment-grade bonds.They urge investors to only invest in such investment-grade bonds.Other bonds are called junk bonds.Junk bonds also have different ratings, including best junk bond and worst junk bond. In 1990, Drexel Burn-ham, a well-known investment bank at the time, was liquidated by the US government.This investment bank specializes in looking for companies with poor credit, such as companies with bad credit ratings such as BB and BC, to help them issue corporate bonds.These corporate bonds were called junk bonds in academic circles at that time.These junk bonds are underwritten by Drexel Securities, and each transaction can charge a handling fee of 1% to 3%.So the more deals you do, the more Drexel makes money.It has completely forgotten that its doing this will destroy this country, this nation.Eventually, it didn't take long for the whole thing to explode, and by then I had a Ph.D. and was working as a professor at NYU.There was not much disturbance at that time.Because the real buyers of junk bonds are savings banks, this caused a large number of savings banks to close down.However, the U.S. government guarantees the deposit accounts of savings banks, and the government pays for deposits below $100,000. Therefore, there was no major financial crisis at that time, and it just passed like a thunderstorm.Drexel Securities was investigated and liquidated on the spot, and Drexel Securities’ person in charge of underwriting and creating junk bonds at the time, Michael Milken, who was known as the king of junk bonds, was also sentenced to 10 years in prison by the U.S. court, and the crisis was eliminated in this way. up. The so-called subordinated debt refers to a commercial bank with a fixed term of not less than 5 years (including 5 years), unless the bank fails or is liquidated, it will not be used to make up for the daily operating losses of the bank, and the claim for this debt is ranked after deposits and other liabilities. long-term debt.The conditions for subordinated debts to be included in capital are: no guarantees shall be provided by banks or third parties, and shall not exceed 50% of the core capital of commercial banks.Commercial banks shall, within 5 years before the maturity of subordinated term debts, convert them into the item of "subordinated term debts" in the balance sheet according to the following ratio: if the remaining term is more than 4 years (including 4 years), it shall be calculated at the rate of 100 %; if the remaining term is 3-4 years, 80%; if the remaining term is 2-3 years, 60%; if the remaining term is 1-2 years, 40%; if the remaining term is 1 year Less than 20%. The U.S. subprime debt crisis has caused considerable shock to the global economy, but how did it spread to the world step by step? The following is the major event of subprime debt expansion: Global stock markets wobbled for the first time this year as evidence of problems in the US subprime mortgage market began to emerge.Borrower default data came out for the fourth quarter, and specialist lenders serving the subprime mortgage market began reporting losses for the quarter, starting with NovaStar, the largest.Less than two weeks later, shares in New Century Financial, the second-largest subprime mortgage lender, were suspended amid concerns over its ability to continue operating.Now, both companies face class-action lawsuits alleging that company executives misled investors. On April 2, NewCenturyFinancial filed for bankruptcy protection. On May 4, UBS announced that an attempt to create an in-house hedge fund had failed.The firm was forced to reintegrate Dillon Read Capital Management into its investment banking arm, and the fund was less than two years old.UBS' decision came after the fund, which stands at about 4.5 billion euros ($6 billion), lost 150 million Swiss francs ($123 million) in the first quarter of the year on investments in U.S. subprime mortgages .The move cost UBS $300 million in restructuring charges.By early July, UBS chief executive Peter Wuffli was sacked, in part because of board concerns over his handling of Dillon Read Capital Management.This week, UBS warned that market turmoil could lead to "very weak" UBS profits in the second half of the year. On June 19, it was reported that some investment banks that had lent to two hedge funds under Bear Stearns Asset Management (Bear Stearns Asset Management) were about to seize Bear Stearns assets to recover cash.The heavily geared funds invest in highly rated compound bond products considered very safe, which