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Text Chapter 62 Forty million taels

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    "Why Indian yarn?" Even if India's industry is much stronger than that of the Qing Dynasty, it cannot be the opponent of established powers such as Britain, France, Germany and the United States.  Why haven¡¯t cotton yarns from these countries won the huge market in China?  "Based on our analysis, there are several reasons why Indian yarn became so popular in our Qing Dynasty." Lu Guangsheng explained one by one what they learned and his own analysis.  The UK is the largest textile country in the world today. Its industrial capabilities and production technology are sufficiently competitive. The UK itself also has the greatest influence in China.  However, British yarn ultimately lost to Indian yarn. The fundamental problem was that British cotton yarn products did not match the Chinese cotton yarn market.  The development of the textile industry in various countries is based on the actual conditions of their own countries and local conditions, and each develops its own unique advantages.  Britain is not a cotton-producing country. In order to maintain a competitive advantage in its products, the textiles it develops are mainly high-count fine gauze that uses less cotton and has more added value.  The United States is just the opposite. Because it is a major cotton-producing country, it is most advantageous to export low-count and thick fabrics that consume more cotton.  Domestic homespun cloth needs low-count thick yarn.  In this regard, India has unique advantages.  India itself is a big cotton-growing country. Like China, it grows Asian cotton species.  Because the raw materials are the same, the machine-spun cotton yarns are all rovings with a count of 10-12, which is very consistent with the machine yarns needed in China.  Of course there is no problem with American cotton roving, but compared to American low-count thick yarn, Indian yarn has the advantages of short distances and low labor costs.  In the United States, because the weaving industry is more developed than in India, Citifabric has also won a place in the Chinese market.  Therefore, the final result is that at the end of the 19th century, China's cotton import market was mainly monopolized by three major players: American coarse cloth, British fine cloth, and Indian cotton yarn.  Because homespun is the largest textile commodity consumed in China, among the three, Indian yarn has captured the most generous profits.  Yang Shaowen found it a bit ironic. The British were eager to open the door to China so that they could dump their industrial products, especially cotton textiles.  They always fantasize about the beautiful big market with a population of 400 million. As long as each person needs an extra foot of fabric for their clothes, it will be enough for all the textile factories in the UK to be busy for a long time.  But in the end, except for occupying part of the fine cloth market of the rich, the wish of 400 million people to add one foot of cloth did not become a reality. In the end, they still made a lot of money by selling opium.  God has played a joke on the British.  Today, decades later, it is colonial India that has realized their dream of opening up a market of 400 million people for their mother country.  Fortunately, India was a British colony, and most of the benefits still went into the pockets of the British.  Otherwise, the British would really be pissed to death.  The comprehensive advantages of these products, transportation, raw materials, labor, etc. contributed to the Indian yarn being able to finally defeat the cotton yarn products of other powers.  "This is not all, there is also a huge impact on the exchange rate." Fu Hongyi added: "The import volume of Indian machine yarn has grown very rapidly in recent years. It can completely defeat the local handmade yarn, except for the machine yarn.  In addition to the efficiency advantage of native yarn, there is also a very important change in the exchange of money over the years. The general trend is that silver is cheap and money is expensive, which has greatly strengthened the competitiveness of Indian yarn. " First of all, it is industrial products.  Prices continue to plummet.  Beginning in 1873, the world economy entered a period of depression that lasted for nearly 22 years. The prices of industrial products in capitalist countries plummeted. China adopted a silver standard for foreign trade, and silver coins happened to continue to depreciate during this period. From European and American countries that were on the gold standard,  For imported products, the advantage of falling prices was offset by the depreciation of silver taels. The price decline of these industrial products calculated in silver taels was not obvious.  India is different. It also adopts the silver standard like China, and the price advantage of industrial products has not been cancelled. This gives Indian yarn a price advantage compared to other capitalist countries because of the exchange rate.  As a mainland bank boss, Fu Hongyi may not have studied the world economic history so thoroughly over the past few decades.  But he knows how import prices of machine yarn from India have changed over the years.  