In Hiroshima, Japan, the vice president's office of Akima Chemical Machinery Co., Ltd., Mineroni is furious at his subordinates:

"What's going on? Why was the chemical plant project in Ecuador 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 implement the terms of the contract, and you can even lose the project. What did you do?"

Sales Director Shigeshi Mori lowered his head and listened to his boss's roar, he did not dare to interrupt. Qiujian Club is a family-owned company. The president is an old man who cares about the affairs. The company's daily affairs are all handled by Vice President Mineronji. Mineronji is already 60 years old this year and is still very strong. As he grows older, his temper is getting older, and his subordinates are afraid of him.

After finally waiting for Mineronji to finish his shouting, Mori Chungshi raised his head timidly and said, "Vice President, please listen to my explanation. Ecuador has not yet finalized who to hand over to this chemical plant project, but is just inclined to hand over to the Dutch. The main reason for this change is that the yen has continued to appreciate in the past six months. Ecuador feels that the price is unbearable, so he turns to the Dutch."

"The yen appreciates?" Mineronji's face turned gloomy. "It's because the yen appreciates again. I don't know what the government is thinking. If the yen rises like this, we who do business will be done."

The appreciation of the yen began with the Plaza Agreement in September last year, and the reasons for the Plaza Agreement must be traced to an earlier period.

In the 1950s, Japan was still a weak country that had just gotten out of defeat. Its industrial level was low and its products lacked competitiveness. At that time, the exchange rate of the yen to the US dollar was 300 to 1, and this exchange rate level was relatively in line with the actual purchasing power situation.

From the 1960s to the 1970s, the Japanese economy experienced 20 years of rapid growth. The technical level of Japanese companies continued to improve. The products gradually gained competitiveness and began to have a place in the international market. At the same time, the exchange rate of the yen did not increase significantly. Compared with purchasing power, the value of the yen seemed to be seriously underestimated. The result of the underestimation of the yen was that Japanese goods had a clear price advantage compared to European and American goods, especially American goods, which was quite similar to the situation of Chinese goods in later generations.

Similar to Japan, another defeated country in World War II, Germany also showed an aggressive trend at this time, with a large number of German-made goods sold around the world, occupying the vested interests of Britain, the United States and other countries.

Corresponding to the rapid growth of Japan and Germany, the economies of Britain and the United States have fallen into long-term stagflation. Economists have proposed various economic stimulus measures, but they still cannot revitalize the country. After research, the large consortiums of Britain and the United States believe that the depression of their own country's economy mainly comes from the competition between Japan and Germany, and the competitive advantage of Japan and Germany lies in their "manipulation of exchange rates", underestimate the currency value, and implement disguised dumping.

The above accusations are exactly the same as the accusations made by the Western world against China in the new century. There has never been any new under the sun, which is also a proof.

In order to crack down on Japan and Germany's exports, 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, USA and reached an agreement between the five governments to jointly interfere in the foreign exchange market, commonly known as the "plaza agreement".

The core content of the Plaza Agreement is to require the Japanese yen and mark to appreciate the US dollar, thereby improving the foreign trade conditions of the United States and curbing the competitiveness of Japanese and German goods. This agreement is not good for Japan and Germany's economy, but they cannot object, especially Japan, who, as a vassal who is completely politically dependent on the United States, can only wait for others to cut their own wool.

Before the Plaza Agreement, the exchange rate of the yen to the US dollar was 250 to 1. In three months, the exchange rate rose to 200 to 1. By the end of 1986, further rising to 152 to 1.

The sharp appreciation of the Japanese yen has led to an increase in the price of Japanese export commodities. Originally, the price of 250 yen in the US market was $1, but now it costs $1.25. People will naturally reduce their purchases of Japanese commodities and instead purchase American commodities, thus losing the revival of American manufacturing.

Of course, this is just a theoretical analysis. The decline of the US manufacturing industry is not only caused by competition from the Japanese, but also the reasons of American society cannot be ignored. The square agreement pushed up the yen exchange rate and hit Japanese goods, but then the goods from Southeast Asia replaced Japanese goods and became new competitors for American companies. Later, the legendary "Made in China" began to show its power, and then... there was no more.

