The Chaebol Returns To The Presidency 1967 [EN]: Chapter 125

Fire on the Foot

125. Fire on the Foot

Deng Xiaoping’s office.

The Chief of Public Security reported.

“Chairman Deng, due to the food shortage, we’re seeing about a hundred riots daily. The number is increasing and consolidating!”

“Is it turning into a civil uprising?”

“Rather than a civil uprising, the bigger problem is the Red Guards. They’re instigating and leading, turning it into a political force.”

Deng Xiaoping, whose specialty was a poker face, flinched as if he had been punched in the gut at the mention of the Red Guards.

“The Red Guards?”

“Yes. They are shouting to return to the old days of the Cultural Revolution.”

“Hmm, using the food shortage politically!”

If it were a civil uprising, there would be justification for suppressing it with public power. But if he suppressed the Red Guards, who were engaged in ideological struggle, as a civil uprising, he would be in trouble, like stirring up a hornet’s nest. His future would be bleak, branded as a reactionary.

Deng Xiaoping had been in trouble with the Red Guards in the past, leading to his downfall and imprisonment. The name Red Guards alone brought back the trauma of that time.

His son, Deng Pufang, was left paraplegic and confined to a wheelchair due to beatings by the Red Guards during the Cultural Revolution.

In his heart, his animosity towards the Red Guards burned more fiercely than towards any external enemy.

This was also a personal reason why he chose the path of reform and opening up [Deng Xiaoping’s economic policy to introduce market-oriented reforms to China].

“Immediately convene an emergency State Council meeting!”

*

Deng Xiaoping attended, and the State Council members, comprising 20 ministries, the highest administrative body in China, gathered for an emergency meeting.

The State Council members conveyed public sentiment and voiced their grievances.

“It’s not even the spring famine season, but there is already an absolute shortage of food. Riots are frequent in small and medium-sized cities where food rations have been cut off, and the Red Guards are using that anger to increase their power.”

“Taiwan is receiving oil aid from Korea, managing prices stably, and enjoying a boom with high export figures. Meanwhile, on the mainland, people are starving to death. The stark comparison is causing the people to turn their backs on socialism. The entire system is shaking.”

“The Red Guards are gaining power because we are falling behind in the system competition. They are agitating that it is not socialism that is wrong, but revisionism [a departure from true socialist principles].”

The failure of reform was the scenario Deng Xiaoping feared most.

Deng Xiaoping instructed.

“Release the military grain reserves to appease the public!”

But that was just a temporary fix that would last less than a week.

The increase in import raw material prices, which more than tripled last year’s trade deficit, was also a huge pressure on the Chinese authorities.

And this year, the deficit was expected to exceed tenfold.

It was truly a crisis both internally and externally.

A fundamental solution was needed.

Deng Xiaoping was in urgent need of a solution.

*

U.S. Department of State.

The Chinese Ambassador to the United States conveyed Deng Xiaoping’s words to the U.S. Secretary of State.

“The Chairman’s intention is to resume Sino-U.S. trade without any conditions.”

China, which had been holding out, finally surrendered.

“I understand. I will relay it to the White House.”

“And before the trade negotiations, could we borrow food as a loan first?”

“Are you talking about wheat and corn?”

“Yes. The Chairman hopes that a decision will be made quickly and implemented.”

The food shortage was a critical situation day by day.

*

In Washington, D.C., U.S.-China trade negotiations resumed in secret.

China, needing to put out the immediate fire, did not set any conditions for starting trade negotiations as promised.

Now, it was the United States that was playing hard to get.

During a brief recess, the U.S. Trade Representative arranged a separate meeting with the Chinese Trade Representative to have a private conversation.

“About the issue of the United States giving China a food loan.”

“Yes, we hope it will be implemented quickly.”

“In the United States, the government does not manage food; it must be purchased from grain producers and wholesalers.”

“…….”

“It will involve enormous costs, and it will take time to compile a supplementary budget.”

“Ah, that’s difficult. It must be implemented immediately. We can’t go without food for a week or a month.”

To the anxious Chinese Trade Representative, the U.S. Representative subtly suggested a negotiation.

“How about Korea providing food aid to China? Korea buys U.S. grain and sends it to China.”

From the U.S. perspective, they wanted Korea to purchase exports rather than providing free grain aid.

“Yes? Korea? Why would Korea provide us with food aid?”

