The Chaebol Returns To The Presidency 1967 [EN]: Chapter 137

137. Exercising the Veto

The Taiwanese ambassador replied,

“Yes, our production volume is second only to China, with over 40% being exported. The pork industry is unique to Taiwan’s industrial structure and is a major export item.”

“Where do you mainly export to?”

“China, of course. Although China has a large production volume, their consumption is even greater, so they import from Taiwan. But why are you suddenly mentioning pork?”

“Isn’t China currently demanding UN representation from Taiwan? Of course, Taiwan is opposed. As a countermeasure, how about banning Taiwanese pork exports to China?”

“Well, we actually considered that plan.”

“What was the conclusion?”

“If we stop pork exports, it would be a significant blow to China, but Taiwan would also suffer just as much. The pork industry involves 1 million people. If we can’t export, pork prices will plummet, and mass unemployment will occur. We concluded that it’s not a wise attack.”

“Hmm, then how about exporting to Korea instead of China? Taiwan can achieve its political goals without economic damage.”

“If the price is right, we’re willing to do anything. There’s no reason to refuse a brilliant idea that can catch both the political and economic rabbits [achieve two goals at once].”

“Now, I’ll tell you my plan, so listen carefully.”

“Yes, Your Excellency.”

“China is the world’s largest pork consumer, and the feed for pigs is soybeans. China’s food culture mainly involves frying in oil, so soybeans for cooking oil are as important a trade item to the Chinese as crude oil.”

“That’s right.”

The Taiwanese ambassador nodded, carefully listening to the President’s words.

*

The President called the White House.

“Hi, President Kennedy!”

– “Are you doing well? Have you finished making the difficult decision?”

“Before deciding, there’s something I need to decide first.”

– “What decision….”

“Isn’t the United States the world’s number one exporter of feed grains?”

– “That’s right.”

“This year’s soybean harvest is abundant, so the price is terrible.”

– “That’s right. The Grain Association plans to adjust shipments during the harvest stage to maintain the unit price.”

If grain is left over and the price drops, the American style was not to sell the remaining grain cheaply or give it to poor countries, but to reduce labor costs and plow the land without harvesting to maintain the price.

“Can I make some soybean investments in Korea?”

– “Are you trying to develop the livestock industry in Korea?”

“We have enough cattle and pigs now. I’m trying to counter the expected economic sanctions from China.”

– “China? How can you use soybeans against China….”

“If Taiwan and the United States cooperate, it’s an economic war worth fighting.”

The President explained the functional relationship between pigs and soybeans to Kennedy in detail.

*

The next person the President looked for was Chairman Jung.

The President explained the plan.

“…In the end, we’re buying pork from Taiwan and soybeans from the United States.”

“Haha, I never thought I’d be betting on pork and soybeans. Now I have to study a lot since I’m betting on physical goods with funds.”

“Let’s mobilize Tiger Fund, BlackRock Fund, Vanguard Fund, and sovereign wealth funds to gather everything. Let’s see what happens on the continent [mainland China].”

“I’m really looking forward to it.”

*

Taiwan. Market.

In the market, there were many butcher shops that looked like street stalls, hanging pork on hooks without refrigeration facilities.

Red fluorescent lights were turned on to make it look fresh and appetizing, so you could immediately tell it was a butcher shop from afar.

The butcher shop salesperson quickly cut the meat with a butcher knife, wrapped it in newspaper, and exchanged it for money.

Pork was invariably in the housewives’ shopping baskets.

*

Taiwan Pork Export Corporation.

Chairman Jung was meeting with the president of the corporation.

“I will buy it for 10% more than China. I will pay in cash every week.”

“Oh, really? Then we should change our sales route to Korea. We’re raising pigs to make money anyway, haha.”

“Instead, we have to buy all 40% of the exports, and we’re buying all of the annual production.”

Live pigs are not produced all at once in a factory, but the number of slaughtered pigs per day is limited depending on the breeding period, so the form was to purchase slaughtered carcasses every day.

In short, it was like buying the entire year’s slaughter volume of pigs in advance.

“Of course, President! But I didn’t know that Koreans ate so much pork. I think they eat more than Taiwan.”

“Haha, I guess their taste has changed. All the quantity purchased from Taiwan will be stored in Taiwanese warehouses.”

The president of the corporation doubted his ears.

“Did you just say that you’re storing it in a Taiwanese warehouse?”

“That’s right.”

“If you’re not going to eat it and just store it, why store it in a warehouse for a long time? If you keep it frozen, the taste and price will drop.”

“There’s a reason. I can’t reveal business secrets.”

If that enormous amount were immediately brought to Korea, the price of pork in Korea would plummet, and pig farmers would have no choice but to go bankrupt.

They didn’t cross the border to avoid distribution costs and market disruption.

“Ah, of course. I was just curious. The President ordered it, so there must be a deep meaning. I’m done if I sell it at a high price on behalf of the pig farmers.”

“The storage warehouse is under negotiation, so I will inform you of the purchase date and storage location soon.”

“Okay, President!”

Chairman Jung flew to the United States.

*

Chairman Jung acquired a grain storage and transportation company with a huge warehouse.

Under this company’s name, he began buying soybean futures on the Chicago Mercantile Exchange.

Futures prices were also declining as a bumper crop was expected.

The futures broker asked Chairman Jung.

“Is there a war somewhere? This is the first time I’ve seen such a large amount bet on soybeans.”

“Haha, I have a very good feeling.”

