The only option left for the British was to negotiate for countries to constrain the size of their navies.

Britain began to propagate that such an endless arms race would only drag down the economies of various countries, and everyone would be finished together.

Britain's strong voice and the fact that European countries are indeed unable to support the arms race, they responded positively, and Britain proposed to conduct a negotiation on naval arms limits in London, and through peaceful negotiations, to determine that each country has the armament to maintain its own maritime security, instead of desperately arming itself in panic as it is now.

France, Germany, Austria-Hungary, Italy, Greece, Russia, and other countries involved in the arms race were willing to participate in the London Naval Conference, but at this time China refused to participate, and China had no interest in it, telling the British that China would build its own army according to its own interests and would not accept any restrictions.

For Britain, the arms race is an economic disaster that cannot be sustained for a long time, because although Britain has introduced a large number of new taxes, turning the temporary personal income tax and inheritance tax into regular taxes, the British tax revenue is only 100 million pounds a year, and the non-tax revenue of the post office and the telegraph is only 20 million pounds. This fiscal revenue, in the whole world, is quite large, second only to China, but in the face of the naval race, the British cannot support it for a long time.

On the whole, the British have played a pretty good financial game, and in the whole world, it is a must. They were able to defeat all their opponents step by step and grow into world hegemons, and their financial system was a great achievement.

Historically, after the Napoleonic Wars, Britain owed 860 million pounds in debt, and through policies such as tax increases during the war, they raised their fiscal revenue to 71 million pounds a year, except for Britain, the rest of Europe combined, did not have this much income. But after that, instead of continuing to maintain high taxes, Britain gradually lowered taxes and cut debt. In 1815, just after the end of the Napoleonic Wars, Britain spent £34.58 million a year on interest on its debts alone. By 1827, it took 12 years for Britain to repay its debt to a level of £2,900, reducing its debt while reducing taxes to £51 million.

The annual deficit was as high as £5 million, and by 1841 there was still a deficit of £2 million a year, and in 1841, Prime Minister Peel introduced personal income tax, which basically balanced the finances. Of course, the debt still exists, but the fiscal can already support it, and the fiscal balance is balanced.

But in this history, in the 1840s, Britain fought a world war with China, not only in the war with huge financial expenditures, but also in order to protect India and Canada after the war, paid China a billion pounds in reparations. Now, 30 years later, the British's clever fiscal tactics have made it easy for them to rebalance their finances. But I don't want to break out again at this time, and Britain can still support it in the short term, because the British are really rich.

Although China performed well in the industrial revolution, because of its huge scale and steam engine power revolution, it was not possible to make China completely industrialized and urbanized, but steam power was more than enough for the British to complete modernization, Britain not only completed industrialization and urbanization, industrial income far exceeded agricultural income, and the urban population also exceeded the rural population. And economically, he has been far behind his competitors, and even evolved into the post-industrial era, half a step into the era of financial society.

Britain has a large and wealthy population, not only does not need to engage in agricultural activities, but even get rid of any productive activities, only need to invest to ensure a good life, these people are despised as rentiers, but they are a sign of the upgrading of British industry to the top of the world.

In the early 19th century, when British industrialization came to an end, the number of British debtors was less than 250,000, or 2% of the British population, which was already exaggerated compared to other countries, and the whole world, except the Netherlands, which was an old-fashioned country with commercial capital. And this 2% of the population has more than twice the wealth of the British national income. The reason why there is such a concentration of wealth is that although Britain continued to spend huge amounts of money in the war, these expenditures were in the form of debt, and finally enriched the 2% of investors through government taxes.

Therefore, every time the British government owes a debt, it actually enriches its own investors. Let these people get richer and richer, and the income of these investors accounts for about 7% of the national income, so to speak, investment, is already the largest industry in the UK. They are not only investing in their own businesses and industries, but also investing heavily in emerging countries such as Germany, the United States, and Sweden, and making these countries work for them. The faster these late-industrial countries develop, the faster their wealth will grow.

Of course, their main income comes from the interest on the debt of the British government to their prefect, and the money that the government receives from all the people through taxation ends up in their pockets. By 1822, interest income from national debt accounted for about half of the British government's total public expenditure, more than two-thirds of the country's indirect consumption tax revenue. By 1870, the proportions had not changed much, at 1/3 and more than half, respectively. Commonly used necessities are taxed to pay interest to a small number of people.

Of course, this is bound to provoke strong social discontent, especially at a time when the workers' movement is booming, and some critics have lashed out at this fiscal policy, angrily denouncing the entire country for being ruined by "those who lend money to the people to maintain this sinful social system...... This includes borrowing and lending, stockbrokers, and savings brokers...... Jews and all tax-payers" in their hands.

