Nanyang 1931: From piglets to giants

Chapter 152 The Right Way to Defeat Japan

Zheng Yi was waiting for Toyota Risaburo's statement. Seeing that he had already kowtowed, Zheng Yi stopped bothering him and quickly pulled him up. He also considerately picked up some food for him and poured him some wine.

"Mr. Zheng, what exactly do you need me to do?"

Zheng Yi: "Have you heard? The Japanese army stationed in North China forcibly burned large tracts of grain fields and forced the people in North China to grow cotton."

Toyota Risaburo nodded: "I heard about it. Oh, I never thought they would come up with such a stupid move. It's really... Sigh~"

With Toyoda Risaburo's understanding of Japanese society, he knew without any hesitation that this must have been done by those brainless people in the military.

Japan's entire cabinet and civil service government is really being controlled by this group of brainless guys. From the perspective of industrial policy, he doesn't even know what to say about this matter.

Although Toyota Boshoku is gone, it was a textile machine manufacturer after all, not a cloth seller. There are still a large number of textile factories in Japan, and textile factories are still Japan's pillar industry. Japan in 37 was not as crazy as it was later.

In order to avoid throwing the already-made textile machines into the steel furnace to make steel and weapons, we still want to preserve the textile industry as much as possible. Not to mention development, we have to start working on new and old textile machines.

So the question is: where does the cotton come from?

Long before the invasion of China, Japan imported large quantities of cotton from China. Before the war, China was the world's third largest cotton producer.

As for China's customs, it's the same as if it didn't exist, and the industry developed by the Kuomintang is worse than not having it at all.

Therefore, the Japanese textile industry has always imported cotton from China, woven it into cloth and garments, and then sold it back to China and even to the Chinese in Southeast Asia.

What war are you fighting for? Not fighting doesn't prevent you from plundering and making money.

This war would be a good thing. Who among the Chinese would still sell Japanese cotton?

The key point is that they can't even buy cotton from Japan. After all, they didn't have any tariffs before. If you still sell it to me at the previous price, what's the point of fighting this war?

But if they buy cotton at a lower price, then I won't just stop growing cotton. It wasn't expensive before!

Even if we don't consider national hatred or family feuds, whether I'm a traitor or not, if selling cotton doesn't make money, why don't I just not grow cotton? Wouldn't it be better if I grow something else?

Then, I don’t know who came up with this idea: forcing Chinese farmers to grow cotton, and then having the garrison in North China lead the puppet army to steal the cotton.

There's no way this will work economically.

How much manpower do you have to send to the vast rural areas to watch Chinese farmers grow cotton?

When Americans used black slaves, they still had to watch them work. They even knew to plant cotton and watermelons at the same time so that the black slaves could have watermelons to eat.

Besides, aren't you forcing people to oppose Japan? The cost of governing North China will be sky-high. That's how the Eighth Army grew stronger.

Toyota Risaburo smiled bitterly: "This is definitely not going to work. In the industrial age, I have never heard of people being forced to farm.
Even if we could get some very low-cost cotton, the shipping cost to Japan wouldn't be any lower. And who would we sell the cotton cloth to? China?

Zheng Yi also nodded and said, "Honestly, from an economic perspective, I can't understand why Japan invaded China. You said that in the past, although China and Southeast Asia often boycotted Japanese goods."

"But in fact, we all know that the so-called boycott of Japanese goods is only temporary. After the hype has passed, people will still buy them. Or they buy Japanese goods and then put a domestic label on them and sell them outside. There are many such cases."

"Aside from a small tariff, which is not high, the Chinese market is completely open to you. With the money you earn from selling cloth, you can buy cotton, minerals, and even grain from China. You can also sell these minerals to Europe and the United States in exchange for dollars."

"Now that China and Japan are at war, from a purely economic perspective, without even considering your cotton problem, let's take cloth for example. Even if the Chinese are still willing to buy it, can they still afford it?"

Toyota Risaburo: "Hey~"

Otherwise, the person who came up with this policy is a living dad.

China's farmers have now ruined their grain fields and have grown cotton. You steal their cotton and don't even want to pay for it. You transport it back, weave it into cloth, and then want to sell it back to them.

Do people buy it with cotton?
This kind of industrial policy seems to have been thought up by someone with an ass.

But Zheng Yi said: "If China wants to defeat Japan, it does not need to defeat Japan on the battlefield. It is the same to defeat Japan economically.

Ultimately, war serves politics, and politics, in the final analysis, serves the economy."

"War, if the more you fight, the more money you make, and the resources and benefits you plunder are greater than the cost of the war, then you can go on forever.

