The Treaty Port Economy in Modern China: Empirical Studies of Institutional Change and Economic Performance 1557290997, 9781557290991

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“These studies of institutional changes in China’s treaty port economies introduce the challenges and potential payoffs of understanding how institutions affect economic performance. With rich and diverse empirical material, they provide perspective on more recent Chinese economic reforms and the ways in which economic growth need neither intend nor result in prosperity for all.” —R. Bin Wong, University of California, Los Angeles

The Treaty Port Economy in Modern China

“Where previous generations of researchers sought to account for China’s failures, we now face the novel problem of explaining massive success. This volume offers a timely reappraisal of circumstances in China’s treaty ports, one of many legacies underpinning today’s economic boom. The emphasis on institutions, a topic that recent studies tend to sidestep, adds to the value of the lively empirical studies in this new book.” —Thomas G. Rawski, University of Pittsburgh

The Treaty Port Economy in Modern China Empirical Studies of Institutional Change and Economic Performance

So and Myers

SoMyersCoversFinal.indd 3 63851cov-IEAS_TreatyPort.indd 1

8/3/2011 5:40:01 PM

CRM 65

CENTER FOR CHINESE STUDIES

INSTITUTE OF EAST ASIAN STUDIES

INSTITUTE OF EAST ASIAN STUDIES UNIVERSITY OF CALIFORNIA ● BERKELEY

Billy K. L. So Ramon H. Myers

CHINA RESEARCH MONOGRAPH 65

Edited by

8/10/11 4:24 PM

Notes to this edition This is an electronic edition of the printed book. Minor corrections may have been made within the text; new information and any errata appear on the current page only. China Research Monograph 65 The Treaty Port Economy in Modern China: Empirical Studies of Institutional Change and Economic Performance Billy K. L. So and Ramon H. Myers, editors ISBN-13: 978-155729-154-7 (electronic) ISBN-13: 978-1-55729-099-1 (print) ISBN-10: 1-55729-099-7 (print) December 2016: “Map 1. The fifty-four treaty ports of China” and its corresponding table were added as pages xvi–xviii. Please visit the IEAS Publications website at http://ieas.berkeley.edu/publications/ for more information and to see our catalogue. Send correspondence and manuscripts to Katherine Lawn Chouta, Managing Editor Institute of East Asian Studies 1995 University Avenue, Suite 510H Berkeley, CA 94704-2318 USA [email protected]

December 2016

The Treaty Port Economy in Modern China

 ȱ ȱ  ȱȱŜś

The Treaty Port Economy in Modern China Empirical Studies of Institutional Change and Economic Performance

Edited by ’••¢ȱ ǯȱǯȱ˜ȱŠ—ȱŠ–˜—ȱ ǯȱ¢Ž›œ

A publication of the Institute of East Asian Studies, University of California, Berkeley. Although the institute is responsible for the selection and acceptance of manuscripts in this series, responsibility for the opinions expressed and for the accuracy of statements rests with their authors. The China Research Monograph series is one of several publication series sponsored by the Institute of East Asian Studies in conjunction with its constituent units. The others include the Japan Research Monograph series, the Korea Research Monograph series, and the Research Papers and Policy Studies series. Send correspondence and manuscripts to Katherine Lawn Chouta, Managing Editor Institute of East Asian Studies ŘŘŘřȱž•˜—ȱ›ŽŽǰȱŜ‘ȱ•˜˜› Berkeley, CA 94720-2318 [email protected] Library of Congress Cataloging-in-Publication Data The treaty port economy in modern China : empirical studies of institutional Œ‘Š—ŽȱŠ—ȱŽŒ˜—˜–’Œȱ™Ž›˜›–Š—ŒŽȱȦȱŽ’Žȱ‹¢ȱ’••¢ȱ ǯȱǯȱ˜ȱŠ—ȱŠ–˜—ȱ ǯȱ Myers. ȱȱȱȱȱȱȱ™ǯȱŒ–ǯȱȬȬȱȱǻ‘’—Šȱ›ŽœŽŠ›Œ‘ȱ–˜—˜›Š™‘ȱDzȱŜśǼ Includes bibliographical references and index. Summary: “Through eight empirical studies, this volume explores the interplay between institutional change and economic performance in a constructed model of the treaty port economy in late-Qing and Republican China”--Provided by publisher. ȱȱȬŗřDZȱşŝŞȬŗȬśśŝŘşȬŖşşȬŗ ȱȱȬŗŖDZȱŗȬśśŝŘşȬŖşşȬŝ ȱŗǯȱȱ›ŽŽȱ™˜›œȱŠ—ȱ£˜—ŽœȬȬ‘’—ŠȬȬ ’œ˜›¢ǯȱŘǯȱȱ‘’—ŠȬȬ˜––Ž›ŒŽȬȬ

