Chapter 50 Taking China Merchants Steamship as an example: the choice between state-run and private-owned

If it is said that the highest authority is trapped in ideological cocoon, then the enlightened Westernization faction is trapped in the dispute between the government and the people.This is vividly reflected in the case of China Merchants Steamship. In 1872, in order to resist the influence of foreign shipping companies in the Yangtze River shipping, Li Hongzhang decided to establish China Merchants Shipping.At the beginning of the preparations, faced with the dilemma of lack of money and lack of people, Li Hongzhang instructed Sheng Xuanhuai to draw up the articles of association, and put forward the enterprise system of "government supervision and business management", "the government will generalize its outline, check its advantages and disadvantages, and listen to the business directors and other independent regulations , please convince all businessmen".This is the first company charter in the normative sense in modern China, which means that the government and businessmen have achieved equality in the sense of capital for the first time.Inspired by Li Hongzhang and Sheng Xuanhuai, Tang Tingshu, Xu Run, Zheng Guanying and other famous compradors entered the game one after another, investing and contributing to the company's funds.After about ten years of operation, China Merchants Steamship Co., Ltd. defeated the American and British shipping companies in the Yangtze River shipping business and achieved remarkable performance. Li Hongzhang regarded it as the "most handy word" after engaging in foreign affairs.

With the enthusiastic participation of private capital and talents, many "China's No. 1" emerging companies have emerged in the shipbuilding, mining, textile, shipping, and insurance industries in more than ten years.From 1882 to 1887, a total of 36 companies published their stock trading prices in Shenbao, and they were the first batch of joint-stock companies in modern China.This is the first Xiaoyangchun of the Westernization Movement. However, at this moment, conflicts between officials and businessmen emerged. Tang Tingshu, Xu Run, Zheng Guanying and others believed that "official funds for official profits, not responsible for profit and loss, are in the nature of deposits." Now that the enterprise is on track, the government should withdraw. The three They jointly submitted a report to Li Hongzhang, hoping that the official funds would be "returned in accordance with the schedule", so that the government would no longer need to send officials, and the responsibility for the profit and loss of China Merchants would be borne by the businessmen from now on.

In Li Hongzhang's view, this suggestion was unacceptable.Therein lies an inherent logical conflict of the Westernization Movement. The sole goal of the Westernization Affairs Commission is to "strengthen the military and enrich the country." Therefore, in Li Hongzhang's view, if the government engages in business, it must have the leading power in the operation and become the biggest beneficiary.The introduction of private capital and comprador talents is an expedient measure when resources are scarce.However, when the economic energy of the people is activated, there will definitely be a market-oriented request for deregulation.Under such circumstances, conflicts between the government and the people will inevitably intertwine and erupt.Throughout the period of the Westernization Movement, this contradiction has never been resolved.

In 1884, the financial crisis broke out in Shanghai, and housing prices plummeted. Xu Run, Zheng Guanying and others took advantage of their position in charge of the finance of China Merchants to embezzle huge sums of money to speculate on real estate. At this time, the scandal came to light.Li Hongzhang took the opportunity to "clean out" these compradors, and Sheng Xuanhuai, as an official representative, also served as the supervisor and general office.Xu Run and others became the first batch of "state-owned enterprise managers" who "sacrificed" due to system conflicts.

In the following narration, we will see that in the century-old history of modernization, there have been six important events of "advancement of the country and retreat of the people".Hao Yanping, a Chinese-American scholar, regarded this as "the turning point of bureaucratic capitalism". He commented in the book "Commercial Revolution in Modern China": "After 1883, unfortunately, the bureaucrats headed by Sheng Xuanhuai firmly grasped the bureaucratic business (they were the early pioneers of China's industrialization), and bureaucracy began to play a more important role than entrepreneurship in China's industrial development." Yang Xiaokai, in "Notes on China's Economic History Over the Hundred Years", even more from the perspective of system construction Reflected from the angle of view: the Westernization Movement was carried out under the constraints of political, legal, system, and ideology that could not be fundamentally changed. Therefore, it was based on the political monopoly of the Qing government, the lack of judicial independence, and the legal system that protected private enterprises.Officials of the Westernization Movement adhere to the system of government-run, government-business joint, and government-supervised business-run systems, and use this as a basis to imitate the technology and industrialization models of developed countries.This approach puts the interests of the government-monopoly industry in conflict with its status as an independent third party in its arbitrating role, making it both referee and player, thus using its refereeing powers to pursue the interests of its players.This institutionalized state opportunism makes the government use its monopoly position to compete with private enterprises for resources and suppress the development of private enterprises.

After the Ship Merchants Incident, the "honeymoon period" between Westernization faction bureaucrats and emerging entrepreneurs came to an end.In the following ten years, it became more difficult for Westernization bureaucrats to raise funds for industrial enterprises. At that time, the Qing government’s financial resources were very limited, and all tax revenues accounted for only 2.4% of national net income. The disappointment of private capital made the investment of the Westernization Group Getting smaller and smaller.