Chongzhen revived the Ming Dynasty

After determining how to levy corvée labor on industry and commerce, Zhu Youjian specifically summoned Han Kuang and Zhang Pu, praising them:
“You have done a good job in conscripting laborers.”

"With this policy, the supply and marketing group no longer has to worry about not being able to buy goods, and can also sell them through the sales industry."

"However, you will need to put in some effort to make the most of the collected supplies."

"The Planning and Development Commission, especially the Economic Group, should pay particular attention to this point."

Han Kuang and Zhang Pu were extremely excited upon hearing these words.

Han Kuang, in particular, received praise for taking initiative for the first time, which allowed the emperor to see his abilities.

He said to the emperor:

"Your Majesty, I will do my utmost to live up to your expectations."

"However, it will take a long time to develop from a wartime economy to a new economy."

This clearly expresses his expectation of re-election. Zhu Youjian neither confirmed nor denied it, saying:
"The transition from a wartime economy to a new economy naturally takes time."

"The current one-tenth corvée ratio is good. We should first incorporate one-tenth of the industry into the new economy."

"If we have the capacity, we should include more and issue substitute service vouchers as rewards to cooperating companies."

"I expect that in the future, the industrial production capacity controlled by the court will reach at least 30%, thus effectively leading the development of the industrial sector."

"The economic task force should pay particular attention to industry. The control of the commercial and service sectors is intended to serve industry."

This requirement is naturally for the purpose of maintaining sufficient control in the future industrial era.

However, both Han Kuang and Zhang Pu felt that the requirement of 30% productivity was too low. Han Kuang said:

"Some companies are actively cooperating and are willing to dedicate all their production capacity to service."

"Is a 50% ratio a bit too low, which is not conducive to enterprises making full use of their production capacity?"

Driven by his bureaucratic instincts, he wanted complete control over businesses and wished he could bring all companies into the new economy.

But Zhu Youjian knew that this was impossible.

Being able to control and utilize 30% of the industrial production capacity is already a very high requirement.

If the proportion were higher, Zhu Youjian felt that given the current level of the Ming Dynasty, industrial production might stagnate.

Of course, Zhu Youjian wanted complete control over important industries.

He certainly didn't want these industries to be controlled by private capital, which would affect the stability of the imperial court.

He said to Han Kuang:

"If it is an industry with entry requirements, such as the equipment industry or the energy industry, the imperial court can have complete control, incorporate all production and sales into the plan, and establish research institutions to promote development."

"However, the imperial court's inclusion of competitive industries such as papermaking and shipbuilding in the plan will cause some enterprises to stagnate, which will be detrimental to development."

"If these enterprises want to thrive, they must participate in market competition. When the imperial court requisitions corvée labor supplies, it prioritizes high-quality products that have emerged from market competition."

"The 50% ratio is tentative. You can determine different ratios based on the different industry categories later."

"But the general requirement is that competitive industries must participate in market competition and cannot be allowed to lie idle and rot."

Although Han Kuang was somewhat reluctant, he had no choice but to accept this explanation.

Zhang Pu, drawing inferences from this example, said:
"So, does this mean that all industries can be divided into those with entry barriers and those with competitive markets, where planning and the market coexist?"

Zhu Youjian nodded approvingly and said:
"The new economy and the market economy should, and must, coexist."

"The imperial court takes the lead in economic development, but for specific details, it is necessary to give full play to the talents of each individual."

"Talented individuals and companies will emerge in market competition."

"Just like you, Zhang Pu, if you didn't compete with others in the imperial examinations, how would you confirm that you are a top scholar?"

Zhang Pu lowered his head modestly, his eyes and brows smiling.

The achievement of passing the imperial examinations with top honors in all three levels was one of his proudest accomplishments. If it weren't for this title protecting him, given his unconventional behavior, he probably wouldn't have been able to stay in the Hanlin Academy.

In fact, he was already being ostracized, and Zhang Pu was focusing more of his energy on the Academy of Sciences. He was now an anomaly in the officialdom of the Ming Dynasty.

Zhu Youjian had observed this. He had no objection to Zhang Pu and Xu Guangqi joining forces with Han Kuang.

Science is currently very weak and needs protection to develop.

Zhang Pu was invited by Han Kuang to preside over the formulation of the plan, which he felt was very appropriate.

When discussing this matter, Zhu Youjian said:
"As I have mentioned before, state-owned enterprises must take a dominant position in public service sectors that are vital to the national economy and people's livelihood."

"For these industries, all production and sales can be brought under the control of the imperial court. Their primary task is to provide public services, while profit-making should be secondary. Therefore, only limited competition is allowed to reduce internal friction and resource consumption."