’œ˜›¢ǯȱřǯȱȱ‘’—ŠȬȬŒ˜—˜–’ŒȱŒ˜—’’˜—œȬȬŗŜŚŚȬŗşŗŘǯȱŚǯȱȱ‘’—ŠȬȬŒ˜—˜–’Œȱ Œ˜—’’˜—œȬȬŗşŗŘȬŗşŚşǯȱȱǯȱ˜ǰȱ’••¢ȱ ǯȱǯȱǻ’••¢ȱ ŽŽȱ˜—ǼǰȱŗşśŘȬȱǯȱ¢Ž›œǰȱŠ–˜—ȱ

Š •Ž¢ǰȱŗşŘşȬȱ ȱȱ ŗŚŗŞǯřǯŜŝŚȱŘŖŗŗ ȱȱřřŖǯşśŗȂŖřȬȬŒŘŘ ȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱȱŘŖŗŗŖŖşşśŞ

Copyright © 2011 by the Regents of the University of California. Printed in the United States of America. All rights reserved. Front cover: The banks of Guangzhou’s Pearl River. 1920s. (Courtesy of the ’œœ’˜—œȱ1›Š—¸›ŽœȱŽȱŠ›’œǯǼ

Contents

Acknowledgments Contributors 1. Modern China’s Treaty Port Economy in Institutional Perspective: An Introductory Essay Billy K. L. So PART ONE: Institutional Change and Economic Growth Řǯȱ‘Žȱ’œŽȱ˜ȱ˜Ž›—ȱ‘Š—‘Š’ǰȱŗşŖŖȮŗşřŜDZȱ An Institutional Perspective Debin Ma 3. The Shanghai Real Estate Market and Capital Investment, ȱ ŗŞŜŖȮŗşřŜȱ Tomoko Shiroyama 4. The Rice and Wheat Flour Market Economies ȱ ’—ȱ‘Žȱ˜ Ž›ȱŠ—£’ǰȱŗşŖŖȮŗşřŜȱ Kai-yiu Chan śǯȱ‘ŽȱŽ’˜—Š•ȱŽŸŽ•˜™–Ž—ȱ˜ȱŽ’ȱ˜ž—¢Ȃœȱ˜˜—ȱŽ¡’•Ž ȱ Š›”ŽȱŒ˜—˜–¢ǰȱŗşŘŖȮŗşřŝȱ Hon-ming Yip Ŝǯȱ‘’—ŽœŽȱŠ›–Ž›ȱŠ’˜—Š•’¢ȱŠ—ȱ‘Žȱ›Š›’Š—ȱŒ˜—˜–¢ of the Lower Yangzi in the 1930s James Kai-sing Kung, Daniel Yiu-fai Lee, and Nansheng Bai PART TWO: Dynamics in Institutional Change ŝǯȱ›Š’’˜—Š•ȱŠ—ȱ’‘œȱ’—ȱ ˜—ȱ ˜—ȂœȱŽ ȱŽ››’˜›’Žœȱ Kentaro Matsubara Şǯȱ‘’—ŽœŽȱ—Ž›™›’œŽœȱŠŒ›˜œœȱž•ž›ŽœDZȱ‘Žȱ ˜—ȱ ˜—ȱ Business Experience in the Early Twentieth Century Stephanie Po-yin Chung 9. Legalization of Chinese Corporation, 1904–1929: ȱ ——˜ŸŠ’˜—ȱŠ—ȱ˜—’—ž’¢ȱ’—ȱž•ŽœȱŠ—ȱŽ’œ•Š’˜—ȱ Billy K. L. So and Albert S. Lee Bibliography Index

