The Republic of China Government is Very Concerned (3)
Volume 6: Great Depression Era · Chapter 31
"Domestic demand for crude steel has already exceeded 15 million tons. Aluminum demand is difficult to judge; we estimate the demand for aluminum products in urban household kitchenware to be around 3 million tons annually. However, industrial demand for aluminum has already exceeded our estimates. At this stage, we can only judge based on electricity consumption. Currently, China generates 30 billion kilowatt-hours annually. Our projection is that within ten years, our electricity consumption is very likely to reach 230 billion kilowatt-hours. We have already begun technical cooperation with the Soviet Union and are preparing to import 50 sets of equipment with a capacity of 50,000 kilowatts each. The orders have already been placed with the Soviet Union..."
Yao Changtian was introducing the Ministry of Industry's plan. As He Rui listened, his mind wandered slightly. The report had been going on for nearly an hour, so He Rui asked Yao Changtian to pause for a moment.
"Chairman, is there a problem?" Yao Changtian asked. Seeing He Rui reveal a look that wasn't particularly enthusiastic, Yao Changtian was somewhat surprised. Currently, China's massive demand was driving the economy tremendously. The comrades in the State Council were very excited when facing this data.
"It's nothing, I'm just a bit tired," He Rui replied. After speaking, he stood up and walked to the window. He Rui had witnessed the years with the most severe smog, and he had also witnessed the climate change after the popularization of new energy. Comparing the dim sky that seemed like it would never clear with the clear, almost transparent sky of the present, He Rui inevitably felt some regret in his heart.
However, to develop practical photovoltaics, wind energy, tidal energy, or new types of reactors, the little knowledge He Rui possessed couldn't even support a single sub-project under a sub-project. Even if He Rui could provide such knowledge and technology, assembling the entire world's current industrial capability would not be enough to realize it within a few years.
Thinking of the industrial pollution that the people now had to face, He Rui could only apologize to the Chinese people in his heart. He silently vowed to do his utmost to promote the advancement of industrial technology and pull China into the new energy era as soon as possible.
Sitting back in his seat, He Rui asked, "How much of our mineral supply can we confirm is unaffected by external influences?"
Yao Changtian, worried that He Rui might raise some objections, heard that He Rui wanted to continue pushing these plans and immediately answered with high spirits, "We can confirm 140 million tons of iron ore, which is nearly 60 million tons of steel. We believe that the expected annual iron ore production of 24 million tons in Korea can be regarded as domestic production. The Soviet Union's annual iron ore supply of over 8 million tons is not considered a stable source. At this stage, several domestic industrial centers, even Guangdong, can be supplied by the iron ore from Qiongzhou Island, guaranteeing the supply of coal and iron ore. Although Shanghai and other regions do not have advantages in this regard, the coastal areas of Jiangsu and Zhejiang can still develop chemical industry capabilities. What we are currently lacking are minerals like copper and nickel. The United States and Canada are the largest producers. Chile has been influenced by Britain and seems to have placed quite a few restrictions on us when exporting copper ore."
After speaking, Yao Changtian watched He Rui's reaction. There was currently an unspoken consensus within the State Council: if China had needs involving foreign countries, Chairman He Rui could solve these problems through diplomatic means. Therefore, the issues Yao Changtian brought this time were the result of tacit discussions within the State Council.
As the State Council responsible for running the country, they were very clear about the difficulties China faced. One of the biggest difficulties was that although China's economy seemed booming, it lacked "fist" industrial products. To put it more bluntly, Chinese enterprises currently lacked the ability to mass-produce industrial goods capable of fully competing with their European and American counterparts. At this stage, what they could present were items like silk, tea, pig bristles, porcelain, and bicycles. Foreigners could buy these consumer goods, or they could choose not to. In the current economic crisis, consumption power in all countries was declining, and the export volume of these Chinese commodities had dropped. In particular, sales to the major market of the United States had dropped even more. This also led to China lacking hard currency like Pounds and Dollars to purchase more raw materials. The State Council expected He Rui to solve these problems.
Yao Changtian waited for a while before finally hearing He Rui speak. "These parts can wait a bit; there will be a result by next year. At this stage, apart from traditional sectors, what are our leading export products?"