“It doesn’t seem like an amount to bet on so spontaneously. I’m sure it’s a rational decision, right?”

“Of course. My head is very clear today. Thank you for your concern.”

Chairman Jung bet 50 million dollars.

There was something the broker didn’t know yet.

The futures market is where you only buy and sell rights without even seeing the physical goods if you roll over (extend) on the expiration date.

However, Chairman Jung did not roll over on the expiration date that month and immediately converted the rights into physical goods.

And he stacked the physical goods he exchanged at the expiration date in the warehouse.

He was able to secure 70% of the distribution volume this month.

Chairman Jung went to Germany and Denmark, European pork exporting countries, and purchased a certain amount to store in European warehouses.

*

UN Headquarters.

The 15 permanent and non-permanent member states were reviewing the agenda submitted by the Steering Committee.

The Soviet ambassador asked the United States.

“You have no objection to the agenda for recognizing China’s UN representation, do you?”

“It’s a matter that requires great caution, but the United States has decided to recognize the overarching trend.”

“Then I will submit this agenda to the General Assembly.”

The Korean representative put on the brakes.

“Why don’t you ask for Korea’s opinion?”

“Ah, then we will formally proceed with the Board of Directors vote.”

The Soviet Union assumed that Korea would naturally follow the United States’ opinion.

“Raise your hands if you agree.”

13 out of 15 countries raised their hands.

Only the United States and Korea did not raise their hands.

Approval required a majority of 9 or more countries.

The US representative said.

“The United States abstains.”

“Okay. 1 abstention. Then does Korea also abstain?”

“Korea opposes!”

The Soviet representative was startled.

“Yes? Oppose?”

“Yes. Oppose.”

Even if everyone agreed, it would be rejected if only one permanent member country opposed it.

“The United States also agreed, so why does Korea oppose….”

“Don’t you know that Korea is a sovereign state?”

“…….”

*

The UN China Liaison Officer foamed at the mouth after hearing the Soviet ambassador’s words.

“Korea opposed it?”

“That’s right. I thought it would pass because the United States abstained, but suddenly Korea is exercising its veto power. Was there no coordination with Korea in advance?”

“I coordinated with the United States, so I thought Korea would naturally follow.”

“There are many loopholes in Chinese diplomacy. Anyway, the agenda submission to the General Assembly has failed this time.”

“Oh dear, this is a big problem, a big problem!”

*

Deng Xiaoping’s office.

He shouted at the Minister of Foreign Affairs and the Minister of Industry and Trade.

“I’ve been watching, watching, and the tributary state of the East dares to touch the tiger’s whiskers [offend someone powerful]! Immediately stop trade with Korea and conduct military exercises in the 7th mining zone sea area!”

“Chairman, the mainland’s major factories are receiving technical support from Korea, so if we stop, the factories will stop operating. We must also anticipate oil retaliation.”

“There is a diplomatic document for oil supply! You can’t stop it arbitrarily. Regulate Korean factories administratively so they don’t stand out!”

China declared an ultra-strong response.

*

Shanghai.

A skyscraper invested in by a Korean construction company was nearing completion.

However, the Korean construction manager was pacing back and forth anxiously.

He went to see the city’s building permit officer.

“Section Chief Wang, when will the completion certificate be issued?”

“Please wait a little longer.”

“It’s been two months since you postponed it, saying tomorrow or the day after. We’ve received all the subscription applications, and the contractors are protesting. We’re losing hundreds of millions of dollars due to vacancies. What’s the problem this time?”

“Non-compliant alarms and sprinklers were found in two offices.”

“The fire inspection already passed three months ago. But are you doing it again? It’s not even a major defect, just a slightly different installation from the design.”

“China has separate building and fire laws. This time, it was caught in the fire supervision.”

“The building next door conditionally approved even though there were cracks in the load-bearing wall. But why are you inspecting our building so strictly?”

“We’re doing it according to the law.”

“Is it because the gift wasn’t enough? Is the 8th floor not enough?”

In China, you cannot do business without bribing public officials.

In particular, construction officials who hold licensing rights are even worse.

The most preferred bribes for public officials are the 8th and 88th floors of buildings.

Chinese people are fanatical about the number 8.

‘Ba (八·8)’ is similar in pronunciation to ‘Fa (發)’ in ‘Facai (發財),’ which means to make a lot of money.

License plates with consecutive 8s are more expensive than cars.

Phone numbers with consecutive 8s are also worth whatever you call them.

Just as Wall Street invests in limited works of art, owners of limited numbers of 8 were soon certificates of wealth.

People gathered around those with the number 8 and tried to rely on them more in business, so it was a number that called for money, so it had a real effect.

The 8th and 18th floors of buildings are sold to powerful people before they are even built.

The sale price of the 8th floor is usually more than double that of other floors.

As a result, bizarre illegal methods such as designing the 8th floor as a duplex to increase office space are prevalent.

When the completion permit was delayed this time, half of the 8th floor was given as a bribe to a high-ranking official.

It seemed like the permit would be issued tomorrow, but it was passing the month like that.

The public official said.

“There are things that cannot be done with the power of the local government alone.”

“Yes? What do you mean? Then is the central government putting on the brakes?”

“I can’t say anymore. Go and wait.”

The situation was similar for all Korean businessmen operating in China.

All permits, such as registration and changes in business, were delayed, effectively suspending them.

Export customs clearance procedures to Korea have also become stricter, and there have been cases where ships have been tied to the pier for more than a month.

A countermeasures meeting was held in Korea.