Despite the criticism of the political forces and social elites who represent the people at the bottom, this fiscal policy is still the most advanced in the world, and wealth is concentrated in the hands of financiers and Jews, but wealth has not disappeared, and as long as their fiscal system continues to exist, their wealth is not the data on the bank books, but represents real wealth.

Therefore, the wealth of the British people has always existed, and it has been increasing, the wealth accumulated by the economy has not disappeared, and the wealth has not disappeared, it will inevitably be used by the government in some way, and the policy that causes the accumulation of these wealth is the British debt fiscal policy, so through the issuance of bonds and other means, the wealth from the rich is borrowed again into the hands of the government, and the British government has the ability and method.

But the problem is that one year or two can be sustained by borrowing, but the arms race seems to have no end in sight.

Britain needs to borrow to wage an arms race, but China does not. Compared with Britain's highly indebted fiscal balance, China's finances are more benign, because China has won every war, so their military spending has been paid in the end, the government itself does not have much financial pressure, and conservative government officials, but has been maintaining a fiscal policy of living within their means, which makes the Chinese government almost no long-term foreign debt, some only short-term, to balance the deficit debt, the total amount has been less than 100 million pounds, relative to China's fiscal revenue, this money can actually be paid off in a year or two.

Compared with the British, who taxed almost everything they could tax in order to maintain a tax revenue of 100 million pounds, China's tax rate is relatively lower, but the tax revenue is ten times more than that of the United Kingdom, as high as 200 million taels of gold a year, equivalent to 1.1 billion pounds. In terms of non-tax revenue, China earns more every year, because China occupies nearly half of the world's land area, and these lands have huge mineral resources, and they can earn about 10 million taels of gold every year through the auction of mineral development rights, although the proportion of these non-tax revenues is not as high as that of the United Kingdom, but the total amount is still huge.

With 1.1 billion pounds of fiscal revenue, China can maintain its naval race with Britain without even having to issue relevant bonds and save some money from elsewhere. Although China still needs to maintain a huge army service system, as long as the overall tax rate is raised to the level of the United Kingdom, China's tax revenue can increase to 300 million taels of gold, equivalent to 1.5 billion pounds, more than enough to cope with the arms race. However, China does not need such a high income, and only slightly increased the level of taxation by one-tenth, which is still just over two-thirds of the British tax rate, and the fiscal revenue of 1.2 billion pounds is enough to sustain the arms race for a long time.

For Britain, the arms race is a desperate gamble under debt, but for China, this is just normalization, so how can Britain compete with China?

Therefore, Britain hopes to constrain the naval armament level of various countries through negotiations, and Britain is even willing to accept that its own naval level is lower than China's, as long as it maintains two-thirds of the level in China, it is enough to protect Britain's security. But China's refusal to negotiate has left Britain in a desperate situation.

If there is to be a war, it is advantageous to fight early than later, but the naval war between Britain and China is a rare naval war in which Britain has a disadvantage, and Britain must take special measures and formulate a more reasonable plan to make up for these gaps.

The British Cabinet asked the Admiralty to formulate tactics, and the tactics sent by the Navy surprised the Cabinet, because the Navy chose to attack rather than defend when the number of warships was inferior. Instead of shrinking into the Strait of Gibraltar and blocking the Chinese Navy in the Mediterranean, it took the initiative to destroy Chinese bases in the Mediterranean.

Then the blockade of the Dardanelles, the Bosphorus, and the Suez Canal kept the main forces of the Chinese naval fleet out of Europe. It only took a small military force to blockade these narrow waterways, after which the Mediterranean Sea reverted to becoming the inland sea of the British Empire's navy. It can also allow the Royal Navy of the British Empire to deploy troops to carry out wars against China around the world, destroy the foreign trade of the other side, and force China to negotiate peace.

This plan to take the initiative to attack was already surprising, but the cabinet found that this was still the most conservative plan of the navy, and the British navy was a very offensive force, and they were accustomed to attacking and attacking. One of the radical plans is actually to directly look for the main force of the Chinese Navy for a decisive battle.

The British Navy frantically believed that they could destroy the main force of the Chinese navy, seize sea supremacy, become the maritime hegemon, and directly make China surrender, rather than make them accept negotiations.

After discussion, the Cabinet divided these plans into conservative Plan A and Radical Plan B, and then had the Navy conduct corresponding exercises to refine these plans, and finally worked out a more detailed battle plan, and finally sealed the plan, which would be activated as soon as the war began.

At the same time, China's foreign naval divisions also have a combat plan against Britain, and the sole purpose of this plan is to directly destroy the British navy, escort the land force to land on the British mainland, and destroy Britain, the only country that dares to confront China, once and for all.