“Korea is an oil-producing country and has a sovereign wealth fund, so they can implement it immediately.”

“…….”

“And China needs oil to run its factories, doesn’t it?”

“That’s true. For electricity, we are urgently operating coal-fired power plants with all our might.”

Coal-fired power plants were pre-modern, inefficient, and the problem was that even if they were built now, they could only be operational in two or three years.

“Electricity is one thing, but what about transportation and logistics? Ships, airplanes, trucks, and cars all need oil.”

“Well, we’ll have to figure something out.”

The U.S. Representative threw out bait.

It was a proposal that Korea had requested from the United States when the U.S.-China trade talks resumed.

“I’ve spoken with Korea’s trade representative, and if China tacitly approves Taiwan transferring its UN Security Council permanent membership to Korea, Korea can lay a submarine oil pipeline to western China and supply crude oil at a 40% discount to the international average price for 10 years.”

The same proposal had been made during Mao Zedong’s time, but Mao Zedong had rejected it outright.

But now, the situation was clearly different from then.

It was an irresistible temptation for a starving giant.

The U.S. representative encouraged.

“If you add a food aid deal to the oil conditions, it seems like it would be very useful in resolving China’s current issues.”

“Hmm, I will get instructions from my home country. Please extend the recess until then.”

“Of course.”

Soon after, the Chinese representative returned and said.

“We will negotiate with Korea.”

“Oh, I understand. I will call the Korean Ambassador to the United States right away.”

*

The Korean Ambassador rushed to the meeting place.

“You said you had an urgent message?”

The Chinese representative stated the conditions he had heard from the U.S. representative.

The Korean Ambassador made an international call to the Korean Ministry of Foreign Affairs from the spot.

The Foreign Minister connected him to the President.

“Your Excellency, it seems the Chinese representative has obtained approval from Chairman Deng Xiaoping. In return, they are adding large-scale food and fertilizer aid in addition to oil. They will also share half the cost of the submarine oil pipeline with Korea.”

– “Hmm, they keep adding more. So, they are okay with the permanent membership?”

“Yes, that’s right. I have confirmed it several times.”

– “Good. Let’s do that. But words disappear quickly, so be sure to put it in a diplomatic document. For sensitive issues, create a side agreement and keep it confidential to save China’s face.”

“Understood, Your Excellency!”

Diplomatic breakdowns often occur at the last minute.

This is because the top leader boasts about their achievements, irritating the other country.

Consideration for covering up the other’s weaknesses is the art of diplomacy. All that matters is securing the benefits.

*

Shanghai.

American rice, corn, wheat, and potatoes were being unloaded at Shanghai Port.

Deng Xiaoping and the President of Korea met at the Shanghai State Guest House and shook hands.

The Korean President had flown in to save China’s face.

Instead of Beijing, they chose Shanghai, the symbol of Chinese trade.

Deng Xiaoping holding an emergency meeting with the Korean President before visiting the United States was proof of how urgent the situation was.

The President said.

“It’s a good deal where both countries win-win.”

Unlike the energetic Korean President, the small-statured Deng Xiaoping looked up and said in a subdued voice.

“It takes time for a sleeping giant to wake up. We will use the fertilizer and food well. Please help us a lot from Korea.”

“Of course. We will help as much as we can.”

“Please also build fertilizer factories and oil refineries. The United States only wants to entrust us with light industrial consumer goods or parts assembly. China must also have factories.”

“I understand. I will instruct the staff.”

Western countries only provide consumer goods aid to China, trying to create a consumer goods-dependent economy, and are reluctant to foster heavy and chemical industries, but China’s goal in opening up was clearly to transition to heavy and chemical industries, not light industry.

In any case, development in the order of light industry, heavy and chemical industry, and electronics industry is a historical process.

If Korea doesn’t step up, Japan will surely try to seize the Chinese market first.

It was justified by the fact that Korea was actively helping because it was the path that China, which had chosen to open up, had to take, but the licenses, equipment, and consumables had to be imported from Korea.

Building oil refining and chemical plants would also increase oil consumption, increasing China’s energy dependence on Korea.

Plant exports have many related ancillary businesses and require continuous management, so just as Korea was once a subcontracting country dependent on Japanese technology during Chairman Wang’s time, this time Korea must take the lead so that Chinese industry has no choice but to depend on Korea.