in turn invest in bonds backed by subprime mortgages.After the news broke, a host of other funds also reported huge losses on similar bond investments.These include Australia's BasisCapital, London's CheyneCapital and CambridgePlace's funds, and the US's BraddockFinancial and UnitedCapital.A month after Bear's problems came to light, investors were told that they had lost all their money in one Bear fund, while the second fund would only get back 9 percent of their investment. Fears of a credit crunch were heightened on July 25 when financing for the AllianceBoots and Chrysler acquisitions ran into serious problems.These are the two largest private equity deals.In the days that followed, stocks slumped as investors worried that tighter credit conditions could derail the buying spree that had driven stocks higher as investors bet that almost any company could be bought soon.The news made more and more people realize that the world's largest investment banks are facing potential credit problems in many areas, and they are beginning to control these risks as much as possible. Investors' fears of a full-blown credit crisis have sparked wild swings in stock and credit markets.Known as the "fear vane" of Wall Street, the Vix index has repeatedly hit multi-year highs.While data this week pointed to a broader decline for equities, with the FTSE 100 dipping below 6,000 and the Dow below 13,000, the sharp shifts in near-daily moves have hurt other markets. suffered heavy losses.This move poses serious problems for quantitative (or "black box") hedge funds.Such hedge funds thrive during market turmoil, but problems arise when trading patterns change suddenly.These problems were most evident last week, when Goldman Sachs was forced to use $2bn of its own funds to bail out its Global Equities Opportunities fund. Growing concerns about America's subprime mortgage problems extend well beyond the US banking industry and small specialty lenders.Some money market funds that invest in complex securities run by BNP Paribas and others have closed their doors to investors who want to redeem them.All types of off-balance sheet lending and arbitrage platforms (i.e., pipelines and structured investment vehicles (SIVs)) are implicated, and they struggle to obtain short-term financing to sustain themselves.The banks backing it up should have stepped in to provide so-called liquidity facilities to shore up the institutions, but they are also eager to reduce credit risk and are trying to stay out of it. Problems at Germany's Industrial Investment Bank (IKB) prompted domestic peers to bail it out on Aug. 2, but that only fueled unease and sent overnight lending rates in the interbank market skyrocketing.The European Central Bank has been forced to take steps, followed by the Federal Reserve, Bank of Japan, Russian Central Bank and Bank of Canada, pumping markets with the money they need to keep those institutions afloat short-term funds. The bank got fake information, lent the money to people who were not qualified for the loan, and then sold the bonds to the investment bank.They then sell small bonds to the general public.Then the insurance company guarantees, and then sells the policy. Please think about it, what happened to this chain?The high debt system of the entire United States has since joined "melamine". This is the root cause of the subprime mortgage crisis in the United States, and "melamine" has entered this system.This consequence is extremely serious. We have also experienced the "melamine" incident. I would like to ask everyone, what do you think of China's food industry when you know the "melamine" incident?Have you lost all confidence?When Americans encountered the subprime mortgage crisis, it was the "melamine" they encountered, which completely collapsed the confidence of the American people in this capitalist system. Once confidence collapses, it is over, because confidence is the key to the maintenance and growth of the financial system, including insurance companies and banks.Think about it, why do ordinary people in Hong Kong run on the Bank of East Asia?As soon as the rumors came out, everyone panicked and ran on the bank. The result of the run is that the bank will fail. This is certain.The same is true for insurance companies. If the public loses confidence in the insurance company and there is a run of some kind, such as cancellation of the policy, you will not be able to bear it.So the crisis of confidence is very serious, and the source of the crisis of confidence is