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Mummer then said, “Based on your country’s actions in this xenophobic incident, our government believes that the compensation of 14 billion gold marks is not an unacceptable figure for your government.”
Seeing that Li Hongzhang wanted to say something, Mu Mo then said, "Of course, we also take into account that your country's southeastern provinces did not participate in this Boxer Rebellion and have always maintained a friendly attitude towards foreigners. Therefore, our government believes that the issue of reparations can still be negotiated, such as reducing the amount by 25% or 20%, which is not impossible."
Upon hearing this, Li Hongzhang breathed a sigh of relief and repeatedly expressed his gratitude, saying, "If your esteemed envoy can support our country in negotiating the indemnity issue, then our country will certainly not forget your country's magnanimity..."
After listening to Li Hongzhang's flattery, Mummer was not particularly moved. Instead, he said to Li Hongzhang, "However, if you want our country to help your country on the issue of reparations, then your country should at least show some friendship towards Germany."
Upon hearing the German minister's almost blatant suggestion, Li Hongzhang immediately recalled several suggestions made by Zhang Zhidong, the Governor-General of Huguang. Although he felt somewhat troubled, the matter of establishing a central bank was not only met with differing opinions domestically, but Russia, Britain, and France had also shown great interest. This made Li Hongzhang quite hesitant about establishing a central bank, fearing that it would become another label of treason.
Seeing Li Hongzhang's evasive words, Mu Mo finally grew impatient and said to Li Hongzhang, "If Your Excellency is not capable of making such a decision, then I suggest that the Governor-General of Huguang and the Governor-General of Liangjiang send representatives to participate in the negotiations. Alternatively, Your Excellency could sign the Boxer Rebellion Agreement as soon as possible, thus saving everyone trouble."
This conversation with the German minister made Li Hongzhang realize that the Germans had already leaned towards Zhang Zhidong's opinion. Continuing to evade the issue would not only make Zhang Zhidong and Liu Kunyi more hostile towards him, but would also create more obstacles for the Germans in the negotiations.
Li Hongzhang's foreign policy at this time was to cultivate closer ties with Russia to balance the pressure from other countries, primarily to resist Japan's ambitions on the mainland. After the First Sino-Japanese War, Li Hongzhang realized that the Qing Dynasty could not only not defeat the European powers, but even its neighbor Japan. With Japan occupying the Korean Peninsula, the threat to China was growing, which is why he hoped to bring in Russian power to balance the pressure from Japan.
However, Li Hongzhang did not anticipate that the Russians' appetite was even greater than Japan's. Not only did they use the opportunity of building railways to infiltrate Manchuria, but they also intended to use the Boxer Rebellion to occupy Manchuria and refuse to leave. At this point, Li Hongzhang had completely lost his diplomatic direction. He was now merely maintaining the status quo, waiting for the powers to fight it out themselves before signing the agreement.
If it weren't for the opposition from the governors and gentry in the southeast, Li Hongzhang would have had no strategy for this negotiation with the foreign powers. His only goal was to preserve Empress Dowager Cixi's position and prevent her from falling from power. If Emperor Guangxu, who had become an enemy of the Huai clique, had come to the throne, the demise of the Huai clique would have been imminent.
However, the chaotic attack by the governor-general and gentry of the southeast, while greatly damaging his reputation, also created a rift among the great powers. At this point, he knew that if he could appease Germany, there would still be some room for salvage in the negotiations.
Because Germany now holds a somewhat detached position within the Allied forces, it not only enjoys the support of Russia and Austria-Hungary, but Japan and the United States also show no inclination to antagonize it. Furthermore, Britain and France maintain a non-confrontational stance towards Germany. Although Britain continues to dictate the direction of the Allied negotiations, Germany's attitude will ultimately determine whether the negotiations can be concluded.
When Empress Dowager Cixi, who was far away in Xi'an, asked Prince Qing Yikuang and Li Hongzhang for instructions, she only expressed her concern about when the Allied Forces would withdraw from Beijing. She said that as long as the Allied Forces could withdraw from Beijing as soon as possible, the demands of the foreigners could be agreed to first, and then further plans could be made after the Qing Dynasty implemented new policies to strengthen itself.
Li Hongzhang knew that Cixi's remarks were just casual talk, and that she had no real intention of making any further plans. However, he was certainly eager to get the foreigners to withdraw their troops. After all, without the return of the two empresses, the court could not be called a court.
