Ch.86Internal Affairs (5)

“…Therefore, both countries will establish markets in Jiezhou and Yizhou, located in the border regions between the two nations, and establish Maritime Trade Supervisorates to ensure uninterrupted trade.”

A few days after Xin Qiji and Wang Dalun returned, envoys from the Song Dynasty arrived.

These were envoys sent directly by the emperor, accompanied by officials from the Maritime Trade Supervisorate whose duty was to inspect and manage overseas trade.

The fact that they sent not only envoys but also practical administrators like the Maritime Trade Supervisorate officials showed that the Song Dynasty was truly serious about trade with us.

It wasn’t quite to the level of “the Song Dynasty sent Maritime Trade Supervisorate officials because the Song Emperor was captivated, the Jin Emperor was jealous, and Goryeo and Japan envied Mongol distilled liquor.”

In truth, the Song Dynasty’s proactive approach stemmed largely from their desire to break out of diplomatic isolation.

And there was one more reason—coal.

By this time, even commoners in the Song Dynasty were using coal for heating.

They had even developed a food culture where they raised oil temperatures with coal to cook food by frying.

This naturally created an enormous demand for coal.

While they obtained coal from mines in Southern Song, supply fell short of demand. So they mostly imported it from the nearby Dali Kingdom.

However, friction with Dali forced them to import from more distant places like Champa or Ailaoyi—tribal regions in what is now Laos.

Since these countries didn’t share borders with Song, transporting coal was inherently difficult.

In this situation, Western Xia, rich in coal deposits, becoming part of the Ulus alliance was like a gift from heaven for the Song Dynasty.

Of course, if we didn’t sell cheaply, they could face significant losses.

But even accounting for that, coal coming through Western Xia would still be cheaper when considering transportation costs.

While I was thinking about this, Bekhter was receiving an imperial edict from the Song Emperor.

As Bekhter accepted it, Western Xia officials raised their arms and cheered.

“Long live the Khan of Western Xia!”

“May the Khan’s glory continue forever!”

There was a reason for the Western Xia officials’ joy.

The Song Dynasty would be paying for coal with rice.

Western Xia’s main grain was wheat.

They subsisted on bread made from wheat harvested in fields created by cultivating areas near oases.

While wheat was a good grain that provided individuals with plenty of carbohydrates, it had a drawback.

Its yield was significantly lower compared to rice.

Additionally, since Western Xia was inherently difficult land for agriculture, this disadvantage of wheat was even more pronounced.

In this situation, the prospect of large quantities of rice coming from the Song Dynasty was cause for celebration.

At that time, the Song Dynasty’s rice production was an impressive 33 million seok.

With 1 seok equaling 180 kg, that meant 5.94 million tons.

To understand how remarkable this was, consider that Korea’s maximum grain production before the Imjin War was 22.61 million seok.

Without question, the Song Dynasty was the “rice country” of that era.

True to its status as a major rice producer, the Song Dynasty planned to distribute rice generously in trade.

* * *

Most countries were devastated after war.

This was natural, as battles resulted not only in people dying and getting injured, but also in the destruction of property like houses and livestock, causing tremendous damage.

Because of this, many people predicted that Xingqing would experience a major depression after coming under Ulus rule.

Contrary to these predictions, however, Xingqing was experiencing unprecedented prosperity since its founding.

“For sale! Cheap! Silk and pottery from the Song Dynasty!”

“Song Dynasty clothes! Books! And more!”

Due to its alliance with the Jin Dynasty, Western Xia had been unable to properly trade with the Song Dynasty for a long time.

While trade with the Jin Dynasty, which occupied the North China Plain, filled some gaps, the quality of goods wasn’t particularly good due to Jin’s poor economic situation.

Consequently, it was inevitable that high-quality Song Dynasty goods were smuggled into Western Xia.

Despite black market prices that were five to twenty times higher, demand from Western Xia people never decreased. They simply loved and preferred to use Song Dynasty products.

Now that Western Xia had joined the Ulus and trade with the Song Dynasty had resumed, merchants and many others couldn’t help but rejoice.

“Before the war broke out, I bought Song Dynasty ink for ten bolts of silk, but now I can get it for just one bolt…”

“It’s even cheaper than before the war, which is astonishing.”

The people of Xingqing couldn’t help but be amazed at the much lower prices.

But with the good came the bad.

Merchants pushing in from Central China were beginning to dominate Xingqing’s markets.

It was inevitable that local merchants would lose out to lower prices and superior quality.

“Are we going to be completely consumed by the Song Dynasty economy?”

“Indeed. We’ve been in commerce for generations…”

Merchants were lamenting with such words.

Just then, they noticed Mongol warriors on horseback approaching Song merchants.

A Mongol warrior dismounted and said something to a merchant.

When the Song merchant refused, the Mongol warrior shook his head and took out a rope to bind him.

“What’s happening over there?”

“I wonder. Let’s go see.”

The two complaining merchants walked toward where the Mongol warrior was.

As they approached the commotion, they could hear the conversation between the warrior and the Song merchant.

“You have violated the laws of both countries. Your right to conduct business will be revoked, and you will be deported to the Song Dynasty to be punished there for disrupting the market.”

