Chapter 314 - 249: Policy Dividend

Chapter 314: Chapter 249: Policy Dividend

(Note: This Chapter contains a lot of business-related content; those who dislike it may wish to skip.)

After Zhen Cui Group increased the scale of its herbal medicine cultivation base from 800 mu to 10,000 mu, everything became much easier to negotiate.

What’s that?

There are difficulties?

As leading cadres of the Party, we specialize in tackling tough problems and overcoming adversity!

If there are difficulties, then we will overcome them!

Zhao Hongbo, who had been hemming and hawing just moments before about Zhen Cui Group wanting too much land, now sounded like a broken record.

No matter what Gu Heng and Fan Hong said, as long as it was a reasonable request within the scope of investment promotion, his answer basically boiled down to two words:

No problem!

Attracting investment is the core tool for local governments to drive economic development, and it is also the critical path for investors to achieve a significant upgrade in their resources.

As the chairman of Zhen Cui Group, Gu Heng had already discussed these policy benefits with the Zhao De Inheritance’s think tank back when he first considered establishing an herbal medicine cultivation base in the Changbai Region.

The so-called policy benefits of attracting investment could be summarized into five main areas: land resources, financial leverage, policy support, talent ecosystem, and credit endorsement.

Land resources referred to the commercial land they had just discussed. This could mean existing platforms, such as established industrial, commercial, or agricultural parks, where a company could enjoy low-cost, ready-to-use sites. However, this type of policy was clearly not suitable for Zhen Cui Group, so the company chose the other option: custom development.

This meant the company could directly request land from the government according to its needs.

After the government coordinated the provision of basic infrastructure, such as utility connections and land leveling, it would hand over the entire plot to the company for independent development—whether to build a headquarters or, as in Zhen Cui Group’s case, to establish an industrial base.

Because this fell under the policy benefits of attracting investment, the price the company paid the government for the land would be far below the normal market average.

Take, for instance, Zhen Cui Group’s plan to build the herbal medicine cultivation base in the Changbai Region. Gu Heng had just asked Zhao Hongbo for the land at half the average market price. In response, Zhao Hongbo had merely shown hesitation and distress, using excuses like "it’s not my decision to make" and "we’ll need to discuss this with Director Huang and the relevant provincial departments" to stall for time. He didn’t dare reject Gu Heng’s request outright.

After land resources came the policy benefit of financial leverage, which offered two main forms of support.

One was equity partnership, which involved bringing in government guidance funds or urban investment companies to take a stake, thereby reducing the company’s financing costs.

The other was credit support. The government could coordinate with local banks to provide low-interest or interest-free loans. For companies with tight cash flow, an interest-free loan was a very appealing policy benefit.

However, Zhen Cui Group had little need for financial leverage. An equity partnership was out of the question. The liquid capital Gu Heng had on hand was more than enough to build two 10,000-mu-level herbal medicine bases at once. There was no way he would allow any equity to be diluted, not even for a share of the cultivation base.

As for credit support, if the Changbai Region could offer Zhen Cui Group an interest-free loan, Gu Heng might have considered it. But given Changbai’s economic condition, it was highly unrealistic to expect them to provide an interest-free loan of tens of millions.

At best, they could offer a low-interest loan. But for Gu Heng, a low-interest loan was like chicken ribs—a policy benefit that was tasteless to eat but a pity to throw away. Thus, for the financial leverage that most companies were so focused on, Zhen Cui Group, conversely, had few demands.

The third major policy benefit of attracting investment, policy support, was broader in scope. It mainly came down to what the company needed and whether the local government, after assessing its own capabilities, could meet those needs.

In this area, Gu Heng made three requests to the Changbai Management Committee on behalf of Zhen Cui Group.

First was assistance with acquiring certifications. For Zhenyuan Restaurant to grow and strengthen in the future, it had to strictly control the quality of its medicinal cuisine. The herbal ingredients were the key factor in guaranteeing that quality, so standards had to be set from the very beginning.

