Chapter 91

Li Hongzhang's arrival in Germany stirred up a significant wave in both the political and business circles. To the Germans, this governor from a distant land had already become a familiar figure.

The German merchants and politicians were actually not well-informed about Li Hongzhang's life and achievements. The reason he had gained a high profile on the other side of the world, apart from his title as the "Oriental Bismarck," was more importantly due to his role as a major customer for German arms dealers during the 20 years of the Self-Strengthening Movement and the development of the Beiyang Army and Navy. Whether it was the firearms and artillery for the army or the ironclad warships for the navy, German equipment far outperformed that of the British, becoming the most widely used and technologically advanced standard weapons in the Beiyang forces. The large number of orders from the Far East boosted the industrial development in Germany, and the well-off arms dealers held a very positive attitude towards this major client.

At this time, the Qing Dynasty was training a new army of tens of thousands of men at the Xiaozhan camp in Tianjin, aiming to build a formidable force capable of resisting Japan and Russia in the Far East. This required a large amount of new weapons. The weapons in the Beiyang arsenal, mostly purchased from Germany before 1888 (the Qing had a six-year military stagnation period before the war), had been largely lost in the battles in Korea and Liaodong, and could not meet the needs of the army. Therefore, to achieve this goal, the Qing had to repurchase new weapons. Seeing their benefactor's need, the arms dealers, led by the Krupp company, became extremely enthusiastic. They frequently visited the Kaiserhof Hotel where Li Hongzhang was staying, trying their best to sell him the most advanced weapons they had developed.

The arms dealers were not the only ones showing great enthusiasm; the German bankers were also eager to get involved. Due to the Qing's compensation of 100 million taels of silver to Japan, the national treasury was empty. The German financial giants, led by the Deutsche Bank, saw an opportunity to fill the void. They offered large loans to Li Hongzhang, waving the olive branch of quick loans. Although the German government did not encourage large loans to foreign countries to avoid affecting domestic industrial development, this situation was clearly different.

Currently, the Qing's old enemy, Japan, had launched a new round of military buildup. In this context, the Qing, having suffered a severe blow, had to expand its army and navy for national security. Therefore, after obtaining the much-needed loan, the Qing would inevitably use a large portion of it to purchase German weapons. This money would flow back into the pockets of the Germans. Moreover, during this period, the annual interest rate on loans was over 5%, and with the compound interest, it was almost like counting money at home until one's hands cramped. Loans to foreign countries were secured by their industries, eliminating the risk of bad debts, which was exactly what these greedy capitalists were dreaming of. If this industry were not profitable, France would not have become the world's creditor through extensive lending!

In addition to arms dealers and bankers, high-ranking officials from the German government, including the Chancellor von Hohenlohe, also visited Li Hongzhang. Although they had already had many exchanges with Li Hongzhang, those were formalities in the palace. The real negotiations about interests always came later. This time, the German officials focused on trade and economic relations with the Qing, aiming to obtain the raw materials necessary for Germany's development from the Qing.

Despite Germany's strong industry, which was almost on par with the world's second-largest economy, Britain, its small land area and lack of resources meant that most raw materials had to be imported. To achieve rapid economic growth and replace Britain's world dominance, Germany needed a large and stable source of cheap raw materials and a market to sell its products.

These two needs for capital accumulation were usually met through the exploitation of colonies. However, Germany was not an old colonial power, and its overseas colonies were only a fraction of those of Britain and France. At this time, the colonies in Africa had been divided among the old imperialist powers, leaving almost no new areas. Therefore, Germany naturally turned its attention to other regions outside Africa. The Ottoman Empire in the Middle East, Argentina in South America... any underdeveloped country had seen the efforts of German exploration. After a comparison, the Germans realized that the decaying old empire in the Far East could meet all their needs!

