Chapter 2548 - Hidden Concerns
Why were the Australians buying cotton too? The Nansha factory had only just begun operations—tens of thousands of taels of silver poured in without so much as a ripple in return. If cotton prices kept climbing at this pace, how could the factory possibly stay afloat?
The more Chen Lin thought about it, the clearer the picture became. The Guangzhou National Cotton Textile Factory sat right next to the International Market—that vast tract of land now fenced off for factory buildings. Once it started running, tens of thousands of spindles would be spinning at once. Of course the Australians would stockpile cotton now.
But if that was the case, cotton prices would only continue to rise. Chen Lin's heart clenched with worry.
Dong Jizhong's next words offered some comfort: "That said, cloth prices have also climbed recently. I hear the Australians have been buying in bulk."
"Why would the Australians need so much cloth themselves?" Chen Lin asked, intrigued.
"Are you familiar with the Nanyang Company?"
"Yes—it was established just recently. Something about developing the South Seas..."
"Developing the South Seas means shipping landless vagrants and displaced peasants from across the provinces to Annam and the islands to clear and cultivate new farmland. These people need food, drink, and clothing. Farming requires seeds and tools. Someone has to provide all of this—the Australians can hardly send them off with bare bottoms and empty hands." Dong Jizhong laughed. "Right now in Guangzhou, it's not just cotton cloth that's rising. Grain and all manner of sundries have gone up too. Even hardware items that used to keep falling—iron nails, the cheapest of the lot—have risen considerably. Why? Because migrants need every last one of these things."
His words struck Chen Lin like a revelation. He'd been so consumed by factory affairs lately that he'd completely lost track of the broader market.
"I see now! A merchant must stay alert to everything around him, keeping constant watch on market conditions!" he said, reproaching himself.
"No need for self-blame, young man," Dong Jizhong said with a chuckle. "Since cotton cloth prices have surged, yarn prices have naturally followed. Whether you're selling cloth or yarn, you'll turn a tidy profit right now. The average price of cotton cloth in Guangzhou has risen fifteen percent, with mid-to-low grade cloth climbing even higher."
He paused as if remembering something. "As for your cotton supply problem, I'll speak to the manager about it the moment I return. Since you're Old Wu's cousin and the manager at Nansha, you're family now. I'll make sure this gets handled properly—you won't leave empty-handed."
"Thank you, Master Dong!"
"No need for thanks. We're all family." Dong Jizhong studied him with an appraising look. "Old Wu has mentioned you to me many times—always said you were the most honest and hardworking young man, from a respectable old family. Now that I've met you, I see he spoke true. With you running things at Nansha, I can rest easy."
"I will always remember your grace in recognizing my humble abilities."
Seeing that the young man was perceptive and knew how to conduct himself, Dong Jizhong nodded with quiet approval.
His father and elder brother both served as officials in Ming territory. Beyond their salaries, various unofficial incomes flowed quietly back to Guangzhou through Delong's northern channels—that was one source. But gray income alone remained limited, since both men were military officers stationed nowhere near the lucrative postings of Liaodong. Their take was modest at best.
To maintain the family's comfortable lifestyle and stave off decline, investment was the only path forward. The Nansha Textile Factory represented the Dong family's largest venture.
Chen Lin had made a favorable impression. His commercial instincts might not match Wu Yijun's sharpness, but he was clearly someone who could get things done.
"This International Market is an excellent place to take the pulse of trade. Renting a storefront here—the business itself is secondary. What matters is understanding this rapidly shifting market. The Australians certainly have vision." Dong Jizhong raised his teacup. "The streets of Guangzhou are paved with gold, if you're willing to stoop and pick it up—I never believed that before, but I do now. We have no wine, so let tea suffice. To your prosperous business and abundant wealth."
Wu Yijun and Chen Lin hastily raised their cups in return. After another round of pleasantries, Wu Yijun noted the time and caught Chen Lin's eye. The two made their excuses and departed.
Chen Lin had wanted to discuss cotton procurement further with Dong Jizhong—since the Dong family had northern connections, this could be a long-term solution. He'd barely taken a few steps outside before voicing his frustration: "I still had more to say to Master Dong."
"What's the rush?" Wu Yijun laughed. "It's only about the cotton business. Don't worry—wastrel though he may be, he still cares about his own investments. Those of us who serve shouldn't spoil his mood. Besides, it's nearly time..."
"Time for what?"
"See that clock tower over there? Can you read the Australian numerals?"
"Those are just Arabic numerals. It's almost two o'clock."
"I didn't expect you to know so much!" Wu Yijun glanced around furtively. "Look across the street."