Empress Dowager Cixi needed to return to Beijing to regain control of the country, and she wouldn't mind paying some price for it. After all, it was the Aisin Gioro family's property; what difference did a little more or less make? Even Li Hongzhang's reputation was a price Cixi could afford to pay.
Li Hongzhang then went along with the idea and, in the name of the Political Affairs Office, notified Governors-General Liu Kunyi and Zhang Zhidong to send representatives to Beijing to participate in negotiations to resolve the issue of reparations from Southeast China.
At the end of August, Zhang Zhidong sent Tao Senjia, Tian Bangxuan, and others as representatives, while Liu Kunyi sent Zhang Jian, Tang Shouqian, Tang Caichang, and others as representatives. In early September, the two sides met in Beijing and exchanged views privately. They then put forward nineteen opinions on issues such as the establishment of a central bank and the formulation of tariffs, which were presented to Prince Qing Yikuang and Li Hongzhang.
Yikuang naturally refused to take responsibility, instead assigning Li Hongzhang to negotiate with the foreign powers. Li Hongzhang then sent Tao Senjia and Tian Bangxuan to negotiate the nineteen points with the German minister. After reviewing the nineteen points, Li Hongzhang concluded that while they were beneficial to China, they would be difficult to implement in practice. Therefore, he wanted to see how the Germans would react.
The Germans' response to these nineteen points was remarkably positive, much to Li Hongzhang's surprise. However, at this point, he could no longer prevent the Southeast Governor-General from interfering in these foreign negotiations and could only wait and see.
The Germans supported the Nineteen Points because they got everything they wanted: the Chinese market and control over Chinese finance—things that couldn't be expressed in the treaty, but the Chinese delivered directly to the Germans.
After communicating with the Chinese, German Minister Mümmer formally proposed at the embassy meeting a reduction in the total amount of indemnities and a restructuring of tariffs.
Both Britain and the United States supported reducing the total amount of indemnities, as British, American, and Japanese goods accounted for about 70% of the value of China's imports, and excessive indemnities would hinder the expansion of British and American goods in the Chinese market. As for Japan, it had not yet truly grasped the complex economic relationship between trade and indemnities, and therefore tried to gain every benefit.
As for the reorganization of tariffs, it was also opposed by Britain, the United States and Japan. For Russia, France and other countries, they were more concerned about who would have the right to pledge tariffs and salt taxes, because after the Chinese proposed to establish a central bank, it would be equivalent to having a unified financial institution for settlement, which would make it difficult for them to push their own banks to China.
The Germans and Chinese first approached the British, and a tripartite meeting was held to obtain British support. The Chinese side was mainly represented by Tao Senjia, Tian Bangxuan, Tang Caichang, Zhang Jian, and Tang Shouqian. In the end, the Chinese side agreed to the condition that Germany concede some orders, and that China would continue to support the British in serving as Inspector General of Customs and to formulate tariffs that would not harm British interests. In exchange, the British relented.
The main reason was that Britain did not want the situation in the Far East to continue to be chaotic. Russia's aggressive stance in the Far East and the dissatisfaction shown by the people in the southeast towards Russia forced Britain to make certain concessions to the representatives of Huguang and Liangjiang as a backup plan for Britain in the Far East.
British Minister Sir John Sadow was deeply disappointed with the Qing government. The British hoped for a confrontational relationship between China and Russia, but Empress Dowager Cixi and Li Hongzhang's close ties with Russia had created a predicament for Britain's balance of power in East Asia. Japan's retreat also made it difficult for Britain to determine whether a Russo-Japanese confrontation would occur. Therefore, Britain needed to find a new force within China to replace the Qing government, preparing for its eventual collapse and the need to shoulder the responsibility of confronting Russia.
Although the representatives from Huguang and Liangjiang regions displayed a pro-German stance, this wasn't a major problem for the British. Germany was simply too far from China, and without the permission of the Royal Navy, German interests in China were essentially unrealistic. German support for the Chinese would easily become a British benefit in the end.
After settling things with the British, Germany immediately approached the Russians for negotiations. The negotiations between Germany and Russia were relatively simple. Germany had no objection to Russia's territorial claims in Manchuria, Outer Mongolia, and Xinjiang, so Germany requested that Russia not obstruct its proposals regarding tariffs and reparations. The Russians accepted.
