Chapter 2419: New Trade Agreement

Now the Dutch East India Company in the Lingao timeline depended even more on Asian intra-trade for precious metals than in the old timeline. On one hand, they took Great Song's bulk commodities and industrial products and secretly competed with Great Song for business in Japan; on the other hand, they relied on reselling Great Song's industrial products to supplement bulk commodities in South Asia for shipment back to Europe. In both transactions, Great Song industry's presence on the Asian-European route was diminished twice over. Simply put, they benefited from Great Song while undermining Great Song, profiting third parties.

Of course, the Senate wasn't made of angels either. After receiving reports from Senator Ping in Japan, the Colonial Trade Department adopted corresponding countermeasures. First, raw silk delivered in Guangzhou switched to a quota system. High-quality Zhejiang raw silk produced by Zhao Yingong's Hangzhou Phoenix Silk Group would first satisfy the Merchants Bureau's Japan trade, and only then could the VOC purchase.

Next, the Colonial Trade Department adopted a second measure. In the new round of trade negotiations starting in 1635, they demanded that the VOC hand over Fort Zeelandia in Kaohsiung—in exchange, the Senate would permit the VOC to establish an unarmed trading post in Kaohsiung. VOC employees and other Europeans and Asians already settled in Zeelandia could continue to reside, do business, and work in Kaohsiung as expatriates. Visiting VOC merchant ships could carry weapons but couldn't station troops.

Perhaps Fort Zeelandia was too symbolic for the VOC. This demand sparked fierce debate in Batavia. Most VOC councilors insisted on retaining this Far East first fortress that had cost a fortune to build. But some councilors pointed out that under current conditions, maintaining Fort Zeelandia was completely unprofitable for the Company.

First, in terms of military force, the Company had absolutely no ability to defend this fortress.

Second, the Company had originally built Zeelandia to obtain Chinese goods nearby. Now through the Australians, Company merchant ships could conveniently obtain various Chinese goods from Guangzhou, Lingao, and Kaohsiung. The meaning of Fort Zeelandia's existence had become negligible.

If they insisted on opposing the Australians for the sake of vanity, the VOC would only end up losing both money and assets.

This debate over whether face or business mattered more probably dragged on too long, which led to the two accidents Wang Kai mentioned: one was a Maritime Police patrol boat colliding with and sinking a VOC agent merchant vessel; the other was a group of pirates who had once defected to Great Song but returned to their old trade robbing a VOC agent merchant vessel.

"These unfortunate incidents are of course coincidental, but we must also acknowledge that trade on the China-Japan route cannot withstand competition between us. I think we should clarify whether Japan falls within the treaty-regulated scope."

De Lantron sighed with an expression of "it's finally come to this," but still maintained professional composure and argued as best he could: "I must emphasize that closing Japan trade will have extremely adverse effects on our side and will also affect our procurement from you..."

"I'm afraid this matter is non-negotiable. But if you have other proposals that can offset the adverse effects, we maintain an open attitude." Fatty Wang cut off the Dutchman's argument. He wanted to see whether the new Governor-General of Batavia was mentally prepared for this.

"Er, we hope you can increase rubber procurement and open rubber refining technology to us. Of course, we will still face several years of difficulty and hope you can provide certain loans."

Indeed prepared. Fatty Wang felt the new Governor-General's caliber was acceptable. Actually, the Senate had prepared an even more "thoughtful" proposal for them. The Senate naturally knew about VOC shareholders' stinginess and also knew how hard VOC employees worked doing "high-frequency" trading in Asian intra-trade to gather enough capital for the Asian-European route. Perhaps the Dutch's fixed image of stinginess and shrewdness had been forced upon them by their superiors.

"Mr. De Lantron, we are prepared to propose a more favorable plan in the 1636 trade negotiations: targeted loans equivalent in value to your annual procurement of goods from Great Song, with preferential interest. The condition is that you may not sell ceramics, raw silk, silk fabrics, and sugar in Japan—from any origin—while other commodities you may freely sell, with no origin restrictions."

This was equivalent to the Australians establishing monopoly rights for silk, sugar, and ceramics in Japan—the thing the VOC had dreamed of. But De Lantron knew this fat meat wouldn't go to the Company. What he could do was bargain as much as possible.

He immediately became interested in the "loans" in the new conditions.

"Really?" De Lantron widened his eyes. "Er, I mean, what's the interest rate?"

"Annual interest rate of 20%, but ships or land must be used as collateral. Additionally, here's another preferential for you: Fort Zeelandia can be valued to offset your interest payments on this loan—principal is separate."

"I believe we can reach an agreement. I'm fully confident about this, but I still need some time to obtain authorization. Our new Governor-General is a..."

