Chapter 64: Household Appliances Going to the Countryside
Monday, November 10
As the A-share market opened for the first trading day of the week, it responded sharply to the major news announced the previous evening—the government's official unveiling of the 4 Trillion Yuan Stimulus Plan aimed at boosting domestic demand.
Right at market open, stocks surged without hesitation, quickly rallying upward. Within just half an hour of the morning session, the Shanghai Composite Index had already soared more than 5%. By 2:00 PM, the market experienced another strong surge.
Breakdown of the 4 Trillion Yuan Stimulus Plan
The funding sources for this massive stimulus package were divided as follows:
1.18 trillion yuan was directly financed by the central government.
The remaining 2.82 trillion yuan was distributed through various channels:
1. Local Government Funding: The central government would issue 200 billion yuan in treasury bonds on behalf of local governments. These funds would then be allocated to local budgets and deficit financing.
2. Policy Loans: The government would introduce long-term, low-interest loans as part of a special policy initiative to fund key projects.
3. Corporate Bonds: To support infrastructure projects like road and power grid renovations, local financing platforms would issue more corporate bonds to address funding shortfalls.
By the market's closing bell, A-shares had posted widespread gains, with all major indices finishing in the green. The Shanghai Composite Index closed at 6,127.12 points, up 6.50%, with a trading volume of 22.3 billion yuan. The total turnover of both exchanges reached 79.2 billion yuan.
Fang Hong's Stock Performance
Unlike many traders, Fang Hong did not closely monitor the market today—he already knew it would be a one-sided rally. His Qunxing Capital portfolio, managed by Hua Yu, and his personal trading account at Zhongxin Securities performed exceptionally well.
A stock in his portfolio hit the daily limit-up and closed strong, with total trading volume exceeding 3.6 billion yuan.
Fang Hong was currently lying comfortably against Ashin, satisfied with his growing fortune. His account balance had now reached 19.6 million yuan, reflecting a 30.6% gain over the last four trading days—an absolute profit of 4.6 million yuan.
Previously, Hexuan had expressed interest in buying a car, and Fang Hong fulfilled her wish by transferring 3.5 million yuan to purchase a Lamborghini. In just four days, he not only recouped that expense but also gained an additional 1 million yuan in profit.
His stock trading record was now astonishing—his securities account had achieved a cumulative return of +42,230.66%, an increase of over 422.3 times! Compared to the broader market's performance, his profit curve was pressing the Shanghai Composite Index to the bottom of the chart.
Soaring Popularity
While Fang Hong was pleased with his financial returns, he was even more satisfied with his rising reputation.
With today's stock market surge, countless retail investors worshipped the trading guru known as "Weathered Salted Fish". The online popularity of Cao Chenghui's trading ID continued to soar.
The Shanghai Stock Exchange 50ETF fund also closed with a +9.29% gain, nearly hitting the daily limit. Today's rally was driven by blue-chip stocks, and the ETF's strong performance provided clear evidence of that.
Cao Chenghui had entered this trade last Tuesday, and his floating profit had now reached 15%. Any retail investor who followed his strategy and held on to their positions had enjoyed substantial gains. This further boosted his reputation in the market.
As a result, Fang Hong's reputation points officially surpassed the 10 million mark, reaching 10.53 million. His achievement points increased by 138,600, bringing his total to 620,100 points, which could be exchanged for six item cards.
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Meeting at Qunxing Capital
At 4:00 PM, Fang Hong arrived at the headquarters of Qunxing Capital after receiving an urgent call from Hua Yu. The conversation was too important to discuss over the phone, so a face-to-face meeting was necessary.
Upon entering the building, two young and attractive female receptionists immediately recognized him. One quickly instructed her colleague to inform the chairman, while the other walked over to welcome him personally.
"Good afternoon, Mr. Fang! Please follow me," she said with a warm smile, leading him to the VIP lounge.
Just as Fang Hong stepped inside, Hua Yu emerged from his office.
"Get back to your work," Hua Yu instructed the receptionist before turning to Fang Hong with a friendly smile. "Brother Fang, please come in!"
The two entered the office, and Hua Yu closed the door.
Fang Hong sat down and got straight to the point. "So, what's the matter?"
Without hesitation, Hua Yu grabbed a document from his desk, handed it over, and said, "This is the 1 billion yuan portfolio configuration. The only stock left to be fully allocated is Zhongjin Gold, with a shortfall of 40 million yuan. Other than that, all positions have been established according to your requirements."
Fang Hong quickly skimmed through the document and set it aside. "That's not the real reason you called me here, is it?"
Hearing this, Hua Yu chuckled. "You're right... By the way, did you see last night's news?"
Fang Hong nodded. "Yes. The 4 trillion yuan stimulus plan announcement was completely in line with my expectations."
Hua Yu, instead of immediately addressing the 10 billion yuan investment, first raised a different topic. "How exactly will this massive stimulus boost domestic demand? Won't most of it go toward infrastructure?"
Fang Hong crossed his legs and explained, "Given the global financial crisis, the government's economic strategy relies on three key pillars—investment, consumption, and exports. Now that 4 trillion yuan has been allocated, investment will be covered. But exports? That's hopeless in this economic climate. Excess production capacity can't be absorbed through exports anymore. That means domestic consumption must be stimulated—and the only viable way is by helping farmers."
Hua Yu was intrigued. "Relying on farmers to boost domestic demand? How does that work?"
Fang Hong continued, "In recent years, the government has invested heavily in rural infrastructure. Now, almost every village has access to electricity, roads, and the Internet. There are over 700 million rural residents—a massive, untapped consumer market. Previously, these people didn't have electricity, roads, or Internet, so even if they wanted to buy appliances like refrigerators, mobile phones, or TVs, they simply couldn't use them. But now? Everything has changed."
After a brief pause, he added, "I predict that the government will soon introduce a Household Appliances to the Countryside policy. This will promote large-scale sales of refrigerators, TVs, mobile phones, and washing machines to rural households. The goal is to boost consumption, stimulate demand, and drive industrial production, countering the negative effects of the global financial crisis."
Fang Hong knew that this rural appliance subsidy program would officially begin on December 1, 2008, running until November 2012. Under this policy, any rural resident purchasing home appliances could get a 13% subsidy from their local Finance Bureau—no matter where they bought the products.
He turned to Hua Yu and concluded, "Exports are collapsing, but by redirecting export subsidies to rural consumers, the government can stimulate the domestic economy. This way, farmers improve their living standards while manufacturers keep their businesses running. It's a win-win situation."
"Ultimately, thanks to our 700 million rural consumers, China has a unique advantage in overcoming this global crisis. That's why we will likely be the first country in the world to recover."
Hua Yu absorbed the analysis and nodded in agreement. "That makes a lot of sense."
Fang Hong glanced at him again. "Alright, now let's talk about the real business at hand."
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