Chapter 582 - Trade Agreement

The workers surged forward like a tide, paying no heed to Li Luoyou's party swaggering down the middle of the road. The steward hurriedly guided the group to the roadside, finding a tea stall to sit down.

The stall owner knew the steward and rushed over to greet them and pour tea.

"No need for tea, we're just resting our feet, leaving in a moment." The steward said. "Don't bother."

Seeing these filthy workers pass by him without a care, he felt very unhappy.

He sat wooden-faced, saying nothing. They sat for a good while until the workers on the road gradually thinned out. Just as Li Luoyou was about to rise, the steward suddenly ran off in a hurry. He returned a moment later.

"Third Master has already set up a banquet at the Commercial Hall to welcome you, Master."

That evening, arranged by the Commercial Hall's restaurant, Liu San and personnel from Foreign Affairs, Commerce, and Intelligence hosted a banquet for this Great Manager Li.

Before taking seats, Liu San introduced them one by one to Li Luoyou.

Those attending were mainly members of the Operation Willow team and heads of relevant departments. Li Mei was also prominently listed—she was invited first because it concerned her department, and second, when it came to socializing skills at the banquet table, there was no more powerful existence among the five hundred.

Because it was a formal occasion, the Elders all changed into formal suits, no longer treating fatigue uniforms as daily wear. Only, in Li Luoyou's eyes, these formal suits weren't much better—hardly distinguishable from their "fake crop" subordinates, just slightly better fabric and cleaner. No wonder Australians had no distinction of rank.

Li Luoyou kept smiling and saying "Long admired," while eyeing these short-haired men like monks. He suddenly realized they were all young, and all had smooth chins and upper lips. Suspicion arose: could they all be "eunuchs"? But thinking again, their speaking voices were normal, so probably not.

Li Luoyou, Quark, and two others were invited to the table; Saoye and the others were invited elsewhere. Gu Baocheng didn't dare take a seat originally, but Li Luoyou seeing the Australians didn't care much for hierarchy—and insisting on Great Ming ways might provoke ridicule—told him to sit too.

Compared to the luxurious banquet hall, the meal appeared very simple. The Elders agreed that although this had the nature of a quasi-state banquet, it should focus on "refinement and thrift." Thus, dishes like tomato scrambled eggs and stir-fried broccoli—vegetables not yet existing in this spacetime—appeared at the feast. They were exquisitely cooked, giving Li Luoyou a refreshing feeling, though Quark's gluttonous desires went unsatisfied—he hardly ate any meat.

Li Luoyou saw the Commercial Hall's interior was luxurious and comfortable, yet the banquet was extremely simple. Not only were dishes light and palatable, but there were no "second and third presentations" by the head chef for tips, nor singing girls or young boys to sing songs and urge drinking. Thinking they eschewed extravagance, he felt a measure of admiration.

The servers at the banquet were all young women, wearing crisp, starched black high-collared one-piece dresses with white ruffled aprons—which only covered the front, with just crossed straps in back. The skirts were short enough to reveal feet. Both black shoes and socks were visible, making Gu Baocheng blush immediately upon seeing them. Their hair wasn't styled, either hanging short to shoulders or tied in a ponytail with various colored ribbons. On their chests was a small shiny silver tag; Li Luoyou looked for a long time before reading the words "Health."

The black and white attire looked clean and efficient. Compared to Great Ming women, they possessed a different kind of beauty.

But having these young women dressed prettily just to serve dishes and wine, without accompanying drinking or singing—wasn't this superfluous?

The drinks on the table were entirely Lanling wine and kvass, not counting the rum Quark loved. None of the famous wines Zichengji sold in Guangzhou were present. Except for Liu San's opening toast, there was no urging to drink.

The atmosphere was relaxed, discussing idle matters. Those present could at least understand Li Luoyou's Cantonese vernacular, and Li Luoyou could actually understand seventy to eighty percent of their "Australian." Communication wasn't difficult. Li Mei was a master of the banquet table, very skilled at adjusting the atmosphere. Soon it became cordial and friendly. As the banquet progressed, Li Luoyou confirmed again: the so-called Australian spoken by this group carried quite a few accents of Liaodong military speech, which he found increasingly strange.

Li Luoyou was considered very knowledgeable among the natives of this spacetime. Speaking of his trips to Nanyang and India, everyone listened carefully, occasionally asking questions. Only when Li Luoyou mentioned Australia, the faces of the Elders present became less animated.

Except for some explanations in a captured manual, no one knew what this so-called "homeland" Australia actually looked like. Was it the 21st-century version or the 19th-century version?

Seeing their hesitant expressions as if hiding something hard to say, Li Luoyou became more convinced of the rumor: this group of Australians had failed in palace struggles in their motherland and were forced to flee to Great Ming in iron ships for their lives.