"Respectable person." Wang Kai finished the sentence for him. "As for what setting the Governor-General's letter should be read in, I think since we've resolved the misunderstanding about trade terms and the impact of the accidents, you may go discuss ceremonial details with my colleagues in the Foreign Affairs Department. With such an excellent subordinate as yourself, I'm sure Mr. Diemen anticipated this pleasant outcome." Fatty Wang even wanted to ask him: how many versions of the letter did you bring?

"Of course, the esteemed Governor-General is a far-sighted person. He anticipated your generosity." De Lantron seemed somewhat excited. Obviously, he wasn't as far-sighted as his superior. He could imagine that with annual "credit" goods, they could both earn principal by selling Great Song goods in Asia to purchase other regional goods for shipment to Europe, and could use relatively low capital costs to purchase Great Song industrial products and bulk commodities to ship back—solving the capital problem that had plagued the Company for years in one stroke. But his Governor-General might perceive the hidden danger: once they became accustomed to this comfort, their entire trade system would have to be based on Great Song goods, on Great Song currency. This was more dangerous than depending on Japanese precious metals—after all, the Japanese had no comprehensive understanding of the Dutch trade system, while the Australians knew the Dutch inside out and also held them by the throat.

But Fatty Wang believed Governor-General Diemen wouldn't give up such generous immediate benefits either. How he would reduce the risks was his own concern. In old timeline history, the VOC's foresight was far inferior to the BEIC. So their achievements and lifespan were far inferior to the latter's.

"In that case, I'll await your good news."

"Then I won't disturb you further. I've heard Senator Wang is going to a new position of higher responsibility. You must be busy with affairs. We also look forward to more cooperation with the Great Song Nanyang Company." De Lantron said as he stood. "I hope we can soon begin negotiations to establish a trading post in Sanya with your company..."

"That you may certainly pursue. We'll have no shortage of dealings in the future. Only, it'll be me visiting you instead. Please take good care of us." Wang Kai also stood and shook hands with the Dutchman.

"Not at all, certainly, certainly. Senator Wang and Senator Zhou's names are quite famous in Batavia. The entire Company is willing to cooperate with your work!" De Lantron had learned many Senator-style pleasantries and was using them with increasing skill.

After seeing off the Dutchman with his complex emotions, Fatty Wang wanted to call in Shopkeeper Gu, who had been waiting a long time. Just as he was about to open the door, he ran into Senator Shi Jiantao pushing in.

This Senator Shi, responsible for the Hong Kong Shipyard, was a busy man. Wang Kai had waited several days in Hong Kong to see him. Because his shipbuilding plan needed the Hong Kong Shipyard's support to have any chance—otherwise it was just empty talk.

At the Hong Kong meeting, his proposal to build clipper ships received enthusiastic approval from Shi Jiantao. Senator Shi had grown bored building the unchanging T-series transport ships. He needed new challenges.

Reaching consensus was one thing; implementing it was another. Fortunately, the Hong Kong Shipyard's Second Five-Year Plan included a 5,000-ton class dock. Once completed, the Hong Kong Shipyard would have exactly one more opening.

With the dock about to be finished, the Planning Agency still hadn't issued Wang Kai's clipper ship construction order. This made Shi Jiantao anxious. If the paperwork still wasn't done after completion, the dock's scheduling would have to wait again.

He simply stopped sending telegrams and came directly from Hong Kong to Lingao.

"So, Fatty Wang, that clipper ship you've been dreaming about—this time do you actually have money to build it?" Senator Shi asked directly.

"Not that fast. Though the new company does have some financial autonomy, money is needed everywhere. As for ships, there are still a pile of old antiques from the Southeast Asia Company available. We'll have to wait a bit."

"Then what do we do? This dock is about to be completed! If you're not building, the ships on my schedule won't wait! Let me make this clear first—it's not that I won't help. For the next dock opening, it'll be at least half a year later. Your big ship of over a thousand tons might have to wait a year."

"Don't worry. The demand is real—people just haven't anticipated it yet. Besides, we have other channels. I was just about to discuss things with Shopkeeper Gu outside."

"What, also utilizing private capital?"

"Yes. The Nanyang Company's equity is prepared to be subdivided by project. So in this era, a ship can certainly count as a small project."

"You're really making full use of policy! But such high-performing cutting-edge vessels—it's hard to argue they should just be given to natives to use."

"That's the benefit of subdivision. We only give dividend rights, not property rights. The operators are also state-owned company employees—even Naval Academy cadets. In these days, Staff Officer Wang is also going to discuss this with us in detail. The Navy needs talent reserves and needs to improve sailors' experience. Their philosophy is: better to have people waiting for equipment than equipment waiting for people."

(End of Chapter)