What Li Huayong wants to tell Lao Lu is that it happened in real history, the private enterprise that started in the BT model and was once so awesome that it didn't want it.

The boss of this company came from an ordinary background, neither has any advanced knowledge, nor is he as "deep background" as the outside world legend, and even his entrepreneurial time is relatively late compared to other well-known private enterprises in China, and he was just an ordinary contractor in the nineties.

However, it is such an ordinary person, an ordinary enterprise, in less than 20 years, to establish a business empire and create an industry giant. The company's performance once left many people dumbfounded.

Because in our country, when it comes to the fierce competition within the industry, if the construction industry only recognizes the second, then there may be no industry that dares to call it the first. According to relevant national statistics, just before Li Huayong crossed, the number of people engaged in the construction industry and construction-related industries in China exceeded 50 million.

More than 50 million! What kind of concept is this, which is equivalent to one in every 20 people who have been directly or indirectly engaged in the construction industry. And this is still the statistics of 2016, if you push back the time, at the turn of the century, the proportion was actually higher.

In such a fierce competitive environment, how did a private enterprise with no technical advantages or deep background do it?

That's right, it's all because of the BT mode. If there is any "core competitiveness" of this company, then the BT model is their core competitiveness. It's this model that makes this company and an industry giant.

Why is the BT model so powerful? Li Huayong remembers that in his previous life, when the situation of this company became a "phenomenon", all kinds of "bricks and beasts" showed up one after another to interpret this private enterprise. It's a pity that Li Huayong has read so many review articles, but he hasn't seen an article that can get to the point.

Especially those second-class people in our country's economic and financial circles, they don't understand why such a company can become so big, and Li Huayong even suspects that these people don't understand the company's profit model at all, so they are making a lot of nonsense there.

What will they do when they can't understand the "brick family calling the beast"? In the Internet era, everyone understands that all the "brick family calls the beast" and most of the "well-known" routines are actually the same. Generally, when this kind of thing happens, they usually have two ways.

The first one is called "mystification": Well, how can such a company be so big? How can it make so much money? The boss of this company must have a very deep background, right? Has a very hard backstage? He should even be a relative or even an immediate family member of a certain leader.......

The second routine is called "demonization": Look at it, why is this company able to win so many projects? Why can their profits be higher than those of others? There must be something behind this that no one can see, right? Is it certain that there is collusion between officials and businessmen? There must be an indispensable deal of power for money......

Li Huayong has always believed that these routines of the public are not worth refuting at all, and are even very naïve and ridiculous. These people don't even understand the basic national conditions of our country.

To say that in our country, there are of course cases of relying on illegal acts to make millions of profits, and in more serious cases, there are of course cases of illegally collecting hundreds of millions or even billions of dollars. However, if you want to rely on some crooked ways to make the company reach a scale of tens of billions of billions, can this happen in our country?

Not to mention our country, in fact, it is a slightly more normal country, and it is basically impossible to allow this kind of thing to happen. Whenever there is such a thing, it is basically some country that has made a big mess. For example, Lao Maozi in the north, when the Soviet Union collapsed, the so-called "financial oligarchy" of all sizes was born, but what happened later? When their country is a little on the right track, what will happen to those oligarchs?

Returning to this realistic example in real history, Li Huayong has always believed that the reason why this private enterprise has been able to achieve such a scale in just over ten years is that at its peak, the value of its construction contracts in hand exceeded 250 billion yuan a year, and the main thing that people are taking is the "right road". And the most critical key to this is the BT mode, which was unnoticed by many people at the beginning.

In the most general terms, this model is exactly in line with the development of our country's entire economy, and as we all know, for a country like ours, economic development must also be accompanied by the process of urbanization of the whole country. It's conceivable that there is nothing for the construction industry that offers a broader market than national urbanization, and the BT model is actually a model that is specifically tailored for urbanization. This is one of the internal reasons why this private enterprise can develop rapidly.

