Chapter 56 An unprecedentedly strong private economy

During the period of the Beiyang government, private entrepreneurs were unprecedentedly active and controlled important industrial fields. In the history of the country, there is only the "Government of Wenjing" in the early Han Dynasty.In the industry, there have been some major changes. The most important event was the privatization of the financial sector. Whether a country is a complete market economy country, the degree of liberalization of the financial industry is a key indicator. In 1915, Yuan Shikai proclaimed himself emperor and Cai E revolted in the south. The Beiyang government printed and distributed huge banknotes in order to expand its armaments, which led to the depreciation of banknotes. During the period, the two banks stopped cashing.The Shanghai Branch of the Bank of China publicly defied the suspension order. This is a very famous "Bank of China Incident" in economic history.Yuan Shikai died in an attempt to proclaim himself emperor. Liang Qichao, who had a close relationship with Vice President Feng Guozhang, was appointed as the Chief Financial Officer. With his full support, the Bank of China established a shareholders' meeting and a board of directors. Recruiting commercial shares, after three expansions, by 1922, private capital had accounted for 91.75% of the total share capital, and the former central bank had achieved complete privatization.Affected by the Bank of China model, the Bank of Communications has also changed from government-run to private-run.

The shareholders of Bank of China also moved their headquarters to Shanghai. There was a consensus among the economic circles at that time that they hoped to learn from the United States and separate the political center from the economic center in the north and south to avoid mutual interference.Twelve bankers in Shanghai also initiated the establishment of the Shanghai Banking Association. Most of these bankers were born in the 1880s and were under 40 years old at this time. All of them had received modern financial education, and most of them graduated from prestigious schools in Europe, America or Japan.Under their mediation, associations from all over the country united to form the National Banking Federation, which became a group of bankers who could openly compete with the central government in Beijing and directly influence financial policies.There is one example that shows their independence and influence: In the autumn of 1920, the central government decided to issue government bonds, and the Shanghai Banking Association refused to subscribe for all bonds on the grounds that the old bonds were insolvent.The central government had no choice but to send representatives to negotiate with the bankers, and finally agreed to establish a unified national debt fund, using the customs balance as a sinking fund, and then managed by the British-controlled Customs General Taxation Department as a third party.The authority of the central government is all over the place, which can be seen.

In addition to the financial sector, entrepreneurial groups also controlled important markets for means of production. In China's industrial economy at that time, the textile industry and the flour industry were the largest industries. In the ten years after 1910, Japanese businessmen once controlled the spot and futures trading markets of these two industries. After the "May 4th Movement" in 1919, Rong Zongjing and others successively established flour exchanges and All the members of the Gauze Exchange gathered together and swore to break with the Japanese businessmen, thereby regaining the right to control the prices of the means of production. In July 1920, Yu Qiaqing founded the Shanghai Stock Exchange, where coupons, cotton, cloth, grain and oil, etc. could be traded. It was the first formal securities exchange market in China.

In the unprecedentedly free market environment, a large number of top-notch entrepreneurs emerged in the global business circles at that time, such as Rong Zongjing and Rong Desheng brothers in the cotton spinning and flour industry, Zhang Jian and Mu Ouchu in the textile industry, and the shipping industry. Lu Zuofu in the banking industry, Zhang Gongquan and Chen Guangfu in the banking industry, Fan Xudong in the chemical industry, Liu Hongsheng in the match industry, Zhou Xuexi in the cement industry, Guo Le and Ma Yingbiao in the department store industry, Zhang Yuanji in the publishing industry, and so on.

The boom in industrial investment that emerged during this period was the second wave of industrialization in China.Compared with the last round of the Westernization Movement, it has distinctly different characteristics.The protagonists of the Westernization Movement are the ministers of the Westernization Movement and the officials and businessmen who are subordinate to them. The characteristics of its industrialization are the focus on military industry, giving priority to the development of heavy industry, with state-owned capital as the main force, and the establishment of large-scale enterprises as the main axis. In the later stage, the focus is on railways. , mining and iron and steel and other resource fields.The Westernization Movement thus laid the foundation for China's modern heavy industry.This industrialization is a feast for the collective rise of private capital. Its protagonists are emerging entrepreneurs whose main motivation is profit. The industries they invest in are mainly concentrated in the field of people's livelihood, mainly providing consumer goods, and cover a large number of small and medium-sized enterprises. Enterprises are the most dynamic mainstream force.During this period, China completed the layout of light industry and service industry.This feature is surprisingly similar to the growth path of Chinese private companies after 1978.

The foundation of China's national economy was basically laid during this period.From the perspective of economic growth rate data, although there are different statistical results, high-speed growth is an indisputable consensus. According to calculations by domestic scholars, the industrial growth rate reached 13.4% from 1912 to 1920, and 13.4% from 1921 to 1922. There was a brief depression, 8.7% from 1923 to 1926.Thomas Rawski, an American economic historian, pointed out that from 1912 to 1927, China's average industrial growth rate was as high as 15%, which was in a leading position among all countries in the world.In the nearly 100 years of modern economic history, such periods of rapid growth have only occurred three times. The other two periods were the first five-year plan (1953-1957) in the 1950s and the period of reform and opening up after 1978.