xii ix 1

33 Śŝ ŝś şŜ 118 ŗŚŝ 172 ŗŞŜ 211 249

Acknowledgments

This volume grew out of two symposia organized by the Chinese —’ŸŽ›œ’¢ȱ ˜ȱ ˜—ȱ ˜—Ȃœȱ Ž™Š›–Ž—ȱ ˜ȱ ’œ˜›¢ȱ ’—ȱ œ™›’—ȱ ŘŖŖŚȱ Š—ȱ œž––Ž›ȱŘŖŖŜǯȱ‘Ž›ŽȱŠ›Žȱ–Š—¢ȱ˜›Š—’£Š’˜—œȱŠ—ȱ’—’Ÿ’žŠ•œȱ ‘˜œŽȱ’—™žȱ and assistance have been instrumental to the outcome of this volume. First and foremost, we are grateful to the Chiang Ching-kuo Foundation for providing a generous conference grant, making the symposia as well as the publication of this book possible. ‘Ž›Žȱ Ž›ŽȱœŒ‘˜•Š›œȱ ‘˜ȱŠĴŽ—Žȱ‘Žȱœ¢–™˜œ’ŠȱŠ—ȱ™›˜Ÿ’Žȱ’–™˜›tant insights on the chapters and the overarching thesis. They include ŠŸ’ȱŠž›Žǰȱ‘’•’™ȱŽž—ǰȱ Š–Šœ‘’ŠȱŠ”Žœ‘’ǰȱ‘’ȬŒ‘Žž—ȱ‘˜’ǰȱ’Š—ȱ Zhiping, Chi-kong Lai, Edmund S. T. Kwok, and Kent Deng. We thank them for their contributions to this volume. We are indebted to Sherman Cochran for reading an earlier version of the manuscript and to Paul Co‘Ž—ȱ˜›ȱ›ŽŠ’—ȱŠ—ȱŽŠ›•¢ȱ›ŠĞȱ˜ȱ‘Žȱ’—›˜žŒ’˜—ǯȱ‘Ž’›ȱŒ›’’ŒŠ•ȱŒ˜––Ž—œȱ greatly improved our arguments. Wen-hsin Yeh provided important advice on how we might proceed on the winding path of revision. To her, we owe much for the completion of the project. The anonymous reviewers of the China Research Monograph series gave very critical and constructive ŠŸ’ŒŽȱ˜›ȱ›ŽŸ’œ’˜—ǯȱ‘Žȱꗊ•ȱŸŽ›œ’˜—ȱ’—Œ˜›™˜›ŠŽœȱ–Š—¢ȱ˜ȱ‘Ž’›ȱŸŠ•žŠ‹•Žȱ ’—™žœǯȱ’—Š••¢ǰȱ Žȱ‘Š—”ȱ‘›’œ˜™‘Ž›ȱŠĴ’œ˜—ȱ˜›ȱŽ’’—ȱ‘Žȱꗊ•ȱ›ŠĞȱ of the introduction and Katherine Lawn Chouta for her very professional handling and copyediting of our entire manuscript. Žȱ Š›Žȱ Š‹•Žȱ ˜ȱ ™›˜Ÿ’Žȱ ˜ž›ȱ ›ŽŠŽ›œȱ œ˜–Žȱ ꐞ›Žœȱ žœŽž•ȱ ˜›ȱ Ÿ’œžŠ•’£ing the treaty port economy as discussed in the chapters herein, which date to the beginning of the twentieth century. Thanks must be given ˜ȱ ‘Žȱ ˜˜ŸŽ›ȱ —œ’ž’˜—ȱ ˜ȱ Š—˜›ȱ —’ŸŽ›œ’¢ǰȱ ˜Œ’··ȱ Žœȱ ’œœ’˜—œȬ ›Š—¸›Žœȱ’—ȱŠ›’œǰȱ ˜‘—ȱ ’›ŽȱŠ—ȱ˜—œǰȱǯǰȱ‘Žȱ ’œ˜›’ŒŠ•ȱ‘˜˜›Š™‘œȱ ˜ȱ‘’—Šȱ›˜“ŽŒȱŠȱ‘Žȱ—’ŸŽ›œ’¢ȱ˜ȱ›’œ˜•ǰȱŠ—ȱ ˜ȱž’Ȭ¢’—ȱ˜ȱ‘Žȱ‘’—ŽœŽȱ—’ŸŽ›œ’¢ȱ˜ȱ ˜—ȱ ˜—ǯȱŽœ™’ŽȱŠ••ȱ‘ŽȱŽ—Ž›˜žœȱœž™™˜›ǰȱŽ››˜›œȱ  ’••ȱ•’”Ž•¢ȱ›Ž–Š’—Dzȱ˜›ȱ‘ŽœŽȱŽęŒ’Ž—Œ’Žœǰȱ‘ŽȱŽ’˜›œȱŠ›Žȱœ˜•Ž•¢ȱ›Žœ™˜—œ’‹•Žǯ ǯȱ ǯȱǯȱǯǰȱǯȱ ǯȱǯȱȱ 20 February 2010

