I Am the Third-Generation Heir of a Conglomerate - Chapter 517



Only Noblemtl

## 517. Alliance Formation (2)

The day after returning from a three-country tour.

I sat at my desk in the morning to catch up on the work that had piled up, but I couldn’t see it properly.

It was because a vice president came to see me with urgent news.

“There has been another incident where a Japanese surveillance aircraft has conducted a threatening flight against a South Korean destroyer. This is the second time since last year.”

“I see you are protesting in this way.”

“I agree. It seems like they are conducting low-altitude, threatening flights of early warning aircraft to protest the ruling on forced labor.”

A literal demonstration of force.

Although military aircraft specialized in reconnaissance missions are called early warning aircraft.

As it was an aircraft capable of carrying weapons, it had combat capabilities.

However, flying low toward the ship was tantamount to declaring intent to attack.

“I get the strong feeling that they are intentionally trying to create diplomatic friction.”

“Considering the Japanese government’s position, this seems like a very possible scenario. Wouldn’t they be able to stay silent if only to gain the votes of the far-right?”

“I guess we should see this as an act of building up a justification. We need a justification to sanction Korea.”

“Do you think so? Even if it is Japan, if there is a problem with trade with Korea, Japan will suffer great damage as well.”

It felt different from the trade dispute between the US and China.

The United States was able to impose strong sanctions because its import volume was much larger than its export volume.

However, Korea was seeing a trade deficit of more than $1 billion with Japan every year.

In short, Korea imports large quantities of Japanese products.

This meant that Japan was not importing Korean products.

Given this situation, Vice Chairman Han predicted that Japan would not resort to trade sanctions.

“I think Korea is very dependent on Japanese materials. I think they are doing this because they think Japanese materials are absolutely necessary for semiconductor production.”

“It’s certainly not normal. But wouldn’t it be difficult to see any clear movement before the G20 meeting?”

“The moment the G20 summit ends, sanctions could be imposed openly.”

There are only six months left until the G20 summit.

The key topic of this G20 meeting was very likely to be the trade dispute and sanctions between the United States and China.

So, until then, Japan would not impose trade sanctions, and it was clear that it would impose sanctions as if it had been waiting for the G20 meeting to end.

“Would you really do something so crazy?”

“For politicians, votes are more important than national interests. If they can get elected, they will do something stronger than trade sanctions. We need to prepare for that too.”

“How should we proceed?”

“Vice Chairman Han, please attack the Japanese economy.”

If the financial tower were to move, it would be enough to shake the Japanese economy.

Of course, there is a limit to shaking things up with only capital without any negative factors, but the Japanese government was able to shake things up strongly because it was the government that created the negative factors itself.

“We will prepare to short sell Japanese semiconductor material companies.”

“Just be prepared. The stock prices of Japanese companies will go up considerably in the coming months.”

“Are you in good health?”

“There is a huge windfall. Taewoo Group plans to sweep up all the materials. They will buy all the materials, at least twice as much as they are currently importing, and up to ten times as much.”

It could be seen as a kind of private affair.

If there were no trade sanctions, then hoarding would have been possible.

“Are you planning to secure materials and buy some time?”

“The Saemangeum Chemical Complex also takes time. Even if the technology is secured and mass production is ready, it will take at least three months to stabilize. Just in case, try to secure enough materials to use for about a year.”

“But if Taewoo Group suddenly receives a lot of orders, wouldn’t the Japanese government become suspicious?”

A sudden increase in exports would naturally arouse suspicion.

But I was able to avoid suspicion just by using the cards I had.

“You can avoid suspicion by using foreign companies. Mobilize all companies that have anything to do with semiconductors and buy up Japanese materials.”

“If it’s a proxy purchase, I think it’s definitely possible to avoid suspicion.”

“There is absolutely no problem if we repurchase the materials at cost price.”

There are more than a dozen foreign companies that I can move to.

Google, Amazon, Facebook, Qualcomm, Nvidia, etc.

There were also companies that had little to do with semiconductor materials, but because they were American companies, the Japanese government had no room to intervene.

“We can buy time through speculation and minimize the damage by having the chemical complex mass-produce the materials or sign a material contract with a company in another country.”

“Shorting can certainly be a big deal. If the bulk purchases continue for a few months, they can expand their factories or hire more workers. But if trade sanctions prevent exports, it can lead to a huge drop in stock prices.”

As sales increase, stock prices naturally rise.

If sales that had reached such a high suddenly hit their lowest point, the stock price would inevitably plummet.

“Push it to the brink of bankruptcy.”

“But if it really goes bankrupt, wouldn’t there be a problem? Of course, we have succeeded in domestically producing many materials in the Saemangeum Chemical Complex, but for some materials, Japanese materials are still superior.”

We have invested a huge amount of money for over 10 years to localize the material.

Thanks to this, we succeeded in localizing most of the materials, but there were still some materials that were lacking.

But that problem could also be resolved through Japan’s trade sanctions.