Hearing that most Australians coming to Lingao were single, and mostly young men, it was likely their fathers' generation failed in rebellion and, facing destruction, sent them overseas to seek refuge and a new life. They came to Great Ming probably because of "same script, same race"—rumors outside had long said Australians were descendants of Song people from Yashan.

Thinking this, he reminded himself not to ask more about Australia to avoid embarassing them or bringing up sad memories. But since so many men came single, they would have needs to marry and settle down. Li Luoyou didn't quite believe the rumors of Australians causing trouble for women; in his view, if they just wanted women to warm beds, wash, and cook, whether buying with money or forcing with guns, it woudn't be hard.

The so-called shortage of women must be a shortage of women worthy of their status. Li Luoyou thought, these Australians must include many sons of high officials from Australia; they would have high requirements even for concubines. In a backwater like Lingao, how could they look upon daughters of ordinary country landlords?

Thinking here, he was already calculating how to cater to their tastes in this regard.

After the meal, Liu San invited them to move to the lounge. This lounge was similar to the banquet area, equally tall and bright, with crystal glass chandeliers. Large paintings hung on the walls—neither landscape nor flower-and-bird, nor quite Western oil paintings. Seemingly a mix of both. They depicted either mountains and rivers or snow-braving pines and plums. Directly facing the screen was a magnificent painting: a great river surging into the sea amidst mist-shrouded mountains, a red sun rising over the sea with ten thousand rays of light, and in the center of the light was that iron ship of the Australians. Four large ink characters were titled horizontally: "Splendid Rivers and Mountains."

Using "Splendid Rivers and Mountains" (a phrase implying sovereignty/territory) for a ship painting. What grand ambition! Li Luoyou suddenly grew alert.

Large Persian carpets covered the blue brick floor. Li Luoyou felt heartache at a glance; these were top-grade Persian goods, sold by inch not piece. Now not only were they filthy, but they also had many burn marks.

As for the chairs, unknown where they were looted from. Not only were they not a set, but arranged strangely in a semicircle. Behind the tables and chairs was a large red sandalwood screen inlaid with mother-of-pearl, gold, and silver wire, exquisitely carved. Normally such a large screen belonged in a grander hall. Placing it in this Australian room gave a feeling of being forced in.

Actually, Duguo Qiuhun had originally arranged this room modeling the layout of Ziguang Pavilion in Zhongnanhai. But the Commercial Hall rooms didn't suit such a layout, resulting in this strange appearance. Although decorated as a state guesthouse, there were no "state guests" initially, so the East Gate Market management staff often used this room as a lounge and smoking room, ruining a fine Persian carpet.

Each chair had a name card; everyone took seats according to cards, saving the tedious etiquette of yielding seats.

Once seated, maids served fine bone china coffee sets. This was high-grade bone china fired under Xiao Bailang's supervision. Recruited Foshan ceramic workers used his process flow, selecting fine kaolin clay, sieving it, adding bone ash, finally firing at extremely high temperature in a gas kiln. Shapes and patterns imitated modern spacetime, coming out exact.

This bone china was produced very little currently. Except for a small amount sent to Guangzhou for Ziming Tower to develop the domestic luxury porcelain market, the rest was kept for self-use in Lingao.

The coffee was hand-roasted from the first batch of beans harvested from Wu Nanhai's tropical crop garden, fragrant in aroma. Wu Nanhai named it "Golden South Sea."

Quark and Li Luoyou had seen this beverage with Arab and Indian merchants and didn't find it strange. Instead, the porcelain attracted their gaze. Quark couldn't put it down. Li Luoyou felt this porcelain's shape and texture didn't look like Great Ming firing. Could Australians fire porcelain too? Then again, since they were descendants of Yashan Song people, having a few ceramic artisans among them wasn't strange.

After coffee, the conversation officially cut to the main topic.

Before the negotiation, Liu San had already determined several basic points in the Operation Willow working meeting, approved by the Executive Committee and the Senate Standing Committee.

1. Li Luoyou to transport and sell goods for the transmigrator collective.
2. Li Luoyou must assist the collective in opening commercial houses locally; if necessary, joint ventures can be opened.
3. Li Luoyou to procure designated goods for the collective; prices negotiated annually for bulk procurement. Lingao has the right to choose payment in goods or currency.
4. Li Luoyou's branches on the mainland and overseas to provide acceptance services for Delung bills of exchange.

But before stating demands, everyone wanted to hear what this Great Manager needed from Lingao.

Li Luoyou didn't hide his intentions. After complimenting the collective's "sturdy ships and sharp cannons" and being "rare in the world," he straightforwardly requested to purchase munitions.

The volume wasn't large; specific types were even simplified to cannons, muskets, and short muskets.

Liu San hesitated. He hadn't expected this to be Li Luoyou's real purpose. Of course he came for trade opportunities, but trading for munitions? Unlike selling paper or matches, munitions consumed massive strategic materials and were high-consumption items for industrial capacity.