As for the French, they were unwilling to engage in conflict with Germany at this time, as Russia was expanding aggressively in the Far East, and provoking Franco-German conflict at this juncture was clearly not a good idea. As for Austria-Hungary, it had consistently followed Germany in its Far Eastern policy. Therefore, the only real threats to the negotiations were the United States and Japan.
Germany and Britain began to extensively report on the US Chinese Exclusion Act, and these news reports also began to appear in Chinese newspapers, once again triggering xenophobic sentiment among the Chinese, but this time the target was Americans. This caused Britain's animosity towards China to decrease.
Chapter 93 Changes
On September 14, U.S. President William McKinley was assassinated, and 42-year-old Theodore Roosevelt succeeded him as president. At this time, the United States was plagued by extreme social contradictions due to the rampant monopoly corporations. The assassination of William McKinley was also related to his attempt to restore the bimetallic standard, which harmed the interests of many Eastern bankers.
Theodore Roosevelt quickly realized that his greatest enemy was not the European powers that controlled the world, but the American monopoly corporations. If these monopoly corporations could not be dismantled, the US president would become a puppet in their hands. This led him to seek compromise with the European powers and focus his main efforts on the domestic struggle against the monopoly corporations.
However, Theodore Roosevelt, who adhered to the big stick policy, did not give up American interests in East Asia. The western and central parts of Eurasia were already controlled by European powers, leaving only the eastern part as a gap. If the United States could not gain a foothold in the east, it would be isolated from Eurasian affairs, which would mean that the United States would become an isolated island.
However, Theodore Roosevelt did not approve of William McKinley's approach of allowing financial groups to control foreign policy toward China. The American financial group's diplomatic philosophy toward China was turning the United States into a follower of Britain. For example, in the Boxer Rebellion, the Americans mobilized the greatest force they could muster in Asia, but they did not gain much say in negotiations with China. Even the opinions of Austria-Hungary were more influential than those of the Americans. The only thing the United States could do was to repeatedly reiterate the Open Door Policy and the principle of shared interests among all countries.
However, this US foreign policy toward China is provoking hostility among the Chinese people, who believe that the US is attempting to unite with other powers to carve up China. Theodore Roosevelt believed it was necessary to revise the foreign policy toward China. On the one hand, he wanted to ease Chinese public discontent with the US, given that the US currently had very little power available for use in East Asia; on the other hand, he wanted to focus on advancing the Panama Canal project.
President William McKinley was an expansionist who, in addition to pushing the United States into the Spanish Civil War and annexing the Hawaiian Islands, also placed great importance on the defense of the United States in the Pacific. Therefore, during his presidency, he initiated numerous negotiations with Great Britain regarding the development of the Panama Canal.
The United States and Great Britain signed the Treaty of Clayton-Bulwer in 1850, stipulating that neither country could seek or enjoy exclusive management and control over the construction of the transoceanic canal on the isthmus of Central America, and that the canal would be used equally by both countries.
The treaty was originally reached by the United States to resist Britain's sole control of the Central American canal leading to the Pacific Ocean. However, by the 1790s, the United States no longer needed to use a treaty to resist British expansion in Central America. Instead, the treaty limited the United States' attempts to expand its power in Central America.
So on February 5, 1900, the Americans renegotiated the Hay-Ponsford Treaty with the British, granting the United States the right to build a canal in Central America. However, the Boer War exposed the weakness of the British, and the Americans felt they had made too many concessions. Therefore, they rejected the treaty in the Senate and began to renegotiate with the British, seeking sole American control over the Central American canal.
Before William McKinley's assassination, the treaty was progressing quite smoothly. The British had lost face due to the protracted Boer War and the risk of losing control of the European balance of power. The British finally agreed to abolish the 1850 treaty, but demanded that the canal dug by the United States be open to all countries and that no country could monopolize the right of navigation on the canal.
Although the Americans were prepared to compromise with the British, Theodore Roosevelt, due to his suspicion of the British character, believed it necessary for Panama, through which the canal route passed, to secede from Colombia and join or come under American control, so that the canal wouldn't be ruined by the British. Theodore Roosevelt also viewed this canal as crucial to America's access to East Asia; only with its completion could the United States be qualified to discuss East Asian issues with the European powers.
In early October, Theodore Roosevelt instructed U.S. Minister to China, John Rockhill, to make concessions in negotiations with China, but to protect U.S. interests in China as much as possible. This U.S. retreat brought the year-long peace talks to a swift end.
