1899.

Paraguay, Asuncion.

After experiencing the Paraguay War, Paraguay has now fully recovered, with its population returning to pre-war levels in the 1880s.

The only unfortunate aspect is that after the Paraguay War, Paraguay is even further from the sea, but through the excellent waterways of the Parana River and its tributary the Paraguay River, Paraguay's internal and external trade have not been greatly affected.

At the fork of the Parana River and the Paraguay River, the East African Paraguayan commercial fleet is in the process of diverting.

"The Aaron Green, Ovium, and Balajinma are headed to Eastern City, while we head northwest into the Paraguay River and then reach Paraguay's capital, Asuncion," Captain Corred said to the apprentice crew members.

"In East African and Paraguayan trade, Paraguay's capital Asuncion, and Paraguay's second largest city, Eastern City, are our main destinations. In the future, you will probably be shuttling between these two cities and East Africa."

"Captain, is there anything special about Eastern City?" someone asked, mainly because East Africa also has an Eastern City on Bemba Island in the Indian Ocean.

Captain Corred explained, "Paraguay's Eastern City is located on the banks of the Parana River and should be called Est City in the local language, but Est City means Eastern City. As for our domestic Eastern City in the Indian Ocean, the concepts are completely different. Paraguay as a small country, has a small population and a modest economy, so our trade with Paraguay is mainly conducted through these two barely passable sized cities, Asuncion and Eastern City."

Although Paraguay's economy and population have emerged from the shadows of war, it does not change the reality of Paraguay as a small country with a small population. Paraguay's population is now just over seven hundred thousand, with only Asuncion and Eastern City having populations of over fifty thousand.

"Asuncion is the capital of Paraguay and across the river is Argentina, so Asuncion is effectively an important trade hub city for East Africa, Paraguay, and Argentina."

In fact, Asuncion was not originally across the river from Argentina, but after the Paraguay War, the south bank of the Paraguay River was ceded to Argentina, and across the river is what used to be Paraguayan territory.

However, after the Paraguay War, Paraguay's population had been almost wiped out, so there were not many former Paraguayans left on the ceded land. Now Paraguay's national population is mainly composed of three major ethnic groups: Italians, Native Americans, and Paraguayans living together.

Captain Corred continued, "In comparison, Eastern City is even more extraordinary. Eastern City is located at the confluence of the Parana River and the Iguazu River, adjacent to Argentina and Brazil, the three countries are divided by the Parana River and the Iguazu River, making Eastern City naturally a prosperous hub for commerce. Across from Eastern City are Brazil's Iguazu Falls City and Argentina's Iguazu Port."

East Africa only needs to transport goods to Paraguay's Eastern City, then there's an opportunity to continue selling these goods to Brazil and Argentina. Of course, this mostly falls to the Paraguayans.

Paraguayans serve as middlemen and make a lot of money, which is one of the main reasons that the economies of Asuncion and Eastern City swiftly recovered and accelerated their development.

"Paraguay was the earliest window for East African and South American trade, making a significant contribution to the export of East African goods, and also witnessing the friendship between the two countries," Captain Corred said with a proud tone.

As he spoke, the fleet, with Captain Corred aboard, had completed its diversion, and the Kaguan, along with the other three ships, sailed into the Paraguay River, marking the fleet's official entry onto the border between Paraguay and Argentina,

Of course, the fleet did not head directly to Asuncion but stopped at Formosa Port, originally Paraguayan territory, established by Argentines in 1879.

East African merchant ships are one of the main sources of imported goods for the Formosa region in Argentina, and the East African Paraguayan trade commercial fleet only left one merchant ship there.

After all, Formosa is just a small border town in Argentina, with a purchasing power that can't compare to Paraguay's capital Asuncion, and their goods are also hard to liquidate.

Argentina and Paraguay's main export commodities are beef and wheat as agricultural products, while East Africa itself is a major agricultural and pastoral country, so the trade activity in the region is not very high.

However, due to the unique geographical environment, Paraguay and Argentina's beef and wheat are of higher quality than those of East Africa, so East Africa does have some demand for their agricultural products.

The East African commercial fleet exports local beef and other agricultural products directly to Europe, or transports them back home to earn a small profit.

Soon, the East African Paraguay commercial fleet arrived at Asuncion City. With the East African merchant ships entering port, many Paraguayan merchants had been waiting for a long time.

The main goods East Africa exports to Paraguay are textiles, electrical equipment, and automobiles. Of course, the latter two do not sell very well since, at this time, cars are considered luxury items, and only a very small upper-class population in the small country of Paraguay can afford them, as for electrical equipment, sales are better, but such are hardly on the rise in Europe and America, let alone in a marginal South American country like Paraguay.

Of course, no matter how small the Paraguayan market is, it's still a market. During Lopez's time, telegraphs were laid, and railways were constructed in Paraguay, so the local people were relatively receptive to new things.

However, the Paraguay War interrupted Paraguay's development path, including its once "most developed" industry in South America, after which East Africa and Austria-Hungary squeezed into the Paraguayan market.

Today, 40% of Paraguay's electrical equipment comes from East Africa, with France coming in second, and finally Austria-Hungary.

Before the Paraguay War, Paraguay's largest trade partner was France. Lopez graduated from France and considered Napoleon as his idol. After Lopez's death, the Paraguayan government's policies changed, allowing East Africa to gain its entry point.

However, initially, it wasn't East Africa doing business with Paraguay, but the Heixinggen consortium, as East Africa did not possess such capabilities at the time.

Later on, as East Africa's economy and industrial strength grew, it began to leverage the Heixinggen consortium's trade channels to gradually build up its trade scale with Paraguay.

After entering the 1890s, with the rapid development of East Africa's industry, now even without lowering prices, East African industrial products can compete with those from other countries. In these two fields, electrical equipment and automobiles are priority choices for Paraguay, and in the global market, East African manufacturing belongs to high-end products with strong competitiveness.

Of course, in the 19th century, even the weakest countries, by striving to develop their industries, wouldn't lack markets. The industrial production capacity in the 19th century was limited, with a high demand for industrial products.

Although Paraguay is a small country with a small population, it has a strong per capita consumption ability. After the Paraguay War, in order to quickly recover its economy and population, Paraguay's economic policies were relaxed, and original social classes were broken due to the reasons of the war, offering ordinary people many opportunities. Even just developing agriculture, the income was quite considerable.

With the increase of Italian immigrants, Paraguay was provided with a significant workforce for commerce and industry, resulting in Paraguay's economic development being relatively good now, even surpassing the pre-war period in agriculture and industry.

After all, many Italian immigrants who fled to Paraguay originally came from more developed regions of Italy like Venice, which itself is an area rich in a commercial and industrial atmosphere.