Moreover, munitions were sensitive strategic materials affecting the mainland power balance. Involving foreign policy, it wasn't something Liu San and others could decide.

Unexpectedly, Li Luoyou raised an issue beyond Liu San's authority right at the start. The present Elders looked at each other, unsure what to do.

Li Luoyou, being who he was, saw their embarrassment and knew it was difficult. But since most of his purpose in coming was for this, he wouldn't give up easily, so he said:

"If there are difficulties, please speak freely."

Liu San steadied himself: "This matter is not within our authority. We need to ask superiors for a decision."

Li Luoyou nodded in understanding: "How long?"

"Three to five days for a result."

"Good. If selling guns directly is inconvenient, could you help set up a gun factory?" Li Luoyou raised his second request—actually his real goal: since selling weapons was a big deal, helping build guns probably also needed "superior" decision.

"I will report your request together." Liu San smiled bitterly. "This concerns military and state affairs; hope Proprietor Li understands."

"I understand, I understand."

Next was Li Luoyou's request for trade privileges. Lingao was free trade; currently import tax was fully waived, export partially waived. Anyone could trade. Li Luoyou wasn't a small merchant hitching a ride; his scale was large, strength great, so he demanded privileges.

Specifically, exclusive export rights for "Australian goods." Mainly Australian glass mirrors. Li Luoyou prepared to ship them to Nanyang and India for sale. For the latter, he also planned to sell to Europe through the Goa window.

Europe's Venetian glass mirrors were world-famous. Not only priced exorbitantly but limited in production. Lingao's Australian glass mirrors seemed endless, and prices were much cheaper. Especially recently, Lingao began large-scale sales of cheap glass mirror compacts of various materials through Guangzhou channels, which had even more price lethality.

Such compacts were small and light. A sea ship could transport massive quantities. Even adding long-distance freight costs, selling in Europe could yield over 100% profit.

Such small, high-priced goods didn't even need to go to Europe to make huge profits. Sea ships could exchange for other goods at trading ports along the way. Actually, Li Luoyou never thought of shipping directly to Europe. He planned to sell part to Goa, for Portuguese merchants to resell to India, Red Sea, and East Mediterranean; part to Quark to ship to Surat, reselling directly to local British merchants. Of course, this secret couldn't be told.

"I'm willing to guarantee sales of one hundred thousand units annually. Fifty thousand porcelain, three thousand lacquerware, twenty thousand others." Li Luoyou said. "Price at fifty percent of your retail price in Guangzhou."

"Too cheap..." Li Mei shook her head directly. Of course she couldn't agree—currently Zichengji gave Gao Ju an import price of sixty percent retail. If she gave Li Luoyou fifty, he could flip it to the domestic market and destroy Gao Ju's business. What Li Mei hated and feared most in business was "trans-shipping": distributors exploiting regional price differences to dump goods, wrecking prices so no one made money.

"Opening European channels, fifty percent isn't excessive. Besides, I have to ship to Portugal, thousands of miles, braving wind and waves."

"Your ships don't need to go to Europe," Li Mei almost said "Actually you've never been to Portugal," but thought better of it, leaving some face. "Just shipping to Goa or Surat is enough to offload."

Li Luoyou's smile stiffened slightly. In Great Ming, people who knew Goa or Surat were almost non-existent. There were many sea merchants, but they went to Japan or Nanyang. They knew Manila and Batavia, but knew nothing of Indian routes.

"Furthermore, we already have a trade agreement on the Goa route." Li Mei remembered the route monopoly agreement signed with Li Huamei last year. It had a few months left. Although the Commerce Ministry's general opinion was not to grant monopoly rights anymore but adopt free trade, this monopoly claim could raise her own bargaining chips.

Both sides launched into lengthy negotiations. Finally, a trade agreement with Li Luoyou was reached: Li Luoyou could transport and sell all products on the transmigrator collective's permitted export list to regions other than South Zhili and Liangguang (Guangdong/Guangxi), including Liaodong; discounts for these goods would match those given to Gao Ju.

"In that case, my costs are much higher than Gao Ju's." Li Luoyou was dissatisfied. "My spending on the road is much greater than his."

"If he wants to ship goods to Liaodong or the Capital to sell, he also has to pay transport costs. On this point your conditions are the same." Li Mei said. "Distance is profit, distance is price. You and all merchants know this."

For goods sold to Surat and Goa, the collective granted an extra 0.5 discount. This discount used a rebate model. Li Luoyou paid full price at procurement; after a fiscal year ended, the discount would be returned to him. Using goods, cash silver, or circulation notes was up to him.

For goods exported to Surat and Goa, a trade agreement for the following year must be signed in November of the preceding year, specifying order quantity and type. The collective granted a 10% fluctuation margin. If orders exceeded the margin, the rebate discount on the excess would be cancelled.

Also stipulated: domestic sales goods settled over three festivals per Great Ming custom. Foreign sales goods settled in cash.

(End of Chapter)