The Japanese were surprised to find that the Germans had no desire to communicate with them at all. The so-called principle of unity among the great powers had essentially become a principle of unity among the European powers, or more precisely, a unity among Britain, Germany, Russia, and France. As long as these four great powers reached an agreement, the diplomatic corps would also have reached an agreement, and the other countries would have no room for questioning.
The Ito Hirobumi cabinet was furious, but powerless to do anything about it. From a certain perspective, this was an inevitable problem Japan would encounter in its attempt to pursue independent diplomacy. The British were using this method to warn Japan that without British intervention, Japan's ambition to join the ranks of the great powers was a joke.
Foreign Ministry officials have once again begun to doubt Japan's independent diplomatic path, and voices have grown louder that Japan still needs the support of European powers to achieve anything in diplomacy.
However, just as Japanese diplomats were questioning Ito's foreign policy, Li Hongzhang offered Japan a conciliatory proposal, stating that if Japan supported the negotiations and the signing of the agreement as soon as possible, the Qing government would compensate Japan in other ways.
Li Hongzhang's actions were not merely aimed at expediting the negotiations; they also reflected the Qing government's realization that it could not force Russia to back down, and its attempt to win over Japan to join forces against Russia. To the Japanese, Li Hongzhang's behavior was utterly incomprehensible. He had initially brought the Russians into Manchuria, and now he was trying to win over Japan there to counter Russia—wasn't this just bringing everything back to square one?
However, from the army's perspective, Li Hongzhang's actions were naturally satisfactory. In the army's view, Manchuria had little to do with China anymore; the issue now was between Japan and Russia vying for control of Manchuria. The fact that the Chinese were willing to cooperate with Japan actually increased Japan's chances of winning against Russia.
In order to keep China on Japan's side against Russia, the army first suggested to Ito that Li Hongzhang's request should be granted and a peace treaty should be passed as soon as possible. This would allow China to focus on discussions with Russia regarding the Manchurian issue, and also divert the attention of other countries from East Asia. No matter how arrogant the army was, it was impossible to fight Russia under the watchful eyes of other powers. If other powers joined the war, Japan would have no chance of victory, even if Russia lost.
Thus, in early November, the Qing government and eleven nations signed an agreement on the Boxer Rebellion, reaching a consensus on the withdrawal of their troops. Compared to the twelve-article peace treaty outline from the beginning of the year, this agreement made significant revisions on two issues and added two annexes: a method for establishing a central bank and clauses on tariff negotiations.
For example, regarding the issue of reparations, the original demands from various countries were for China to pay them 4.5 million taels of silver, with interest totaling over 9.8 million taels, secured by customs duties and salt taxes. The newly revised terms stipulated that China would pay 1 million taels of silver, with an annual interest rate of 1450%, from January 1, 1902, to 1935, with an annual payment of 35 million taels, totaling 50750 million taels over 3.5 years (including interest). The 2000 million taels owed to provincial governments were not included in this calculation. Customs duties and salt taxes were also used as collateral.
The protests by the people of Southeast Asia led various countries to agree to reduce their reparations demands by 20%, reducing the principal and interest by more than 400 million taels. Of course, another 100 million taels of reparations were not actually reduced, but were instead converted into orders for Britain, Germany, and the United States.
According to the annex to the establishment of the new central bank, the 7250 million taels of indemnity payable by China in the first five years would be automatically converted into central bank bonds for the Qing Dynasty's currency reform, with an annual interest rate of 5%. Customs duties and salt taxes were pledged to the central bank, and the Germans obtained advisory rights over the establishment of the central bank.
The annex also stipulated that China should provide industrial orders worth no less than 100 million taels of silver to Britain, Germany, and the United States within five years. In addition, after the establishment of the central bank, it would issue 60 million taels of silver in infrastructure bonds in the financial markets of Britain, Germany, France, and the United States, with an annual interest rate of 5%.
Therefore, while the powers reduced their reparations demands in the publicly agreed treaty, they converted the reduced reparations into domestic industrial orders in the unpublished annexes. Although this appeared to require the sacrifice of some industrial goods, it still brought them greater benefits. The reduction in the total amount of reparations effectively suppressed public discontent in the various provinces.
However, how to distribute the debt, totaling 130 million taels, among the provinces was also a thorny issue. Although the provinces could borrow the money for a period of time, it was clearly a heavy burden compared to the principal and interest to be repaid. However, with the support of Huguang, Huguang took 100 million taels of the debt, while the remaining 30 million taels went to Liangjiang and other provinces.