“That’s why we’re pushing them to the point of bankruptcy. If we reach out just before bankruptcy, Japanese companies won’t move to Korea. A Japanese company will end up taking up a spot in the Saemangeum Chemical Complex.”

“Is this a strategy to take Japanese companies out of Japan?”

“It was the Japanese government’s fault, so how could Japanese companies be at fault?”

If Taewoo Group brought in a Japanese company and absorbed it, it would have been able to secure technological prowess in one fell swoop.

Moreover, the trade sanctions were not a problem at all, as the Japanese government was simply pushing Japanese companies to the brink.

“But it is clear that the Japanese government will try to interfere in some way.”

“We can make up for any shortcomings by collaborating with other overseas companies. We are already trying to contact several companies through David.”

We were in contact with DuPont, a world-famous chemical company.

Although it is said that the semiconductor materials market is dominated by Japan.

However, this does not mean that only Japanese companies can produce it.

If only we could promise demand.

It was possible to force foreign chemical companies such as DuPont to build factories in Korea.

Of course, the best way would be for Taewoo Group to succeed in localizing the materials on its own, but for materials that require more time, it could be resolved by joining hands with foreign companies.

* * *

The next day.

Another big breaking news story has broken out.

2019 was a year without a single quiet day.

“The U.S. political establishment has officially proposed a bill banning Chinese electronics and telecommunications companies.”

“Now that the bill is out, it will likely take several months to pass.”

“However, since this situation was already announced last year, there are no major changes. To be exact, the stock price has already fallen by about 50%, so there will be no further decline.”

“If it had fallen by 50%, the financial tower would have had a lot of fun.”

There was a vice president who couldn’t hide his smile.

Short selling basically uses leverage.

If it had fallen by 50%, you could have made at least 2-3 times the profit.

“I was able to have a lot of fun. The only regret is that I was unable to get stocks of China’s largest electronics companies, so I was unable to have fun. However, I was able to make up for the shortfall by short-selling telecommunications companies and related affiliates.”

“Since Huawei stocks can only be owned by employees, short selling itself may be difficult.”

The company that the United States mainly attacked was Huawei.

It was China’s largest electronics company, with a controlling stake in smartphones and communications equipment.

It was also the company that suffered the greatest damage from the US-China trade dispute, but short selling was impossible.

“If short selling had been possible up to Huawei, I would expect to achieve several times the profits I have now. Still, I am still making decent profits.”

“I guess the other financial companies in the financial tower are all satisfied as well?”

“They are generating returns of at least 60%, and in the case of aggressive financial companies, they are generating returns of up to 200%. How can you be dissatisfied with these returns?”

This means that there are already financial companies that have made profits exceeding their initial investment.

But this was only the beginning. There were still many cases left to generate profits.

Japanese trade sanctions, COVID-19, semiconductor crisis, food crisis, etc.

There was a long line of things waiting to satisfy the financial tower.

“As relations between the U.S. and China continue to deteriorate, there is absolutely nothing wrong with it for us.”

“That’s why we receive dozens of requests a day from overseas financial institutions to open branches in the financial tower. In particular, we are receiving a flood of requests from financial institutions that have opened Asian branches in Hong Kong.”

“It seems like the atmosphere in Hong Kong is not normal.”

“The Chinese government is increasingly determined to Chineseize Hong Kong. So more and more financial companies are trying to relocate their bases.”

The Hong Kong democracy movement is not far off.

This incident will likely push Hong Kong out of its position as Asia’s financial hub.

Before the return, the base had shifted from Hong Kong to Singapore, but this time the plan was to have Korea take that position.

“As time goes by, there will be more and more movements like this.”

“However, some companies are hesitant because Korea has so many regulations and Korean companies’ stock prices are not good investments.”

“That problem will be solved soon. One of President Choi Jae-seok’s main re-election pledges will be financial reform. We are also preparing a pledge to forcibly increase corporate value.”

In order to attract foreign financial institutions, Korea itself had to become an attractive market.

Taewoo Group was an attractive company because it was continuing to grow rapidly, but other companies were not.

The dividend rate was also lower compared to American companies.

When they thought they could make money, they would split the company and list it, which would harm the interests of shareholders.

And the abundance of companies with low PBR (price-to-book ratio) has made investors reluctant to invest.

“This is the first presidential re-election in Korea, so the atmosphere will definitely be different.”

“Shouldn’t your re-election pledge be stronger than your first-term pledge? So don’t worry and just attract foreign financial companies to your financial tower.”

“Let’s increase the size of the financial tower.”

“Go ahead. I’ll just leave now.”

“Do you have any outside schedule?”

“I have to stop by Myeongdong for a bit. I need your help with some Japanese trade sanctions.”

Myeongdong’s help was needed to prepare for Japanese trade sanctions.

Taewoo Group had no choice but to move only through legal means.

If you move around Myeongdong, you can obtain a huge amount of information without worrying about other people’s eyes.

Especially when it came to information related to the dark world of the Yakuza, Myeongdong was able to find out more information than Taewoo Group.