Reborn in Tokyo: From Heiress to Global Tycoon

Chapter 310 A Battle of Words

(Two chapters today too~)

The following morning. Conference room on the third floor of the Shanghai Foreign Investment Promotion Bureau.

The sky outside the window was still that grayish-white tone, like an old bed sheet that had been washed too many times.

The 1:5000 scale planning map we used yesterday has been rolled up and placed in a corner. In its place is a white tablecloth that covers the entire long table, with eight white porcelain teacups and two thermos flasks on the table.

The tea is Biluochun, freshly opened this morning. It hasn't been brewed yet; the dry, rolled leaves are piled at the bottom of each cup, like a small clump of dark green iron filings.

There were two more seats today than yesterday. Director Sun from the Municipal Tax Bureau sat in the third seat to Chen Zhiyuan's right, with a black faux leather briefcase in front of him. The zipper wasn't fully closed, revealing the edges of several documents stamped with red seals inside. Section Chief Ma from the Municipal Labor Bureau sat at the very end, his chair half an inch lower than the others—there weren't enough chairs in the conference room, so they had temporarily brought one from the next department.

Chen Zhiyuan stood by the window, his back to the conference table, his hands clasped behind his back.

"Old Chen, let me make this clear from the start," Deputy Director Liu said in a low voice, "I spoke with the city again last night. The bottom line is $50,000 per mu. This is the price reported to the Ministry of Foreign Trade and Economic Cooperation for filing, and not a penny less. Otherwise, we won't be able to explain ourselves when other foreign businesses come."

Chen Zhiyuan hummed in response, without turning around.

$50,000. The Japanese side's asking price is probably less than half of that.

"Let's hear what they have to say first." Chen Zhiyuan turned around, pulled out the chair in the head seat, and sat down. "The Japanese have a habit when doing business: the more aggressive their initial cut, the greater their sincerity. Don't be intimidated by the numbers."

"You have to play the cards on the table one by one."

No sooner had he finished speaking than there was a knock on the conference room door.

Everyone instinctively straightened their backs.

The door opened, and Endo walked in first. Behind him were two Japanese personnel in suits—one legal, the other finance. Each carried a hard-shell briefcase under their arm, like two bricks of similar color.

"Welcome, welcome..."

Chen Zhiyuan and Deputy Director Liu immediately stood up, their faces bearing just the right smiles, and went to greet them.

The two shook hands, exchanged pleasantries, and took their seats.

The last one to enter was Satsuki.

Today she wore a beige cashmere dress with a light camel-colored short trench coat over it. In her hand she carried a small white porcelain plate containing an exquisite French opera cake, topped with a piece of gold leaf.

Ignoring the tense atmosphere at the conference table, she glanced around casually and walked straight to the window, away from the long table, where a set of single sofas for guests were placed. She placed the cake on the coffee table, sat down on the sofa, and took out a hardcover travel brochure about Shanghai from her handbag, flipping through it by herself.

As Chen Zhiyuan sat down, he glanced at her feet out of the corner of his eye. The little leather shoes that had gotten stuck in the mud yesterday were gone; today she was wearing a pair of soft brown ballet flats.

This detail deepened the smile on Chen Zhiyuan's face.

"Mr. Endo, how did your inspection go yesterday? Did you rest well?" Chen Zhiyuan personally picked up the thermos and refilled the teacup in front of Endo with hot water.

"Thank you for your thoughtful arrangements, Director Chen." Endo bowed slightly. "The expansive views and independent shoreline of Plot B-07 have left a deep impression on us. We held an internal assessment meeting overnight and drafted a preliminary letter of intent for investment."

He took a bound document from his briefcase and pushed it to the center of the table. The cover had a title printed in both Japanese and English: "SAIndustrial (Shanghai) Co., Ltd. Investment Intent Terms".

"Based on the current original topography of the site and the preliminary plan provided by you, we propose to lease the entire 520 acres of land in plot B-07 at a price of US$18,000 per acre for a term of 50 years."

The sound of translation echoed in the conference room. Deputy Director Liu's hand, holding a teacup, froze in mid-air, the rim of the cup touching his lower lip, but he didn't drink.