Sensing something improper in his uncle's manner, Chen Lin knew better than to make any obvious movements. He shifted his gaze subtly—and saw a small sedan chair arrive at the teahouse entrance. The proprietor and waiters emerged to greet it. The curtain lifted, revealing a woman in Ming-style dress...
"Could that be Master Dong's...?"
Wu Yijun nodded silently. Only after they'd walked some distance did he speak in a low voice: "She's a woman Master Dong recently took as a concubine—not yet made official. He finds too many prying eyes in the city, so he bought her a courtyard in the living quarters here and rented a storefront for her to run."
"A woman, running a business?"
"What's so strange about that?" Wu Yijun laughed. "Plenty of women run wine shops in the city."
"Those are small establishments. The businesses in this market are major operations!" Chen Lin said, puzzled. "Besides, Master Dong himself isn't from a merchant family and doesn't understand commerce. What sort of business could he set up for a woman to run?"
"Who said everything here is big business? Zone A is for smaller operations. Her shop is there—she deals in export goods, fine embroidered fans and handkerchiefs. The shop only just opened, but she's already secured several orders from the Europeans."
Wu Yijun's voice carried a note of envy. "Master Dong really knows what he's doing—finding himself a woman like that. Capable and beautiful both."
Such gossip held little interest for Chen Lin. "Uncle, where is our storefront located? I noticed quite a few people here looking at spaces."
"You needn't worry about that. I've already identified a suitable spot and had the manager submit our bid yesterday. Highest bidder wins, but there are plenty of storefronts in this market. The one I chose isn't in any particularly auspicious location—probably no one will compete for it. We'll likely get it at the base price."
Their business was wholesale, far less sensitive to location than retail. No need to invest heavily in the lease.
Wu Yijun led him to a storefront in Zone B. The doors stood wide open, workers renovating inside amid piles of timber and bricks.
The annual rent was two hundred yuan, Wu Yijun explained—Guangzhou's going rate for a prime commercial space in a bustling district.
"The rent is steep, but you get what you pay for. I've also bought a courtyard in the residential quarter here. I'll be spending quite a bit of time in this place from now on."
"What about your dried fruit business, Uncle?"
"I've handed it over to Ah Huan. He's nearly thirty now. Doesn't need me watching over him every day." Wu Yijun's voice turned wistful. "I'm approaching fifty—old enough to know my destiny. While my body still holds up, I need to hustle for a few more years. Opportunities like this don't come along often."
The two strolled through the market, stopping to chat with merchants they knew, discussing current prices and conditions for various goods. Even storefronts not yet officially open had workers and managers in place, and they went in to exchange words with them too.
By the time they completed their circuit, it was past four in the afternoon. They took a ferry back to the Guangzhou urban area. Wu Yijun, in high spirits, ordered food and wine prepared. The two drank and discussed business—their grand plans for the future, naturally.
But where Wu Yijun brimmed with enthusiasm, Chen Lin wore a troubled expression. His uncle noticed and tried to console him: "Ah Lin, still worried about the cotton? Don't fret—Master Dong will certainly help you sort it out. He won't let the factory shut down. After all, he has his own stake in it..."
"That's not what concerns me, Uncle." Chen Lin set down his cup. "What worries me most is the price of cotton itself. From everything I gathered at the market today, I fear a great storm may be brewing."
"You mean paper cotton? As long as we don't speculate, nothing will happen to us." Wu Yijun waved a dismissive hand. "Besides, the cotton market could climb even higher in the second half of the year."
"Uncle, have you considered this? Cotton prices have skyrocketed, but while cloth and yarn prices have also risen, the increase is far smaller."
The market's cotton supply hadn't grown—if anything, it had shrunk in the short term. But cloth and yarn production had surged with the introduction of new machines, actually pushing prices downward.
"I recently compiled the cotton cloth quantities and prices from the past few months' Commercial Monthly Reports for the Nanyang Company's purchases, then compared them to prices before this year's rally. After factoring out the increase caused by Nanyang's buying, the actual price of cloth has fallen."
This caught Wu Yijun's attention. He set down his wine cup. "Go on."
"The Nanyang Company is just one company—there's a limit to how much cloth it can buy. Last month, its purchase volume already dropped by half compared to the previous month. If that continues, there will be a surplus of yarn and cloth on the market. Prices will inevitably fall..."
In commodity markets, people chase rising prices but flee falling ones. Once a commodity begins to decline, panic selling often follows, driving prices down further. Breaking through cost price can happen in an instant.
(End of Chapter)