Chapter 7: Industrial Development Office

After Liang Jinsong finished speaking, the air inside the jeep once again fell into silence, with only the rumbling sound of the engine remaining. Liang Jinsong's sadness and powerlessness were clearly written on his face, without any attempt to hide it.

In fact, at a macro level, Wang Ye knew more than Liang Jinsong did.

Last year, in 1981, China's military expenditure reached 16.8 billion, accounting for over sixteen percent of the government's total annual fiscal expenditure.

Across the country, there were over two hundred third-line factories, collectively costing tens of billions of yuan in subsidies each year to support these semi-operational or non-operational military factories!

The majority of the remaining funds were consumed by the military personnel themselves. Currently, China's military boasted an astonishing force of over 4.2 million, with the railway troops alone exceeding four hundred thousand.

In a sense, the existence of the military was an "investment," and the channel for return on investment was war.

Without the outbreak of war, theoretically, all investments in the military would be in vain, as the military could not directly bring economic returns to a country.

However, if war did break out, everything would change.

This was why decades later, the United States could allocate over half of its total annual fiscal expenditure to military spending because their military was engaged in continuous warfare, from which they could reap dividends!

As for the details of military expenditure, it typically consisted of three parts.

The first part: equipment research and procurement.

The second part: the consumption of daily training materials.

The third part: military personnel expenses.

For many countries, not all of the expenses in the first part were considered military spending. Some of the research costs were channeled through other scientific research funding channels to reduce the proportion of military spending.

However, in China today, almost all military expenditure was consumed by the third part. This included not only the military personnel but also those in military-industrial units like the Red Star Machinery Factory.

The ultimate result was low levels of daily training, outdated equipment research, minimal weapon procurement, or even none at all, and almost no new equipment entering service.

It was because of this that, this year, the four hundred thousand railway troops would be disbanded, and in the following years, the military would be streamlined in waves until the new century.

The main purpose was to save a bit from the already limited military spending to invest in military-industrial research areas, or even to replace equipment with research, to maintain the advanced nature of military equipment. This reality would remain true even in China forty years later.

Thinking of this, Wang Ye couldn't help but let out a long sigh. He took out his "Hong Mei" cigarette from his pocket. These were much cheaper than the Daqianmen cigarettes Liang Jinsong smoked, belonging to the kind without a filter tip—a type of cigarette that a graduate student like Wang Ye could afford.

"Here, Director! Have one!"

Then Wang Ye lit a Hong Mei cigarette for Liang Jinsong, unable to resist comforting him, saying, "Difficulties are temporary, but our reform will surely succeed."

"We must push forward under any circumstances. As long as our ideology remains firm, there will always be more solutions than difficulties. The Red Star Machinery Factory will definitely succeed in transitioning from military to civilian production. I have confidence that we will win this battle!"

"Then, starting from here, we can promote the transition of over two hundred third-line factories across the country!"

Hearing Wang Ye's ambitious words, Liang Jinsong, who had taken a deep drag from the cigarette, couldn't help but cough and laugh heartily, saying, "Indeed, you are a young man in his prime, daring and capable!"

"The world belongs to you, as well as to us, but ultimately it belongs to you; you young people are full of vitality, like the sun at eight or nine in the morning; hope rests on you."

"Indeed, this saying is correct!"

"But..."

With that, Liang Jinsong chuckled, changing his tone, "Words alone won't do. You have to deliver in practice!"

"Your bold words won't be of any use now; we have to look at the reality!"

"The Red Star Machinery Factory is located in the mountainous area southwest of Laiyang County, Yunhai City, in the Luqi Province. It's over thirty kilometers from the county seat and hundreds of kilometers away from Yunhai City. Just this distance alone makes it difficult to initiate any projects or business ventures."

"Thinking of building a road? Let me tell you, there's no money!"

"Not to mention, the current Red Star Machinery Factory has over twelve hundred cadres and workers on its payroll, totaling over five thousand including their families."

"It's easy to feed one person, but when five thousand people come knocking for food, you'll know what a headache feels like!"

"Let me tell you, kid, don't think it's that simple!"

With that, both of them lost interest in speaking and just sat in the car, puffing away on their cigarettes.

At the same time, after leaving the urban area of Quancheng, the rest of the journey could be described as hellish. The infrastructure level was already low in this era. There were no highways, and even the provincial roads were bumpy. Add to that the fact that they were riding in a 212, this industrial junk, and their backsides felt like they were going to fall off.

"Damn, we have to get a car no matter what in the future."

"This car feels like it's going to fall apart any minute now. It's shaking so much that my stomach acid is going to reflux. Ugh..."

As time passed, finally, after more than six hours of bumps and jolts, the car finally arrived at the gate of the Red Star Machinery Factory located in the mountainous area of Laiyang County.

Liang Jinsong got out of the car first, and at the same time, he heard a middle-aged man's voice saying, "Director Liang, long time no see! Hahaha!"

Suppressing the urge to vomit, Wang Ye got out of the car and saw another 212 jeep parked at the factory gate. At the same time, a slightly stocky middle-aged man who looked to be around thirty-five or six was shaking hands with Liang Jinsong.

"Wang Ye, let me introduce you. This will be your immediate superior in the future. You must maintain good relations! This is Li Gang, Deputy Director of the Yunhai City Industrial Bureau, responsible for the development and construction of state-owned factories in Yunhai City. He is also the director of the Industrial Reform and Development Office in Yunhai City."

Upon hearing Liang Jinsong's introduction, Wang Ye immediately understood. This was a young, powerful figure in the industrial system of Yunhai City!

His power did not come from the position of Deputy Director of the Industrial Bureau alone, as there could be several deputy directors in one bureau. His power came from the position of director of the Industrial Reform and Development Office!

The reason was simple. With the advent of the country's reform and opening up, the appearance of a dual-track economy had greatly impacted the operation of state-owned enterprises. The old "big pot" model had reached a dead end.

In normal history, from 1985 onwards, state-owned enterprises began large-scale reforms, transitioning to a system of joint-stock and contracting.

And the purpose of this Industrial Reform and Development Office was to explore the development direction of state-owned enterprises and would also lead the contracting reforms of state-owned factories in various provinces, cities, and counties in the future.

"Director Li, hello, I am Wang Ye!"

With a flash of thought, Wang Ye quickly walked over to shake hands and greet him.