"...Domestic demand is too large. Commodities including soda ash are all being used to meet the demands of the East Asia plus Soviet Union market," Yao Changtian explained, then fearing He Rui might misunderstand, he hurriedly added, "Almost all our industries are seeing booming production and sales, and the production capacity for these competitive commodities is also increasing massively. Moreover, domestic personnel training in the field of quality inspection is being promoted very successfully. However, Chairman, why do you favor private capital so much? Private capital has now set off a wave of investment, and their proportion in domestic production fields has increased significantly. Will this cause trouble?"
"Heh, what kind of trouble do the comrades think will happen?" He Rui laughed.
Seeing He Rui looking prepared, Yao Changtian felt much more settled. As long as He Rui was prepared, the comrades in the State Council generally believed that things wouldn't go too far off track. However, recently the proportion of all central enterprises in the national economy had plummeted, and the pressure on the State Council was indeed very great. So Yao Changtian replied, "Once these capitalists have money, will they interfere in politics? There have already been some cases of relatively large private factory owners wanting to run for local councilors."
"Have you all read the new book I wrote?" He Rui asked.
Yao Changtian nodded hurriedly. "We have already organized study sessions. I don't quite understand the Chairman's judgment that the lifespan of large-scale enterprises rarely exceeds thirty years. And even if it is thirty years, capitalists can still do a lot of things. Not to mention, as one capitalist falls, another rises; they will always form a bourgeoisie."
"Comrade Changtian, you have worked in state-owned enterprises and also in financial enterprises. What is your definition of a capitalist?"
Hearing He Rui mention his work experience, Yao Changtian felt a burst of joy in his heart. He was from Nantong, Jiangsu. After graduating from high school, he went to Shanghai and worked in the stock exchange for a few years. Later, he was invited to work at a bank in Tianjin. After going there, he felt that the domestic economy was too far behind foreign countries and couldn't see any future.
At that time, He Rui was already quite famous, and Yao Changtian also received an invitation letter from the Northeast Bank. Since many colleagues had received such invitations, Yao Changtian didn't take it seriously. Just as he was preparing to leave Tianjin, the severe drought in the North hit. At the Tianjin docks, he witnessed with his own eyes the Northeast Government organizing massive numbers of refugees to go to the Northeast in an orderly manner. Yao Changtian was stunned.
Every winter in Shanghai, there were many corpses of refugees who had frozen or starved to death on the streets every day. Yao Changtian found it hard to imagine how the Northeast, which was far colder than Shanghai, could accommodate hundreds of thousands of refugees. From an economic perspective, spending so much money and mobilizing such massive manpower was a losing business.
If it were just for show, Yao Changtian felt that it would have been enough for He Rui to symbolically recruit ten thousand people. Given He Rui's prestige at the time, Yao Changtian had to suspect that He Rui was just another impulsive young warlord with some ability. But for some reason, Yao Changtian contacted the Northeast Government's office in Tianjin and soon obtained an internship opportunity at the Northeast Bank.
During those few months, Yao Changtian's views underwent a complete transformation. The Northeast was colder than Yao Changtian had imagined, but the Northeast Government's capability exceeded his imagination by ten or a hundred times. The Northeast accepted millions of refugees, allowed them to survive, and enabled them to live stable lives with hope.
For this reason, Yao Changtian, who loathed Chinese political parties, joined the Civilization Party without hesitation. And while studying at the Central Party School, he also became He Rui's student. Facing the teacher's question, Yao Changtian felt that his teacher, He Rui, viewed the problem too optimistically, especially He Rui's definition of a capitalist as a 'rational person.' But the business owners Yao Changtian had met were all very individualistic, quite different from the capitalists He Rui expected.
However, Yao Changtian didn't want to argue with He Rui on this matter, so he replied, "I am currently using the Chairman's definition."
"If the bourgeoisie wants to establish a capitalist state, they must first dominate the national economy. Can they do that at this stage?"
"...No," Yao Changtian said, though in his heart he truly felt that the future was uncertain and that the possibility still existed.
Party School Principal He Rui continued to speak with the abundant enthusiasm he used when lecturing at the Party School: "Correct, they cannot. Capitalists do not have armies in their hands; on what basis can they dominate the national economy? Of course, they have the ability to cause some influence on the national economy. But to truly cause an impact, they need two conditions. What do you think those conditions are?"
