In Hiroshima, Japan, in the office of the vice president of Akima Chemical Machinery Co., Ltd., Minai Takayoshi is angry with his subordinates:

"What's the matter, why was the Ecuadorian chemical plant project snatched away by the Dutch? When I visited Ecuador last year, I had already negotiated with their minister of industry, all you need to do is to implement the terms of the contract, and you can still lose the project, what did you do?"

Shigeshi Mori, the sales director, hung his head, listened to the roar of his boss, and did not dare to interject. Akima Kaisha is a family-owned company, and the president is an old man who doesn't care about anything, and the day-to-day affairs of the club are handled by Vice President Minelongi. Mineilongi is 60 years old this year, his body is still very strong, and as he grows older, his temper grows, and his men are afraid of him.

Finally, when Mineilongi finished shouting, Mori Shigeshi raised his head timidly and said, "Vice President, you listen to my explanation." The Ecuadorian side has not yet finalized who will do the chemical plant project, but it is inclined to hand it over to the Dutch. The main reason for this change is that the yen has continued to appreciate over the past six months, and the Ecuadorian side has found the price unaffordable, so it turned to the Dutch. ”

"The yen is appreciating?" Mineilongi's face was gloomy, "It's because of the appreciation of the yen, and I don't know what those people in the government are thinking. ”

The yen's appreciation began with the Plaza Accord in September last year, and the reasons for the Plaza Accord can be traced back much further.

In the 50s of the last century, Japan was still a weak country that had just risen from defeat, with a low level of industry and a lack of competitiveness in its products. At that time, the exchange rate of the yen against the dollar was 300 to 1, which was quite in line with the real purchasing power situation.

From the 60s to the 70s, Japan's economy experienced 20 years of rapid growth, and the technical level of Japanese enterprises continued to improve, and their products gradually became competitive and began to have a place in the international market. At the same time, the yen's exchange rate has not increased significantly, and its value is grossly undervalued compared to its purchasing power. As a result of the undervaluation of the yen, Japanese goods have a clear price advantage over European and American goods, especially American goods, which is quite similar to the situation of Chinese goods in later generations.

Similar to Japan, the Federal Republic of Germany, another defeated country in World War II, also showed an aggressive posture at this time, and a large number of German-made goods were sold all over the world, encroaching on the vested interests of countries such as Britain and the United States.

Corresponding to the rapid growth of Japan and Germany, the economies of Britain and the United States have fallen into long-term stagflation, and economists have proposed various economic stimulus measures, but they have still not been able to revitalize the country. After studying, the big British and American conglomerates believe that the depression of their own economies mainly comes from the competition between Japan and Germany, and that the competitive advantage of Japan and Germany lies in the fact that they "manipulate the exchange rate," underestimate the value of the currency, and practice dumping in disguise.

The above-mentioned accusations are exactly the same as the accusations made by the Western world against China in the new century, and there is nothing new under the sun, and this is also a proof of this.

In order to crack down on the exports of Japan and Germany, in September 1985, the finance ministers and central bank governors of the United States, Japan, West Germany, France, and Britain held a meeting at the Plaza Hotel in New York, and reached an agreement on joint intervention in the foreign exchange market by the governments of the five countries, commonly known as the "Plaza Accord."

The core content of the Plaza Accord is to demand that the yen and the mark appreciate against the dollar, so as to improve the foreign trade conditions of the United States and curb the competitiveness of Japanese and German goods. This agreement was not good for the economies of Japan and Germany, but they could not oppose it, especially Japan, as a vassal completely dependent on the United States politically, could only wait for others to shear their own wool.

Before the Plaza Accord, the yen was trading at 250 to 1 against the dollar, and within three months, the exchange rate had risen to 200 to 1. By the end of 1986, it had risen to 152 to 1.

The sharp appreciation of the yen has led to an increase in the prices of Japan's export goods. Originally priced at $1 in the U.S. market, a 250 yen item now costs $1.25, and people will naturally reduce their purchases of Japanese goods and buy American goods instead, thus losing the revival of American manufacturing.

Of course, this is only a theoretical analysis. The decline of the U.S. manufacturing industry is not only due to competition from the Japanese, but also to the causes of the U.S. society itself. The Plaza Accord pushed up the yen and hit Japanese goods, but then goods from Southeast Asia replaced Japanese goods as new competitors for American companies. After that, the legendary "Made in China" began to exert its power, and then ...... There is no then.

