Chapter 418: Agreed To Half
Lin Ran rarely comes to Yanjing.
Although the Yanjing side hopes he comes more often to report on his work.
But every time he comes to Yanjing, he feels a sense of discomfort.
Perhaps the aura of successive capitals is too strong, the political atmosphere too thick, even though he is already an indispensable part of this country, he still feels an invisible pressure when he comes here.
He generally holds the attitude of not coming if he can avoid it.
Except for particularly important meetings that he must attend, only then will he make a trip.
But after the meeting ends, he returns to Shanghai, never staying longer than necessary, and never attending local Yanjing gatherings. Similar gatherings Lei Jun has privately invited Lin Ran to many times, saying that those attending are top-tier entrepreneurs who can get together to exchange ideas and build relationships.
Because important meetings aren’t just for Yanjing entrepreneurs, and for the gatherings Lei Jun organizes, they definitely feature the nation’s top-tier batch of people.
Lin Ran hasn’t attended such gatherings either.
But after Longi Green Energy’s production capacity landed, Lin Ran specially flew to Yanjing. The last time he specially flew to Yanjing was tracing back to the cooperation with America to harvest the 4v capital market.
It wasn’t long ago.
This time, in Lin Ran’s view, this matter is even more important than the last one.
In an office in Yanjing, there were few people in the office, only a handful.
Lin Ran spoke first: “The landing of the new generation photovoltaic module is a good thing for our country, a joyous occasion, but I also have some thinking to report to everyone.”
The people present felt a chill inside; they knew the power of Lin Ran’s thinking. The Taiwan Stock has been badly affected by such thinking, and TSMC’s dismemberment is underway.
It’s no exaggeration to annotate it as: when Lin Ran thinks, the world is influenced by it.
“In the photovoltaic industry, we have been accustomed in the past to the model of getting big first and then getting strong, with enterprises sparing no effort to seize the market at all costs.
What was the result?
Photovoltaic module holds the global market share first place, but our own enterprises have thin profits, technical personnel income cannot compare with their peers in Europe and America, and the entire industry has fallen into endless involution.
Now our photovoltaic module, after more than twenty years of development, has for the first time a technological generational advantage.
Compared to products from peers in Europe and America, the competitiveness is more than one level higher.
In my view, without government intervention, our photovoltaic module will again engage in a price war. Clearly with leading technology and product advantages, yet still sold at ultra-low prices, enterprises don’t make money, employees’ income doesn’t increase, and the entire industry remains in involution.
The market enters a mode of vicious competition, and the direct beneficiaries of this revolutionary technology instead become consumers in Europe and America.
I hope to cooperate with relevant departments, using taxation for supervision, to forcibly require all enterprises using new generation photovoltaic technology to raise wages for their employees.
This wage increase will be linked to the enterprise’s production capacity scale.”
The people present looked at each other; as one enterprise, isn’t this managing a bit too broadly?
Let us manage it?
“General Manager Lin, I understand your meaning, and we will seriously study it later.”
Lin Ran nodded and continued: “To support enterprises, Apollo Technology is willing to bear half of this additional wage portion.”
Before they could digest what this sentence meant.
Lin Ran continued: “The bearing here, of course, is not in the form of giving money, but utilizing the mechanism of technology licensing fees.”
Then Lin Ran explained to everyone the charging model of technology licensing.
Then he said: “According to the charging model agreed with photovoltaic enterprises, all enterprises must pay us tiered fixed technology fees based on production capacity.
Apollo Technology is willing to deduct the subsidized portion directly from the authorization fees collected from them.
In other words, the fund cycle for this subsidy is: enterprises pay authorization fees, and a portion of the authorization fees is directly deducted to the enterprises for paying wages.
We hope the tax department can supervise the entire process to ensure every penny truly reaches the employees’ hands.
This way, it neither increases fiscal burden, ensures employee interests, and also forces enterprises to abandon the low-price competition model.
I hope through this method, to a certain extent, change enterprises’ competition model: no longer relying on suppressing labor costs and prices to compete, but forcing them to optimize management and increase technology added value.”
The technology here is a broad concept.
Processes and enterprise management capabilities that determine production capacity, yield rate, production efficiency, etc., all count as technology.
“General Manager Lin, your starting point is good, but I want to ask two questions.
First, who defines high wages? How much counts as high? Eight thousand or ten thousand? If you forcibly intervene, will it distort the market and create new unfairness? Isn’t an enterprise’s value determined by its market performance? Your idea can actually be seen as using administrative means to intervene in an enterprise’s core labor costs. Will this stifle market vitality and deprive enterprises of self-adjustment ability?
We cannot forget the lessons of past rushed large-scale efforts.
Once subsidies and targets are set, rent-seeking behavior will inevitably emerge.
Enterprises will try every means to exploit subsidies instead of truly improving efficiency. We are using a complex intervention to solve a problem that should be self-regulated by the market.
Furthermore, the involution you mentioned, isn’t that the market’s self-clearing process? Weaker individuals are eliminated, stronger individuals survive.
Now using subsidies to protect enterprises that should be eliminated, isn’t that creating inefficient zombies? The ultimate price will be a decline in the entire industry’s competitiveness.”
