The Qing Dynasty

Chapter 537: Methods of Introducing Joint Ventures

After Teng Yuzhao finished explaining to Yang Shixiang about asking him to call his younger brother Yang Shiqi over.

Zhou Xuexi couldn't wait to say to Teng Yuzao, "Marshal, now that we have finished the new city construction, the bank, and the railway, you should arrange for the Aurora Industrial Development Company!"

Teng Yuzao smiled and said, "New Town, the bank, and the railway are all public affairs. The Aurora Industrial Development Company is my private matter. Let's talk about public affairs first."

Teng Yuzao continued, "Jizhi, you are an official of the imperial court after all. I can't always ask you to help me with my personal affairs. You have to take responsibility for the official duties as well."

"I plan to let you serve as the general manager of the Foreign Affairs Supervision Office, mainly responsible for promoting and managing all foreign affairs companies and factories in Zhili. You have a heavy burden. Zhili's foreign affairs are the most critical factor in whether Zhili can develop smoothly. Not only the research, manufacture and supply of weapons and ammunition for the vanguard army, but also the steel needed for railways and shipbuilding, and even the newly built locomotive factories, automobile factories, and machine factories in the future. Almost all foreign affairs factories also need steel and new machines."

"Even some of the machines needed by the new factories are not available abroad, and you can't buy them even if you want to. Naturally, they also need your machine factory to manufacture them."

"I can't possibly buy all these things from abroad. I have to produce them myself."

"Well, you know the importance of this better than I do, so I won't say much. Let me first talk about some factory equipment that we must purchase from the great powers right now."

Although Teng Yuzao was explaining the matter of the new factory to Zhou Xuexi, everything Teng Yuzao said today shocked and even stunned these people. These people wanted to see if Teng Yuzao had any other creative ideas that would broaden their horizons and make them dare not even think about it.

Teng Yuzhao took a sip of tea to moisten his dry throat and spoke.

"Steel mills, machine factories, shipyards, arsenals, automobile factories, locomotive factories, cement factories, and mining equipment. We are currently unable to manufacture all of these machines and equipment ourselves. We need to purchase them all from abroad."

"This time, our newly built factories must learn from the lessons of the past domestic purchase of imported equipment to avoid the problems like those at the Hanyang Iron Works."

The initial founding budget for the Hanyang Iron Works was set at more than 246 million taels, but by the time it was completed, the actual expenditure was around 500 million taels.

However, due to lack of consideration, the purchased equipment was not suitable for refining the high-phosphorus ore provided by Daye Iron Mine, and the steel produced did not meet the requirements of railway rails. Steel production is still in trouble, which makes Zhang Zhidong very embarrassed.

"I have a few requests, I'm asking you."

Because he had a lot of things to say, Teng Yuzao originally wanted to ask Zhou Xuexi to write down his words, but suddenly he saw that Zhou Xuexi had already taken out a notebook and a shiny gold pen and was quickly writing down his words. Teng Yuzao could only smile awkwardly and continue.

"First of all, it's about scale and technology. Although these factories are built in Zhili, we need to have a long-term vision and not just focus on Zhili. We need to see the needs and market of the whole country. If we want to build one, we must build at least the largest one in Asia, with the most advanced technology in the world, and the technological gap with the most advanced ones in other powers should not exceed five years."

Teng Yuzao's words inspired everyone present.

"The second is funding. You just heard that all the construction in Zhili, including new cities and railways, will be carried out on a large scale, and the funds required are extremely huge. Although there are some ways to raise funds for the new cities, the investment in the railways will still require Yucheng Bank to invest a large amount of long-term funds, even if we can raise some private capital. Our funding pressure is still very high."

"So, for these major factories that are essential, we should invest as little as possible for the time being, and not spend money if we can. In other words, we won't give you too much funding."

Teng Yuzao's words not only made Zhou Xuexi, who was taking notes, stop writing and smile bitterly, but also made other people a little surprised.

These business owners from the powerful countries are not the nobles and wealthy businessmen in China. They will not recognize the reputation and prestige of the Governor-General of Zhili. They only recognize money. If you want these foreigners to give you machinery and equipment for free without paying real money, I'm afraid the sun will only rise in the west.

