Chapter 2367: Financing (Part 2)

From the posts' content, the Senate's intention to raise funds from the private sector was universally accepted. Some practical steps had already been taken. Proposals to promote "mixed-ownership enterprises" that separated management rights from equity had been floated. Runshitang had pioneered this approach—originally a small herbal medicine shop in Lingao, it had grown into the Senate's largest traditional Chinese medicine enterprise, a textbook case of "mixed ownership." Later, Guangzhou's "Purple" brand had issued non-preferred shares, becoming the first Senate enterprise to attract private capital through share offerings.

However, precisely because these early ventures had been so successful—and because, despite the Planning Committee's fifty-one percent control principle, the Senate maintained controlling stakes in all mixed-ownership enterprises—quite a few Senators believed that too much profit was being shared. As these enterprises continued to grow, this was becoming increasingly obvious. Equity acquired for just a few hundred or thousand taels of silver would gradually balloon into assets worth millions or hundreds of millions. This was inevitably seen as "giving away too much"—another point of consensus among all factions.

Setting aside ridicule posts about "harvesting leeks" and "jumping off rooftops," and plans lacking any operational feasibility, the disagreements beyond these two points of consensus centered on how to finance and whether a stock exchange was necessary.

Regarding the stock exchange and financing approaches, three basic schools of thought had emerged: issuing stocks, issuing bonds, and a mixed approach. Each school held divergent views on whether to establish a stock exchange. This yielded six distinct positions. Chu He himself favored a mixed approach and establishing an exchange. The stock exchange, in particular, was the primary reason he had rushed back from Jeju.

From a financing perspective, the Senate could currently employ only stocks and bonds—the question was which should dominate or be issued first. But on whether to establish the Guangzhou Stock Exchange, opinions diverged sharply.

Every Senator understood that a stock exchange could "generate wealth." But how an exchange made money, and how capital could "create something from nothing" or "turn something into nothing" through this market—that was not widely understood.

Since ancient times, finance had been a game for the clever. Top students flocked to the financial field in droves. Beyond the high income, the work itself was beyond ordinary people's capabilities.

Precisely because the waters of this industry ran so deep, many Senators opposed establishing stock trading institutions. They argued that the Senate's current focus should remain on territorial expansion and industrial development—there was absolutely no need to launch projects for their own sake. They particularly opposed the intentions some harbored of using an exchange as a pretext for large-scale "leek harvesting." They further pointed out that a stock exchange would inevitably increase speculation and significantly raise financial risks. Therefore, while they didn't oppose engaging in stocks or bonds, they opposed creating specialized institutions for trading.

Chu He understood the Senate's goals: obtain working capital, minimize financing costs, and maintain a respectable appearance while profiting.

Taking care of all three proved quite difficult, especially in the current social environment. No wonder some Senators had derided the whole effort as "pulling down one's pants to fart."

His idea was to establish rules first, leaving interpretive space in the corners for the Senate as regulator. Let the Senate itself make substantial profits, allow a small number of core forces aligned with the Senate to profit alongside it, use the wealth effect to attract a larger pool of private capital, and employ the rules so that this private capital could ultimately obtain only modest returns. Whether to "harvest" some investors to the point of ruin would depend on the impact on the financial ecosystem and the Senate's needs. The means lay in leveraging the Senate's understanding of financial rules, its power to interpret those rules, its vast financial capital, and its legal monopoly on force.

Therefore, the exchange had to be established. Even if physical infrastructure couldn't be built immediately, the rules had to be put in place as soon as possible.

It was based on these ideas that he had meticulously crafted his plan and posted it on the BBS. But the situation over the past few days had been disheartening. Nearly a week had passed since he released his financing proposal, and the popularity he had envisioned hadn't materialized. Even replies discussing his post were scarce—"no one cared" would not be an exaggeration. This was completely different from the lively debates of just a few days earlier. He wondered privately whether his plan was simply subpar. But looking around, other proposals weren't necessarily any more brilliant.

No, Chu He resolved. This can't drag on. Tomorrow I'll find someone to ask.

The following evening, Chu He stepped into the Nanhai Coffee Shop. His eyes swept the room several times before a man called out: "Brother Chu! Over here!"

The caller was Sun Butao, an old acquaintance. Both had financial backgrounds and similar experiences. After D-Day, both had been conscripted by the construction team. After basic training, one drove an excavator, the other a bulldozer. Later, they had slacked off together in Fangcaodi—brothers who had shared hardship and ease. But then the financial sector had gotten on track, and Sun Butao had actively "moved closer to the organization," becoming a financial worker once again. Now he was a mid-level leader in the Central Reserve Bank's Foreign Exchange Administration.