"...Possessing certain rights to issue currency, as well as commodity pricing power."
"Correct. We do not allow private banks, and we have enacted laws to crack down on illegal fundraising and the illegal issuance of securities. Capitalists no longer have the right to issue currency or currency equivalents. As for commodity pricing power, why do foreign monopoly capitalists create monopoly organizations like trusts, cartels, and syndicates?"
Yao Changtian's thoughts immediately cleared, and he answered at once, "To control pricing power!"
"Exactly, these monopoly organizations exist to control pricing power. In our country, laws against these monopoly organizations have already been enacted. Hey, Changtian, you haven't read them, have you?"
"...I really haven't read them much." After saying this, Yao Changtian blushed with shame.
He Rui didn't intend to tease Yao Changtian; he continued, "No army, no currency issuance rights, no monopoly pricing power. These capitalists have some money and some wealth in their hands. Although they cannot create rules when using this wealth, they can exploit the rules to conduct transactions. For example, roping in or even corrupting some of our officials, cadres, and party members. But ultimately, the efficiency of this kind of transaction is too low. They can only buy off those with very low moral standards. Even if the capitalists really united and wanted to change the nature of the state, which army do you think would follow them? Which general would support them?"
Yao Changtian quickly replied, "Chairman, now you are joking."
"Heh." He Rui chuckled and didn't say anything about Yao Changtian's reaction of trying his best to avoid trouble.
He tossed Yao Changtian a cigarette, took one for himself, lit them for both, and then asked, "To formulate policy, it has to go through meetings. Up to now, which comrade in the Central Committee or the State Council is actually a pushover? Do they not understand the hidden interest distribution schemes within policies? If they don't understand, then it shows that I, the Party School Principal, am unqualified and haven't let the Party School teachers clarify the chapters on risks and returns in economic policies. So the teachers haven't made the comrades understand this issue."
The more Yao Changtian listened, the more uneasy he felt. If it were macro issues, basic laws, it wouldn't matter much. But the closer one got to the execution level, the sharper the problems became, and the more dangerous it was for the executors. Whether a minister or a Central Committee member, as long as they were deemed to be seeking profit for a certain capitalist or capitalist gang, not only would their political future be ruined, but they would also be immediately kicked out of the center of power. So Yao Changtian didn't want to touch this topic at all.
But it was Yao Changtian who had raised the issue, and the person speaking was He Rui. Yao Changtian could only use smoking as an excuse to shut his mouth. As for his thoughts, Yao Changtian regretted it somewhat, yet was deeply attracted by this topic.
He Rui continued, "If an outstanding capitalist just becomes a city councilor, a provincial councilor, or a member of parliament, it doesn't matter. Just control the numbers. Moreover, letting capitalists come into contact with the operation of power is actually a good thing for them. It saves some fools from getting hot-headed and doing foolish things. The more they know the ropes, the less likely they are to be foolish."
"Chairman, can you be more detailed about your judgment that the lifespan of enterprises above a designated scale rarely exceeds thirty years?" Yao Changtian tried his best to steer the topic to a safe area without showing his hand.
"As long as there is no monopoly. If an enterprise wants to survive, it must improve efficiency and reduce costs. This forces those business owners to act according to the capitalist mindset. If they don't let themselves become capitalists, their enterprises will fail in competition. And in order to survive in competition, expanding the scale of the enterprise is an inevitable direction. The larger the scale of the enterprise, the greater the decision-making risk. A single mistake can lead to the enterprise's demise. Therefore, we actually want more entrepreneurs to appear. This way, it is not a bad thing for the entire industry. Even if a few decent enterprises collapse, it won't trigger turmoil across the entire industry. Furthermore, entrepreneurs all want their enterprises to survive longer, so they will certainly learn lessons. But in a competitive state, conservatism will be left behind. Entrepreneurs and capitalists must constantly improve their own strength."
Hearing this, Yao Changtian's brow furrowed unconsciously. He took two fierce drags on his cigarette, stubbed out the butt, and then asked, "Chairman, those capitalists will realize what kind of competitive rules we have set for them, right?"