On the contrary, the more battles you fight and the more you win, the closer you are to the abyss.”

"The way to defeat Japan is to destroy its economy, deplete its foreign exchange reserves, exhaust its people, undermine its currency, incite left-wing ideas, and tear apart Japanese society.

In a word, delay. We don't need to win the war head-on, as long as we can delay it, we can delay it until Japan's complete collapse."

As he spoke, Zheng Yi ate the dishes on the table with big mouthfuls. He picked up a large piece of roast suckling pig and took a big bite, biting all the bones in his mouth, crunching until the meat and bones were broken into pieces.

"With my financial resources, I could definitely donate more money if I fully supported the war of resistance. I've signed a monthly donation agreement for three million US dollars. Doubling that amount wouldn't be too much of a burden for me."

"But I think it's unnecessary, because even if I add another three million, the Nationalist army won't be able to win on the front battlefield, and the amount I'm donating now is enough to slowly hold back the Japanese army."

"They want to fight a military war, but I want to save money and fight an economic war against Japanese militarism. Economic warfare is the right way to defeat Japan."

Toyoda Risaburo sighed and said, "Mr. Zheng's economic war has been very successful. As far as I know, because of you, Japan has to pay a 30% to 50% premium on oil, steel, and rubber. Japan's foreign exchange reserves are being rapidly depleted by you."

Upon hearing this, Zheng Yi couldn't help but burst into laughter, with a look of complacency and even pride clearly revealed on his face.

This was the proudest thing he had done in the anti-Japanese war, and in his opinion, it was more helpful to the direction of the war than simply donating money to the country every month.

In fact, it is certainly impossible for Zheng Yi to completely prevent the Japanese from buying oil. There is nothing in this world that cannot be bought with money.

It is impossible for him to impose the same embargo as the US government did 40 years later. All he can do is not to sell his refined oil products directly to Japan.

He first sold a shipload of refined oil to an American customer and sent people to follow the ship. When the ship docked in the United States, the American customer sold it to other customers, and then the other customer sold it back to a Japanese customer, who then shipped it back. Could he do anything about it?

Besides, he is not the only one who refines oil in the world.

But no matter what, Japan spent 30% to 40% more money, and he did it.

No matter how much sanctions are imposed, there is no situation where oil cannot be sold or bought. The same thing happened when the United States imposed sanctions on Japan in history. The reason why Japan gradually ran out of oil after 40 years was not just because the United States stopped selling it to it.

He himself really didn't have the money to buy it.

Japan's flagship product before the war was the textile industry, with its market in China and Southeast Asia. After the war broke out, its textile industry was completely destroyed by itself. How could it earn foreign exchange?

It's nothing more than grabbing some raw materials, agricultural products, minerals and the like from China. How can exporting these things be as profitable as exporting industrial products?
What's more, Japan has not been able to establish a stable positive profit regime in areas outside the Northeast for eight years and has been losing money.

But Zheng Yi's eyes were filled with a bit of ferocity. He chewed the roast suckling pig in big mouthfuls and said:

"In fact, in my opinion, the reason why the Nanjing Massacre occurred is that Japan's mentality has become a little broken.
For Japan, what they want is another round of indemnities, another policy of non-resistance, and the re-creation of Manchukuo, but definitely not a scorched earth war of resistance."

"Japan won on the battlefield, but they were bound to lose economically, and what I want to do is to accelerate this process."

"Raising the prices of oil, steel, and rubber is intended to deplete Japan's foreign exchange reserves and cause imported inflation. Targeting textiles is naturally intended to undermine Japan's exports and destroy its domestic economy."

"Although I know that even if I do nothing, Japan's textile industry will still be destroyed, but if I take action, I can accelerate the process. In fact, I don't just want an economic collapse."

Toyoda Risaburo: "So, you want to discuss with me about expanding the scale of Nanyang Textiles, or even lowering the price of blended textiles, or even using my previous connections to reversely dump textiles to Japan."

Zheng Yi: "Mr. Toyota is truly one of the smartest people in the world."

"But Mr. Zheng took the initiative to lower the price of blended products, so you will lose a lot of money."

Zheng Yi, however, didn't care at all. He said, "You make money to spend. For the Chinese people right now, there's nothing more important than resisting the Japanese. I'm just making less money, not losing money."

"Economic war is also war. If it's war, how can we just kill the enemy without suffering any losses? As long as we can win this national war, making a little less money doesn't matter."

"You know, my chemical fiber production is huge. It's only a matter of time before I have to lower the price."

Toyota Risaburo's expression also became very serious at this moment. He knew that what Zheng Yi discussed with him today seemed to be a business matter, but in fact it was really to cut off Japan's roots and send it into an irretrievable situation.