not high debt, because high debt has always been a tradition in the United States, but under high debt, everyone discovered that there is "melamine" in the debt. Well, 20% of these subprime borrowers can't pay the interest. When they can't pay the interest anymore, the whole chain is passed down from link to link. You will find Fannie Mae and Fannie Mae Dimei can't receive the 20% interest from the borrowers, what should they do?You can only breach the contract, what should you do after the breach?collapse.So the US government was forced to inject money to save Fannie Mae and Freddie Mac. What about insurance company AIG?In simple terms, it guarantees that these bonds can be paid, and if 20% of people can't pay, then AIG will pay for them.But how can the insurance company cope with such a large amount of payment?can't do it.Because insurance companies have an important principle called the law of large numbers.The so-called law of large numbers means that an insurance company needs to have a lot of policyholders. For example, suppose I have 10,000 policyholders, and if seven or eight of them have an accident and need to settle a claim, that’s no problem. I can afford it. Eight policyholders is no problem.But if 5,000 of the 10,000 policyholders have problems, it will be over, and the insurance company will collapse. What is this called?This is called systemic risk.Insurance companies are most afraid of systemic risk. For example, if a hurricane in the United States blows to Florida at once and blows all the houses in Florida, what will be the consequences?It was the local insurance companies that all went bankrupt.Why?It is because of systemic risk.Originally, there were 10,000 houses, and you could afford to pay for seven or eight houses that were blown down. If all 8,000 houses were blown down, how could you afford to pay for it?If you can't afford it, you can only go bankrupt.Therefore, insurance companies cannot afford systemic risks.However, if 20% of the borrowers are unable to pay the interest, it will cause systemic risk, and may lead to the collapse of AIG, the largest insurance company in the United States. Therefore, the US government injected 85 billion US dollars to help it repay its debts. It is not enough, so continue to inject capital .Why?Because AIG cannot go bankrupt, how many American insurance policies does it hold, if it goes bankrupt, the consequences will be disastrous.Insurance companies must never go bankrupt, so the U.S. government continues to help, keep helping, and keep helping. This matter is not over yet, and the U.S. government's approach is very interesting. It decided not to help Lehman Brothers.Why does the US government help this and that, but not Lehman Brothers? There is some information here, the New York Times once published an article saying that Richard Foud, the CEO of Lehman Brothers, was the number one greedy person in the world.Richard Foud received a total salary of half a billion dollars from 1993 to 2007.What is even more hateful is that after the crisis of Lehman Brothers, the British Barclays Bank wanted to invest 1.7 billion US dollars to acquire Lehman Brothers, which had lost 2 billion US dollars.You must not believe that eight senior executives at Lehman demanded a $2.5 billion bonus. You may be surprised, what qualifications do they have to ask for $2.5 billion?This is a very strange phenomenon in the American system, called the "golden parachute" system.Among American companies, there are many cases of acquisitions or mergers. For example, if company A wants to acquire company B, the stock price of company B may rise sharply, even by 20% or 30%. Therefore, this is very important for shareholders of company B. It is beneficial to say.However, executives such as the CEO of Company B are likely to lose their jobs.So these senior executives don't want the company to be acquired, even though the acquisition would benefit their shareholders.What about the final shareholders?Therefore, the "golden parachute" system was designed. If the company is acquired, the executives are guaranteed to be given a "golden parachute" so that they can jump out safely.For a professional manager, if you give him US$80 million or US$100 million, it is only a drop in the bucket compared to the benefits obtained by shareholders. Shareholders may even obtain profits of tens of billions or hundreds of billions of dollars. According to the "golden parachute" clause, the eight executives of Lehman Brothers were required to give them 2.5 billion US