"Correct. A portion of those people will understand, and they will also hope to obtain power. But the Party and the upper echelons of the government recognize this even more clearly. As long as there are no problems within the Party and the government, what waves can they plan to stir up? Capitalists who can realize this theoretically wouldn't think they have the ability to physically eliminate the Party Central Committee and the government, would they?"
Having said this, seeing Yao Changtian looking overly nervous, He Rui quickly waved his hand. "This is a bad habit of mine; I get easily excited when encountering such stimulating questions. What I just said was a joke."
Yao Changtian also tried hard to pull his mood out of He Rui's joke. After a pause, the strong negative emotions generated by discussing sharp issues dissipated, and Yao Changtian suddenly felt his confidence surge. Although He Rui's joke was frightening, thinking about it carefully, it was actually impossible to happen. To successfully assassinate the head of state or the leaders of the Party and government without leaving a trace was unrealistic.
Although Yao Changtian did not know about the assassination of Comrade Stalin's close comrade-in-arms Kirov in another timeline, Yao Changtian was someone who had seen great storms. Many people always felt they could do things without anyone knowing, but such things didn't actually exist. Even if occasionally successful, the reason was only that those people were too insignificant and completely unnoticed.
People with power were watched by countless eyes, and those who came into contact with them were also watched. Any person who appeared suddenly would be noticed; because they were too unfamiliar, they would stand out even more. If an assassination succeeded easily, it meant there was definitely a major problem with the national security apparatus. And if there was a problem with the national security apparatus, it meant there was a problem within the upper echelons. So, if a high-ranking official were inexplicably assassinated, it meant a bloody storm of purges within the upper echelons would inevitably follow.
Any high-ranking official with a brain would not entertain such thoughts unless driven to a point where they thought they had no way out. Even if driven to desperation, they wouldn't dare to do so lightly, because being kicked out of the core of power was just a personal issue. Once the bottom line was broken, it meant their family and subordinates would all be finished together.
So Yao Changtian dared not think further because he knew very well. If He Rui were suddenly assassinated, Yao Changtian himself would resolutely support the principle of "better to kill the wrong person than let one go" and carry out a great purge of suspicious elements. If people who didn't care at all about breaking the bottom line weren't eliminated, the country would never have peace!
Soon, Yao Changtian stood up to take his leave. Watching Yao Changtian's retreating figure, He Rui also felt that his mood was a bit off. The topic just now had been too sharp, reminding He Rui of the Great Purge launched by Comrade Stalin in another timeline.
The cause of the Great Purge was the struggle over the line within the Soviet Union; this was undoubted. Because the policies promoted by Comrade Stalin overly emphasized rapid industrialization and selling grain on the international market, in the eyes of the great powers at the time, "Soviet commercial credit" did not exist. Even during the Great Depression, when European and American capitalists were forced to export machine tools and production lines to the Soviet Union, these countries all demanded payment before delivery.
The Soviet Union imported 3 billion US dollars' worth of currency in a short period between 1929 and 1935. The actual value of the grain it exported was likely as much as 5 to 6 billion US dollars at the time.
Such hardline measures first led to the Great Famine in Ukraine from 1932 to 1933, which naturally greatly shook Comrade Stalin's ruling foundation. But at the time, Stalin's security protection had no loopholes, so those opposing Stalin made their move against Stalin's close comrade-in-arms, Kirov. Facing such a situation, Comrade Stalin had no other choice but to counterattack. The Great Purge erupted.
He Rui didn't like Comrade Stalin very much, but He Rui also didn't wish to see the Great Purge. From the current situation, the Soviet Union, which began its Five-Year Plan in 1928, had greatly reduced the cost of purchasing equipment and importing technology with China's help, and efficiency had improved a lot.
Apart from financial and technical improvements, trade with China allowed the Soviet people to obtain several times the amount of light industrial goods compared to history, which to some extent stimulated the Soviet people's enthusiasm for labor. Hopefully, there weren't that many people opposing Comrade Stalin anymore, right? Even if there were more opponents, at least don't let it get to the point where killing Central Committee members becomes necessary.
The Great Purge was a heavy blow to communism, and He Rui really didn't want to see it happen.