Chapter 2421: Trade Adjustment Memorandum (I)

Good kid—seems your brain works even better than your uncle's? But his steadiness—why can't you learn that? Wang Kai paused for a moment and furrowed his brows.

"Would I not have thought of this! Could I possibly shortchange you? Tell me, how many H800 ship trips does the Japan trade in raw silk and sugar need?"

"Er, ten ship trips. You said the cutting-edge vessels are five times the size of H800? Then wouldn't there only be two or three ships to divide?" Gu Baocheng realized he had passed and continued playing dumb.

"I said five times the efficiency, not size. Cargo capacity is about 1.25 times. The advantage is speed. Let's say for the first plan, the first batch of share recruitment is for 8 ships. Is that profitable? After one trip, I'll send you all to ship back grain and minerals. On the outbound leg you sell Australian goods and can still earn. We're not mistreating you, right?" Wang Kai calculated on the spot, found no problems, and stopped being embarrassed.

"That's most of a ship's cost recovered in one year! I hope the Senator will give us the opportunity!" Shopkeeper Gu was ready to sign the contract on the spot.

"The matter isn't settled yet. Don't rush."

"Then, may I ask Senator Wang—raw silk and sugar for Japan is basically settled, right? What about ceramics?"

"Buy and sell freely. Also iron goods, glass, and other Great Song industrial products—we won't impose too many restrictions. Overall, we still welcome trade prosperity."

"Oh, I understand!" Shopkeeper Gu excitedly raised his head, but hesitated to speak, probably remembering being inexplicably scolded just now.

"What do you understand? Say it. I'm still confused." Senator Shi urged. Fatty Wang also gestured permission.

"Senator Wang's intent is probably that for commodities where Great Song's competitiveness is strong, they can be sold freely—flooding the market to crush competing products. For example, the bone china newly produced by Australian Kiln: output is large, costs probably aren't too high, and quality far exceeds old products. Iron goods and glass are even more our Great Song's strong suits. As for raw silk and sugar, raw materials account for a large portion of costs, and the Senate also has to purchase from the private sector. The technological gap—yes there is, but it's not that great. These need administrative measures to ensure profits, especially in special areas like Japan." Shopkeeper Gu finished speaking deferentially, occasionally glancing at Fatty Wang.

Fatty Wang applauded in approval. "With Shopkeeper Gu's brain, not making money would be unjust to heaven. Don't go spreading this around though—after all, the matter isn't settled. However, if you have good friends in this line, you can discuss it in a small circle first."

Fatty Wang deliberately had him leak some news to gauge the feedback. Otherwise, he wouldn't have disclosed such valuable information. Being able to tell his uncle would already count as filial.

"If there's nothing else, you may leave first. I still have matters to discuss with Senator Shi." Fatty Wang prepared to see the guest out, and Shopkeeper Gu quickly thanked him and took his leave.

"How about it—did I work hard to find orders for your shipyard? Satisfied?" As soon as Shopkeeper Gu left, Fatty Wang said smugly.

"Satisfied my ass. Who told you I was giving cost price? Did you consult me?" Senator Shi challenged with a smile.

"Consult, my ass. Can he know the real cost? Can't you even let me take credit?"

"When you take credit, there's definitely more business behind it!"

"There is business, but it's all good business. That ocean-going fishing boat of yours—isn't there a newly launched one? Don't rush to outfit it. Let me modify it. I have an assignment to visit Burma."

"You're taking a fishing boat? Don't you find it shabby? You'll be laughed at. You don't mind losing face, but I do."

"So I'm asking for a new one. On one hand, easier to modify. On the other hand, less fishy smell. Besides, the two of us being mocked is a small matter—might even be a good thing. Most importantly, this season your fishing boat can do 15 knots. I could take a galleon or H800 for convenience, but that's over a year round trip. Our company just started—being away over a year isn't good. I need to 'run really fast'!"

After seeing off the visitors, Fatty Wang surveyed his surroundings. He would also be leaving soon.

Seven years—the same length as his first job before transmigrating, which he hadn't been too satisfied with. The feelings of monotony and oppression were also similar.

After transmigrating, it seemed like they were always discussing important matters, "conversing with scholars." But that was only a lateral comparison in this timeline. Awkwardly, he hadn't accomplished much in the new spacetime either. Looking at the big picture, the entire Trade Department hadn't accomplished anything major.

From the data, the Colonial Trade Department could be considered the Senate's most important department. Though with the deepening of tax reform, trade profits' proportion in fiscal revenue was constantly declining, to this day foreign trade earnings still accounted for half of fiscal revenue. If the Planning Agency's material income was all counted, calling the Colonial Trade Department the breadwinner of the Senate wouldn't be wrong.

