Chapter Ninety-One: A Company Is to Be Founded

With a crisp snap, he set down the pen in his hand and cheerfully picked up the sheet on the desk showing the final result of the foreign exchange settlement, handing it to Old Wu.

With an envious expression, he said, "Take a look, Mr. Wu. This is the money your foreign exchange finally brought in after conversion. We’re talking tens of millions here. Quite impressive."

A closer look at the settlement sheet made it obvious something was wrong. Out of five point four million US dollars, only two hundred seventy thousand remained. By the numbers, that was only five percent of the foreign exchange, clearly incorrect. The directive for this self-raised capital project had stipulated a thirty percent retention rate.

He immediately took out the document he had specially brought with him and handed it to Director Wang.

"Director Wang, please look at this. This is the document issued from above, and it states the opinions regarding our self-financed project. There are specific regulations concerning the retention of foreign exchange."

Still puzzled, Director Wang picked up the rather thin file and examined it carefully. One look was enough to make him inwardly start. The document really did specify a fairly high retention ratio. Most important of all, the signature at the bottom was actually that of the Chief Designer, which made the paper carry enormous weight.

After putting the file down, Director Wang began calculating in his mind: a thirty percent retention on this foreign exchange was clearly very high. The document from above could not be ignored, but leaving an extra one million three hundred fifty thousand dollars with this company was truly hard to accept.

In the end, whatever else happened, thirty percent of the total, a combined one million six hundred twenty thousand dollars in foreign exchange, would definitely have to be retained. Suppressing a sigh, he finally spoke.

"If that is the case, then we’ll handle it according to the requirements above. That means a retention of one million six hundred twenty thousand dollars. For now, the funds will be kept at the Foreign Exchange Administration Bureau. When you need them later, just come and say so."

At this time, the five major state-owned banks had not yet been established in the year 1983. Foreign exchange like this was all kept at the Foreign Exchange Administration Bureau, and when it was needed, the funds could simply be disbursed.

Since Director Wang agreed to handle it this way, that was naturally excellent. Old Wu then began allocating the foreign exchange. This was a self-raised capital project, so he could not follow the fund-handling methods set out above for import-export companies. However, Director Bai and Old Wu had already discussed it in advance: the import-export company would receive ten percent of the total retained foreign exchange.

"All right then, let’s split these one million six hundred twenty thousand dollars into two accounts. One is the one point six-two million for the Aviation Administration and Development Company. You can deduct the fifty thousand dollars you borrowed from us last time from that amount. The remaining funds will be kept in..."

He no longer knew which account this should be held under, so Old Wu had no choice but to ask Director Bai where the bureau’s funds were to be kept.

"Young Bai, under what name are you holding these funds?"

Under what name? That was indeed a problem. In the past, the bureau’s funds were all in renminbi provided by the state; they had nothing to do with the Foreign Exchange Administration Bureau, so naturally there had been no account. But now...

"Let’s keep them under the import-export company for now. I still need to think this through a bit more; later we’ll set up a proper account."

The reason it was being placed under the import-export company for the moment was that a few days earlier Yang Hui had mentioned something to Director Bai. If they wanted to cooperate externally and take on projects, they could not do without a formal company name. For now, they would leave the funds as they were and wait a few more days until Old Yu and the others arrived and see how the company should be established.

Old Wu did not know what this young Bai fellow was up to, and though he was baffled, he still said they would keep all the funds temporarily in the foreign trade company according to this method. This matter did not seem finished yet, and they would have to come again later.

After Old Wu and Director Bai left, Director Wang sat in his office deep in thought. This flight-model project was making such money—what exactly was this Aviation Administration and Development Company thinking? Opportunity did not wait. Such a fine chance to earn foreign exchange had to be seized. If they would not do it, then he would find someone else to do it.

On the surface, the reason was to seize the opportunity and export more to earn foreign exchange; in truth, only Director Wang himself knew the real reason. Since this Aviation Administration and Development Company was taking thirty percent of the foreign exchange from the project, that was simply intolerable.

You have an official document from above allowing you to keep thirty percent? Fine, I can’t afford to provoke you. I’ll find someone else to do it. Other aviation manufacturers would probably be willing to take the job even without foreign exchange; with profits this strong, renminbi still counts as money, and everywhere is short of cash these days.