In return for accepting the debt from Huguang (Hubei and Hunan provinces), Li Hongzhang had no choice but to accept Sheng Xuanhuai's suggestion to withdraw from the Hanyang Ironworks, Daye Iron Mine, and Pingxiang Coal Mine. This was because Huguang needed to integrate these three entities into the Hanyeping Iron and Steel Company, thereby attracting capital and becoming the main industrial production base for repaying the debt. At the same time, the Qing government also relinquished its power over tariff setting and management of the central bank. Given the inability to repay the debt, both of these were clearly extremely troublesome matters.
In this way, Huguang and Liangjiang had effectively replaced the Qing government as the main bearers of the Treaty of 1901, which also granted the governors-general of these two regions greater autonomy. The foreign powers had begun to acknowledge that Huguang and Liangjiang, outside of the Qing government, had the right to negotiate with them.
The main content of the second amendment was the modification of the tariff administration authority. Originally, the powers advocated bringing the regular customs offices under customs administration and adopting a uniform 5% tariff rate.
However, at Germany's insistence, the Qing government decided to impose a 100% tariff on steel products, and the import price of foreign steel could not be lower than the cost price of Hanyang Steel; a 15% tariff was imposed on chemical products and machinery; and a quota system was implemented for coarse yarn and cloth, with the import value in 1900 as the benchmark, and a tariff of up to 25% was levied on coarse yarn and cloth exceeding the quota. The average tariff increased to 14.7%.
This tariff level is still lower than that of the United States and Germany, but it has exceeded the UK's average tariff of 10%. In essence, this differential tariff is a blow by the UK and Germany to US and Japanese goods in the Chinese market, because all the items subject to high tariffs are those in which the US and Japan have an advantage, or are in which the US and Japan are gaining an advantage.
Furthermore, an agreement was reached between the various countries and the Qing government to establish a tariff-setting committee, with one representative each from Britain, Germany, Russia, France, the United States, and Japan, and six representatives from Qing China. The committee was to hold substantive discussions on tariffs every three years. China thus regained some of its tariff-setting power, although this power remained subject to the control of Britain and Germany.
Chapter 94 Benefit 1
Tian Junyi and Cai E, who were riding in a rickshaw, got off at the intersection of Dongjiaomin Lane and were then inspected by the Allied soldiers at the intersection. When the German officers guarding the intersection saw the silver badges hanging on their chests, they were a little more polite. However, the Allied soldiers were very impatient with the other Chinese merchants and civilians who entered Dongjiaomin Lane.
As Tian Junyi and Cai E passed the intersection, they saw a Chinese rickshaw driver trying to enter the Dongjiaomin Lane area to solicit passengers. In fact, he had just picked up a foreigner who had asked him to wait there because he needed another ride, but the foreigner never returned. The rickshaw driver tried to go in to find his passenger, but was stopped by Allied soldiers because he did not have a pass. Seeing that the rickshaw driver was still trying to go in, the Allied soldier raised his hand and slapped him, cursing him in broken Chinese, "pig."
Cai E angrily stepped forward to stop the Allied soldiers from continuing to assault the coachman. Tian Junyi walked over to the coachman, took out some money, and told him to leave quickly and not suffer any more losses. The coachman, with a mournful face, pulled the rickshaw back and shouted, "In broad daylight, they take a ride without paying and even beat people. Is this the civilization of foreigners?"
Tian Junyi could only shake his head upon hearing this. Soon, he heard the argument between Cai E and the Indian soldiers escaping, growing louder. He quickly ran back to urge Cai E to calm things down. However, at this moment, the Indian soldier became restless and wanted to take both Cai E and Tian Junyi back for interrogation. Just then, the German officer guarding the intersection came over and helped the two men out of the predicament.
Tian Jun thanked the Germans and then quickly pulled Cai E away. After walking for a while, Cai E still said sullenly, "What's the difference between this and being a subjugated people? Even Indians can swagger around in China now. How did our country fall to this state?"
Looking at the construction sites expanding everywhere in Dongjiaomin Lane, and the foreigners and foreign troops walking on the street, it was like a country within a country. Tian Junyi also said with regret: "So, if we don't organize the masses, the 400 million people will be a disorganized mess, and this is the result. Now, let alone catching up with the foreigners, we can even catch up with Japan's development, which would earn us some respect."