However, in Wang Kai's view, Lingao's trade was in a state of "passive comfort" without any initiative. Many early expedient measures had slowly become "established rules." After all, organizing trade was less convenient than sitting and waiting for merchants to come buy goods.

The department had gathered many people with foreign trade experience from the old timeline, but everyone had just been a tiny cog on a giant wheel in the past. If you really asked them to formulate major policies, everyone enjoyed discussing and stopped at discussing. They had no confidence in their hearts and still had to face colleagues' scorn and increasingly pointed issue-exploiting. So no one did this thankless task.

Now he was about to leave. But before leaving, he had much to say that he couldn't keep bottled up. This was also the last bit of responsibility he owed to his unit. After all, these years he had been paying attention to every trade route and export market of the Colonial Trade Department, and these were conclusions drawn after collecting relevant data.

These conclusions were unfriendly to the Company, or to the Senate. Bringing them out would only annoy people. But after much thought, he still brought these problems forward. After all, the Senate still needed to progress.

Lying flat was comfortable, but as a Senator, one should still have some aspirations. Wang Kai decided to compile his years of observation and research into a memorandum for distribution.

The distribution scope was limited to internal Colonial Trade Department and two departments with direct connections: the Planning Agency and the Finance Ministry, with copies to Cabinet members.

This masterpiece was written by Wang Kai with the same effort he once put into thesis papers, during work breaks. The content was research on gains and losses of Japan trade, but the main purpose was to call for reform of the existing foreign trade system within the Colonial Trade Department.

In his work, the most critical evidence was two tables, both statistics of 17th-century Japanese silver outflow. One was from old timeline historical materials, Western statistics; the other was manually counted by Customs, the Foreign Intelligence Bureau, and overseas trading posts at various ports in this timeline.

Compared to the old timeline, the Senate had replaced the Zheng Zhilong bloc and established "Peace on the East Asian Seas." This peace was so effective that it greatly improved the entire business environment compared to history. At the same time, the Senate's existence had established relatively stable product supply, so Japanese silver outflow had also become stable—unlike the old timeline with its obvious annual fluctuations. Starting from 1632, it ran about 4 million taels annually, or about 5.9 million Aussie Dollars when minted.

5.9 million was a very large sum, because the entire 1635 Senate fiscal revenue was only 20 million Aussie Dollars. This was almost a quarter and more.

This was also what made Wang Kai most indignant, because in 1635, for the Two Guangs Campaign plan, not only was the 20 million spent completely clean, but there was actually a deficit of over 4 million—part of this deficit was made up from Two Guangs spoils, and the rest was made up by printing money.

Printing money was convenient, but the aftereffects needed a long time to digest. Besides, 1635 was just a beginning. Next came various industrial capacity expansions, administrative governance of the Two Guangs... these investments added up to probably over 30 million.

"If only this money could all be in our hands!" Wang Kai couldn't help clicking his tongue when he calculated this. At least the deficit wouldn't be so large. And many proposals could get funding.

Money couldn't be eaten when hungry or worn when cold, but as long as there was money, the whole world became a supplier. The various industrial raw material reserves that the Planning Agency often felt were lacking—in the final analysis, it was because there was no money.

Many of the Senate's current difficulties and debates ultimately came down to the plate being too big but money being too little. In all fields, there existed the vicious cycle of "lack of money—can't expand capacity—even more lack of money." And endless administrative governance investment and counter-insurgency wars quickly sucked away the funds.

The portion of Japanese silver outflow, though it couldn't solve all problems, could at least fill part of the gap and make many barely sustainable projects operational—especially the several mineral projects the Nanyang Company was preparing to develop.

These mineral development plans, formulated to satisfy industrial sector needs, had long development-return cycles. Expecting long-term private capital investment was impossible. So these projects remained listed in the fiscal long-term appropriation budget table.

If fiscal revenue was insufficient, the budget would predictably be cut. After all, right now it was "military first." And military expenditures were pure consumption with only investment and no return. Predictably, the counter-insurgency war in the Two Guangs in 1636 would devour massive military expenditures.

The Japan trade route problem, under his repeated strong requests, had already been gradually corrected. What concerned him more now was the accumulated problems of the entire trade system.

First was that under the current "free trade system," two unexpected reverse effects had emerged: silver was flowing to the Senate's potential opponents and hostile forces; and Great Song's position in the trade system was being lowered.

According to the conclusions of the Japan Trade Profit Destination Survey he had commissioned the Foreign Intelligence Bureau to write, among the trade profits generated on this route, the Merchants Bureau under Senate control received only half. The other half was obtained by the VOC, naturalized citizen maritime merchants, and Ming smuggling merchants.

(End of Chapter)