"The same applies to industries with licensing requirements, which allow for a higher proportion of capacity to be included in the plan."

"Competitive industries are subject to a maximum 50% limit. The imperial court can only purchase 50% of the products, while the other 50% are left to compete in the market for profit."

"The Planning and Development Commission should first identify these three major categories of industries and determine the planned proportions for each industry."

Upon hearing this, Zhang Pu inquired:
Should state-owned enterprises in competitive industries also be subject to similar restrictions?

"We can't just abandon the enterprises run by the imperial court and local governments, can we?"

Zhu Youjian pondered for a moment and felt it would be unreasonable not to grant him preferential treatment, so he said:

"It's okay to manage, but you can't provide unlimited protection."

"Only when the public shareholding accounts for more than half can the proportion be exceeded 50%."

"At the same time, at least 10% of these companies' products must be put into market competition. If even 10% cannot be sold and results in losses, it means that their products are not competitive in the market."

"You and the State-owned Assets Supervision and Administration Commission should work together to determine the performance evaluation standards for the managers of these enterprises, as well as the procedures for bankruptcy and restructuring."

"For companies that have been losing money for a long time, management should be replaced in a timely manner. If they cannot turn a profit, they should be resolutely bankrupted and restructured into a new company or merged into another company."

"The government will not bail out competitive enterprises; even enterprises subject to licensing requirements and public service enterprises that suffer long-term losses will be declared bankrupt according to law."

This is his consistent stance: he cannot allow the management of those companies to become too complacent.

Otherwise, those people will manipulate things and act recklessly, and it will be impossible to select outstanding talents.

With a self-sales ratio of 10%, and a profit margin of no more than one-tenth, if this portion of goods cannot be sold, the company will suffer losses.

Zhu Youjian hoped that state-owned enterprises in competitive industries would also participate in the competition, rather than relying entirely on orders from the imperial court.

While formulating economic plans, he did not reject market competition. He even limited the planned proportions to allow room for market competition.

He hopes to create a favorable environment that allows excellent products and businesses to stand out in market competition.

However, the current market environment in the Ming Dynasty is far from perfect, and the industrial and commercial owners who have transformed from landlords are extremely focused on stability rather than excessive profits.

This made it more popular for the imperial court to place orders according to plan, and merchants in the Suzhou-Songjiang New Area were eager for the imperial court to monopolize their products.
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Upon learning that the imperial court had imposed a limit of 50% on private enterprises in competitive industries to purchase goods, Wu Shirui and other factory owners in the new district were extremely dissatisfied. Wu Shirui, in particular, planned to purchase land in the Liaohetao region, register his household in Liaoxi Province, and participate in the Liaoxi imperial examinations in the future.

The requirement for shipyards is stability, so as to reduce the effort and energy they expend.

He was very reassured that the imperial court had placed orders for his purchases, even though the profits were not high.

Now that the imperial court has set this restriction, he suddenly feels that there are more troubles ahead:

"Fifty percent is too low. Can't the imperial court place more orders?"

"Now it's all good. If we produce one ship according to the imperial court's order, we have to produce another ship and sell it ourselves."

"What should we do? We might lose money if we're not careful."

While complaining to Liu Lishun about this matter, Wu Shirui felt that the 50% ratio was very unreasonable.

Thanks to his relationship with Wen Tiren, he was able to secure a large number of orders from the government, the supply and marketing group, and other state-owned enterprises, ensuring that the shipyard's products would sell easily.

Now that the 50% restriction has been implemented, many of his orders have been diverted to other shipyards. There are already some ships piling up in the shipyard's dry dock.

This has put great pressure on the shipyard's production and cash flow, and the stock price of Wu's Shipyard has fallen as a result.

Now, Wu Shirui is finding it difficult to sell his shipyard shares.

He was naturally very unhappy with this policy.

He said to Liu Lishun:

"How about we have Brother Shen's fleet buy more ships, and I'll sell them at the purchase price?"

Liu Lishun, who was reviewing official documents, glanced at him, put down his brush, and said:
"Both shipping and shipbuilding are considered competitive industries in the court's classification."

"The imperial court requires these industries to maintain fair competition and will not favor any non-publicly owned enterprise."

"We will not interfere in the specific operations of the company; otherwise, we will bear the corresponding responsibility."

"If you want to get policy support, one way is to sell shares and transform Wu's Shipyard into a state-owned enterprise."

This is the choice of many businessmen, and the State-owned Assets Supervision and Administration Commission of Suzhou-Songjiang New Area has received many requests to invest.

Many companies have expanded their land use scale so that when they contribute land to the new district, they can hold a higher proportion of public shares.

As a result, land prices in the Suzhou-Songjiang New Area have increased, making it even more sought-after.