Upon hearing this, Cai E stopped complaining, but he looked even more depressed. The two walked to the intersection of the south side of Dongjiaomin Lane and the north side of Hongchang Hutong, and finally saw the German Legation on the west side of the hutong, which was their destination for coming to Dongjiaomin Lane today.
Originally, the German legation was just a rented residence, but last year, taking advantage of the Boxer Rebellion, the Germans immediately occupied the adjacent Guangcheng Timber Factory and a large number of surrounding houses, and have now expanded it into a small castle with barracks.
The two men walked to the gate of the German legation, handed their invitations to the sentry at the door, and the sentry went to the guard post at the door to make a phone call. He quickly returned and gestured for the two men to enter and then walk through the passage leading to the main building.
At the entrance of the main building of the embassy, Second Secretary Halbach was already waiting in the lobby. Upon seeing the two men arrive, he led them directly to a reception room on the second floor. Shortly afterward, Minister Mummer and a German man with a long beard entered.
After greeting the two, Mu Mo introduced the person next to him to them, saying, "You should have met this gentleman before. He is the representative of Deutsche Bank in Beijing. The reason for inviting you here today is to talk to you about the development of Hubei and Hunan provinces."
Halbach translated for Mümmer, and Tian Junyi replied after listening: "On behalf of the Governor-General of Huguang, I would like to express my gratitude to the Minister. The Governor-General himself is very willing to establish a closer relationship with your country. After all, during his tenure as Governor-General of Liangjiang, the officers invited from your country provided him with great assistance. He hopes that this time, Germany's assistance to Huguang will be as unwavering as ever."
Mummer was quite satisfied with Tian Junyi's answer. These representatives of the Governor-General of Huguang, especially the two young men in front of him, had fully demonstrated their pro-German stance during the negotiations. Mummer believed that among the Chinese, no one was more favorable toward Germany than these two.
Because after the German Expeditionary Force arrived in China, their actions on this land were far from civilized. Due to the behavior of these German soldiers, the Chinese people had a very negative impression of Germans, and almost overnight, Germans became seen as as barbaric as the Russians.
The image that German diplomats had cultivated in China was completely destroyed after the arrival of the German Expeditionary Force. This was indeed a blow to German diplomats, as it meant that much of their past efforts in China had been wasted. The Chinese people no longer wanted to interact with Germans, making them objects of exclusion on this land.
For a country like Germany, lacking naval power, its overseas interests require a foothold, ideally with the support of local powers. Without such support, Germany cannot sustain its presence abroad. This explains why German investment is increasingly concentrated in the Mediterranean region, as Germany has established connections with the Austro-Hungarian and Ottoman Empires through railways.
Mummer addressed the two Chinese men, saying, “My friend here represents Deutsche Bank. His main concern is that your country is combining the Hanyang Ironworks, Daye Iron Mine, and Pingxiang Coal Mine into a single company and hopes to invite German companies to invest. Are you willing to offer 51% of the shares?”
Upon hearing Halbach relay Mummer's question, Cai E immediately blurted out, "Of course not. What we need is to save this factory, not to turn it into a foreign factory. Otherwise, we won't be able to explain it to the people of Hubei and Hunan."
In response to Cai E's reply, the Deutsche Bank representative calmly stated: "Excuse my frankness, but for German steel companies, your country's Hanyang Ironworks is actually of little value. Although the Daye Iron Mine and Pingxiang Coal Mine are valuable, they can only supply the Hanyang Ironworks. Trying to transport the coal and iron resources from these two places out of the country would be a losing proposition."
Therefore, it is indeed a wise move for your country to combine these three mines, as this will at least increase their value. However, for German steel companies, your country's capabilities in mining and smelting technology are too poor. If our steel companies were to invest in this company, they would need to gain complete control and thoroughly transform its technology in order to produce truly qualified steel.
This is why we need a 51% stake in Hanyeping Steel. If you cannot offer this, then I believe German steel companies will have little interest in Hanyeping. I think you gentlemen should understand that you cannot save Hanyeping; only we can. Therefore, our demand for controlling interest is not unreasonable.”
Cai E immediately fell silent. He knew better than Tian Junyi, who was beside him, that this was a matter of great importance, so it was better to leave the answer to him. After thinking for a moment, Tian Junyi shook his head and said, "We must retain controlling interest in Hanyeping Company. This is a matter of principle, and we will not discuss matters of principle with you."
