A Pawn's Passage

Qi Xuansu did not quite grasp Chen Shuwen’s train of thought, so he said, “Please enlighten me, Old Master Chen.”

Chen Shuwen explained, “When I say that the Nanyang United Trading Company is like a kingdom, I do not mean a traditional Central Plains dynasty. First of all, traditional Central Plains dynasties were essentially closed systems. They could only economize but could not generate new sources of wealth. As a result, no dynasty could last 300 years.

“But if you look at the Great Xuan Dynasty today, which has been founded for more than 200 years, there isn’t even a hint of chaotic decline. On the contrary, it is still in an upward phase. This is because the Great Xuan Dynasty is not a closed system and is able to open up new sources of wealth.

“Take Nanyang as an example. In order to exercise real control over the region, large numbers of Central Plains people come to the Nanyang every year. The Great Xuan Court and the Daoist Order still consider this insufficient, so they encourage migration and even send people who have lost their land to Nanyang. With this, the powerful elites are no longer obsessed with annexing land. Instead, they sell off their land and head overseas in great numbers to establish their fortunes abroad. Under such circumstances, how could the Central Plains possibly face a conflict of too many people and too little land? Put plainly, a closed environment also restricts the powerful, forcing them to focus their efforts solely on land.

“Secondly, technological stagnation in the past Central Plains dynasties meant that the pie could not be made bigger, and thus, there was a limit to how many people could eat it. It was only after the Daoist Order replaced the Confucian School that development began to accelerate, truly enlarging the pie and making it possible to support the majority of the population.

“Rather than saying the Nanyang United Trading Company resembles an ancient dynasty under Confucian governance, it would be more accurate to say that it resembles the Great Xuan Dynasty under Daoist governance.

“There is the same underlying trajectory here: technological development, venturing overseas to seek cheap resources, and then expanding. However, during the expansion process, technological advantages begin to erode, leading to a gradual loss of cheap resources, rising costs, and the difficulty of moving from extravagance to frugality. In the end, the entire system begins to collapse.

“The Great Xuan Court is still in its expansionary phase. Compared to surrounding regions, it continues to enjoy unmatched technological advantages. The people of the Great Xuan Dynasty can build ironclad ships, firearms, artillery, glass, and steel, while the people in Nanyang lack such techniques. So, Nanyang can only supply raw materials such as ore, timber, and rubber, things that require no advanced technology and cannot fetch high prices. They also need the Central Plain’s high-end products, so they can only exchange vast quantities of cheap raw materials in exchange for Great Xuan goods. These are the Great Xuan Dynasty’s cheap resources.

“However, in this process, the Nanyang people also gradually began to learn the Great Xuan’s advanced technologies. One day, they will catch up to the Great Xuan Dynasty. At that point, for various reasons, such as proximity to raw material sources and cheaper labor, the Great Xuan Dynasty will relocate manufacturing industries from the Central Plains to Nanyang, indirectly accelerating Nanyang’s technological progress. This is how technological advantages begin to erode.

“On the surface, the Great Xuan Dynasty appears to have escaped the 300-year cycle of rise and decline. But in reality, such cycles must still exist. They simply no longer resemble those of the old Confucian dynasties, unless Great Xuan technology can continue to advance indefinitely and maintain its advantage forever. But we all know this is impossible. A person’s cultivation will reach a limit, and when that happens, they must ascend and leave this mortal realm. But can the Great Xuan Dynasty leave this world?

“One day, there will no longer be any difference between the Central Plains and Nanyang. The Nanyang people will directly manufacture the things they want, instead of exchanging cheap raw materials for Great Xuan’s products. At that point, Great Xuan will lose its source of cheap resources.

“The Nanyang United Trading Company appears to be a Nanyang company, but in reality, it is a company rooted in the Great Xuan Dynasty. The underlying logic is the same. The Nanyang United Trading Company is not merely engaged in transit trade. It relies on technological advantages and a vast supply of cheap resources to achieve rapid growth.