Chapter 2403: Industrial and Commercial Promotion Act

January 2, 1636

As the first New Year since the formal promulgation of the "Great Song Public Calendar" in Guangzhou, the Great Song Guangzhou Municipal Government spared no effort in promoting the Public Calendar New Year. On "New Year's Day," January 1st, they announced a five-day holiday for government offices and schools.

Shops and workshops throughout Guangzhou followed suit, closing from New Year's Day and waiting until the fifth day to welcome the God of Wealth before reopening for business.

Some trading houses, reluctant to abandon the year's best business opportunity, arranged for their clerks to rest in shifts. Though the Australians had issued no official decree requiring "uniform observance by scholars and commoners," everyone felt it prudent to play along and show support.

Since the Australians' arrival, their thunder and rain—their displays of power and benevolence—had left the city's scholars and commoners in a daze. The gentry and wealthy households especially lived in a state of terror. The Witchcraft Case had shattered hundreds of elite families inside and outside the city walls. And scarcely had the plague ended before the "New Tax System" began rolling out.

Throughout history, countless heads had rolled over tax collection. Though the Australians weren't bloodthirsty, the frequent "exiling" in recent major cases had set everyone trembling. For Australian exile meant not just one person—entire families were typically sent away together. Though they were permitted to bring property and household members, the destinations were all "remote and wretched prefectures" that no one had ever heard of. Exile amounted to a one-way journey.

Perhaps recognizing that recent purges had been too severe—and that last year's plague had greatly sapped Guangzhou's vitality—the Australians had consciously softened the atmosphere starting in December, pivoting to lively preparations for various celebrations. Decorations festooned every corner. On New Year's Eve, massive firework displays erupted at Bai'etan and other locations, illuminating half the sky with colorful sparkles for over half an hour and driving the entire city into a frenzy of excitement.

The Guangzhou Federation of Industry and Commerce held a Group Greeting on the second day of the New Year. For Federation members, though the gathering was largely a formality, it also served as a "reassurance pill"—a chance for industrialists and merchants, alarmed throughout the past year, to relax somewhat.

At the Group Greeting, Lin Baiguang, who presided over the meeting, and Liu Xiang, who came specially for the occasion, offered more than polite pleasantries. They specifically mentioned a series of "Industrial and Commercial Promotion Acts" from the Senate, including the much-discussed "Nanyang Company" plan.

Beyond the Nanyang Company's stock and bond issuance, there were numerous specific industrial investment projects. Mayor Liu personally delivered detailed speeches on each—tireless in his explanations. As Mayor of Guangzhou, vigorously organizing industry and commerce had always been his guiding principle. Besides the relocated and newly built enterprises in the Planning Agency's blueprint, encouraging local industrialists and merchants to establish ventures was a shared goal of the Planning Agency and Municipal Government alike.

The Planning Agency and Guangzhou Municipal Government weren't the only ones eager to "diffuse production capacity." The agricultural and light industry departments were also rubbing their palms, ready to seize opportunities on this flourishing land of Guangzhou. Wu Nanhai was scheming to launch a "patent transfer" program, preparing to license a batch of civilian technologies to Guangzhou's wealthy households for fees, enabling them to invest in factory establishments.

Though these projects hadn't yet been formalized in official documents, Liu Xiang had disclosed their general content to the major households via his presentation today.

The projects seemed varied, but all fell under "agricultural product processing." The largest and most important among them was cotton spinning.

Cotton spinning was an industry the Senate had largely neglected until now. The reasons were simple: the Senate lacked a stable cotton supply and faced competition from cheap Indian cotton cloth and Songjiang cotton cloth. Consequently, though the Senate had established spinning mills and textile factories over the years, their scale remained modest—primarily producing specialized textile products. Bulk cotton fabrics were mostly imported from India and the Great Ming.

After occupying the Two Guangs, the cotton supply problem had been largely resolved. Moreover, various departments had complaints about existing "local cloth," whether Indian or Songjiang. From an application standpoint, cotton textiles had extensive industrial and civilian uses. Yet the current limited spindle capacity under Senate control kept special textile production hovering at relatively low levels in output, variety, and technology alike.

Expanding cotton textile production was soon placed on the agenda. Following the Senate's established policy for industrial development, such light industries were consistently developed through "attracting private capital investment." Thus the "Guangzhou Industrial and Commercial Promotion Act" was launched.

After Lin Baiguang concluded the Group Greeting, he hosted a banquet for the members. Glasses clinked amid lively chatter, and everyone appeared quite pleased. After eating and drinking their fill, Wu Yijun bid farewell to his acquaintances and settled into his sedan chair for the journey home, pondering the Short-hairs' motives all the way.

He wasn't originally in the cloth business—he was a dried fruit wholesaler. But that sandy land in the south belonged to him. The Short-hairs had purchased it, and he'd heard that a "Real Short-hair" had specifically gone to inspect it, which made him scent a business opportunity. He had long envied Gao Ju, who had risen rapidly since establishing connections with the Short-hairs, becoming one of the top wealthy households. Before Guangzhou's "liberation," however, Wu Yijun had no dealings with Short-hair industries. He had originally come today merely to mark his attendance, following the crowd.

