Chapter 43 Westernization Era

As mentioned earlier, when Li Hongzhang was having a headache about where to start the Westernization Movement, the economically minded Sheng Xuanhuai gave him an idea: to set up a steamship merchants bureau in Shanghai. Sheng Xuanhuai analyzed: In Shanghai, shipping is the most profitable industry, and now 80% of the shipping market is in the hands of foreigners. If it is managed properly, it can not only make money but also regain considerable benefits from foreigners. Why not? Li Hongzhang admitted that what he said was reasonable, but he asked him a question: there is a lot of start-up capital needed, where does it come from?

Sheng Xuanhuai took out the plan that had been prepared a long time ago——"Steam Charter Program", and explained: Although the imperial court can't give us much money, there is still one thing that can be used, and that is power, and power is the primary productive force.Our China Merchants Bureau only needs policy support from the imperial court. The operating funds are raised by private businessmen, the settlement is settled at the end of the year, and dividends are returned to the imperial court as a reward. The imperial court will definitely agree.I have given a name to this form of substantive private management under the banner of state ownership, which is called "government-supervised business office".

What Sheng Xuanhuai said surprised Li Hongzhang.Although he knew that Xiao Sheng was a talent, he had to get to know the person in front of him again at this time: this is not an ordinary talent, but a great talent, and he will surely achieve great success in the future! In this way, the first government-supervised and merchant-run civilian enterprise and the first purely Chinese joint-stock enterprise-Shanghai Shipping Merchants officially debuted. But the first leader of China Merchants was not Sheng Xuanhuai, he was too young, only 28 years old, not enough to convince the public.Li Hongzhang chose Tang Tingshu, a well-known private businessman, as the supervisor and Xu Run as the meeting manager, which is roughly equivalent to today's manager and deputy manager.The boss behind the scenes is naturally Li Hongzhang.

Although Sheng Xuanhuai's position in China Merchants is an assistant, which is equivalent to an assistant to the manager, but with the support of Li Hongzhang, his status is not low, and he has considerable voice from decision-making to execution. After that, Li Hongzhang continued to speak in front of Cixi, and the imperial court also started a small fire for China Merchants, one after another red-headed documents from the imperial court helped China Merchants reduce taxes, attract business, and suppress opponents. Sheng Xuanhuai, who was in charge of the implementation, also lived up to expectations: China Merchants, as a banner of China's Westernization Enterprises, miraculously took back a market share of more than 13 million taels of silver from foreign merchants in only three years.In the next few years, China Merchants aggressively acquired foreign companies, even Qichang Company in the United States. Soon after, it accounted for more than 60% of the market and basically monopolized the shipping market.

The success of Li Hongzhang and Sheng Xuanhuai proves a rule - once capital lowers its haughty head in front of power, capital and power can enjoy the joy of fish and water forever. A few years later, Mr. Xu Run, the deputy manager of China Merchants, was found to have financial problems: he embezzled 160,000 taels of public funds to speculate in real estate, but he lost all his money.Ever since, Xu Run was "double-guided" and asked to sit in the bureau, and Tang Tingshu was also jointly and severally responsible, and was thrown out to sit on the bench. In the name of "anti-corruption", Sheng Xuanhuai finally became the supervisor of the China Merchants Bureau, and has since taken root here.

In addition to continuing to implement monopoly operations, Supervisor Sheng’s office is obviously different from when Tang and Xu presided over the China Merchants Group. Ironworks, banks, railways and other fields covered almost all Westernization industries in the late Qing Dynasty... Of course, Superintendent Sheng also benefited greatly from it.This cadre of the Qing Dynasty who invested in China Merchants as a technology stock was the largest shareholder of China Merchants until his death, and thus became one of the top richest people in China, with his personal wealth reaching tens of millions of taels of silver.

At the same time when Superintendent Sheng was drastically transforming China Shipping Merchants from private ownership to state-owned, the Japanese government transferred its largest state-owned shipping company, Nagasaki Shipbuilding, to private businessman Yataro Iwasaki at an astonishingly low price.The Nagasaki Shipyard was later named "Mitsubishi", which is now the business empire "Mitsubishi".