As for the Hanyeping Company not being of much value to your country, I do agree that. For a major country like yours, which is the largest steel producer in Europe, the Hanyeping Company may not even be comparable to your country's smallest steel mill. However, the Hanyeping Company is of great significance to our country, so we cannot simply hand it over to someone else.
Because this is not important to your country, but is very important to my country, I hope that you will make concessions on this issue.
Upon hearing Tian Junyi's answer, the Deutsche Bank representative frowned. He didn't understand the point of the Chinese insistence on this issue, because if Germany chose to withdraw its investment, the Chinese would only be left with a mess. For a country without steel production capacity, imposing high tariffs on foreign steel products is practically meaningless.
Just as he was shaking his head, trying to bring the Chinese to their senses, Tian Junyi continued, "In that case, let's set aside the Hanyeping Company project, which isn't particularly important to you, and talk about the project that's most valuable to you. Minister Mu, what are your thoughts on the railway construction plan I previously presented?"
The Deutsche Bank representative turned to look at Mummer with some confusion. The German minister remained silent for a moment, then got up, went back to his desk, opened a locked drawer, and took out a file folder. Mummer opened the folder, pulled out a folded map, and handed it to the bank representative.
The representative glanced at it, remained silent for a few seconds, and then looked at the Chinese and asked, "Are you sure you want to build this railway? This railway will probably be opposed by Russia and Britain."
Tian Jun nodded and said, "Of course, this is the same as the resistance your country faced from Britain when it built the 3B railway. But when our country started building this railway, didn't it relieve your country of some of the pressure? Compared to the fact that most of the 3B railway your country built was on foreign territory, this railway is mostly on our territory, so the opposition from Russia and Britain is just opposition to our country."
The Deutsche Bank representative lightly tapped the blueprints in his hand with his fingers, and after a while asked, "Does your country have enough money to invest in this railway?"
Tian Junyi shook his head and said, "Of course not now, so we need the Hanyeping Company. Only with such a self-sufficient steel company can we reduce the cost of this railway to the lowest possible level. In addition, a large amount of cheap steel will also help our country improve its military equipment to resist the military threats posed by Russia and Britain."
The Deutsche Bank representative held the blueprints in his hand. He knew it was indeed a tempting lure. Germany's goal in building the 3B railway was to open a land route to the Indian subcontinent. However, German industry didn't really care whether the railway ended in India or China, because both regions have the most densely populated areas in the world, which meant huge consumer markets.
While the bank representative was deep in thought, Minister Mu asked Tian Junyi, "Does your country really have the confidence to withstand the pressure from Russia and Britain to build this railway? You should know that you may not even be able to take back Manchuria right now."
Chapter 95 Benefit Two
Standing on the balcony watching the two Chinese men leave, Minister Mumer turned to the Deutsche Bank representative beside him and asked, "Are these concessions really feasible?"
After bowing to the ambassador, the representative said, "The Chinese are right about one thing: for Germany, the greatest interest in China is the railway connecting Qingdao and Berlin. Once this railway is built, Germany will no longer have to be at the mercy of Britain, nor will it have to care about Russia's Trans-Siberian Railway, because Germany will have its own Eurasian railway bridge."
This railway would bring German industrial power to Asia and suppress the influence of Britain, Russia, and France in Central and Eastern Asia. Its significance, and indeed the Suez Canal's, would be even greater for Germany than the canal was for Britain. This meant that even without a powerful naval fleet, we could protect German interests on the Asian continent.
However, before the railway is completed, we need someone to help us maintain its safety. In fact, only three countries have significant interests in this railway: Germany, the Ottoman Empire, and China. Germany can help the Ottoman Empire resist pressure from Britain and Russia, but China needs to confront Britain and Russia independently. Therefore, Germany should strengthen its alliance with China.
If these Chinese can indeed push forward the construction of this railway, then I don't think concessions in other areas will be a problem. Moreover, our concessions would only involve cooperating with them in a commercial manner, which would still be profitable for German industry, commerce, and banking.
The question now is whether the army and the emperor will approve of this cooperation.
After a moment of silence, Mu Mo withdrew his gaze from the Chinese figures that were gradually disappearing from his sight, and turned to the bank representative beside him, saying, "Personally, I support the cooperation between the two sides. The Governor-General of Huguang has now become a representative of the powerful faction in the southeast, and his prestige in China is second only to Li Hongzhang, while the other Governor-General of Liangjiang cannot speak frequently due to health reasons."
