Chapter 62: The Lingao Trade Agreement

The first business negotiation with the Dutch ended in a “warm and friendly atmosphere.” Si Kaide secretly laughed. Many of the things the Dutch argued for were actually not worth mentioning to him, but he used them to get many exchange conditions. The Dutch were most resolute about “no monopoly purchase,” which had a realistic lesson, so Van der Lants resolutely demanded that the Dutch be given the right to freely sell their goods in Lingao.

Si Kaide “reluctantly” finally agreed to this request. In Lingao, besides the transmigrators, there would probably not be many people who needed so many Dutch goods, nor could they come up with such a large amount of liquid capital to buy the Dutch goods. Gu Baocheng’s Qionghai Hao certainly had this strength, but Gu Baocheng would never do such an unwise thing. In terms of foreign trade, no one in Lingao dared not to follow the command of the Ministry of Colonies and Trade.

The two sides reached a preliminary agreement on trade:

The goods transported by the “Magdeburg” have been taxed and cleared through customs. This batch of goods will be purchased by the foreign trade company under the Ministry of Colonies and Trade at a certain price. The guiding price is the price at which the East India Company sells to Chinese sea merchants in Tayouan. For goods not sold in Tayouan, the price will be negotiated by both parties.

After this trade, the two sides will conduct bilateral trade under a new trade agreement. The conditions are as follows:

The Dutch East India Company has the right to freely sell goods in the ports of Lingao and Sanya under the control of the Senate. Anyone can buy goods from the East India Company. The Australians will not levy other fees on the imported goods of the East India Company except for the import tariffs approved by both parties.

The Dutch East India Company can send an unlimited number of trade ships to the various trade ports designated and opened by the Senate for trade each year. The specific trade ports will be revised once a year. At present, the Senate has specially opened the two ports of Lingao and Sanya for trade. If necessary, the Senate can increase or decrease the number of open ports at any time, but at least one trade port should be reserved for the company.

When the ships of the Dutch East India Company enter these ports, they must fly the designated signal flag. After entering the port, they must completely obey the command of the port personnel and pay all port fees—this fee cannot be reduced or exempted. Otherwise, the port authorities have the right to confiscate a considerable amount of imported goods as compensation.

After the company’s ships enter the port, all weapons must be sealed, and they must accept all quarantine and disinfection measures. Those who refuse will be immediately expelled from the port.

Half of the deadweight tons of the company’s ships transported to Qiongzhou must be goods designated by the Ministry of Colonies and Trade. A specific catalog will be provided for this type of goods. If enough designated goods are not transported in this voyage, they must be supplemented in the next voyage, otherwise the relevant trade will be suspended.

The company can rent the trading houses built by the Ministry of Colonies and Trade in the designated open ports. Merchants and sailors must live collectively in the trading houses or on the ships, and are not allowed to stay overnight. The rent for the trading house is five hundred guilders per year. Food and daily necessities are purchased by the company’s personnel from the market, and the Ministry of Colonies and Trade provides convenience.

The last clause is about judicial jurisdiction. Van der Lants agreed to the judicial jurisdiction of Lingao, but requested judicial privileges in commercial disputes. The so-called special rights were not extraterritoriality, but a request that in the event of a commercial dispute between the company and local merchants, the Ministry of Colonies and Trade must give certain preferential treatment, mainly in the collection of accounts and bankruptcy liquidation. He asked Si Kaide to guarantee that the company would be given priority in such events. At the same time, the company was allowed to station a consul in Lingao to protect the company’s commercial interests.

Si Kaide said that implementation was not a problem. As long as the East India Company recognized that the Australians had judicial jurisdiction over commercial activities in Qiongzhou, once the Lingao Maritime-Commercial Court made a judgment, it would be implemented.

The Dutch East India Company allowed Australian ships to sail in the waters of the East Indies and Taiwan under the same conditions. Australian ships had the right to enter Batavia and Tayouan for trade at any time. The Australians could also establish trading houses and station consular personnel there. At the same time, it was guaranteed that Australian ships could enter Banten safely and without harassment at any time. All the privileges granted by Lingao to the Dutch East India Company would be granted by the Dutch East India Company to Lingao at the same time.

Finally: the two sides agreed to station consuls in Batavia and Lingao respectively to protect their own commercial interests.