The price of imported machine yarn per quintal dropped from more than 30 taels in 1875 and continued to fall for nearly 20 years. Although there was a slight increase once or twice, it fell to less than 17 taels in 1892, a decrease of nearly half.  In contrast, cotton products in capitalist countries did not experience such a decline.  Another reason is that money is expensive.  As a bank boss, Fu Hongyi knows this best.  In the 1870s, one customs tael could be exchanged for about 1,800 copper coins. By the 1890s, it could only be exchanged for about 1,400 copper coins.  China's rural economy is within the scope of the copper coin economic circle. The appreciation of copper coins means that their purchasing power has increased, which makes Indian yarn??It has stronger competitiveness for local yarn.  Fu Hongyi¡¯s financial analysis made Yang Shaowen feel a lot more relaxed.  This made him understand that Indian yarn has such advantages. In addition to its own good competitiveness, there are also many reasons for the increase in exchange rate changes.  If it is all due to its own competitive advantages, Tusha may not have a chance, but if there is an exchange rate bonus, it will have a lot more chances of winning.  Although he cannot influence exchange rate changes, he also knows that changes in exchange rates will not always be in one direction.  In recent years, the price of imported yarn has begun to rise slowly, and the price of copper coins cannot always appreciate. If copper coins appreciate again, some local governments will see the benefits and mint copper coins.  Lu Guangsheng asked again: "Boy Yang, do you know how much cotton yarn we import from India every year?" Yang Shaowen shook his head. These data must be compiled from the customs of the Qing Dynasty to get accurate results. Of course he would not know.  Given the poor economic management level of the Qing court, I'm afraid it was a black eye.  He said with some doubt: "It should be quite a lot. Does President Lu know?" "Of course I don't know the specific number, but I can estimate it." After Yang Shaowen introduced machine yarn Jinwu into the market, Lu Guangsheng started making it locally.  Did some fieldwork.  The clothes in ordinary people¡¯s homes are divided into two types: work clothes and dress clothes.  Local farmers generally use homespun cloth for their work clothes, and about 60% of their costumes are homespun, more than 30% of foreign cloth, and less than 10% of silk.  The ratio of work clothes to costumes is 4:1, which means that more than 90% of the fabrics needed by farmers are homespun cloth.  Farmers consume about 2 pieces of cloth (old homespun cloth) a year, of which 1.8 pieces are homespun cloth.  Considering that Wujin is much richer than other places, the annual consumption of homespun cloth per person is calculated as 1.6 pieces.  China has more than 400 million farmers, who consume 640 million pieces of homespun cloth every year and require about 4.2 million tons of cotton yarn.  Lu Guangsheng concluded: "In Wujin, it has only been about a year since the machine yarn was introduced, and the local yarn has almost died out. Considering the inconvenient transportation in some places in the mainland, it is not easy to enter the machine yarn, and some farmers spin it for their own use. We conservatively estimate  , about 60% of the 4.2 million tons of cotton yarn is machine yarn. After deducting the domestic machine yarn, we need to import more than 2 million tons of Indian yarn every year, which costs a total of about 40 million taels!  silver!  Yang Shaowen took a breath of air.  40 million taels of silver flow out of India every year, and there is also the related loss of a large number of labor jobs in cotton planting, cotton processing, spinning and so on.  In terms of cotton yarn alone, China has suffered heavy losses!  Not to mention that China is a silver-standard country. These huge outflows of silver will definitely cause domestic currency tightening and severely damage economic development.  Min Jingyuan also said with emotion: "It was the first time I heard about Chairman Lu's estimate and I was very shocked. During the First Sino-Japanese War, our Qing Dynasty compensated 200 million taels of silver, which shocked the whole country. But for cotton yarn alone, we lose 200 million taels of silver every year.  40 million yuan of silver has been lost, but how many people care about it? Hey, my own abilities are limited. I can only hope that our Wujin County can make a difference in spinning and minimize the loss of profit rights. "  After the defeat, everyone was reviled and angry, and the scholars wrote letters on the bus calling for reforms to strengthen the country.  But on the economic front, we have already fought so many huge defeats, yet so many people have stood up and spoken out.  At this moment, Yang Shaowen felt that his mind was agitated and it was difficult to calm down. Unknowingly, he felt that he had a heavy sense of mission.  My goal is no longer just for my family, the company's employees, and my OEM customers, but I should shoulder greater responsibilities and missions.  His dream of saving the country through industry, which he originally felt was somewhat nihilistic, has never felt so real and concrete at this moment!
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