At the beginning of 1919, a large industrial and commercial delegation of the Republic of China, headed by Liang Qichao, Minister of Finance, Zhang Guogan, Minister of Industry and Commerce, and Cao Rulin, Minister of Communications, arrived in Vienna. According to the plan proposed by Li Haidon, the Austro-Hungarian government and the Beiyang government initially worked out a large-scale investment aid plan to promote China's industrialization process.

In fact, in the early years of the Republic of China, China's industry and commerce had been developing rapidly, especially during the European War, and both bureaucratic capital and national capital had a good momentum of prosperity during this period. Therefore, historians often refer to this period as the "golden age" of China's modernization. However, the development of China's capitalist economy during this period was different from the industrialization path of early capitalist countries such as Britain, France, and the United States, and also different from that of later capitalist countries such as Japan and Russia, and had a distinct Chinese imprint. It can be said that the process of China's capitalist economic development is unique and has strong Chinese characteristics.

During the Beiyang period, China's industrial and commercial development had strong bureaucratic capital characteristics, and it also showed the rapid expansion and development of bureaucratic capital. During the period of Yuan Shikai, the bureaucratic capital represented by the Department of Communications has begun to take shape, and the early representative of the Department of Transportation was Liang Shiyi, who took Yuan Shikai as the backstage and made meritorious contributions during the period of supporting Yuan Shikai to become the president, serving as the Minister of Posts and Telecommunications, and later serving as the Secretary-General of the Presidential Office and the Premier of the Bank of Communications.

During this period, the Bank of Communications basically played the role of the central bank, undertaking the state's foreign loans, issuing treasury bonds, and acting as an agent for the state treasury. After the death of Yuan Shikai, Liang Shiyi was dismissed from the post of chief of transportation as a "remnant of the imperial system", and Ye Gongqiu was appointed as the chief of the Ministry of Communications.

The new Department of Communications joined forces with the bureaucratic capital backbone of Jiangsu and Zhejiang to form the Department of Political Science in the National Assembly, and the bureaucratic capital backbone in the south became the chaebol of Jiangsu and Zhejiang. The Department of Political Science, represented by Li Gengen, Zhang Qun and others, monopolized the financial business in North China, with the North Four Banks (Jincheng, Yanye, Mainland, and Zhongnan Bank) as a foothold. The chaebols of Jiangsu and Zhejiang are represented by Chen Guangfu, Xu Jixu and others, and are based on the five southern elements (China, Commerce, Shanghai, Zhejiang Xingye, and Zhejiang Industrial Bank). The bureaucratic capital of the Beiyang period not only operated the financial industry, but also invested in the industrial and mining industries under favorable circumstances. For example, Li Yuanhong invested in Zhongxing Coal Mine in Shandong, Zhou Xuexi opened Tongbao Coal Mine in Tangshan, opened Tianjin Huaxin Yarn Factory, the Department of Communications invested in Jingcheng Coal Mine and Longxi Coal Mine in Northwest Shanxi, and the Liuhegou Coal Mine invested in the New Transportation Department. Duan Qirui himself is one of the major shareholders of the Longbian Coal Iron Ore Company and the Bada Jiqì Coal Mine.

As the Beiyang government has adopted the development policy of "encouraging industry and commerce", it has successively formulated laws and regulations such as the Regulations for Rewarding Handicrafts, the Law on Guaranteeing Interest for Industry and Commerce, the Law on the Chamber of Commerce, the Guidelines for the Implementation of General Regulations for Merchants, and the Detailed Rules for the Implementation of the Company Regulations, which have promoted the development of domestic private capital, industry and commerce. During this period, the domestic national industry and commerce developed rapidly, and the new investment increased by 150 million yuan, and the scale expanded by about two times.

During this period, the field of national capital industry was mainly concentrated in light industry, especially the textile and food industry, which developed rapidly and expanded fivefold in scale. However, due to the lack of scale, China's national capital is mainly based on light industry, and the development of heavy industry is extremely slow.