Of course, given the situation in Lingao, it was impossible to have many ships going to Batavia in the short term—the current problem in Lingao was insufficient transport capacity. But through this step, it was possible to gradually attract those Ming merchants who were willing to go to Batavia to come under the banner of Lingao. Historically, Batavia was a Nanyang location where Chinese sea merchants frequently traded, and the Zheng family and Liu Xiang basically did not directly involve themselves in this route. Si Kaide planned to first seize control of this route from them, and then collect protection fees for passage. After all, the Lingao regime already had the basic concept of protecting overseas merchants, and was not just at the level of a mountain king who relied on monopolizing routes to collect tolls. In other words, the Lingao regime had the consciousness of “collecting money for protection,” while other sea lords were just “collecting money and not looking for trouble.” The difference between them was obvious at a glance. The reason why the Lingao regime was more popular than the Ming regime was actually because of this.

After reaching the trade agreement, the two sides negotiated on trade goods and tariff details. Van der Lants knew that the company was most interested in dumping spices from the East Indies. This was one of the few commodities that the Dutch could dump on a large scale. The Dutch had already formed a tight network of crop acquisition, storage, and sales in the East Indies. Compared to rice and timber, the most convenient thing for the Dutch to supply to China was spices, and Lingao was obviously not interested in spices. Moreover, it had been confirmed in the previous agreement that the general cargo volume must carry goods in the designated catalog of Lingao—and there were no spices in it. This meant that at most he could only use the remaining transport capacity for spices, and the 24% tariff could completely make the spice trade unprofitable.

This junior commercial agent did his best to demand a substantial reduction in the spice tariff, at least to 5%, but Si Kaide was indifferent to this. Although spices could be a useful re-export trade product, Lingao had never sold spices on the mainland, and it was not necessarily a competitor to the existing distributors. If the spice trade became profitable, the Dutch would be too lazy to transport other goods.

In the end, the two sides reached a compromise, that is, the import tariff for the spice trade was 12%, a reduction of half. Van der Lants knew that it would be very difficult to obtain sufficient profits from spices. For this reason, he had to consider what kind of goods to export to Lingao. If he could not find suitable goods, the company would have to consider the amount of silver quota allocated to Lingao. In the trade with the Ming Dynasty, the main commodity exported by the East India Company was actually silver.

The silver transported by the company from Japan, Persia, and Europe disappeared into the trade with the Ming Dynasty as if it were poured into a black hole. The East India Company had always hoped to reverse this situation. From the current situation, the Australians were much more in demand than the Ming Dynasty, which needed nothing. Just from this designated goods catalog, the East India Company could transport and sell a variety of goods. Timber and rice in the bulk goods were all materials that could be effectively obtained from the East Indies. Although rice did not have great export potential in the East Indies, the company had a trading port in Siam, where rice was very abundant, and a Siam-Lingao rice trade route could be opened.

Judging from the list provided by the Australians, they needed a large number of metal products. However, the Dutch were powerless on this point. In East Asia, except for copper, which was a major export commodity of Japan, the main exporters of other metal products were all from the Ming Dynasty. But it was very difficult to import copper directly from Japan at the moment. The Dutch-Japanese trade was actually in a state of interruption recently. It seemed necessary to ask the council in Batavia whether it could quickly open up channels to obtain Japanese copper.

The Australians also specified that they should transport high-quality woolen cloth, coarse and fine linen, and leather of various colors. Not only the deerskin that was popular in this region, but they were also quite interested in coarse goods such as cowhide and sheepskin. Except for woolen cloth and linen, which needed to be shipped from Europe, leather could be shipped from Basra in Persia—Persia had a sufficient supply of leather.

As for the imported products from Lingao, Van der Lants had already made a decision. The first was glass products. The glass products produced in Lingao, including mirrors, had many styles, good quality, and were cheaper than the European goods that were transported from thousands of miles away. They had a market in the East Indies, the entire Southeast Asia region, and Persia, and could be used as trade goods to be transported to various places. The second was Lingao’s white sugar. In terms of the quality of the Lingao white sugar transported by the British to the East Indies, this was a high-grade product they had never seen before. It was not only far superior to the various local sugars in Southeast Asia, but even better than the Fujian and Guangdong sugars of the Ming Dynasty, which were known for their high quality. It could be sold at a high price when transported to Persia and Europe. Then there were the Ming products re-exported from Lingao.

Van der Lants and Si Kaide hit it off in the field of re-export. Since both Zheng Zhilong and Liu Xiang had the problem of excessively high prices in their trade with the Dutch in Tayouan, the Australians in Lingao could take their place. Si Kaide said that they could “openly supply” various silk products and raw silk, as well as all the Ming goods that the Dutch were interested in.

Van der Lants was curious, because except for the Portuguese who had the right to enter Guangzhou regularly, no other country’s merchants dared to make such a boast. Without relying on the Chinese merchants’ own ships to transport goods out of the port for trade, it was very difficult for Europeans to obtain enough Chinese goods. You should know that so far, all the efforts made by the Dutch along the coast of China have not been able to achieve this goal.