Of course, such a general statement does not explain the power of such a model. After all, other construction companies are not stupid, and there is the broadest market in urbanization, which everyone can see, so why do other companies use other models to compete with the BT model? This is mainly because the BT model is just in line with another economic characteristic of our country.

If you pay attention to it, you can find a very interesting thing, that is, most of the projects that operate according to the BT model rarely appear in first-tier cities or economically developed cities, but in the second-tier, third-tier, and even fourth- and fifth-tier areas of some economically underdeveloped areas, this model is very popular.

Why is this happening? This is mainly related to a characteristic of our country's fiscal revenue. One of the most obvious characteristics of our state's fiscal revenue is that the higher you go, the richer you become, the central fiscal revenue is better than the provincial fiscal revenue, and the provincial fiscal revenue is better than the municipal fiscal revenue. This situation exists in our country, especially after the tax reform in the 90s.

For example, since the beginning of the new century, when people talk about "financial difficulties," they can only hear the local governments below shouting "financial difficulties," and they never hear about the "financial difficulties" of the central government.

As long as you understand this, you should be able to understand why BT projects are rarely seen in economically developed first-tier cities.

Do you want to use the BT model to take on a project in Beijing or Shencheng? People will tell you, sorry, we don't need it, we have our own money, where do we need you to advance money, instead of letting you make the profit of the advance, then let me earn it myself......

Again, as long as you understand this, you should be able to understand why the BT model can be popular in the second, third and even third and fourth tier areas.

Some places are very poor and have no money in the local finances, but no matter how poor the places are, there is also a desire to develop the economy. Especially for government officials in our country, it can be said that no matter what kind of ability the official is, what is his character, whether the official is clean or corrupt, and there is almost one thing that is unanimous, that is, the pursuit of GDP is the same.

Of course, everyone knows this, and there is no such thing as "land finance" in later generations, and for most local governments in China, the simplest and crudest way to increase GDP and fiscal revenue is to sell land.

Of course, it is not so easy for you to sell your land, especially for most economically underdeveloped areas, you want your land to be able to sell, and you want to buy it at a good price, you still have to do the necessary preliminary work.

For example, if you want to turn this place into a commercial area, you still have to do the necessary greening and lighting work, right? If you want to build an industrial park in this place, at least the "three links and one leveling" must be perfected.

And these things, the industry is called "primary land development", after the primary development of the land to do other projects, this is the secondary development of land. As for the primary development and the secondary development, which is more profitable? The layman may think that it is the secondary development, after all, in real life, the price of the "land king" and the "land king" in the future generations blinded many people's eyes. However, this is wrong, the real insider will tell you that compared with the secondary development, the primary development is the real profiteering.

How can we describe it? Doing primary land development is like buying the "original shares" in the stocks, and it should be needless to say how profitable the "original shares" are. In real history, the profit model of the private enterprise is actually like this.

Because the BT model is originally a model specially designed for the development of land at the primary level.

Having said all this, it should be understandable why Li Huayong said that the BT model is a double-edged sword, right?

On the one hand, this model is in line with economic laws, especially in line with some economic characteristics of our country. On the other hand, it is extremely difficult to operate this model, and the real estate industry has several bad characteristics: "high investment, high leverage, long cycle", and the BT model is almost all available, and it is easy to have problems if you are not careful in the operation process.

For example, in real history, why is a company riddled with negative news, and can even be said to have a bad reputation? Li Huayong doesn't even need to give examples, anyone can make up a lot of brains.

Of course, when stating the pros and cons with Lao Lu, Li Huayong still gave a few examples in the Spring and Autumn penmanship, his purpose was to let Lao Lu know the power of this, so that he could be mentally prepared.

Who knew that after Lao Lu listened, his reaction was a little beyond Li Huayong's expectations.

I saw him smile at Li Huayong:

"Xiao Li, is this what you're worried about? I really don't understand, what's there to worry about. ”

"Huh!?"