In addition, under the influence of cheap labor, the national capitalists paid almost no attention to the key issues of industrial development, such as updating equipment, technological transformation, and adopting advanced technology, and in the end, they could not compete with foreign capital in the West with advanced technology and equipment and advanced production methods.

In view of the main problems in China's economic development, after repeated consultations between German and Austrian economic experts and the Chinese industrial and commercial delegation, the two sides worked out an aid plan focusing on the development of basic industrial sectors such as transportation, energy, electric power, industrial materials, mechanical processing, and chemical industry, and first established a complete set of relatively complete industrial systems.

According to the agreement, Germany and Austria will provide the Beiyang government with low-interest financing of about 15 billion marks (crowns) of infrastructure and industrial projects in the form of "state-guaranteed subsidies and bank contributions" over five years to support the national industrialization process promoted by the Chinese government. Half of the loans were provided to the Beiyang government in the form of cash, and the other half were provided to the Beiyang government in the form of machinery and equipment and personnel and technical support.

According to Igal's estimates, if this plan goes smoothly, then in the next five years, the total export volume of Germany and Austria to China will be at least 50 billion kroner, which is actually equivalent to one-third of the current annual industrial production of Germany and Austria, which will greatly promote the industrial development of the two countries.

In addition, similar investment plans were drawn up in the German-Austrian colonies in Ukraine, the Ottoman Empire, and Annam, and Africa.

If the plan goes smoothly, it will create a huge market of about half of the world's population, which is enough to compete with the huge colonial market controlled by Britain and the United States.

With the gradual return of the Chinese Workers' Corps to China, the Beiyang government now has nearly 350,000 troops in seven divisions, plus three divisions originally in the Beijing-Tianjin area, which has formed an overwhelming advantage over the warlords in various places. Xu Shuzheng has now begun to prepare to clean up the disobedient warlords one by one.

However, no one expected that he would first set his sights on Mongolia.

Mongolia declared "independence" in the early years of Xinhai, which was later changed to "autonomy" under the blows of the Beiyang Army. After the start of the European war, Tsarist Russia was caught in the European battlefield and was unable to look eastward, and the Kulen authorities felt that the situation was not good, so they proposed to abolish "autonomy".

In October 1915, Beijing appointed Chen Yi, the Chinese general office in Kulun, and the resident commissioner in Uriya, Sutai and other places to take up posts in Outer Mongolia. In July 1916, according to the Kyakhta Entente, a ceremony was held in Kulen for the Chinese President to canonize Zheshi Zundamba as Khutuktu Khan. In order to rectify the financial chaos of Outer Mongolia under the control of Tsarist Russia, Beiyang Zheng F set up the Bank of China in Kulun, and later opened up a road transportation from Zhangjiakou to Kulun.

It is particularly worth mentioning that in January 1916, under the pressure of patriotic public opinion, Jebtsundamba and the "autonomous" government of Outer Mongolia sent the "Minister of Justice," Nawang Nalin, head of the Chechen Khanate League, and "Deputy Minister of Military Affairs" Zamuyan Dorji to Beijing to present a large number of gifts to Yuan Shikai, President of the Republic of China, and the central government, expressing their willingness to abolish "independence" and restore the reunification of the country.

At this time, the princes of Outer Mongolia were fighting fiercely with the group of upper-class lamas headed by Jebtsundamba, and in order to seize power, the upper-class princes of Mongolia united and expressed their willingness to abolish "autonomy" in order to restore their dominance in Mongolia during the pre-Qing Dynasty. Chen Yi, the commissioner of the Beiyang government in foreign countries, quickly reported the situation to the central government.

At that time, in order to take advantage of the civil strife in Russia to recover China's northern frontier territory, the Beiyang government set up the Northwest Frontier Supervision Office, with Xu Shuzheng as the Northwest Frontier Supervision Office to coordinate the affairs of the Northwest Frontier.

After receiving Chen Yi's telegram, coupled with the need to deal with the hundreds of thousands of Chinese laborers and tens of thousands of Chinese laborers retreating eastward along the Trans-Siberian Railway, Xu Shuzheng simply led a division north to Kulen and forced Jebtsundamba to declare the abolition of Mongolian "autonomy".

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