Its land area was larger than all of Europe, second only to Russia with its vast frozen territory. The quantities of coal, timber, grain, and minerals were countless. Except for oil, it was almost a treasure trove of all resources. Its decay and weakness meant it could not process these raw materials into finished products and could only sell them cheaply. In terms of exporting German products, it was an excellent market. With a quarter of the world's population, its potential demand for goods was terrifying. If Germany could establish a trade agreement with the Qing, importing raw materials at low prices and selling processed products at high prices, it would be the ideal outcome!

Due to these three interests, Germany had long wanted to negotiate with the Qing. Li Hongzhang's visit to Germany was a golden opportunity for them. If they did not seize this chance to fill their pockets, when would they have another chance? For several days, the Kaiserhof Hotel where Li Hongzhang stayed was filled with distinguished guests, and its popularity had not been seen for seven or eight years.

Li Hongzhang had anticipated the Germans' overwhelming enthusiasm when he left the capital. Like other powers, the Germans were always thinking about the wealth of the Qing. Now that he had given them this opportunity, they naturally swarmed like hungry dogs. However, this was exactly what Li Hongzhang wanted to see. The Germans could benefit, and the Qing could obtain what it needed most!

The weapons sold by German arms dealers could help the Qing reorganize its army, and various loans and trade cooperation could effectively alleviate the national treasury's deficit caused by the indemnity for the First Sino-Japanese War. Both sides were mutually attracted, and in a short time, they signed nearly ten contracts: German banks provided loans to the Qing exceeding 100 million marks, and the Qing purchased 200 cannons from Krupp alone.

However, amidst this harmonious and mutually beneficial atmosphere, there were still elements of discord. Emperor Wilhelm II was an ambitious man, always looking for opportunities to expand Germany's influence overseas. The First Sino-Japanese War had exposed the Qing's weakness to the world. Seeing Japan's quick victory over the Qing, Wilhelm decided to accelerate Germany's expansion in the Far East and quickly incorporate a region into Germany's sphere of influence. Li Hongzhang's visit provided him with an excellent opportunity. Under Wilhelm's instructions, German Foreign Minister von Marschall visited Li Hongzhang several times, discussing core interests between the two countries for hours each time. Marschal, citing Germany's "success in forcing Japan to return Liaodong," not only rejected Li Hongzhang's request for additional tariffs on German imports but also demanded various privileges for Germany in China, including mining, railway construction, leasehold territories, trade, and lower prices for raw materials, to enhance Germany's position in the Far East. Despite Li Hongzhang's efforts to resist, without a strong backing, he was forced to give the "Liaodong hero" the corresponding "reward" and agreed to most of Marschall's demands.

After this unpleasant interlude, Li Hongzhang welcomed the long-awaited naval procurement. Unlike in history, Li Hongzhang had little intention of buying warships from the British; he almost placed all his bets on the Germans. This butterfly effect was directly caused by the Qing's intervention in the Anglo-German rivalry.

In the early days of the Beiyang Fleet, most of its warships were built by Germany. The ironclad warships Dingyuan and Zhenyuan, and the armored cruisers Jingyuan and Laiyuan, had withstood the most severe tests during their 10 years of service and the Battle of the Yalu River. The German-built Brandenburg also performed excellently in that battle. Although Li Hongzhang was unhappy with Marschall's tough stance, he had to admit that German warships had indeed provided a solid shield for the Beiyang Navy.

Compared to the excellent performance of German warships in the first major naval battle of the steam age, the warships built by Britain and France were rather disappointing. Of the 8 warships that sank in the battle, 5 were built by Britain. No matter how the British defended themselves, the fact that many British-built warships sank was undeniable. Advanced warships like the Yoshino could have played a greater role, but due to the low combat skills of the Japanese sailors, who were mostly conscripts, these advanced warships performed poorly. The French ships were even worse; the 320mm Canet guns, which required a huge investment, were only good for making noise, and the Katori sank due to boiler failure, providing a significant advantage to the Beiyang Navy. In comparison, Li Hongzhang naturally turned his attention to Germany.

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