Therefore, if Germany wanted to maintain and expand its interests in China, it not only needed to cooperate with Yuan Shikai, but also needed to deal with the Governor-General of Huguang. Normal industrial and commercial cooperation between the Huguang region and Germany did not infringe upon British interests in the region, because we were not seeking influence in the middle reaches of the Yangtze River.
Of course, as cooperation between Germany and the Huguang region deepens, even without a treaty to solidify Germany's interests in the middle Yangtze River region, we can still defend our interests through the influence of these powerful figures in Huguang. In my view, this Mr. Tian is precisely the kind of defender of Germany's interests in the Huguang region, and he is gradually gaining the trust of the Governor-General of Huguang.
I will, in my capacity as a diplomat in China, express my position to the Cabinet and the Emperor…
While the German minister and the representative of Deutsche Bank were discussing cooperation with the Huguang region, the British minister, Sir John Saud, was also exchanging views with Tao Senjia, the representative of the Governor-General of Huguang.
Tao Senjia's purpose in visiting the British minister was simple: first, to seek the British understanding that the cooperation between Huguang and Germany only involved private trade and did not mean that the Governor-General of Huguang had shifted to a pro-German stance; second, to request the British minister to abolish the arms embargo.
Minister Satow did not want to offend the Governor-General of Huguang, who wielded immense power in the middle reaches of the Yangtze River. In his view, Zhang Zhidong was similar to the princes of India. While these princes respected the power of Britain, they also resented challenges to their personal authority by British officials, which often led to unnecessary wars.
Although these wars always ended in victory for the British Empire, they took place in India, which was not a unified country but a continent composed of many independent states. Whether it was the Mughal Empire or the East India Company, their rule over the Indian subcontinent was merely to maintain a system of personal loyalty, and they did not truly transform the Indian subcontinent into a unified country with a unified system, law, and economy.
The British Empire only truly began the construction of the Indian state after it accepted the East India Company's power on the Indian continent. China, on the other hand, has always existed as a unified nation. Even now, under the rule of barbarians, China remains a true country. Chinese emperors treat powerful governors like Zhang Zhidong no differently than they would their servants; the people under Zhang Zhidong's rule are still subjects of the Chinese emperor, not subjects loyal to him.
However, the Boxer Rebellion and the invasion of Beijing by the Eight-Nation Alliance directly shattered the barbarian dynasty's control over the local areas. Many European diplomats, including Satow, realized that the loyalty of local power holders to the central government was no longer so pure, and that the Han Chinese in the local areas were beginning to feel resentment towards the foreign rulers of China.
Although British diplomats believed that maintaining the current Manchu rule over China was in the best interests of the British Empire, they also had to consider who would maintain those interests when the Manchu rule ended.
Emotionally speaking, the political group of Li Hongzhang and Yuan Shikai was the most suitable to take over the power to rule China, because their attitude towards Britain was the same as the Qing government's attitude towards Britain. Therefore, even if there was a change of power, Britain's interests in China would not be affected.
However, the Southeast Mutual Protection Agreement, which fostered local power factions in the southeast and generated widespread resentment among the southeastern people towards Li Hongzhang and the Huai clique he represented, was significantly reducing the Huai clique's control over China. Satow, therefore, had no choice but to safeguard British interests in China by placing his bet on the Governor-General of Huguang, a view shared by the British Foreign Office.
To be honest, the Boer War was a losing proposition for the British Empire. Although the war gave the British Empire control of a gold-producing region, it destroyed the British Empire's moral prestige and authority.
European powers began to question whether Britain still had the ability and right to dominate the world. This can be seen from the United States' pursuit of the Panama Canal, Russia's attempts to expand in the East, Germany's continued construction of the 3B railway, Austria-Hungary's ambitions in the Balkans, Italy's aspirations for North Africa, and the Ottoman Empire's attempts to implement European-style reforms to restore its traditional sphere of influence. Britain was beginning to lose control of the world order.
Faced with a volatile European situation, Britain needed to restore peace to the Far East as soon as possible and end the Boer War quickly to extricate its empire from the quagmire of South Africa. Naturally, it would not allow China to descend into complete chaos. Yuan Shikai and Zhang Zhidong were the two cornerstones of China's stability.