Teng Yuzao said to everyone awkwardly, "Don't look at me like that. I don't have any money. We need to buy land for so many machines and equipment, and train personnel for commissioning. We also need to build roads and railways to connect these factories. I'm afraid it will cost tens of millions of dollars."

Yang Shixiang smiled bitterly and said, "Marshal, as far as I know, the Hanyang Iron Works built by Marshal Xiang cost a total of more than 5 million taels of silver, which is already the largest ironworks in Asia."

Teng Yuzao sighed, "Lianfu, you know that the equipment Zhang Xiangtao bought at that time was the best in Asia, but it was not the most technologically advanced in the world. It has been more than ten years now, and the technology level of steel enterprises in the great powers has become more and more advanced, and the scale has also become larger and larger. It is now impossible to buy back such a large enterprise with five million taels of silver."

Xu Shichang also smiled bitterly and said, "It is indeed difficult for the Marshal to handle such a big thing, but the money still needs to be spent. Even if our railway construction is slow, I think these factories should be built first."

Teng Yuzao waved his hands and sighed, "I also want to take it step by step, but time is running out. Not only are we being left far behind by the great powers, but even the impoverished little Japan has already surpassed our great country. If we don't catch up quickly, it will be too late."

Teng Yuzao waved his hand and said, "You should listen to me first, and then we can work it out to see if it works."

Seeing Teng Yuzao say this, these people had no choice but to shut up and wait for Teng Yuzao's next words.

Teng Yuzao lit up another cigarette and took a puff. He said, "For us, we can get little or no money and ask the foreigners to build a factory for us. Moreover, the factory must be technologically advanced and large enough. This is obviously unrealistic. The foreigners are not fools. How can they give us machines and factories for free?"

Teng Yuzao's words made several people roll their eyes, and they all secretly criticized Teng Yuzao in their hearts, saying that this was just nonsense.

Teng Yuzhao pretended to ignore the expressions of the others and continued speaking.

"We must always give the foreign devils some benefits. As Mencius said, a gentleman can be deceived by tricks, but it is difficult to deceive him by doing things that are not his way. A villain can be lured by benefits."

"So what's the benefit? It allows us to spend less money temporarily and let the foreign devils help us build these factories first."

Teng Yuzao answered his own questions and said, "Foreign merchants are naturally for profit. As the saying goes, all the people in the world are for profit." "Benefits naturally have to come from money. I mean that these factories I just mentioned will all adopt the shareholding system in the early stage. We own 51%, and the remaining 49% of the shares will be held by foreign merchants who provide equipment. Our people will be the chairman and general manager, and their people will be the vice chairman and vice general manager. In principle, they have the final say in production organization management and technical management. The technicians will help us train technicians and workers."

"Foreign merchants invest their equipment, and we invest our land and factory buildings. The shortfall will be made up with cash, which can be used as operating capital after construction."

"The benefit to them is that within three years of the start of production, Zhili will not collect any taxes from this factory. In other words, the first three years will be tax-free, and the tax will increase year by year thereafter. After seven years of production, the tax will return to normal."

Teng Yuzhao had no idea how much tax was levied on businesses in the late Qing Dynasty, but when he saw that these people were not moved, he knew that the tax should not be very high, and he couldn't help but sigh.

"In addition, not only are all the machinery and equipment they import tax-free, but any materials and equipment purchased from abroad that the factory needs within three years after it goes into production are also tax-free."

"Also, as long as they reach full production capacity, we can allow these factories to be listed on our stock exchange to facilitate fund-raising. At the same time, as long as the factories produce high-quality and qualified products, the Zhili Governor's Office will ensure that they are all sold. If there is any backlog, the Zhili Governor's Office will purchase them all."

It was not until this time that the Chinese people were shocked and moved. Teng Yuzao couldn't help but secretly breathe a sigh of relief, knowing that this last point would finally be enough to impress the foreign businessmen.

Xu Shichang frowned and said, "Marshal, I'm afraid this won't work. If the foreign merchants try their best to expand production, and we can't use them at all, and can't sell them, then wouldn't our Zhili Governor's Office become a sucker, having to keep investing money in their factories and buy a bunch of useless things?"

Zhou Xuexi relaxed his brows and said, "No, we still have a general manager. When necessary, he can intervene and switch to produce the products we need."

