Chapter 334: The Tripartite Alliance (Continued)
The Hechingen Consortium's goal of forming a "triangle commercial alliance" is much like local supermarkets joining forces to fend off an outside competitor. Frankly, the Shanxi and Huizhou merchants may not be entirely sincere about working with the Hechingen Consortium. The Shanxi merchants in particular have been operating in North China, which was originally in their sphere of influence. However, their true power base is far away in Shanxi, and they lack the local clout of big families in places like Zhuhai. In the social hierarchy of scholar-farmer-merchant, the Shanxi merchants are the most traditional type of "merchants." While they may have influence in Shanxi, it doesn't extend effectively to North China.
For the Shanxi merchants, being able to cooperate with the Hechingen Consortium is definitely a boon. Qiao Zhiyong was the first to propose: "We can collaborate, but first we must clearly define a boundary between our respective territories—where yours ends and ours begins. Then we must all agree not to cross those lines."
Hechingen Bank's Far East General Manager, Anthony, replied, "No problem at all. But we must also emphasize that, once our regions are delimited, all three parties in the north must give priority to each other's goods. For example, if you need grain or industrial products, you buy from us first; and if we import anything from the north, we prioritize your two groups."
Hu Xueyan asked, "But what if your products are low quality?"
Anthony said, "Hechingen Consortium's products have no such issues. Of course, words alone aren't enough, so we can set up unified standards and categorize goods by quality. Better-quality items will cost more, lower-quality less, and we can each assign specialists and form a central body to monitor them."
Hu Xueyan and Qiao Zhiyong exchanged glances, both nodding.
Qiao Zhiyong said, "So this same body would be our liaison center. Where do we place the main office?"
Anthony answered, "It can be in Jiaozhou, Xuzhou, or Kaifeng—you can discuss among yourselves, but it has to be one of those three."
Qiao Zhiyong proposed, "Then let it be Kaifeng. All three of us are relatively close."
Hu Xueyan said, "Kaifeng works, but I prefer Xuzhou."
Anthony concluded, "Kaifeng it is. We'll make it the headquarters for our mutual cooperation and communication. We can build next to the East African Kingdom's consulate in Kaifeng, making it convenient to coordinate."
Hu Xueyan continued, "Now there's also the matter of borders. You've expanded too fast in the Far East these past few years—it hasn't felt friendly to us."
Anthony replied, "Easy, Mr. Hu. We've done our market expansions through normal trade under your government's permission. After all, people willingly buy cheap, high-quality goods."
Hu Xueyan said, "But if you keep expanding at this rate, you'll push past the Huai River all the way to the Yangtze. That would leave us Huizhou merchants half-extinct! Mr. Anthony, is that really cooperation?"
Anthony thought to himself, That's flattering me too much! If East Africa truly had that power, Britain, France, and America wouldn't have anything to do here.
He said aloud, "Once we fix our commercial boundaries, we'll stay where we are. But Mr. Hu, I must remind you, your greatest enemy is likely Britain, not us. We Hechingen bankers aren't foolish enough to challenge the British on the Yangtze. Even if Germany is one of the great powers, it has no real influence in the Far East. We at Hechingen Bank must lie low, too."
Lie low indeed. The sites East Africa chooses are all places Britain doesn't care about. Take North China, for instance. Hechingen's business in the region arcs from the Yimeng Mountains southward into the Central Plain. That's their limit—no thick waterway network in the north, and Yantai is contested by the British and French. As for the south, they only hold a tiny strip of coastal land at Zhuhai, never venturing deep inland.
Hu Xueyan said, "Thank you for the warning. But are you associated with Prussia, Austria-Hungary, or that scarcely mentioned East African Kingdom?"
He called it "scarcely mentioned" because the East African Kingdom was founded only a year ago. Even in Europe, few know of it. People glance at Africa in the newspaper and move on.
Anthony responded, "Hechingen Bank is a Germanic enterprise—belonging to all the Germanic peoples, not just those three states. It's not confined to a single country."
Hu Xueyan said, "Heh, no offense, Mr. Anthony, I'm just curious about your firm."
Anthony assured him, "No need to apologize. The information is fairly public. We're just an ordinary bank in Europe."
Qiao Zhiyong asked, "Mr. Anthony, might we send people to Europe to learn how your company runs?"
He'd long been intrigued by Western-style banking. While Chinese money shops are somewhat similar, they're still distinct.
Anthony replied, "If you're interested in banking, Mr. Qiao, there's no need to copy Hechingen Bank specifically. We're not a pure financial institution. If you prefer something simpler, I'd recommend going to the Netherlands, where the commercial environment is strongest, and finance is most purely developed."
Qiao Zhiyong exclaimed, "Oh, the Netherlands?"
"Yes, many modern financial concepts originated there," said Anthony. "It's among the wealthiest regions in Europe."
Qiao Zhiyong admitted, "I hadn't imagined that. I spend most of my time in the Far East's interior and know little of foreign nations. I only heard of the English and French because a few years ago…"
Anthony said, "No worries, Mr. Qiao. If you truly wish to understand Europe, send people to study it. We at Hechingen can help you avoid some pitfalls."
Qiao Zhiyong replied, "That's most kind!"
The court wants to "learn from the foreigners to repel them," so the Shanxi merchants should do likewise. Back when they competed with Hechingen, Qiao Zhiyong realized Western banks were more competitive—customers got interest for their deposits, so where did banks profit?
Hu Xueyan added, "Can we also send people to Europe?"
Anthony answered, "Certainly. But we'll only give suggestions; you must decide how to proceed. Our alliance can only strengthen if you keep up with the times."
Learning Western norms can help guard against being exploited by other foreign investors. The Far Eastern government won't help—these merchants can only rely on themselves. Anthony almost sympathized with them. At least Hechingen Bank can call on the governments of Germany, Austria-Hungary, and East Africa if needed, while Hu Xueyan and Qiao Zhiyong must watch their backs against "their own compatriots."
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