No wonder he was so polite and courteous to me today, and tried so hard to nominate me to the Penang Municipal Council.

Penang and Yangon also have textile industries, but the textile industry in Nanyang is based on chemical fibers from Penang, and chemical fibers are new.

There will be at least a few more years of huge profits, especially now, as the products are exclusively supplied to Europe and the United States, targeting the high-end market.

Even ordinary people in Europe and the United States have not had time to import those synthetic fiber fabrics and clothes.

Most of the textiles produced in Japan are cotton, supplemented by a small amount of mulberry and linen. When Kiichiro Toyoda came to discuss cooperation with Zheng Yi, Zheng Yi did not agree to let any chemical fiber flow into Japan. Instead, he asked Toyota to bring textile machines to Penang to start cooperation.

So in fact, the Japanese textile industry is targeting the low-end market, while Zheng Yi is targeting the high-end products. The two originally had nothing to do with each other, and Zheng Yi was making a fortune every day by relying on chemical fibers.

This is the most profitable project among so many projects in Penang, and it will continue to make money for at least a few years.

Who would have thought that Zheng Yi didn't even want the money, but was willing to bring high-end products back to the domestic market to compete with Japanese products.

It is indeed reasonable to treat him nicely. After all, these textile factories are the product of the cooperation between Zheng Yi and Toyota. Those textile factories are part of Toyota.

This is equivalent to dragging Toyota Textiles along with them, making less money and attacking Japan's textile industry, which is still surviving.

It doesn't matter whether there is money or not. After all, it is not a peaceful time now. But as Zheng Yi said, he is the former chairman of the Japanese Textile Association. Now he is willing to follow Zheng Yi to admit the loss and destroy the Japanese textile industry.

Not to mention the present life, he didn't even dare to think about how Japanese children would write about him in their textbooks a hundred years from now.

However, Toyota Risaburo seriously reasoned, "Although you may make less money, you are losing profits, while those textile companies in Japan are losing costs."

"Besides, if you want to compete on price, you must use a cotton blend. In fact, you only need to add 30% of chemical fiber to a piece of cloth to make it much stronger and more durable than Japanese cloth."

"There's plenty of oil in Southeast Asia, and you're an oil producer, so electricity must be cheaper. As for iron, you already have two large steel mills. I make the textile machines, but now that I'm gone, Japan's existing textile machines are difficult to maintain."

"Land is cheap in Southeast Asia. Labor costs, as long as you don't do it in Penang, using Indians and Malays will at least not be more expensive than Japan. As for cotton, you can buy Indian ones.
India is also a major cotton-producing country in the world and is closer to Yangon. The cotton purchased through the market economy is definitely more reliable, stable, and may even be cheaper than the cotton that Japan snatched from Chinese farmers through militarism and forced farmers to grow.

"As for chemical fiber, you make it yourself, so you just make less money. In terms of cost, Nanyang cloth has a much greater advantage than Japanese cloth."

"Our cloth is of good quality, and we can even compete with Japanese cloth on price. Furthermore, it's a domestic product. You've been building the Burma Railway for over a year now. If this line is completed, Nanyang cloth should soon dominate the entire Western China market, not to mention the Nanyang market."

“Of course, Japan can control China’s customs and markets and ban Nanyang cloth, but… first of all, Nanyang cloth comes from Yunnan, and Japan has no control over it.

Secondly, I can use my connections to contact Japanese cloth merchants to smuggle it, or mix it with Japanese cloth and sell it.”

"Merchants are driven by profit. Even Japanese cloth merchants will secretly sell your cloth. The military may not be able to stop them and may even take a piece of the pie. The traitors that the militarists rely on in China are certainly even more unreliable."

"If you are not after profit, I am fully capable of selling the cloth directly to Japanese textile mills and putting my own brand on it to satisfy the Japanese government and military."

"By then, in China, whether it's Japanese cloth sold legitimately or Nanyang cloth sold secretly, they're all fucking Nanyang cloth.

Japanese factories will not be able to operate at all, and even the Japanese cloth market may be full of Nanyang cloth."

"Cloth may not only fail to generate foreign exchange for Japan, but will also consume a large amount of foreign exchange to buy cloth.

No, they probably don't have foreign currency, but you're likely to receive Japanese yen. If you have a lot of Japanese yen...

If I were you, I would use the yen I have to short Tokyo stocks and target the yen exchange rate."

As he spoke, Toyoda Risaburo closed his eyes in pain: "If you can really do all this, Japanese textiles are finished. The Japanese economy is finished. Japan is finished."