Teng Yuzao nodded and said confidently, "Jizhi is right, this is the first point, secondly, I estimate that the products produced by these factories will not be able to meet our needs in ten years, especially the steel mills. The railway tracks are enough to keep them busy, and there is also high-quality steel for shipbuilding;"

"Third, we can also add one more rule, asking these factories to give priority to fulfilling the orders placed by the Foreign Affairs Office, and not letting them arbitrarily produce products we don't need."

At this point, Yang Shixiang finally breathed a sigh of relief, "The Marshal's method should work. If that's the case, take the arsenal for example. As long as they can make the cannons we need, we will naturally buy them. There is no need to import from abroad. These factories will make a lot of money."

Huang Chujiu couldn't help but praise, "The Marshal is very smart. With just this one move, the foreigners will probably rush to try it."

Teng Yuzao smiled and said, "Don't praise us yet. We can't let these foreign merchants who have invested in joint ventures with us stay in our factories forever. We should give them a cooperation period. After ten years, if they want to withdraw from these factories, we have the right to purchase their shares first."

"Catch it."

"You can hold an investment promotion conference and invite major European and American powers to come to Tianjin for negotiations as soon as possible. We will set up joint ventures with whoever offers the best conditions. My opinion is that if the conditions are the same, we should give priority to joint ventures with American and German businessmen."

"it is good!"

Zhou Xuexi also perked up at this time, and said with a smile, "With the Marshal's method, it will be much easier for me. Please rest assured, Marshal, I dare not say that I will satisfy you in the end, but I will definitely be able to run these factories. I dare to guarantee this. Is there anything else you want to say?"

Zhou Xuexi's question reminded Teng Yuzhao of an important matter, and he spoke hurriedly.

"Jizhi, if you want to build a steel plant, you need iron ore. When I was studying in Germany in my early years, I overheard two Germans talking about how there are a lot of iron ore and limestone mines in Luanzhou, Zhili. You should organize people to explore as soon as possible."

Teng Yuzhao knew very well that there were a large number of iron mines in Luan County in later generations. He could even tell the specific names of villages and towns, but he could not be too direct and arouse suspicion.

However, as long as you say it is Luanzhou, you will find it quickly.

"besides."

Teng Yuzao also instructed Zhou Xuexi, "In addition to those joint venture factories, you must also restore the Beiyang Machinery Bureau and Kaiping Coal Mine as soon as possible, especially the technicians and technical personnel who were beaten by the Beiyang Machinery Bureau. You must bring them back without missing a single one. The salaries of technicians and technical personnel must be the highest in the country. In addition, you can also recruit skilled workers and technicians from Shanghai, Guangdong, and even Hong Kong."

"The several factories of the Beiyang Machinery Bureau must be restored as soon as possible. These factories must be wholly owned by us. Any machinery and equipment they need must be purchased from abroad. They were already able to build submarines before the war."

"We want them to not only research and design our own ironclad warships, but also focus on submarines. We also need to quickly imitate our torpedoes, and at the very least, we can improve on them."

"Some weapons and other machinery and equipment that we need to keep secret also need to be manufactured by them, so the funds they need must be met."

"Also, we should make full use of those young children who came to us from the United States. They should be deployed to various factories. They have a foundation in Western theories and will learn Western technology faster."

Just as Teng Yuzao was about to finish his speech, he suddenly thought of something and said to Zhou Xuexi, "All our merchants and domestic merchants, as long as they are willing to come to Zhili to set up new factories, no matter how big or small the factories are, will be taxed the same as those joint venture factories. Only in this way can we attract more people to come to Zhili."

After Teng Yuzao explained everything in detail, he spread his hands and said, "Jizhi, that's all I have to say."

As he spoke, Teng Yuzhao picked up his teacup, wanting to drink some more water to moisten his thirsty throat, but Zhou Xuexi, who was already full of confidence, was unwilling to let him go and spoke expectantly.

"Marshal, we have already talked about the Foreign Affairs Office, but you haven't mentioned the Aurora Industrial Development Company yet. What else does it want? Is there anything new that foreigners don't have or that is much better than what foreigners have, that we can produce?"

(End of this chapter)