dollars as agreed in the contract.Originally, when the company was acquired, it was okay for the shareholders to give you a "golden parachute" after they got the benefits, because after all, there was not much money.But it's different now. Now Lehman's stock price has plummeted, almost to zero.Shareholders have lost beyond imagination, and you have to implement the "golden parachute" clause in accordance with the contract.Barclays used US$1.7 billion to buy your bank with a loss of US$2 billion, and you also demanded US$2.5 billion in compensation as your "golden parachute". This unconscionable Wall Street, this kind of pressure is simply too much for the members of Congress, and everyone is scared to death.Because everyone needs to see the votes. If voters and common people in the United States hate this group of greedy Wall Street people who have lost their trust, it will be difficult for American congressmen to vote.So this time the U.S. government proposed a $700 billion bailout plan. As soon as it was sent to the House of Representatives, the members of the House of Representatives felt cold and didn't know what to do.Many people are afraid to vote for it under the pressure of voters.In the end, we found that most of the Republican congressmen voted against the bill proposed by the Republican Party.Why?Because the Republican Party has always been regarded as the party of the rich in the history of the United States, while the Democratic Party is considered as the party of the poor. In order to calm the anger of the public, the representatives and congressmen of the party of the rich dare not vote for it. Some lawmakers voted against it, which is why the US$700 billion bailout plan was not passed. But what happened afterwards was too serious to imagine. The US$700 billion bailout plan was not approved, and the US stock market plummeted immediately.The pensions of so many ordinary people in the United States are basically placed in the U.S. stock market. The result of the stock market crash will naturally affect these innocent people. Under this pressure, the U.S. government has spoken again, look, look Well, if you don’t vote for it, the common people don’t support us, what’s the result?Everyone is done.This is used to threaten the common people, but at this time the stock price has been falling, and the common people have nothing to do, so the pressure of opposition is gradually reduced, because the situation is too serious. In the early spring of 2008, Professor Lang Xianping gave a lecture at the Beijing Century Famous Management Lecture Hall. Using his "dual economy" viewpoint and the "6+1" industrial structure to distinguish, he expressed deep concern about the Chinese economy and the world economy at that time. Fears were soon fulfilled. At the end of 2008, Professor Lang came to Beijing to give lectures again, and brought out a new point of view: the world economy has entered the era of "business chain". Judging from this financial crisis, the role of the government is very important.Why did the US government take out 700 billion US dollars to rescue the market?I want to propose a new thinking to explain the behavior of the US government.That is, now is no longer the era of "marketization", and the world economy is in a new era of "business chain".What is "business chain"?That is, when a crisis occurs in a sector, if you do not rescue this sector, there will be a chain reaction in multiple links, which will impact other sectors at the same time, causing the collapse of the entire economy. The industrial characteristic of the industrial and commercial chain era is "6+1" The competition in the era of "business chain" is a war without gunpowder.The reason why my country's manufacturing industry is so vulnerable is that under the "6+1" industrial structure, we have no way to raise prices.Because the one who really controls the pricing power must be the "6" in the entire industry chain, and the "1" in this chain does not control the pricing power. Is there any enterprise in our country thinking about entering the "6"?Yes, like Haier.Although I have criticized Haier, I still agree with Zhang Ruimin's views.He once wanted to acquire the American company Mattel, which is the "6" in "6+1".How can the Americans let you buy "6" in the past?If you buy his "6", how can he create production value for himself?This is unimaginable.Therefore, the final result is that Haier's acquisition failed. An important reason for the strength of the US economy is that it controls the most