The more he thought about it, the more feasible it seemed. Director Wang picked up the telephone and prepared to contact an old friend. This friend appeared to be a mid-level cadre at that famous aviation research institute in the Northeast. Better ask him first.

"Hello, is this..."

And so, just as the bureau’s flight-model business was beginning to show results, someone came to reap the fruit. But could that research institute in the Northeast really be relied upon? Director Wang had also dragged in a pig teammate from far away.

...

After returning to his lodging, Director Bai told Yang Hui about the issue at the Foreign Exchange Administration Bureau. Yang Hui was indeed a young man with ideas, so it could not hurt to hear his opinion.

Thus Yang Hui and Director Bai worked out various possibilities. Right now, the priority was to handle the company matter properly. Only after the company was established could they truly connect with the international stage and make things easier abroad.

After waiting two days, they finally received the people from the base. The key figures from the whole base had all arrived, though the overall head of the base had not. The reason was simple: Base 011 was called a base, but each factory and institute within it held parallel administrative rank. They only interacted on business, and the various factories and institutes were scattered over dozens of kilometers.

Apart from the Aviation Industry Ministry above, which could issue orders to all the factories and institutes of the base, the only other body with any coordinating power was the provincial defense industry office where the base was located, and even that was only coordination.

As long as the leaders of the few most important factories and institutes came together, most of the base’s major and minor issues could be resolved. With the current situation so critical, Director Bai had issued the call, saying that if there was a major matter they should discuss it together, and naturally everyone came.

The two institute directors were the most influential figures at the base, followed by the director of the Liyang factory.

At that point Chief Engineer Yu was the first to speak: "Old Yang, what’s the occasion for calling everyone here this time? Has the flight-model project made money, and are you planning to treat us all to a free ride?"

His words drew a burst of good-natured laughter from everyone.

"All right, the matter of a meal is easy enough, but I called everyone here because there is a major issue, one that concerns the rise and fall of the entire base."

The seven or eight people in the group were arranged by Director Bai to stay at the guesthouse where Yang Hui and the others were lodged. After everything had been settled, ten people including Yang Hui gathered in one room. Seeing that nothing was amiss, Director Bai solemnly brought up the advanced trainer project. When they had notified the people from the base to come to the capital, they had not dared mention this matter over the phone; secrecy could not be relaxed anywhere.

"All right, this time I urgently summoned everyone to the capital for one very important matter, and now I can tell you. On our trip to Paris, we discussed a cooperative development project for an advanced trainer aircraft. It is still only an initial intention, but there is an eighty percent chance it will continue."

Upon hearing that a trainer aircraft project had been discussed, Chief Engineer Yu had the most to say.

"A trainer aircraft? The Institute’s J-7 trainer is already under development. Wouldn’t this count as duplicating research on the same type of aircraft?"

Picking up from Chief Engineer Yu’s words, Director Bai gave a more detailed account of how the project first came about.

"This trainer aircraft project is an upgraded version of the J-7 trainer. At the time, when Pakistan asked whether we had a matching trainer for the J-7, we said we were developing one. Afterwards, we gradually persuaded the Pakistani side to invest in our trainer aircraft, and in the design we would take Pakistan’s needs into account."

By this point, everyone understood. In other words, they had brought in Pakistani investment for the J-7 trainer project. That was indeed a very good thing—the project would surely have more funds and progress faster.

Before the others had finished rejoicing, Director Bai went on to say that Saudi Arabia was also involved.

"But that is not the greatest good news. The greatest is that we later persuaded Saudi Arabia to take part in the project as well. Saudi Arabia said it could cover up to half of the development funds."

Still wondering what was going on with Saudi Arabia, they had not expected the kingdom to be so sincere as to shoulder half the research and development costs. It was truly unexpected—far too unexpected.

Seeing their eyes widen in disbelief, Director Bai was the most delighted. That was exactly the effect he wanted. Only by fully arousing everyone’s interest in this project would the later matter of founding the company become more certain.

He continued to add more weight to the news. Half the funding was by no means a trivial matter.

"There is more. Saudi Arabia said the maximum amount it could contribute would be three hundred million dollars, and Pakistan has also initially stated that it can cover up to twenty-five percent of the project funds, roughly one hundred fifty million dollars."