Story of a Big Player from Gangnam

When Gun-Ho went to work in GH Building in Sinsa Town that morning, he received a call from Seukang Li— the director of the bureau of cultural affairs and art in Shanghai.

“I heard that the joint venture was officially established in Antang City now. Congratulations.”

“I’m still not sure if it was the right decision to join that joint venture. As a matter of fact, I can find tons of business that I could invest in with the funds that I would invest in it.”

“I think you made the right decision. A terminal project cannot be failed because it is closely related to Chinese ordinary people. You might not make a fortune, but you won’t lose your investment funds. That fact should give some comfort to you, especially these days where we see a lot of businesses going broke. You will see many Korean companies in China disappear when you wake up next morning. China is a land of opportunities, but people should know that they have to bear high risk to enjoy those opportunities.

“At least you are honest.”

“The Central Committee of the Communist Party of China wants to reduce the steadily increasing economic gap between the east area and the west area by developing the west area. That’s why they are sending very competent personnel to small cities. For example, they placed Lizian Zhang at the small provincial city— Antang City— as its deputy mayor. Actually, with his ability, he should be working for the central government.”

“So, you think I will have a good return from this investment, huh?”

“Don’t worry about it. You will have your investment funds back with good profits. While you are working with them, pay attention to the construction work in that area.”

“Construction work?”

“As the central community party announced that they will start developing the west area, the working class people in the area are moving to the cities in the west rather than major cities like Shanghai or Beijing. Even though Antang is a small city, you will see an acute increase in the house price there soon.”

“Which one is the richest area there? The area like West Lake in Hangzhou City or Gangnam District in Korea. You can never fail with real property investment in the area like that. Whether the government imposes restrictions or not, the real property price always increases in those areas.”

“Of course. It’s one of a human being’s natures. They want to reside in a rich area. Don’t forget about the resemblance theory. People want to consider themselves as rich as the neighbors who are living in the same wealthy area. Professor Jien Wang is a member of the Financial Service Committee of a municipal government, but he sometimes calls me and talks about his concerns and worries.”

“What does he worry about?”

“He thinks that there are so many obstacles that need to be overcome for China’s economy to grow.”

“Hmm.”

“I think the central government needs talented people like Jien Wang. I want Jien Wang to do politics in one of the central cities like Beijing. It’s a waste to keep him in a small provincial city. He is a brilliant man who used to teach at Yale University in the U.S.”

“Hmm.”

“By the way, you won’t be able to make another investment in the soap opera production industry that I talked to you about last time, will you?”

“Well, I do want to try it since you recommended it to me, but the thing is that I’m currently investing a significant amount of funds in the terminal project. That’s the problem.”

“Of course.”

“Another concern is that an investment in a terminal project is relatively safe while a soap opera production is a very high-risk investment.”

Seukang Li let out a deep sigh and agreed explicitly, “You’re right.”

“What’s the matter?”

“Several people, who used to work for the broadcasting station, gathered together and formed a soap opera production company, and they are currently shooting a soap opera with 35 episodes.”

“Yeah, I think you told me that before.”

“The production cost for one episode is now exceeding 1.5 Yuan in China, and these people got hit hard when their investor backed out. Not just the production company, but the broadcasting station that made a contract with this production company also got hammered severely by it consequently.”

“How much is 1.5 million Yuan in Korean won? Let me see… Well, it’s more than 250 million won. It’s very expensive.”

“I heard that it costs more than 500 million won to make one episode of a soap opera in Korea. One of the factors that are contributing to the high production cost is the payment for actors or actresses. A popular actor or actress in China makes a tremendous amount of money. Also, without having a popular actor or actress, a soap opera cannot be successful.”

“But, it’s not your job to worry about one specific soap opera production company as a government worker, is it? Some production companies succeed while some don’t. That’s how it is, right? Why are you letting out such a deep sigh for it? I understand that you do feel for them, but it’s not like the company is directly related to you or anything like that.”

“The estimated production cost for the entire soap opera is 52.5 million Yuan. Part of it has already been paid for those episodes that were already aired. They can cover the cost by making some money through advertisements, VOD, and selling them in the international market.”

“You said that part of that soap opera has already been aired. How are their ratings?”

“Many scenes had been cut off because of the government’s strict censorship, and it made the series less fun. As a result, I wouldn’t say that it has high view ratings.”

“Well, I guess that you are in an awkward position. What can you do for a soap opera that has low ratings? I understand that you feel sorry for them as the director of the bureau of cultural affairs and art in Shanghai. But, I don’t see what you can do about it. Unless you invested your own funds in that company, don’t worry too much about their business.”

“Haha, you think so? Well, I got what you mean.”

After getting off the phone with Seukang Li, Gun-Ho thought that it was weird that Seukang Li seemed to worry too much about the production company.

“Is there something that I don’t know about?”

Gun-Ho made a call to Professor Jien Wang at Zhejiang University to find out.

“Xianzai Zhong Zai huiyi (He is in the meeting right now).”

“Shoot, it seems that he is in a meeting all the time. Chinese people indeed love to have a meeting.”

After quite a while, Gun-Ho received a call from Jien Wang.

“Mr. President Goo, I’m sorry that I missed your call. I had an important meeting earlier.”

“I called to ask you about something. Seukang Li keeps asking me to make an investment in a soap opera production company. What do you think? Do you think it would be okay for me to do that?”

“I don’t believe that it’s only about money. There are many media groups in China with a significant amount of funds available to make an investment. A substantial amount of money is moving around in the industry. I’m not sure, but I think maybe those funds are entwined with the political party opposed to Seukang Li’s. If that is the case, Seukang Li is probably looking for a new investor who is not related to the opposing political party and also who can provide enough funds. The ideal investor would be a Korean soap opera production company that has high technology and skills that can directly benefit the business.”

“Technology?”

“Yes. You know things like recording, lighting, sound, and editing skills. Moreover, if they can work with a Korean production company, they will have easier access to work with internationally popular actors and actresses through Korean Wave.”

“Hmm, is that so?”

“Also, maybe Seukang Li is somewhat related to that specific production company in some way like one of his relatives is working there, or he asked them to produce a specific video but it failed to elicit high ratings so he is looking for a way to break through.”

“It seems that the cost to produce a soap opera is enormous in China.”

“It’s still on the rise steeply. The Chinese top stars get huge performance fees. Look at Fan Bingbing or Qian Kun. Their annual income coming from their playing roles in a soap opera already exceeded 100 million Yuan.”

“100 million Yuan (approximately 17 billion won)! Wow. That’s a lot!”