At this time, it was half a year after the signing of the Plaza Agreement, and the impact of the appreciation of the yen has already appeared. For example, in this project of the Ecuadorian chemical plant, Akima Company first quoted Ecuador's side of 10 billion yen, equivalent to 40 million US dollars. As the yen appreciated, 10 billion yen became 50 million US dollars, an additional 10 million US dollars out of thin air. Of course, people have to reconsider it.

Some things like this have happened several times in the past few months. Some customers have proposed to lower prices and return to their original prices, while others have begun to seek other suppliers. After all, there are still other countries in the world that can produce similar equipment. To be honest, even after the yen appreciates, Japanese products are still relatively cheap, which is due to the lower labor costs of Japan than Europe. However, the customers' psychology is so strange. People think that Europeans have higher prices, so things must be better. In the past, because your things are cheaper, everyone chose you. Now that your things have increased, they might as well add some money to buy better things.

The appreciation of the yen has advantages and disadvantages for Japanese companies. The advantage is that when using the yen to buy things in the international market, the yen is more valuable. The disadvantage is that commodities quoted in the yen appear more expensive in the international market and will lose part of the market.

This is actually similar to China in the new century. After the RMB appreciates, people who travel abroad feel happy because the RMB is more valuable than in the past. Export-oriented companies feel uncomfortable and things are hard to sell. Foreign merchants have turned to places like Vietnam and Bangladesh to purchase.

"Vice President, we can't continue like this anymore." Mori Shinshin said, "Because the appreciation of the yen, our product competitiveness is declining, and Koreans are snatching our market. If we cannot change this situation, we will lose a lot of traditional markets, which will further increase our production costs. This is a vicious cycle."

"But the appreciation of the yen was done by the bureaucrats in the province of Taoism. What else can we do?" Mineronji said angrily.

Mori Shigeshi said: "The appreciation of the yen is something we cannot change. What we can do is to reduce the prices of our products accordingly and give up some profits to customers. Otherwise, we will not be able to get the order at all."

"Didn't we have already made a round of price cuts last month? The turnkey price of our 300,000 tons of fertilizer complete sets fell by 3%," Mineronji said.

Mori Shigeshi said with a wry smile: "This price reduction is not enough to offset the impact of the appreciation of the yen. The appreciation of the yen is 25%. What's the use of our price dropping by 3%?"

Mineronji questioned: "You are not asking the company to reduce the price of the product by 20%, right? If so, can we still make a profit?"

Mori Shigeshi said: "It doesn't have to drop by 20%. If it can drop by about 10%, I think we still have hope of regaining the Ecuador project. We will also have stronger competitiveness in other projects."

Mineronji said: "This is impossible. If the price drops by 10%, our profits will be very meager. At present, domestic prices are rising very quickly, and our employees' wages are also increasing. The cost has increased, and it is not easy for us to not raise prices. How can we still reduce the price by 10%?"

"If this is the case, it will be troublesome." Sen Chongshi was a little depressed. He was responsible for marketing and had no idea about the production situation and could not say anything.

"But, the vice president and Korean equipment quotations can be more than 15% lower than ours. Is it because we have not discovered the company's potential yet?" Mori Shigeshi's assistant Goto Tada interjected.

Mineronji shook his head and said, "Tada-kun, things cannot be compared 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 those of them. South Korea is a country with a much lower labor costs than us, which is one of the reasons why their equipment quotations are lower than ours. For example, if you go to Latin America with Mori, the daily subsidy is 80,000 yen, and if you are a Korean salesperson, the subsidy he receives is less than 20,000 yen."

"This..." Tada Goo is dumb. If Mineroni gives another example, he might be able to criticize it. Now people are saying that he has received too much subsidy, what else can he say? Will you let the company reduce its subsidy? That is something that only fools would ask for.

"You go down first, this matter makes me think about it. You also need to continue to contact Ecuador. As long as there is a glimmer of hope, you must seize it. In terms of price, we can have up to about 2%, so you can talk to each other within this range." Mineronji said.

"Okay, we will work hard." Mori Shigeshi and Goto Tada agreed in unison, then bowed and left.

"Cost! Cost is really a big problem!" Mineronji sighed while sitting at his desk, pounding his head.

The secretary gently pushed the door and said, "Vice President, there are two Chinese people downstairs who want to visit you. They say they belong to the China National Major Equipment Office."
Chapter completed!