As the saying goes, talk is cheap. In the future, when consumers questioned the quality of Zhenyuan Restaurant’s medicinal cuisine, the restaurant couldn’t just argue with empty words. It had to present something substantive to prove that its quality was absolutely up to par.

In the realm of agricultural product inspection, there is a certification called the "Green and Organic Agricultural Product Certification," usually issued by a province’s Agricultural Product Quality and Safety Center. As it happened, herbal medicines were classified as agricultural products.

As long as Zhen Cui Group’s cultivation base could obtain this certification, then in the future, when consumers questioned Zhenyuan Restaurant’s quality, the restaurant would have concrete proof to back up its claims.

’What?’

’I’ve shown you the proof, and you still don’t believe me?’

’Good grief!’

’Since you won’t listen to reason, we happen to understand a bit about the law.’

The so-called "assistance with certifications" meant that in the future, if Zhen Cui Group’s herbal medicine cultivation base in the Changbai Region needed to apply for relevant qualifications like the "Green and Organic Agricultural Product Certification," the Changbai Management Committee would handle the process on their behalf.

Sometimes, it’s easier to get things done between Government Offices.

The Changbai Management Committee was an agency dispatched by the province, while the Ji Province Agricultural Product Quality and Safety Center was a directly affiliated provincial institution. Although they weren’t in the same department, they were both under the same provincial umbrella.

They crossed paths constantly in their daily work; doing someone a favor was doing yourself one in return.

Having the Changbai Management Committee handle what was originally Zhen Cui Group’s responsibility, turning a complicated matter into a simple one, offered a great deal of convenience.

Second, under the broad category of policy support, was the issue of taxation, which no company could ignore.

Regarding tax incentives, Gu Heng wasted no words. He directly demanded that the Changbai Management Committee give Zhen Cui Group the maximum benefits, requesting a "three-free, three-half" tax holiday for the herbal medicine cultivation base.

"Three-free, three-half" meant the company would be exempt from taxes for the first three years and pay only half the tax rate for the subsequent three years. The larger the scale of the company’s investment, the greater the tax benefits it could enjoy.

The moment Gu Heng stated the "three-free, three-half" condition, Zhao Hongbo’s face soured. But what could he do? Gu Heng represented a major investor who would provide a huge number of jobs. No matter how bitter or difficult it was, he had to grit his teeth and swallow it.

Changbai Mountain was indeed rich in herbal medicines and very suitable for their cultivation, but the neighboring Yanbian Prefecture was also fertile ground for growing them.

If news of a 10,000-mu herbal medicine cultivation base with a future total investment exceeding 300 million yuan reached the ears of the leaders in Yanbian Prefecture, they would probably rush over that very night to snatch the deal away.

Even though the Changbai Region was administered by the province, it was on a completely different level compared to the vast Yanbian Prefecture. Therefore, as long as the demands Gu Heng made tonight weren’t completely over the line, they had to hold on to this investment project for dear life, even if it meant grinding their molars to dust.

If this investment project was truly snatched away by a neighboring prefecture, the careers of these Changbai leaders would essentially be over. Even if their superiors didn’t hold them accountable, they would inevitably be labeled as "mediocre and incompetent."

Finally, the third point under the umbrella of policy support was risk warning.

Nowadays, every industry has its own regulations, and the herbal medicine cultivation industry is no exception.

The main risk lay in environmental protection, and national environmental requirements changed every year. If a company wasn’t careful, it could easily misstep, facing hefty fines in a minor case or even imprisonment for the responsible personnel in a serious one.

In the future, after Zhen Cui Group’s herbal medicine cultivation base was established, the Changbai Region would form a special task force with specialists from the Agriculture and Rural Affairs Bureau and the Environmental Protection Bureau. This group would be fully responsible for interpreting policies and providing risk warnings, ensuring the project’s smooth operation...