Zheng Yi smiled and poured wine for Toyota Risaburo: "It's difficult for me to do it alone. I need your help, Mr. Toyota."

Toyoda Risaburo: "You want me to directly poach textile factories in Japan. After the operating rate drops, let them bring the factories and workers, or even just bring money and the backbone of the factories, to Southeast Asia, and give up the production of Japanese cloth and switch to the production of Nanyang cloth.

Zheng Yi smiled and said, "It's all for business, isn't it? Everyone wants to make a living. Militarism also needs to make money, eat, wear clothes, and live."

Toyoda Risaburo: "Penang can only develop high-end industries, so it has to manage Yangon. Even Yangon alone is not enough. The textile industry is labor-intensive. If you want to produce enough low-end fabrics to compete with Japanese fabrics, you have to use a large number of Indians and Malays."

Zheng Yi: "Across Myanmar, outside of Yangon, any area along the railway line can be used to build new textile factories. Even factories in Yunnan are not a bad idea. Kedah and Perak are also suitable."

Toyota Risaburo couldn't help but reveal a somewhat sarcastic expression and said, "Why, now you don't exclude Indians and Malays anymore?"

Zheng Yi: "When have I ever rejected them?"

Risaburo Toyoda: "…………"

In order to deal with Japan, Zheng Yi no longer minds spending a lot of money to develop the economies of Kedah and Perak.

In extreme cases, the worst that could happen is that he would wait until Japan attacks Kedah and then destroy the factory.

Besides, if his plan had gone smoothly, the textile industry would have long ceased to exist when Japan attacked Southeast Asia, so it wouldn't have mattered even if they had seized the factories.

To be honest, Kedah and Perak now have the conditions to develop industries on a large scale, especially labor-intensive light industries such as the textile industry.

These two states have developed rapidly in recent years.

As Penang becomes more and more developed, land is becoming more and more crowded and labor costs are getting higher and higher. As neighbors, the two states have not missed out on even the leftovers.

Those who come to Penang to work illegally are generally engaged in the construction industry, nanny and servant industries. The salary of ordinary workers in Penang is enough to hire a Malay maid to serve them. Although the house is not big, they can sleep in the cupboard, so there is still a market for them.

The worst thing is that these Malays and Indians who worked illegally, after returning to Kedah and Perak, started working in the service industry targeting ordinary workers in Penang.

Such as hot spring bathing and massage.

This is relatively clean.

The unclean ones are the mainstream.

Penang dancers can only dance with you for a dollar, and it takes a few minutes. The Malay girls in Kedah can take you to a hotel.

An ordinary worker living in welfare housing has a day’s salary that is enough to take a boat to Kedah, find a young girl who is much prettier than his wife, spend the whole night with her, have a meal, take a shower, and then take a boat back to Penang.

Gambling houses and opium pipes also flourished in both states.

Almost all the shop owners are Chinese.

Zheng Yi had no idea what to do with this matter. After thinking about it, he felt that it would be better to develop some light industry there.

If this continues, these two states will soon become mixed-race states.

In order to fight against the Japanese, it is also necessary to unite the Malays and Indians.

Toyota Risaburo couldn't help but ask, "Mr. Zheng first developed oil, steel, and rubber to boost Japan's imports, and now he's going into textile exports. What's Mr. Zheng planning to do next? Can you tell me?"

Zheng Yi did not shy away from the question: "Foreign exchange and food, with the war going on like this, Japan will definitely suffer from a food shortage.

Penang has a food processing industry that can, to a certain extent, control the bulk price of Southeast Asian grain exports. Not to mention China's domestic grain, you've all burned down your grain fields to buy cotton."

"Chinese farmers certainly have food grown by themselves, but you Japanese can't possibly have extra troops to go to the villages and collect food."

"Add to that the depreciation of the yen and the consumption of foreign exchange from purchasing oil and steel. If I raise the price of food a bit, there's a certain probability of creating a food crisis."

Toyoda Risaburo: "The current Japanese militarism is crazy. If you do this, you are killing the entire Japanese society!

Those lunatics won't be resigned to this. Will they let you go? If pushed to the limit, they won't care about your protection from Britain or the US. Even a cornered rabbit will bite. Doesn't militaristic Japan dare to attack Southeast Asia?!"

Zheng Yi asked in confusion, "Mr. Toyota, didn't I take you to visit the underground bunker on your first day in Penang? I've been preparing for this day."

Risaburo Toyoda: "…………"

For a moment, his eyes when he looked at Zheng Yi were filled with fear.

"Mr. Toyota, I need your help for everything I want to do. You won't refuse to help me, will you?"

(End of this chapter)