There is no charity in business. There is only when the price is paid.

The President went one step further in a good atmosphere.

“I want to invest in Chinese industries and companies, but China is all nationalized, so Korea cannot invest. Land is nationalized, but I hope that free investment guarantees will be made for other companies and movable property. I hope that the repatriation of profits and the establishment of companies will also be free.”

“Hmm, I will create a foreign exchange management and foreign investment promotion law and reflect it.”

The laws later created in China had no flaws in form, but in practice, foreign-owned companies were virtually not allowed to establish, with policies favoring joint ventures with domestic companies.

It meant that complete foreign companies and capital were not tolerated.

In foreign exchange management, initially, prior approval from the Chinese authorities was required to take money abroad, but later it was eased to registration.

In particular, Korea had frequent exports and imports related to plants, so a special customs clearance procedure was established administratively, which was almost a free pass.

The President proposed.

“Instead of repaying Korea’s aid loans with money, how about repaying them with China’s abundant mineral resources? With the minerals that Korea wants.”

“Oh, that’s a good idea. But our mining equipment and technology are terrible, so I don’t know if it will be satisfactory.”

“We will create a mining company and mine it ourselves. The unit price of the mined ore will be calculated at the international average price.”

“Do that.”

For China, it was only grateful to have the debt repaid by directly digging up the minerals it had.

But the Korean President’s aim was China’s rare earths.

Rare earths, meaning rare minerals, are labeled as ‘vitamins of high-tech industry’ and ‘essentials of green industry’.

Due to their chemically stable and heat-conducting properties, they are essential resources for the production of advanced products such as mobile phones, semiconductors, and hybrid cars, which are future industries.

China had 37% of the world’s reserves of such future resources, rare earths.

During Chairman Wang’s time, China openly wielded rare earth hegemony, often using rare earth resources as a weapon to subdue other countries.

Japan, the kingdom of electronic products, imports all of its rare earths from China, so it is completely helpless against China.

China still did not know what rare earths were or their importance.

So, Korea planned to establish a mining company locally, mine them in large quantities, and store them in Korea.

At the end of the meeting, Deng Xiaoping made an unexpected request.

“I heard that Korea is prosperous and orderly because of the Saemaul Undong (New Village Movement) [a South Korean rural community development program]. Would you guide the Saemaul Undong in China’s rural areas?”

China’s organizations were all ideological organizations like the Red Guards, so Mao Zedong, who was fed up with the Red Guards, desperately needed a non-ideological organization.

“Of course. The Saemaul Undong is based on individualism and harmony and cooperation with the local community, so it will be most suitable for China’s rural movement. We will educate Chinese trainees at the Saemaul Training Institute and dispatch our Saemaul leaders to China for exchanges.”

“Thank you.”

No one at this time guessed that the Saemaul Undong would later have a significant impact on the continent.

The leaders of the two countries signed the treaty.

Of course, the transfer of Taiwan’s UN Security Council permanent membership was agreed to be a separate side agreement and kept confidential.

Reporters busily pressed the camera shutters so as not to miss the scene of the two leaders shaking hands.

Click! Click!

The United States shook hands with China to open the floodgates of opening up, but Korea was actually taking the benefits.

Japan’s large-scale electrical and electronics factories were located in Korea, so they could not advance into China.

The speed of Japan’s entry into China was very slow.

Meanwhile, as China used Korea as a lever to drive its opening, isolated North Korea was in a state of emergency.

The Chaebol Returns To The Presidency 1967 [EN]

The Chaebol Returns To The Presidency 1967 [EN]

재벌총수가 대통령으로 회귀함 1967
Status: Completed Author: Native Language: Korean
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[English Translation] Imagine a world where the ruthless efficiency of a chaebol chairman collides with the iron will of a nation's leader. Chairman Wang, the titan behind the Hyundai Group, finds himself hurled back in time, inhabiting the very body of President Park in 1967! Korea stands at a crossroads, shackled by authoritarianism and suffocated by bureaucratic red tape. Now, armed with future knowledge and a relentless drive, Wang seizes the reins of power. Witness the birth of a new Republic, forged in the fires of innovation and meritocracy. Will he succeed in transforming Korea into a global powerhouse, or will the ghosts of the past and the weight of history crush his ambitions? Prepare for a thrilling saga of power, ambition, and the ultimate battle for a nation's destiny!

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