Lin Ran explained: “Director Wang, of course not. This is an audit of our partners, subsidizing them.
This is not some administrative intervention.
In the past, America’s giant enterprises have always done this, with Apple being the most typical.
Apple has always had strict Supplier Code of Conduct, requiring affiliated suppliers to have reasonable working hours, wages and benefits complying with local laws or even higher than industry standards.
At the same time, Apple conducts third-party audits of global suppliers regularly. These audits are not just routine checks but go deep into production workshops, employee dormitories, even anonymous interviews with employees, to ensure no forced labor, full payment of compensation, and working conditions meeting safety standards.
If any violations are found in audits, Apple requires suppliers to rectify immediately and sets clear rectification deadlines. For serious violators, Apple takes severe measures like stopping cooperation.
By your logic, Apple’s degree of intervention in suppliers is much higher than my proposal.
What I hope to do is very simple: avoid involution, so that frontline employees of these photovoltaic enterprises can also enjoy the benefits brought by technological progress.
Enterprises can do this, some enterprises with technology advantages have been doing it, and I think Apollo Technology should also make some attempts.
If we do it well, then I hope in the future our domestic supply chain leading enterprises, like mobile phone manufacturers and new energy vehicle manufacturers, can also impose certain constraints on suppliers, requiring them to improve employee treatment and launch systems similar to Apple’s supplier management code.
Implement anti-involution requirements from the enterprise level.”
Indeed, Lin Ran’s trip to Yanjing this time was for this.
Some anti-involution voices from Yanjing also call on enterprises not to engage in vicious competition, not to maliciously lower prices, not to wage bottomless price wars, but they don’t mention that you should give employees wage increases. From the perspective of welfare treatment and labor protection, you need to benchmark foreign enterprises.
In the past without technology advantages, doing so was to protect the competitiveness of domestic industries, protect domestic enterprises, protect employment, which is beyond reproach; all countries have gone through this.
During the first Industrial Revolution, England’s workers’ working environment was worse than slaves.
Now with technology advantages, even if everyone gives employees equal treatment, you can still compete with foreign enterprises. Not doing this is a bit unjustifiable.
Lin Ran cannot directly propose it; he can only indirectly promote it in this way.
After returning from the 1960s, Lin Ran carries some idealistic thinking. If no one does it, then I’ll start first.
The photovoltaic industry is a very suitable entry point.
Initially setting tiered charging was to enable pushing partners to improve employee treatment in the future.
This push requires support from Yanjing on one hand, and data cooperation from Yanjing on the other.
“General Manager Lin, I think your proposal is good, but I still have some doubts.”
The middle-aged man sitting opposite Lin Ran in the middle said seriously, his hand pressing on the proposal submitted by Lin Ran.
“General Manager Lin, you have seen the bottleneck in our current economic development model and advocate breaking the situation through top-level design. Apollo Technology is top-tier; it has absolute dominant position in treating partners.
While Director Wang insists on market efficiency and fiscal discipline, worrying about risks brought by policy intervention.
In principle, I approve of General Manager Lin’s idea. We have indeed reached the time to further let the broad masses of people share the achievements of our industry development.
So, what General Manager Lin wants to do is essentially an exploration of the new development vision.
If you do it well this time, then our future private enterprises and state-owned enterprises can gradually promote it.
Further promote this method.
Advantage industries and advantage enterprises can push for broader labor treatment improvements.
It is neither a complete planned economy nor disorderly market laissez-faire.
It is a new balance. We must both maintain market vitality and correct its blindness.
So I need to ask clearly.
How to ensure enterprises do not increase employees’ labor intensity?
If my enterprise previously paid employees five million in wages, now raising to eight million, with the extra three million, if I earn it by squeezing employees’ labor intensity, then your company is purely losing money.
More importantly, from a higher dimension, it’s actually the national level footing the bill.
Apollo Technology is mostly state-owned capital, and photovoltaic enterprises use this to raise new generation photovoltaic module shipping prices. Currently, the biggest buyer of photovoltaic modules in the market is still state-owned enterprises.
I don’t mind the national level footing this bill, but I mind that after footing it, we don’t achieve the effect.”
The middle-aged man waved his hand: “My meaning is, compared to your proposal.
I think at the national level, in advantage industries, set a minimum price.
Then since state-owned enterprises are the largest single buyers of these photovoltaic modules, we set an entry threshold, a set of rules, requiring them to improve employee treatment.
I think this will be more effective.
General Manager Lin, thank you very much for your reminder; this is a road we must take.
This is an exploration about the future, about our economic development model.
This is also something we must do at this point in time.”
For this Yanjing trip, Lin Ran achieved half of his purpose.
Didn’t agree to do it his way, but the national level will push “anti-involution” at the laborer level.
In the past, Xiaomi emphasized letting everyone enjoy the fun brought by technology.
This was from the consumer level; in the past decade, China has indeed achieved this.
Almost every consumer can enjoy electronic products of the same quality at the global lowest prices.
And now in today’s explosive technological development, with Chinese people going to the Moon several times a year, China is finally going to achieve it from the labor relations level, letting laborers start enjoying the benefits brought by technological progress.