“Wh-what are you saying? I-I haven’t broken any laws.”

“Did you not smuggle and sell goods that should have been subject to tariffs without declaring them?”

“S-smuggling? Th-that’s… C-can’t you let me off just this once? I’m sorry. I’m begging you.”

“This isn’t something that can be resolved with an apology.”

The warriors, as if they had nothing more to say, bound the Song merchant and took him away.

The two merchants who witnessed this approached nearby merchants to inquire about the situation.

“What happened here?”

“I heard that Song merchant smuggled goods subject to tariffs and distributed them in the market.”

“Tariffs? Are you saying Western Xia—I mean, the Ulus—has a tariff treaty with the Song Dynasty?”

“How can you call yourself a merchant if you don’t know that? The Maritime Trade Supervisorate was established between the Ulus and Song Dynasty, and tariffs were immediately introduced.”

“I know that. But when we trade with Central Kingdom countries, aren’t there usually unfavorable clauses for us?”

The complaining merchant’s words had some merit.

Traditionally, Central Kingdom countries—those of the Son of Heaven—received a kind of most-favored-nation treatment in trade.

This most-favored-nation treatment was a kind of right to demand equal tariffs across all trade goods, creating differential treatment in tariffs.

Central Kingdom countries had frequently used this right to send merchants to other countries and erode their economies.

But the Ulus was receiving protection for certain items in this trading relationship with the Song Dynasty.

“This person clearly didn’t read the proclamation posted at the city gate! Go there and see for yourself. Song Dynasty goods that compete with Western Xia’s main products and livestock are subject to tariffs.”

A condition had been established that Song goods would always be subject to tariffs if they were products also produced in Western Xia.

This was possible because it aimed to protect Western Xia’s industries and those involved in them.

In other words, for the same goods, Song imports would have tariffs added, making them more expensive to purchase.

Thanks to this, merchants who produced and sold goods directly, rather than those engaged in transit trade, could maintain their livelihoods based on lower prices compared to Song’s high-quality products.

“Hmm… to think the Song Dynasty would accept such favorable terms for the Ulus…”

“I’m so surprised I wonder if the heavens have turned upside down.”

Objectively speaking, this was an unfair clause from the Song Dynasty’s perspective.

Nevertheless, the implementation of these tariff measures was largely due to the influence of Wang Dalun and Xin Qiji.

Xin Qiji, as an Anmusa just below the Military Governor, could be considered the superior of the Maritime Trade Supervisorate officials.

Additionally, he had the authority to directly advise the emperor and the Military Governor.

Using these advantages, Xin Qiji and Wang Dalun were able to conclude a tariff treaty with Mongolia.

Considering only this aspect, one might think that Xin Qiji and Wang Dalun, enchanted by alcohol, concluded a treaty favorable to Mongolia.

But looking at the underlying intentions, it was actually a treaty that greatly benefited the Song Dynasty as well.

While the Ulus’s industry was weak compared to the Song Dynasty, there was one field where Song could never catch up.

That was livestock—due to the mountainous terrain of Southern Song, they could never match Mongolia in raising cattle, sheep, goats, and camels.

Consequently, if Mongolian livestock entered without tariffs, Song’s livestock industry would surely collapse.

“How can those who follow the way of commerce be so behind on information… tsk tsk.”

The complaining merchants could only blush at the merchant’s rebuke.

Still, they didn’t forget to express gratitude to the merchant who had taken the time to inform them.

“Thank you for enlightening us, sir.”

“Thanks to you, we’ve found a way to survive. If it’s alright, may we ask your name?”

The merchant looked at the two for a moment, observing their humble attitude.

Then, adjusting his posture, he answered politely:

“I’m just an ordinary merchant who doesn’t need to reveal his name.”

Understanding his reluctance to share his identity, the two nodded as if they didn’t mind.

“Then we’ll call you ‘sir.’ I was originally a merchant who made and sold perfumes, but I was at a loss about how to proceed. After hearing your words, I’ve had a significant realization and would like to ask something. If I want to succeed as a merchant, what goods should I sell to make the most profit?”

It was a question that others might find absurd.

But the elderly merchant, seemingly not displeased with the merchant’s demeanor, readily answered.

“If I were your age, I would acquire Song Dynasty goods and sell them in the Western Regions.”

“By Western Regions, do you mean the countries where Muslims live?”

“That’s right. It might be physically demanding, but if you engage in transit trade, you’ll make more money at a young age than you could otherwise imagine.”

“But as you mentioned earlier, with tariffs in place, we might not make much profit, right?”

“Haha. That shows you know one thing but not another.”

“What do you mean?”

“It’s true that selling goods subject to tariffs won’t yield much profit compared to the effort invested. But don’t just chase profits—you need a broader perspective.”

“Broader…”

“Yes. Even the Song merchant who was just arrested could have gained something more valuable than profit if he had sold his goods while following the law.”

“Wh-what would that be?”

The elderly merchant only smiled in response, without answering.

Then he turned and slowly walked away from the street.

The complaining merchants could only watch him leave, unable to stop him.

It was as if he meant they should find the answer themselves.