Cape Town’s voluntary compromise is good news for Ernst. Now he can extricate himself from South Africa and focus on more important matters.
In October, instead of returning to First Town, Ernst went directly to Nairobi.
The factories invested by Heixinggen in Nairobi were already completed and had all comnced production. Simultaneously, Heixinggen Bank’s headquarters relocated here, establishing a new site specifically for Heixinggen Bank headquarters along with a suite of luxurious infrastructure.
"How are our investnts in North Arica currently faring?" This was the first question Ernst asked upon arriving at the headquarters of Heixinggen Bank.
"Your Highness, we’ve already begun the eleventh round of asset liquidation and still have thirty percent of fixed premium investnts in hand, which has allowed us to recoup a large amount of funds and make a substantial profit. However, according to the current economic situation in North Arica, we are essentially at a loss since the assets we liquidated continue to appreciate, and the entire market is booming."
Ernst nodded and said, "You can’t have your cake and eat it too. After all, we can’t take all the good things. How are things in Europe?"
"According to your instructions, we sold fewer assets in Europe compared to North Arica, yet made more money there. The positive image created by many brands under the Heixinggen consortium led many to take over assets at high prices. Take supermarkets, for example, even locations that are geographically disadvantaged and difficult to profit from received overwhelming interest. However, Your Highness, many of these investors want us to authorize them to continue using the previous nas."
Ernst shook his head, saying, "That won’t do. We can still provide the supply channels and even refrain from taking a cut, but they can’t use our registered brand nas. That’s a matter of credibility. Of course, if it’s a branded franchise, we can introduce it to them."
Supply channels are the crucial support for various supermarket brands under the Heixinggen consortium to survive. As all-round players in the field of light industry and electricity, the Heixinggen consortium operates extensively and is a unique ga-giant in Germany. Heavy industry is just starting but its major investnts are deployed in East Africa. As for Europe and North Arica, the consortium can hardly penetrate.
The rich industrial chain allows supermarkets under the Heixinggen consortium to obtain a wide variety of product supplies, primarily enabling East African agricultural products to be sold through these channels.
It is uncertain how many enterprises and companies will go bankrupt in this economic crisis, and the Heixinggen consortium must steer clear of association with them.
Ernst continued, "Also, start clearing the bank’s bad debts now. Sell off all risky assets while the market is hot, and raise our lending standards. Reject all companies with operational problems and unrealistic projects, and ensure all branches focus on recouping funds to guarantee there won’t be issues with our reserve funds."
"Your Highness, this might cause the bank to earn substantially less money."
"Just do as I say. Any company aiming for long-term operation can’t ignore its inherent problems. To blindly seek short-term profits while disregarding risks leads to an unstable stance and harms long-term vitality, not to ntion the reputation previously built that will need rebuilding, which is a trendous waste."
Under Ernst’s direction, the Heixinggen consortium sold everything that could be sold, continually reducing size, but this also had so negative effects. As many industries were sold, so investors and depositors suspected a possible operational risk in Heixinggen Bank, potentially a problem with the capital chain. Otherwise, why would they sell so many "superior" assets? The current market has brought unprecedented confidence worldwide; even selling air, if hyped well, can earn profits, whereas the reverse strategy of the Heixinggen consortium diverges entirely from the mainstream.
Thus, many investors and depositors turned to other banks or to the currently booming railway industry, leading to a small wave of withdrawals at Heixinggen Bank. However, it ca quickly and went equally fast since Heixinggen Bank was originally cash-rich, and after selling a large batch of assets, had recouped substantial funds, hence facing it fearlessly.
Subsequently, Heixinggen Bank refuted these baseless defamations: the bank was currently optimizing investnt structures and did not bear any so-called operational risk.
However, the effect of the rebuttal was mixed (as intended), maintaining depositor confidence in Germany through years of accumulated credibility and dia and newspaper control by the consortium, though it was less convincing in other regions.
Especially among competitors of Heixinggen Bank who used every possible ans to defa it; multiple financial institutions in London rated Heixinggen Bank as a high-risk enterprise.
Heixinggen Bank’s fully owned Sun Newspaper spoke up to refute the rumors, but London citizens believed more in the adverse claims. Everyone knew the composition of the Sun Newspaper; it might be good for handling gossip and scandal, but you dare talk about finance?
However, London, as the center of the financial empire, has banks and financial institutions more nurous than can be counted, with Heixinggen consortium having little market share here.
So impulsive depositors, after seeing their funds being drawn out, the notion of a broken capital chain vanished into thin air, returned to deposit their money again. In a way, it’s a benefit, as so ti deposits being withdrawn ant Heixinggen Bank could pay less interest.
This minor disturbance didn’t affect Ernst at all. After giving instructions regarding Heixinggen Bank, Ernst proceeded to visit multiple textile factories within Nairobi.
"Your Highness, our investnt in the textile industry here in Nairobi currently ets about seventy percent of East Africa’s demand, with the remaining thirty percent supplied by Far East factories. Factories in Germany have already been transferred though the Far East factories dominate exports to Europe due to significant labor cost advantages. Had we not split the Far East Textile Factory earlier, we surely could achieve greater profits."
Overall, the Heixinggen consortium’s textile factory investnts in Jiaozhou in the Far East were split into three parts: one part sold to Jin rchants and Huishi, another part continues operations leveraging cost advantages to export to East Africa and Germany, and another part was relocated to Nairobi.
The Far East market indeed holds great allure: first, it is large-scale with high demand though its profits fall short compared to Europe; second, it has extrely low living costs with abundant human resources and ample raw materials; third, fewer hassles arise, as an external enterprise, Jiaozhou Textile Factory’s operations aren’t impacted by bureaucracy. This aspect is evident from Jin rchants and Huishi, whose operations face tax burdens besides bureaucrats taking cuts locally, whereas Jiaozhou Textile Factory’s issues are managed by the consulate, with none daring to bother East Africa’s consulate.
Incidental improvents were made to the business environnt in Huaihai Economic Zone and Zhuhai Trade Region, such as notably relocating the renowned modern national enterprise Jichanglong Silk Factory to Zhuhai Trade Region from Nanhai County, as depicted in textbooks from previous generations.
Historically speaking, the owner of Jichanglong Silk Factory, Chen Qiyuan, established the factory in his hotown Nanhai County, but died prematurely, beset by local citizens, bureaucracy, and gentry. It was a no-win situation but fortunately, thanks to Chen Qiyuan’s outstanding capabilities, he was able to operate Jichanglong Silk Factory amid such harsh conditions and could compete with foreign enterprises.
Things are different now. Most economic power within Zhuhai Trade Region is held by Xiangshan Consulate, while local gentry and bureaucrats have been once reprimanded by East Africa. Guangzhou Prefecture also keeps a close watch over local bureaucrats, to prevent a repeat of previous conflicts.
Furthermore, entering Zhuhai Trade Region cos with preferential policies from East African Kingdom, mainly more convenient loans. The Far East market is one of the crucial regions Heixinggen Bank focuses on, following East Africa and Europe, on par with North Arica.
Ernst isn’t concerned about potential crises in the Far East, which is purely a traditional agricultural nation, positively affected by this economic crisis. Additional investnts there won’t incur losses.
This results in Heixinggen Bank contracting worldwide, with East Africa and the Far East as the only regions receiving increased investnts.
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