Chapter 17 Why did the Meiji Restoration not "attract investment" from foreign countries

In the early days of the Meiji Restoration, Japan was able to think of Jinlu public bonds as the core capital of banks, which shows that Japan's deep understanding of the nature of modern finance far surpassed that of the Qing Empire at that time.Please note that Japan’s industrialization during the Meiji period did not introduce a large amount of foreign capital and foreign debt, because Japan has thoroughly discovered the secret of bank credit.Under the modern banking and credit currency mechanism, legal tender will never be scarce, and currency can be created by its own banking system.If so, there would be no need for foreign capital to enter the Japanese banking system at all.The only purpose of Japan's need for international hard currency is to introduce foreign technology and equipment and resources that Japan does not have!

Therefore, the Meiji Restoration in Japan never engaged in "investment attraction".Japan only needs foreign technology, machinery and equipment, and raw materials, and Japan is better at management than foreign countries.Hard currency could be obtained from Japanese exports of raw silk, tea, and porcelain.Foreign funding?Sorry, no need!Because Japan can create its own currency!Foreign firms can participate in international trade, help Japanese products open up the world market and purchase what Japan needs.Domestic trade is shared by Japan's own firms. Digesting Western technology is Japan's unique skill.It is a unique skill in Japan to carve all kinds of things to the extreme, and to build a dojo in a snail shell.When the Russian fleet arrived in Japan, the curious Japanese boarded the ship for a visit, and the Russians showed the Japanese a toy model of a steam train.When the Japanese saw the smoking train running on the track for the first time, they were all knocked down on the spot.A group of people never thought about eating and drinking, and carefully studied the reason why the train was able to move.Soon, the Japanese also came up with small model trains, and soon they were more refined than the Russians.

The fractional reserve fund system of modern banks is a highly leveraged financial system.A reserve of one dollar can create a magnification effect of 10 dollars.Before 1882 in Japan, the entire banking system even used nearly 20 times leverage to create money on a large scale.Money creation on such a scale greatly stimulated the leap forward of Japanese industry and commerce, but it also planted the hidden danger of inflation. Japan began to borrow foreign debt on a large scale, which occurred during the Sino-Japanese War and the Russo-Japanese War. At that time, Japan’s domestic finance had already been unified, and industrial modernization was basically taking shape. Foreign debt would not destroy Japan’s political and economic autonomy.The war foreign debt is equivalent to venture capital. Japan gained huge benefits in the Sino-Japanese War and the Russo-Japanese War, which was nothing more than sharing profits with the big powers.

While Japan's domestic financial strength expanded rapidly, the influence of the formerly dominant foreign banks was greatly weakened. From 1863 to 1868, the first six foreign banks to land in Japan had a total capital of 200 million taels, far exceeding the sum of the Japanese banking system at that time.Until 1897, the total capital of the Japanese banking system was only 133 million yen, which shows the strength of foreign banks. After the Meiji Restoration, although the strength of foreign banks was extremely strong, it was always difficult to develop the market in Japan.By the beginning of the 20th century, the six major foreign banks that first opened in Japan, except HSBC, had all closed down or withdrawn from Japan.HSBC still has a place in Japan with the huge profits gained from the opium trade in China, but it has also been squeezed into small fields such as foreign trade and international exchange. Ordinary business is difficult.

In addition to the fierce competition and containment of the three major competitors of Mitsui, Mitsubishi and Sumitomo, Japan's lack of basic soil for the survival and development of the foreign comprador class is also an important reason.Without the strong cooperation of local people, it is unimaginable for foreign banks to develop their business in the Japanese market.The Mitsubishi family once publicly swore to all employees that foreign shipping companies would be wiped out from the Japanese shipping market.With the help of the two powerful groups of government and finance, Mitsubishi realized its oath.

The Meiji government of Japan, which was formed with the samurai aristocrats of Choshu and Satsuma as the core, and the regime controlled by the politicians and literati of the Qing government have completely different attitudes towards Western powers, especially in the financial field.The Ministry of Finance is the core power of the Meiji government. Many financial and financial officials are from samurai families in Changzhou and Satsuma. These people regard finance as an arena for samurai fighting.If foreign banks want to control Japan's finance, the first difficulty they have to overcome is this group of financial warriors.

When Japan has complete control over its financial system, it also has a firm grip on the nation's destiny.In spite of the severe inflation and deflation caused by the financial chaos during the violent industrialization process, Japan as a whole jumped from a backward country on the verge of colonial danger to a A modern industrial power, the stability of its financial high frontier has made the first contribution! Immediately afterwards, Japan began to launch a fierce attack on HSBC's still dominant international trade and exchange business.