Compared to the militaristic style of conversation from the Army faction led by Katsura Taro, the Navy faction's manner of speech appeared much more refined. After all, they were considered quite a Westernized group in Japan—people who would drink milk and eat bread. Takahashi Korekiyo had studied abroad, so naturally, he was quite Westernized himself. He knew that his visit here today was essentially a "work report" to these bigshots who supported the Takahashi cabinet. Although Japan's recent economic situation was good, this was precisely the time to be cautious. If the economy were in bad shape, many wouldn't dare to take over the position of Prime Minister. But once the economy turned around, those tempted by the position wouldn't just be from the Army faction. There was more than one or two people waiting in the wings to stab him in the back.

Facing this group from the Navy faction, fellows who were quite sensitive to current technological developments, Saionji Kinmochi raised the point that the People's Party's attitude toward Japan's hot bulb engine trade was definitely not particularly friendly. Of course, this was also Takahashi Korekiyo's opportunity; if he could demonstrate his economic acumen, it would actually be easier to establish authority during a crisis.

The hot bulb engine issue was just a microcosm of current Sino-Japanese trade. For the Japanese government, it wasn't just hot bulb engines they were buying from the People's Party; they also had to import heavy chemical products like the "three acids and two bases," and even hemp ropes and cables. If the government was doing this, the scope of smuggling trade by Japanese "unscrupulous merchants" included all sorts of textiles, and they would even find ways to import daily necessities like needles and thread from China. After all, Japan had a small territory and scarce resources. The People's Party base areas, on the other hand, possessed vast land, and the yield of various crops was enormous. Just taking buttons made from coconut shells and brushes made from coconut palm fibers as an example, the People's Party could produce seven or eight hundred million buttons of various types and tens of millions of brushes of various types a year, at prices that were outrageously cheap. If one was willing to pay a 70% deposit, the People's Party's factories even accepted custom product orders. No matter how much Japan squeezed its laborers, it was impossible to lower prices to such a level.

Faced with the People's Party's cheap hot bulb engine trade, it wasn't that Japan hadn't tried to imitate them. Any industrial nation is a nation of imitators; in this regard, there is no difference between early and late-developing industrial nations. If one cannot learn humbly but instead thinks "I am number one in the world," a destructive end is inevitable. The Japan of 1915 wasn't unable to imitate the hot bulb engines mass-produced by the People's Party, but like with other products, Japan couldn't drive the price down to the People's Party's level. In fact, as early as 1913, Japan had begun to import hot bulb engines manufactured by the People's Party on a relatively large scale.

In this era of high shipping costs, importing hot bulb engines from the United States or Britain was an extremely uneconomical affair. Actually, Japan didn't need to feel ashamed at all, because the hot bulb engines for the entire Western Pacific were basically provided by the People's Party. Not only were the Japanese buying them, but the British and Americans in their Western Pacific colonies were also buying them, and the purchase volume of the British and Americans was even larger than Japan's.

Takahashi Korekiyo was a Japanese economic expert, and he had his own small team conducting research on economic phenomena. A force like the People's Party rising so suddenly couldn't help but draw Takahashi Korekiyo's attention. A power with a population of over a hundred million and a territory several times that of Japan rising so abruptly—if the People's Party's experience could be found, it would be extremely beneficial for a country like Japan that needed rapid expansion.

After listening to Saionji Kinmochi's remarks, Takahashi Korekiyo slowly replied, "I have already sent people to collect information on the People's Party's mode of industrial development. This mode is truly difficult to explain. Although the People's Party also pays great attention to foreign trade, their attention seems to be focused domestically. You all know the fixed-quota trade agreements implemented by the People's Party; they publicly state they do not pursue a trade surplus, but instead go all out to expand the scale of production. Such measures are vastly different from Japan's."

At first hearing, these words felt a bit far off-topic, but the attendees were all people of status. Naturally, they wouldn't simply interrupt but waited quietly for Takahashi Korekiyo to finish speaking.

According to intelligence collected by Japan, the People's Party's foreign exports were entirely for the purpose of driving industrial scale. Because the scale of exported products was very large, the People's Party's related industries were all developing quite well. Of course, given the People's Party's currency which had zero gold as collateral, if the People's Party wanted to export its own currency, no country would accept it. The result was that the number of factories in the People's Party controlled areas increased rapidly, and production capacity continued to improve.

After hearing Takahashi Korekiyo finish, Saionji Kinmochi asked, "What do you see in this, Takahashi-kun?"

"The People's Party can be viewed as a single large conglomerate. The divisions of labor within this conglomerate are different, but they are completely under the control of the People's Party and receive support from the People's Party's central bank. Although other individual enterprises exist, they can be completely ignored," Takahashi Korekiyo replied.

"Then do you mean, Takahashi-kun, that the People's Party is learning from Japan's path?" Saionji Kinmochi was still somewhat puzzled.

Japan had also engaged in state-owned enterprises at the beginning. After the state-owned enterprises had reached a preliminary scale, the Japanese government sold the enterprises cheaply to various zaibatsu (conglomerates), implementing a partition of Japan's state-owned enterprises. Saionji Kinmochi thought Takahashi Korekiyo was likely thinking of this matter.

"Not so," Takahashi Korekiyo replied briskly. "Recently, the hot bulb engine matter has had quite a reaction domestically, and I have analyzed this as well."