"In exchange, Saionji Group promised that all infrastructure within the park—including but not limited to roads, electricity, water supply, and sewage systems—would be fully funded and constructed by us."

"In addition, Japan will build a deep-water berth on the northern shoreline, with a design standard no less than that for vessels of 5,000 tons. The construction costs of the berth will also be borne by Japan."

Endo turned to the second page of the document.

"Our conditions are as follows. First, the approval process for changing the land use from agricultural to industrial must be completed within sixty working days after both parties sign the formal contract. Second, the park enjoys an independent customs supervision code, and import and export goods are declared within the park without transiting through other ports. Third—"

Endo moved his finger to the terms highlighted in bold at the bottom of the page.

"Corporate income tax is exempt for the first five years, and reduced by half from the sixth to the fifteenth year."

After the translator finished speaking the last word, the conference room fell silent for three seconds.

Chen Zhiyuan placed the teacup back on the table. The movement was very quiet, without making a sound.

Eighteen thousand.

It was two thousand lower than the lowest price he had estimated.

These Japanese are sharp as knives.

Chen Zhiyuan's smile remained unchanged. He didn't even blink.

Instead of immediately responding to the offer, he took out a document from his own briefcase and gently pushed it in front of Endo.

Interim Measures for the Administration of Foreign-Invested Enterprises in Pudong New Area, Shanghai (Draft for Public Comment)

"Mr. Endo, before we discuss prices and taxes, I would like to reach a consensus with you on a few basic principles of the cooperation framework." Chen Zhiyuan pointed to Article 12 of the document.

"For wholly foreign-owned manufacturing enterprises, the proportion of their products exported must not be less than 70%. This is a mandatory regulation to balance the country's foreign exchange reserves."

His finger moved to the eighteenth.

"From the third year after a company officially starts production, the proportion of local employees must not be less than 80%. Mr. Endo, the development of Pudong is not only about attracting capital and technology, but also about creating jobs for the local people."

Chen Zhiyuan withdrew his hand and leaned back in his chair.

"These two points form the framework. I personally cannot change them. As for your request for a tax exemption period, Director Sun from our tax bureau is here today. Without violating national tax laws, we can discuss it together and do our best to secure it."

In the meeting room, the Chinese personnel relaxed a little. Director Chen was not angered by the other party's low price, but instead steadily passed the buck back.

Endo picked up the draft for comments and began reading it word by word. The legal representative next to him leaned over, and the two exchanged a few quick words of Japanese in very low voices.

"Director Chen," Endo put down the documents, "Regarding these two principles, we understand and respect them in principle. However, there are a few details regarding implementation that need clarification."

"Speaking."

"We can accept a 70% export ratio," Endo said, looking up. "However, the statistical definition of 'export earnings' needs to include the portion of trade transshipped through Hong Kong. Our products are shipped from Shanghai Port to our Hong Kong warehouse, and then transshipped from Hong Kong to customers in third countries. This route should be included in the export value in customs statistics."

Chen Zhiyuan looked at the customs officer. The officer flipped through the folder in his hand and said something in a low voice. Chen Zhiyuan nodded.

"The issue of statistical standards can be discussed. There are precedents to follow at customs."

"Article 18." Endo turned to the next page. "We can also accept 80% local employees. However, the definition of 'local employees' in this clause needs to be clearly defined as 'Chinese nationals who have officially started working after passing the technical training provided by the Japanese side.' Management and core technical positions—including but not limited to factory managers, quality control supervisors, and equipment maintenance supervisors—are not included in the calculation base for this percentage."

Section Chief Ma from the Labor Bureau opened the documents he had brought and tapped twice on a certain line. "Mr. Endo, according to our current labor regulations, the definition of 'local employee' is based on the place of household registration and the place where the labor contract was signed—"

"Section Chief Ma," Chen Zhiyuan raised his hand, interrupting him.

Section Chief Ma glanced at Chen Zhiyuan and then shut his mouth.

"We'll coordinate the specific wording of the employment terms internally," Chen Zhiyuan said, looking at Endo. "I understand Mr. Endo's core demand—management autonomy. This is a direction we can discuss."

Endo nodded. "Thank you for your pragmatic approach, Director Chen."