After exchanging pleasantries, Sun Butao asked: "Brother Chu, why the sudden return? New appointment? Where's your family?"

Though Chu He had been a slacker for years, it hadn't stopped him from having children. He now had three life secretaries and seven children.

"I came back on temporary leave." Chu He ordered a black coffee—the most obvious mark of his years studying abroad—while speaking. "To be honest, I came back to campaign for a position."

"Campaigning? That's rare. If you really wanted to campaign, would you have gone to Jeju Island?" Sun Butao looked skeptical. "Truth be told, most Senate positions work you to death. After a few years, you won't even have interest in... you know..."

"I've seen the light! There's no future in slacking." Chu He said. "I can't drift around Jeju Island forever—I'm still young. Teaching for so long has worn me out. I'm ready to follow your example and actively move closer to the organization."

Sun Butao's eyes lit up. "Did you come for the Nanyang Company business? Planning to defect to Zhou Wei? He's the hot ticket right now! People wanting to see him are taking numbers and queuing up..."

"It is about the Nanyang Company, but I don't plan to defect to him." Chu He said.

Sun Butao blinked. "Then what's your plan? Could it be you've got your eye on the stock exchange?"

"Something like that. I wrote a financing plan for the Nanyang Company and posted it on the BBS. It's been days with no response. I think what I wrote is solid, so I came to find out what's going on."

Sun Butao laughed. "Brother, what kind of response did you expect? Everyone applauding, followed by an appointment letter from the Organization Department?"

Chu He said sheepishly: "Not exactly. I just figured that for something as important as Nanyang Company financing, I'd propose a plan and nobody would discuss it?"

Sun Butao shook his head. "Brother Chu, you've been away from Lingao too long. Think about it—the Nanyang Company is certainly important, and people are certainly discussing it. But who's going to discuss it with you? You're not in the financial sector. Even when they do discuss it, it won't be on the BBS. They don't care what someone posted there."

Chu He protested: "That can't be right. I see plenty of people on the BBS..." Even as he spoke, he felt his confidence waver. Compared to the early days after crossing when the BBS served as a vital internal communication channel, its status had declined considerably. First, Senators' suggestions and opinions now had formal channels for response and resolution. Second, many matters simply couldn't be solved on the BBS—it was better to visit the ministries in person. Third, most Senators' daily work consumed so much time that if they wanted news, they could just read internal references rather than waste energy arguing online. Not to mention that a large number of Senators stationed outside Lingao had no access to the BBS at all.

"Didn't... didn't the Southbound Faction previously use the BBS to build public opinion and gain discourse power, ultimately pushing through the Nanyang Company? Wasn't that done through the BBS?" Chu He suddenly remembered.

Sun Butao said: "That was fighting for interests, brother—of course they needed to build public opinion. Now it's about distributing interests—naturally that's done behind closed doors among insiders. Who would discuss that publicly on the BBS?"

Chu He couldn't help sighing that he had been away from Lingao too long. Living far from the political center and paying little attention to Senate affairs, he had grown unclear about internal power dynamics. For a moment, the whole endeavor seemed impossibly complicated—far less relaxing than life in Jeju, riding horses and amusing himself. But the feeling passed quickly. "So what should I do? Go directly to the finance sector people? Cheng Dong?"

Sun Butao considered this for a moment before replying slowly: "Probably not. Setting aside whether you could even find him right now, it's uncertain whether this falls under his jurisdiction."

"Then who in the finance sector handles this?"

Sun Butao studied Chu He's face and asked suspiciously: "Brother Chu, don't you know about that situation?"

Chu He looked blank. "What situation?"

Sun Butao realized: "Oh! You were at sea during that time—no wonder you don't know." He immediately lowered his voice and spoke conspiratorially: "The Southbound Faction clashed with the Administration Council. During that period, the Southbound Faction was making all sorts of connections to push their political views, and the public opinion campaign was particularly intense. Word has it that several big shots were very displeased, saying they were engaging in factionalism and attacking dissidents. There was even talk of 'making the Wenlan River flow backward'..."

"Damn, that's a serious accusation." Chu He was startled. "Who was displeased? Chairman Wen? Secretary of State Ma? Or..."

Sun Butao immediately looked away. "Don't know. Not clear. Didn't hear. Anyway, tensions were running high at the time. The situation has calmed down now, but the aftermath lingers. If you go to the Finance Department with a financing plan under the Nanyang Company banner right now, I doubt you'll receive a warm reception."

(End of Chapter)