The ins and outs of the public-private partnership of Minfeng Paper Mill

2022-07-14 0 By

| ho freeman wen paper mill (hereinafter referred to as “freeman”) is one of the largest paper mill, zhejiang is in east China paper industry in the relatively large size, equipment is advanced enterprises.However, in old China, “Minfeng” was subjected to the double oppression of foreign economic aggression and domestic bureaucratic capital, several times to the brink of despair.The company’s history in old China began as Wellhope Paper Mill.In 1923, Chu Fucheng (Huiseng) and Chu Fengzhang, father and son of Jiaxing, formed Hopeng Paper Co., Ltd. and invested 360,000 silver yuan to buy land and set up a factory in Jiaoli Street, Dongmen of Jiaxing.In 1925, Wellhope Paper Mill was put into operation, mainly producing yellow paperboard (commonly known as Ma Shiou paper).When the Japanese paper merchants learned that Wellhope was going to produce yellow cardboard, they immediately called a meeting of local paper merchants in Shanghai before it was put into production. They slashed the price of yellow cardboard by 40% and sold it on credit. They sold enough yellow cardboard to supply the market for two years, trying to choke Wellhope to death in its cradle.Therefore, when “Wellhope” put into production after the production of yellow cardboard could not be sold, huge losses, capital erosion, debt.In the winter of 1928, in order to repay his debts, Chu fucheng transferred “Wellhope” to Zhu Meixian and Jin Runxiang, well-known figures in Shanghai’s industrial and commercial circles, at a price of 285,000 yuan.In the spring of 1929, he began to organize Minfeng Paper Co., LTD., with Zhu Mei as the manager and Jin Runxiang as the assistant manager. He raised 500,000 yuan to set up minfeng paper mill.The yellow cardboard with the trademark “Sailing boat” was manufactured in February 1930.”Minfeng” in the initial stage, the main production of yellow cardboard, then gradually increase the fancy cardboard, a single product into a variety of products.Capital was built up because of good management and low wages paid to workers.In 1935, the capital was increased by 750,000 yuan to expand the first cigarette paper machine in China.In the first half of 1937, the capital was increased 1.75 million yuan again to expand the production scale.Before the outbreak of the War of Resistance against Japan, minfeng invested 3 million yuan successively.In 1938, under the occupation of the Japanese invasion army, Japanese businessmen asked for “cooperation” with “Minfeng” through the German business Tianli foreign firm, but Zhu Meixian resolutely refused.Japanese businessmen pestered threats to him, Zhu left Shanghai to shelter in Ningbo.Later, Oji Paper Co., Ltd. seized the Minfeng paper factory through the Japanese occupying army. After 1942, it changed to forced lease, and produced a large number of “Sun brand” cigarette paper with the equipment of “Minfeng”, which sold well all over the country. Japanese paper business consortium made a great fortune from “Minfeng”.In June 1945, with victory in the Anti-Japanese War in sight, Kim yoon-shang seized the opportunity to prepare for the recovery of Minfeng.When Japan surrendered, Jin made a concerted effort to recover the minfeng paper mill from the Japanese before the Kuomintang “plunder” officers came from the rear.At that time, the business people believed that the world would be peaceful and they could live and work in peace.However, shortly after the war, the Yangzi company, which belonged to the bureaucratic capital, took advantage of its privilege to import a large amount of American cigarette paper arbitrarily and dumped it at a price lower than the cost of The cigarette paper produced by Minfeng. No one paid any attention to the cigarette paper produced by Minfeng, and the inventory of the cigarette paper produced by Minfeng was as high as 6000 boxes (including the inventory of Huafeng paper Factory).Faced with the grim situation of extinction, Jin Yunxiang and others knew that the confrontation was weak and had to turn over some cultural paper to make ends meet.Although there was a short-term recovery, but in the winter of 1948, yangzi company repeated the old line, “Minfeng” suffered a second time, cigarette paper inventory piling up.In order to survive, he bribed an official of the Central bank of the Kuomintang at the cost of $8,000 to secure a batch of orders for banknote printing paper, which only maintained the half-closed situation.Zhu Peinong, deputy director of Minfeng paper Factory, recalled the history of that period and said: “Our factory could not even pay the wages of workers for several times, relying on debt to survive. The liberation of Jiaxing was also the beginning of the rebirth of Minfeng paper Factory.”On May 7, 1949, When Jiaxing was liberated, Minfeng Paper Factory had three paper machines and more than 1,000 workers (including 300 temporary workers).The Party has adopted a policy of protection and support for private industry and commerce that is beneficial to the national economy and people’s livelihood. Immediately after liberation, the Party dispatched military