Hot bulb engine technology was not complex. Japan wanted to use domestically produced hot bulb engine products to replace imported People's Party hot bulb engines, but Japan's steel output was insufficient, so hot bulb engine output naturally couldn't go up. Moreover, production and sales also involved the issue of profitability for the manufacturers; the price could not compare with the People's Party no matter what. The war in Europe had brought Japan quite a few orders, and Japan, with its family-run small factories as the main production mode, greatly needed power sources like hot bulb engines that were simple to operate and maintain, and not picky about fuel. Addressing Japan's situation, the People's Party also had a series of matching accessories, from gas generators that provided fuel to small generators that the hot bulb engines could tow; all were low-priced, durable, and rugged. Japanese goods were originally the exemplars of "low quality, low price," yet while the People's Party's hot bulb engines surpassed Japanese similar products in quality, the price was actually only 80% of the hot bulb engines produced domestically in Japan. Even selling them as scrap iron wouldn't result in a loss.

The Japanese government had vigorously cracked down on this at first. Consequently, first there were black-hearted Japanese merchants who disregarded life and death to smuggle using small boats, and later it even reached the point where certain shipping companies would implement large-scale smuggling operations every few days. Faced with a situation where production capacity needed to be vigorously expanded, the Japanese government was forced to reluctantly include hot bulb engines in the trade list. One had to know, Japan was just like the United States, both major imitators of mechanical goods. And the Japanese market had never been open to this degree for a certain industrial product.

Hearing this depressing analysis, the attendees, including Saionji Kinmochi, all fell silent. Calculated from an economic angle, Saionji Kinmochi knew that importing large quantities of People's Party hot bulb engines would have an immediate effect on the Japanese economy; orders from Europe would allow these factories to easily earn back their capital. However, letting Chinese industrial products be so rampant in Japan made Saionji Kinmochi feel as uncomfortable inside as if he had eaten several pounds of green-headed flies.

Takahashi Korekiyo had personally approved the import of People's Party hot bulb engines, so he couldn't help but offer an explanation for his own actions. Seeing that the various bigshots remained silent, Takahashi Korekiyo felt much more relaxed inwardly. "Gentlemen, the People's Party has given us a very good line of thinking: enterprise scale must be large enough. This is also the reason for the People's Party's success."

Those inclined toward the Navy Ministry were all very sensitive to the machinery industry; industrial capacity meant national power. Since Takahashi Korekiyo mentioned an idea for industrial construction, everyone was willing to let this Japanese economic expert analyze it a bit.

Takahashi Korekiyo had gained time to continue promoting his own concepts. Since the People's Party base area was so close to Japan, Takahashi Korekiyo also wanted to find out exactly what methods the People's Party used to lower costs. The results of the inquiry surprised him greatly: the People's Party neither squeezed the workers to death nor developed any earth-shattering technologies. The sole reason for the lowered costs was that the People's Party's industrial sector implemented universal parts—for different equipment, there was a series of standard screw types. The characteristic of universal parts was to further lower costs, making larger-scale socialized mass production a possibility.

This simple principle was precisely what Japan could not imitate. The People's Party could use seven or eight large screw factories to provide various screws to the People's Party's entire industrial sector. Each screw factory had over a thousand workers, working six days a week, eight hours a day. Various screws, bolts, washers, and rivets—tens of millions were produced a year. Although Japan considered its industrial scale larger than China's, their factories of small family scale determined that these small enterprises all hoped to follow the "small but complete" path. Like farmers, they would try their best not to buy what they could make themselves. What could be simply patched up, they would try their best not to spend huge financial resources to painstakingly improve that tiny bit of precision. But taking mechanical equipment like the hot bulb engine, which was already considered "big, clumsy, and black," as an example, the accumulation of several small errors could cause terrible consequences. If precision was increased by 1%, the profitable price acceptable to the enterprise might have to increase by 20% or even 40%; Japanese enterprises absolutely would not do such a thing.

Japanese enterprises weren't willing to do this, but the People's Party was. This was one of the important reasons why Japanese people of insight felt fear toward the People's Party. According to the situation Japan understood, the proportion of universal parts on the hot bulb engines produced by the People's Party exceeded 30%. Roughly parts from a dozen factories were used on a single hot bulb engine, whereas for similar Japanese products, it was at most two or three enterprises cooperating in production. Just this single comparison made Japanese products fundamentally unable to compete.

The result of waiting for so long was actually "Japanese products cannot compete with the People's Party"; this couldn't help but make the attendees feel extremely surprised. Before anyone could speak, Takahashi Korekiyo gave the final conclusion. "The People's Party has the power to order enterprises to adopt what types of universal parts. On this point alone, we are already unable to compare."

"Is Takahashi-kun preparing to learn from the People's Party?" Saionji Kinmochi finally somewhat understood what Takahashi Korekiyo wanted to say. It was just that Saionji Kinmochi had said not long ago that the People's Party wanted to learn from Japan's move of selling state-owned enterprises to private individuals; now encountering a potentially opposite conclusion, Saionji Kinmochi was a bit disappointed.

"Whether to learn from the People's Party can be discussed later, but the People's Party is destined to be the enemy of our Great Japanese Empire. We cannot take them lightly. From this perspective, we actually should support the Beiyang government," Takahashi Korekiyo gave his own conclusion.