Chapter 52 Start a cotton yarn textile business

China's modern cotton spinning enterprises, like new enterprises such as China Merchants Steamship and Tianjin Telegraph Bureau, were also created under the stimulation of Western capitalism's bullying of China's cotton textile industry. On the eve of the Opium War in 1840, machine-made textiles did not play a very prominent role in the trade between China and Britain.Since the 1860s, cotton textiles have increasingly played an important role in the commodities exported to China from Britain, the United States and other Western countries.Due to the invasion of foreign cotton textiles into the mainland, China's cotton textile industry suffered an unprecedented impact, and a large number of handicraft workers fell into bankruptcy or semi-bankruptcy.In addition, Western powers also colluded with comprador forces to use China's raw materials and cheap labor to illegally set up factories in China in order to obtain greater profits.Aiming at the harsh reality that endangered the production of China's light textile industry, Li Hongzhang became more and more aware of the necessity of a commercial war with Western powers.Based on this understanding, Li Hongzhang actively started to prepare for the establishment of the Shanghai machine weaving layout.

At the beginning of 1879, the first cotton textile enterprise in modern China, Shanghai Machine Weaving Co., Ltd., purchased a warehouse in a bank in Hongkou as a base and started to establish it.Li Hongzhang appointed Zheng Guanying as the office, and Tang Rulin, Zhuo Peifang and Changkang as assistants.During the preparatory process, due to the misappropriation of share capital by Zheng Guanying for speculative exposure, the organizer once stalled for a while.In the autumn of 1879, Li Hongzhang appointed Dai Jingfeng, an alternate Taoist priest in Zhejiang, to handle the layout of machine weaving in Shanghai nearby, and Wu Zhongchun and Gong Shoutu, two priests, to handle it together.However, due to the lack of experience in managing new-type enterprises, these people did not make any progress in the IPO and fund-raising work during the one-year period in charge of the bureau's affairs.

In October 1890, Li Hongzhang reassigned Ma Jianzhong, one of the directors of the Shipping Merchants Bureau, to take over the affairs of the bureau, and allowed him to embezzle 300,000 taels of provident funds from Renji and insurance companies as a working capital.After Ma Jianzhong took over, he paid the old money in advance, bought new machines, and built the factory buildings. Finally, after more than ten years of preparation, Shanghai Machine Weaving Group started production.The machines used included a complete set of ginning, spinning, and weaving machines purchased from Britain and the United States, 36,350 spindles, 530 looms, and about 4,000 workers.After it was put into production, the business flourished and the profits were huge.In October 1893, due to the chaotic operation and management, the factory caught fire and the whole factory was destroyed. The first large-scale textile factory in modern China, which had developed through hardships, was destroyed by a torch.

Although the Shanghai machine weaving factory was destroyed by fire, its huge profits and its role in the process of competing for profits with foreigners attracted and prompted Li Hongzhang's determination to regroup and continue to operate.After a year of intensive preparations, in September 1894, the Huasheng Machine Textile General Factory was established and partially put into production, with 6.15 million spindles, 750 looms and 4,000 workers. More than one person, the scale is larger than that of Shanghai machine weaving layout.But because businessmen dared not rush to buy shares, Li Hongzhang had to use official funds to support him.As a result, the nature of the government-supervised and commercial-run business of the original Shanghai machine weaving layout has changed, and it has gradually transformed into a government-run enterprise with an absolute advantage.After Li Hongzhang's death in 1901, Sheng Xuanhuai excused that Huasheng Machine Textile Factory was losing too much money and wanted to attract investment to replace it. It was renamed Integrated Textile General Factory, and soon changed its name to Youxin Textile General Factory.The so-called investment promotion is actually Sheng Xuanhuai's personal capital.So far, the Huasheng Machinery Textile General Factory has been transformed from a government-run enterprise into a comprador capital enterprise.

The modern Chinese cotton textile industry initiated and supported by Li Hongzhang not only laid the foundation for the further development of the Chinese cotton textile industry in the early 20th century, but also showed that Li Hongzhang, as a member of the feudal ruling group, was able to maintain a strong conservative atmosphere at that time. Under the environment and conditions of China, the relatively conscious introduction of western capitalist production relations has provided a certain ideological basis for people to further get rid of the concept of small-scale peasant economy, emphasizing agriculture and suppressing business.Therefore, Li Hongzhang's achievements in the development history of China's cotton textile industry are undeniable.