valuable part of the global industrial chain.Today, if we have entered an era of industrial chain wars, we will suddenly find that many ideas in the past will be overthrown today.For example, should we still play brand strategy?For example, should we still engage in technology upgrades?Because we suddenly discovered that after the industrial chain changed, the concepts we talked about before were all wrong. Brand strategy is the inevitable result of the success of "6+1", not the cause of enterprise development.I can make such a conclusion that if Chinese companies still want to use cheap labor to build brand strategies and take the road of technological upgrading, they will inevitably fail.Because this is not our advantage. There are two companies that do not listen to my advice and use China's cheap labor to create brands first and then upgrade technology. One is TCL and the other is Acer. TCL bought Acatel and Thomson, and Acer bought Siemens' mobile phone business, all of which are produced in China.The production cost in China is low enough, and the brands of Acatel, Thomson and Siemens are excellent enough, but the result?A few years later, the joint venture between the two companies collapsed.Why?First, China no longer has the advantage of cheap labor; second, brand strategy is not important, it is just a result; third, technological upgrading is not important. At present, traditional manufacturing and traditional industries can still survive, but now everyone does not know where to go.Today's world has entered an era of industrial chain wars.Take a look at the multinational companies that have entered China, which one is not a "6" or "6+1" company?Many enterprises in Guangdong and Zhejiang have moved to the west or Vietnam after encountering development difficulties, and the final result is still closed.Why?Because labor costs are not important, the most important thing is the industrial chain. In my opinion, the goal of our future efforts is to master the entire industrial chain, and this is the path we should take.Is it difficult to go this way?It's not difficult at all, our entrepreneurs are smart and wise people, it's just that we have been misled too much in the past.For example, "exchanging the market for technology" is all nonsense. In the end, the technology has not been exchanged, and the market has been lost.What should we do?The integration of the "6+1" industrial chain should be promoted on a product-by-product basis. When I say this, I don't want every company to set up a logistics center.Enterprises must use products as units, such as teacups, to promote the "6+1" integration of teacups; or promote the "6+1" integration of textiles or sports shoes.Only after integration can enterprises have more room for maneuver to deal with the economic crisis. Recently I went to Jinjiang to give a speech, and their leaders said that 58% of our enterprises are very difficult now.After talking about the difficulties of the enterprise, he explained that those companies with brands are still doing well.I told their leaders at the time: Your export manufacturing industry in Jinjiang is facing a great crisis, but your turning point is also in Jinjiang.What does he mean by asking me?I told him that in Jinjiang, companies that do well are basically companies that control the entire industrial chain. These companies obtain the highest profits because they have the "6" of "6+1". He asked me, will Jinjiang companies that have mastered the "6+1" industrial chain be able to survive the financial crisis?I told him, I don't know.There is no problem under normal circumstances, and there is no problem during the small depression, but no one has experience with this once-in-a-century Great Depression, including me. An enterprise that has mastered the "6+1" industrial chain should be an expert in process control.Taking a clothing company in Guangdong Province as an example, it takes 180 days from product design to the completion of the "6+1" process.The most profitable and fastest-moving company in the world is ZARA in Spain. Their control over this process is 12 days.The efficiency of this company is amazing.Such an industrial chain can create high profits.A piece of clothing, if it is made by our company in Guangdong, it will take 180 days to sell it, and there will be 180 days of storage costs.What if it is sold within 12 days?The same piece of clothing reduces storage costs by 168 days. What are the best companies in the world doing right now?Significantly compress the industrial chain, the