At this time, half a year after the Plaza Accord was signed, the impact of the yen's appreciation was already being felt. For example, in the case of the Ecuadorian chemical plant, the first offer from Akima to Ecuador was 10 billion yen, which is equivalent to 40 million US dollars, but with the appreciation of the yen, 10 billion yen became 50 million US dollars, an extra 10 million US dollars out of thin air.

Something like this has happened several times in the past few months. Some customers want to reduce the price and return to the original price, while others start to look for other suppliers, after all, there are other countries in the world that can produce similar equipment. Speaking from the bottom of my mind, even after the appreciation of the yen, Japanese products are still relatively cheap, thanks to Japan's lower labor costs than Europe, but the psychology of customers is so strange, people think that the high price of Europeans must be better. In the past, because your things were cheap, everyone chose you, but now that the price of your things has risen, people might as well add more money and buy better things.

A stronger yen has both advantages and disadvantages for Japanese companies. On the plus side, when you use yen to buy things in the international market, the yen is worth more. The disadvantage is that goods quoted in yen are more expensive in the international market, and a part of the market will be lost.

In fact, this is similar to China in the new century, after the appreciation of the renminbi, people who travel abroad feel happy, because the renminbi is more valuable than in the past. Export-oriented enterprises are uncomfortable, things are not easy to sell, and foreign merchants have turned to Vietnam, Bangladesh and other places to purchase.

"Vice President, we can't go on like this. "Because of the appreciation of the yen, the competitiveness of our products is declining, and Koreans are grabbing our market." If we can't change this situation, we will lose a lot of traditional markets, and this will further increase our production costs, which is a vicious circle. ”

"But the appreciation of the yen is something that the bureaucrats of the Ministry of Finance have come up with, so what else can we do?" said Minei Longji angrily.

"The appreciation of the yen is something we can't change, and what we can do is to reduce the price of some of our products accordingly and give away some of the profits to customers," Mori said. Otherwise, we won't be able to get the order at all. ”

"Didn't we already have a round of price cuts last month? The turnkey price of our 300,000 tons of fertilizer equipment has dropped by 3%. Mineilongi Road.

Mori Shigeshi smiled bitterly: "This price reduction is simply not enough to offset the impact of the yen's appreciation. The yen appreciates by 25%, so what's the use of us dropping the price by just 3%?"

"You're not going to ask the company to reduce the price of its products by 20 percent, are you?"

"It's not necessary to drop by 20 percent, but if we can drop by about 10 percent, I think we still have hope to win back the Ecuador project, and we will be more competitive in other projects," Mori said. ”

"It's impossible, if the price drops by 10%, our profit will be very meager." At present, prices in China are rising very fast, and the wages of our employees are also rising. The cost has increased, and it is not easy for us not to increase the price, so how can we reduce the price by 10%?"

"If so, then it's troublesome. "Mori Shigeshi was a little depressed, he was in charge of marketing, he didn't know anything about the production situation, and he couldn't say anything.

"However, Vice President, the Koreans' equipment quotations can be more than 15% lower than ours, is it because we haven't tapped the company's potential yet?" said Mori's assistant Takeo Tada.

Mineilongji shook his head and said, "Tada-kun, there is no comparison between different countries. Our production costs are also lower than those of the United States and the United Kingdom, because our labor costs are generally lower than theirs. South Korea is a rising country, and the labor cost is much lower than ours, which is one of the reasons why their equipment quotation is lower than ours. For example, if you and Mori-kun go to Latin America, the subsidy is 80,000 yen a day, but if you are a Korean salesperson, he will receive less than 20,000 yen. ”

"This ......" Tada Wufu was dumb. If Minerongi had given another example, he might have been able to criticize it. Now people are saying that they have received too many subsidies, what can they say? Let the company reduce their subsidies, that is something that a fool would ask for.

"You go down first, let me think about it. You also have to keep in touch with the Ecuadorian side and seize any glimmer of hope. In terms of price, we can have a maximum margin of about 2%, and you can talk to each other within this range. Mineilongi Road.

"Okay, we'll try. Shigeshi Mori and Takeo Tada agreed in unison, then bowed and left.

"Cost! cost is a big problem!" said Mineilongi, sitting at his desk, pounding his head.

The secretary gently pushed the door and came in, saying, "Vice President, there are two Chinese downstairs who want to visit you, and they say that they are from the China National Major Equipment Office." ”

"Oh, I know. Mineilongi said casually, "Please let them in." ”