The Group Greeting had exceeded all expectations. This so-called "Industrial and Commercial Promotion Act" was essentially the Senate's investment promotion conference.

Among the projects presented, cotton spinning interested him most. He owned many newly reclaimed sandy fields, currently useful for little besides growing cotton. But merely selling raw cotton wouldn't earn much. Spinning and weaving it himself could maximize profits. Judging by the Australians' current appetite for cotton cloth, entering this line of business meant not worrying about sales. Both Mayor Liu and Director Lin had explicitly stated that the Senate would fully support local industries.

However, local cotton spinning in Guangzhou Prefecture had never been as strong as silk weaving. The market was dominated by Songjiang cloth, and many fabrics were produced for farmers' personal use. After the Australians arrived, large quantities of foreign cloth flooded in. Guangzhou's cloth shops had long since ceased carrying local cloth. In remote county markets, farm-produced cloth still appeared, but after the chaos of war, who knew how many weaving households remained?

The Short-hairs offered three schemes in total.

The first was simplest—essentially a variant of the putting-out system. Traditional putting-out dealers provided raw materials to peasant households, then purchased and resold the finished products. The specifics varied: some provided raw cotton or hemp, others provided spun yarn, and some large workshop owners produced and sold directly. But looms were basically each family's or workshop's own property. The Short-hairs added "machine credits"—leasing machines on installment. Besides the usual putting-out arrangement, the Short-hairs would take a cut of profit from every bolt of cloth sold by those who obtained machines, in perpetuity. This was far more ruthless than the credit terms offered by households like his own. Unless one bought back the "shares" in the Australians' hands—but the buyback price was more than ten times the machines' direct selling price. Though the invested party could receive Australian technical and management guidance, and the cut was determined by profit margins, it essentially amounted to selling oneself to the Australians.

As for corporate share dividends, in Wu Yijun's view, this was simply the "East-West System" under a different name. "East" was the capital owner; "West" was the manager. The capital owner provided money, the manager handled operations; joint stock operations among several families were commonplace. But there were differences. For example, this company that promoted him as legal person was also to receive investment, yet wouldn't conduct specific business. He had initially assumed the capital owner was that young False Short-hair, but unexpectedly, the investor wasn't a person but another company—one whose shareholders were apparently Real Short-hairs. Thinking it over, these Short-hairs truly deserved their reputation as sea merchants. Though it looked complicated, they could earn money while lying down.

Finally, there was one more model: the merchant funded the factory alone or in partnership; the Australians only sold equipment and technology to the factory, intervening in nothing else. After paying profit taxes, the rest went into one's own pocket.

If asked which was best, naturally it was the third option. But that option, needless to say, required investment beyond ordinary wealthy households' reach. At minimum, several families would need to pool shares.

Returning to his residence, he ordered the family guards at the gate: "Bring everything inside." The Short-hairs had distributed samples to members interested in the cotton textile industry.

Back in his study, he pondered for a while, then sent for his cousin-nephew Chen Lin. Chen Lin was a relative through Wu Yijun's family in Nanhai County. His family had originally worked in silk workshops. Not long after the Australians fought their way in, bandits and soldiers swept through the countryside. The Chen family was first robbed, then struck by fire—their home largely destroyed. Chen Lin fled to Guangzhou seeking refuge with Wu Yijun.

Originally, after the surrounding countryside was pacified, Chen Lin had planned to return and assess the family property. Then the plague struck, and the delay kept him trapped in the city.

A few days ago, Chen Lin had come to bid farewell, saying he would leave Guangzhou on a chosen date to return home.

Viewed this way, it was perfect timing.

Chen Lin arrived and paid his respects. He was a handsome man in his early thirties. As a silk merchant in the countryside, his face had been tanned pitch black. Having stayed in Guangzhou for over a year, he had grown much fairer—he now looked like a scholar.

Wu Yijun exchanged pleasantries, asking about his luggage preparations and whether the boat was firmly hired. He also instructed servants to prepare some Guangzhou local products as gifts.

Only at the end did he broach his real purpose: "Your family has lived by the loom for generations. Tell me—what do you make of these cloth samples?" He handed several samples to Chen Lin.

Chen Lin examined them, turning them over repeatedly, frowning. "I wonder where Uncle obtained these samples."

"Never mind that for now. Just tell me about the quality and grade."

Chen Lin cleared his throat. "My family has always worked with silk. Though I understand a thing or two about cotton cloth, I'm no expert in that line and can only offer rough observations."

Wu Yijun laughed. "If you don't understand, I understand even less. Just say what you can."

Though he had thoughts of entering the cotton spinning business, something felt off. Competition in Guangzhou's cotton cloth market was fierce. Whether local cloth, fine Songjiang cloth, or various Western cotton cloths—all held firm market positions, with little room in pricing. To truly enter this field would mean facing intense competition.

(End of Chapter)