representatives and working groups to “Minfeng” to keep track of the situation of the enterprises and implement the policy of “developing production, flourishing economy, balancing public and private interests and benefiting both labor and capital”.Around the end of 1949, party organizations were established (minfeng paper Mill branch of the Communist Party of China, later for the industrial Committee, are not open).”Minfeng” due to inventory overstock of 8,000 boxes of cigarette paper (including “Huafeng” part), worth more than $1 million, capital shortage, production has been affected, the government through bank loans to support.The state strictly prohibited the import of foreign cigarette paper, “Min Feng” cigarette paper has a broad market, all inventory backlog quickly sold.The government gradually rescued Minfeng from its predicament.However, the capitalists who held the real economic power in the Minfeng Paper Co., Ltd. located in Shanghai did not obey the leadership of the state-owned economy, and they put cigarette paper into the foreign market in order to escape the management and supervision of the government.The stipulated price in October 1949 was 300 yuan per case, but they raised it to 930 yuan, more than 300% higher.At the same time from around the high price of raw materials, a large number of stockpiling.From the middle of March 1950, the government strengthened financial regulation and banned the speculative market, dealing a heavy blow to speculative capital, and prices fell accordingly.After April, when the price stopped rising, “Minfeng” snapped up the hoarded raw materials at high prices, but the purchase price was too high, artificially raising its production costs, and the company suffered losses.In addition to the reasons mentioned above, there were other factors that contributed to the extremely severe financial difficulties of The Company in 1950.First, the organization is overstaffed and overstaffed.”Minfeng” then in Tianjin, Guangzhou, Hankou, Nanjing and other eight cities have offices, the company expenses;Second, there is a 25-fold difference between the maximum and minimum wage in the enterprise. Relatives and friends of shareholders account for a large proportion of employees. Most of them receive high salaries regardless of their ability and contribution, which increases the burden of the enterprise.Third, the company’s general manager and other powerful figures, arbitrary spending and occupation of public funds.Due to the above reasons, at the beginning of 1950, “Minfeng” owed us $150,000 for equipment and materials payable externally, and over RMB 700,000 for loans owed internally. Since April, it could not even pay employees’ salaries on schedule, leaving general manager Jin Runxiang at a loss.The day before the factory set up a labor and capital consultation meeting, Unexpectedly and deputy general manager Zhu Peinong quietly left Shanghai to Hong Kong, deputy general manager Chu Fengzhang acting general manager.According to the instructions of the CPC Zhejiang Provincial Party Committee, the relevant provincial and municipal departments and enterprise party organizations, on the one hand, mobilized and educated Chu Fengzhang, and he came forward to send a letter to inform the import companies, foreign banks and offices in Hong Kong, not allowed Jin and Zhu to handle the goods stored in Hong Kong without authorization (” Min Feng “, “Huafeng” materials stored in Hong Kong about $1 million).On the other hand, through the factory trade union organization, to the workers to explain the problems existing in the enterprise, the propaganda of the Party’s policy, launched the whole factory workers to take the initiative to undertake difficulties, united capital to do a good job in production.Since May 16, 1950, it has been decided by the collective bargaining council that any employee whose basic salary is 100 yuan or more will be given a discount.The majority of workers to automatically reduce wages to help enterprises tide over difficulties, finally make the enterprise economic situation has improved.Jin Runxiang was invited to zhejiang Provincial People’s Congress for the purpose of education.After the news was published in the newspaper, the factory labor union sent a telegram to Jin Runxiang and Zhu Peinong to welcome them back to the factory.At first, Jin and Zhu were very dissatisfied with Chu fengzhang’s action to stop them from disposing of the goods stored in Hong Kong. They once convened two meetings with directors du Yuesheng, Jin Tingsun and Yu Zuoting to discuss countermeasures. Wang Rulun, who was responsible for foreign orders, sent all the contracts for foreign orders to Hong Kong to prepare for the opportunity.Later, Jin Runxiang saw the news that he was invited as a special representative, and when he realized that the situation of the company was improving again, he took the initiative to call and contact him. The company immediately sent Zhu Peiyuan and other three people to Hong Kong to promote their return.Under the influence of the party’s policy of “unity, education and improvement”, Jin and Zhu returned to Shanghai in early July.(To be continued,,)–END