Endo touched the seventh line of the clause summary with the nib of his pen.

"We need further clarification regarding the statistical scope of export ratios," Endo said slowly. "Our products are loaded onto ships at Shanghai Port and shipped to our Hong Kong warehouse. After sorting in Hong Kong, they are then transshipped to customers in North America and Europe. The total value of goods transported along this route should be included in the 70% export earnings ratio."

As soon as the translation ended, the customs officer opened the folder in his hand and pressed his finger on a red annotation on a certain page.

"Mr. Endo, according to the current customs statistics system, export earnings are based on the 'departure declaration form.' If the port of destination on the customs declaration form is Hong Kong when the goods are shipped from Shanghai Port, then statistically, it can only be included in trade with Hong Kong, and cannot be directly counted as exports to a third country."

Endo tapped his fingers lightly on the table.

"So, what if the final destination on the customs declaration is listed as New York or Hamburg, but the physical transit route is through Hong Kong?"

The customs officer exchanged a glance with Chen Zhiyuan. The officer looked down, flipped through two pages of documents, and then looked up.

"If a transit bill of lading from a Hong Kong warehouse and a commercial invoice from the final recipient can be provided as supporting evidence, it can be considered entrepot trade and included in the export value. However, each shipment needs to be verified separately."

Endo wrote the sentence down in his notebook, drawing a line under the words "individual reimbursement" with his pen.

"The administrative costs of verifying each shipment individually are too high." Endo looked up. "We suggest submitting a summary transit list on a quarterly basis for batch verification by customs."

The commissioner shook his head. "There is no precedent for this."

"Then let's create one." Endo's tone remained unchanged. "Our quarterly export value is projected to exceed twenty million US dollars. This volume warrants a new process."

Chen Zhiyuan picked up his teacup, took a sip, and remained silent. He then turned his gaze to Section Chief Ma of the Labor Bureau.

"The employment details should also be broken down," Chen Zhiyuan said, putting down his teacup. "Section Chief Ma, please read our definition again."

Section Chief Ma cleared his throat and opened the document. "'Local employees' refers to Chinese employees who have signed labor contracts with the company, whose wages are paid by the company in a domestic account, and whose social insurance is paid in Shanghai."

"The problem lies in the calculation base," Endo interrupted him. "Our park's planned workforce is 420 people. Of these, about 35 are Japanese-appointed technical and management personnel. If we include these 35 in the denominator, an 80% employment ratio means that the number of Chinese employees must be no less than 336."

Endo flipped through the pre-calculated figures in his notebook. "But if we exclude management and core technical positions from the denominator, the actual denominator is 385 people, meaning we only need 308 Chinese employees to meet the target. The difference of 28 people—these 28 positions—is crucial to the proper functioning of our quality control system."

Section Chief Ma looked at Chen Zhiyuan. Chen Zhiyuan shook his head slightly.

"Mr. Endo, the boundaries of 'core technology positions' are too vague." Chen Zhiyuan leaned forward. "If there were no specific definition, you could define any position in the workshop where someone tightens a screw as a 'core technology' position—"

"We can provide a detailed list of positions, which both parties can confirm one by one," Endo responded almost instantly.

The translator's voice bounced back and forth between Chinese and Japanese, the pace quickening. Chen Zhiyuan would say a sentence, and Endo would immediately follow; when Section Chief Ma tried to interject, Endo would cut him off with a single data point; when the customs commissioner proposed a workaround, Endo would point out its flaws within three seconds.

After three rounds, neither side backed down an inch.

Chen Zhiyuan leaned back in his chair and placed the ballpoint pen on the table. The pen rolled half a circle and stopped.

That's really troublesome...

"Okay." He reached for the terms and conditions in front of him, and with a ballpoint pen, drew a pair of parentheses next to the two clauses, "Export Statistics" and "Employment Definition," and wrote six words outside the parentheses: "To be further negotiated."

Endo stared at the two pairs of parentheses, remaining silent for a second. Then he nodded, drew parentheses around the corresponding two lines of clauses on his own terms and conditions, and wrote the same six words next to them.

Both documents had an extra pair of silent parentheses, like a temporary ceasefire line drawn in the middle of a battlefield between two armies.