shorter the compression, the better. This is called "6+1" efficient integration.The compressed process makes the product cost lower, and on the other hand, the gross profit margin is greatly improved.An efficient industrial chain is a complete system. If you want to build great companies like Samsung and Sony, you must establish a set of rapid response processes. Why hasn't China's manufacturing industry produced such a system for 30 years?The answer is simple, only countries that value rules the most can establish this system.In Asia, there are only two countries that value rules, one is Japan and the other is South Korea.Do Chinese pay attention to rules?Don't pay attention.What do we focus on?Unspoken rules.A country that pays attention to unspoken rules will not have procedures. Three years ago, I went to Shanghai Diesel Engine Factory to give a lecture on "how to make an engine".I'm a finance professor, and I tell them how to build an engine.When I visited the factory, they didn't have a system, only a workshop.So, they spent 1.2 million yuan to hire an old retired engineer from General Motors to be the director of the company.The first thing he said when he arrived was, "Why does this company only have a workshop and no system?" Yiye Zhiqiu.Most of China's manufacturing enterprises only have workshops without systems. "Screws" in the industrial chain Companies like Samsung and Sony have their own small systems.What does this little system mean?It can be explained in the simplest terms.For example, has your company advertised "Hiring Talent, Looking for Talent"?Talent recruitment is the patent of Chinese enterprises.You go to American companies to see, what do they recruit?They recruit "screws". Only the Chinese attach the most importance to talents, and the word "talent" is a Chinese patent.Believe it or not, you can’t find what we Chinese think of as talents in English, because Americans don’t recruit talents.Do you know why?In a manufacturing country, where there are only workshops but no system, he can only look for talents.Once you give up the workshop and build the system, you don't need talents, it's that simple. After the enterprise completes the "6+1" industrial chain integration, it does not need to recruit talents. What you need to recruit is 20 screws.For these 20 screws, each screw is chopped green onion and shredded pork according to the requirements of Chinese chefs frying "fish-flavored shredded pork", and each screw enters the process.You will find that this company will no longer emphasize innovation in the future, because a nation without creativity will emphasize innovation.A creative nation, they understand that creation must come from accumulation, and it cannot be obtained out of thin air.A company without a process cannot become a high-tech company, because it is impossible to accumulate your technology. A student told me that BYD's battery is the first generation battery, and a professor at Tsinghua University has developed the third generation battery.He believes that if he replaces BYD's first-generation battery with this third-generation battery, his company will become the best company.Actually he was wrong.If you take the third-generation battery from the professor of Tsinghua University, it will become obsolete after two years.Why?因为他从来就没有对第三代电池做“鱼香肉丝式”的加工分解，就这么简单。一个用所谓“创新”创造出来的电池，是没有竞争意义的，因为你无法分解成工序。 什么叫科学？科学的基础不是创新，科学的基础是工序流程式的积累，这才是真正的基础。你知道什么国家会喊创新吗？一个从来没有建立过系统的国家才会喊创新。创新一定要根据前人的努力逐渐积累改进，这样才能创新。 你不要奇怪，2008年之后中国很难有现代的高科技企业，也不会有现代意义上的跨国企业。也许有人会说，华为不错吧？还有富士康不错吧？好，我告诉你，华为既有严谨的小系统又有严谨的大系统。华为的小系统是自己创造的，华为的大系统是它花了2亿元请IBM创造的。它的大系统水平多少呢？是3.7分；IBM的水平是多少呢？是5分。 富士康之所以能够成为全球第一大的工厂，是因为它的资金实力雄厚吗？是他们老板的正确经营吗？Not at all.富士康有着最严谨的小系统，同时还有“3+1”的大系统。它没有“6+1”，但有“3+1”。它就是靠这种“3+1”系统，建立了全世界独一无二的产能规模。它的规模比第二名和第三名加在一起还要大。 在金融危机冲击之下，企业面前的路非常清楚：进行“6+1”的高效整合，这是唯一的出路。短期看，是为了求生存；长期看，建立起一套大系统，应该是我们未来十几年努力的目标。 在中国，海尔、联想、方正、华为、中集、TCL、美的、康佳、海信这些企业中，经过这次冲击之后，慢慢就会出问题。我认为，半年以后还能扛得住的，排序应该是华为、中集、方正等。我看企业行不行，是看它们的系统。我很担心，中国的很多企业在2009年能不能扛得住，格力空调已经出问题了，这是我们制造业的现状。在十大制造业面临困难的今天，你会发现建立起系统的公司，受到的冲击会相对较小，但能不能全身而退，我也没把握，主要看外部冲击有多大。 有人说，制造业不好做，我就转型做服务业。那么，我要问，没有制造业你服务什么？如果没有制造业，你快递公司送什么东西？送空气是不可能的，送友情也是不可能，你只能送茶杯、送麦克风才有价值。有很多地方说要放弃制造业，去做服务业，这样的想法肯定是错的。制造业是未来中国的灵魂，如果中国制造业全面垮台，我们将为此付出惨重代价。而且，制造业出现危机之后，给银行带来的危机会更加严重。 英国《金融时报》有一篇文章，说这次金融危机美国是轻伤，欧盟是重伤，中国是内伤。按照现在的情况看，欧洲是轻伤，美国是重伤，中国有可能是内伤。目前，美国的情况在继续恶化，欧洲好一点，因为金融危机对欧洲冲击不大，他们的救市方案也比较好。 中国的制造业处境很危险，因为我们的制造业一直在全球“6+1”的前端，最容易受到冲击。2009年，中国制造业的生存环境会进一步恶化，我相信政府在这方面应该会有一些积极应对政策，但我希望这些政策出台要快，如果政策推出太慢，造成制造业迅速崩塌的话，处理起来是非常棘手的。但是否会出现这样的情况，我都不太敢想。