Some factory owners, following the new regulations of the imperial court, increased dividends for employees, especially managers and technicians. These shares were held by the workers' congress and, according to the imperial court's allocation, were also considered public assets.

Some even sought help from royal businesses, inviting them to invest. Royal assets, according to the court's classification, were also considered public assets.

It can be said that in order to break through the 50% limit, these merchants have used all sorts of methods in the hope of getting more orders.

Wu Shirui also wanted to do the same, but he couldn't. This was because when Wu's Shipyard went public, the family's shared shares were distributed among many of the family members who had contributed their efforts.

Now, even if he wanted to increase the public shareholding to more than half, he couldn't do it because he couldn't convince others.

So he asked for advice:
"Is there any other way?"

"Please enlighten me, Master Liu!"

Liu Lishun didn't really think much of Wu Shirui, especially after returning to Beijing last year and learning about Wu Shirui's actions from Zhang Pu.

However, he would not let personal matters interfere with public duties. Upholding the principle of serving the people, he continued to offer advice and suggestions:
"Another option is to transform into an enterprise subject to licensing requirements."

“One business in the shipbuilding industry is building warships, which is equipment production and belongs to the equipment industry.”

"If your shipyard obtains an equipment production license, there will be no restrictions on equipment production orders."

This suggestion caught Wu Shirui's eye, and he felt it was somewhat feasible.

Given his relationship with Wen Tiren, obtaining the equipment production license would be no problem for him.

The only concern is whether there are enough equipment production orders to meet the shipyard's production needs.

In response, Liu Lishun said:
"The Ming Dynasty needed a massive number of warships to recover Annam and conquer Southeast Asia."

"The only worry now is that we don't have enough warships to gain control of the South Seas."

"Moreover, armed merchant ships are also considered equipment, and their production and modification require shipyards."

"Even if Wu's shipyard expands tenfold, it still won't be able to handle all the related orders."

These were all facts, and Wu Shirui understood them immediately upon hearing them.

He felt this method suited him well, as he could use his connections to obtain the equipment production license.

Overwhelmed with surprise and joy, I repeatedly thanked Liu Lishun.

Under Liu Lishun's guidance, he also learned about the Naval Research Institute of the Chinese Academy of Marine Sciences, which was developing standard ship models. As long as he was willing to spend money, he could acquire the design and production technologies of various ships and even invite engineers to provide guidance.

If the buyer placing the order has special requirements, they can pay a design fee to have the ship research institute design it separately.

With the support of the Ocean Science Research Institute's technology, his shipyard transformation was effortless.

This relieved Wu Shirui of his worries, and he felt that producing warships and armed merchant ships was very suitable for him.

Liu Lishun did this to secure business for the Academy of Sciences, which was headed by Zhang Pu, and to help Zhang Pu control the Ocean Academy. This branch was originally the Ocean Research Institute of the Tianjin Naval Academy, and after being converted into a branch of the Academy of Sciences, it remained largely independent.

During his conversation with Shen Tingyang, Liu Lishun keenly recognized the role of the Marine Science Academy and expressed his hope that the Academy would establish a research institute in the Suzhou-Songjiang New Area to promote the development of marine trade in the area.

Purchasing ship designs is just the beginning; more research institutes will come in the future.

At the same time, guiding Wu Shirui to invest in the equipment industry is also an effort by Liu Lishun to develop in the equipment industry.

During last year's Liaodong campaign, the biggest beneficiaries of the wartime procurement policy, besides the logistics material production in the Suzhou-Songjiang New Area, were the equipment manufacturing industry in the north.

After the start of the Annam War, the establishment of the supply and marketing group, and the resumption of production of logistical supplies, Liu Lishun was no longer worried about industries such as textiles and shipbuilding.

Therefore, he wanted to expand into the equipment industry and increase the industry in the Suzhou-Songjiang New Area.

After obtaining the equipment production license, Wu Shirui will definitely build warships.

The firearms needed for the warships should naturally be produced in the Suzhou-Songjiang New Area.

The production of firearms requires steel, which will also expand the industrial chain of the Suzhou-Songjiang New Area.

Liu Lishun had not forgotten the emperor's assessment:
The future will be the age of steel.

The steel age naturally requires steelmaking, and he hopes that the steel industry in the Suzhou-Songjiang New Area can also develop.

To this end, he has invited renowned steel experts from Suzhou to Suzhou-Songjiang region to establish the Baoshan Steel Industrial Park in the Baoshan area, modeled after the Caofeidian Steel Plant. Iron ore will be sourced from places like Taipingfu, and charcoal and coal will be imported from overseas.

The heavy industry in the Suzhou-Songjiang New Area is also beginning to take shape, rather than being limited to light industry. (End of Chapter)