Contributors

Š—œ‘Ž—ȱȱǻŠ’ȱŠ—œ‘Ž—Ǽȱ‘Šœȱ‹ŽŽ—ȱŠȱ™›˜Žœœ˜›ȱ˜ȱ‘ŽȱŒ‘˜˜•ȱ˜ȱricultural and Rural Development at Renmin University, China, since 2004. Prior to this post, he was a research fellow at China’s Research Center for Rural Development, of the State Council, and the Research Ž—Ž›ȱ˜—ȱž›Š•ȱŒ˜—˜–¢ǰȱ’—ȱ‘Žȱ’—’œ›¢ȱ˜ȱ›’Œž•ž›Žǯȱ ’œȱŒž››Ž—ȱ research interests are surplus rural labor, social inequality, and poverty Š••ŽŸ’Š’˜—ȱ’—ȱ‘’—Šǯȱ ’œȱ›ŽŒŽ—ȱ™ž‹•’ŒŠ’˜—œȱ’—Œ•žŽȱReturn Home or Go to Town: Research on the Return of Rural-Urban Migrants ǻŘŖŖŘǼȱŠ—ȱOut of the Village: Research on Rural Labour Migration in China ǻŗşşŝǼǰȱ ‹˜‘ȱ ’—ȱ ‘’—ŽœŽǯȱ Žȱ ‘Šœȱ Š•œ˜ȱ Œ˜—›’‹žŽȱ ˜ȱ Šȱ œž¢ȱ Ž’Žȱ ‹¢ȱ ˜›Š’—Žȱǯȱ West and Yaohui Zhao titled Rural Labor Flows in China (Institute of East œ’Š—ȱž’Žœǰȱ—’ŸŽ›œ’¢ȱ˜ȱŠ•’˜›—’ŠǰȱŽ›”Ž•Ž¢Ǽǯ

Š’Ȭ¢’žȱ ȱǻ‘Š—ȱ Š’ȱ’žǼȱ›ŠžŠŽȱ›˜–ȱ‘Žȱ—’ŸŽ›œ’¢ȱ˜ȱ¡˜›ȱ ǻǯ‘’•ǯǼȱŠ—ȱ’œȱŠ—ȱŠœœ˜Œ’ŠŽȱ™›˜Žœœ˜›ȱ˜ȱ‘’œ˜›¢ȱŠȱŠ’˜—Š•ȱ‘Ž—ȱ ž—ȱ —’ŸŽ›œ’¢ǰȱ Š’ Š—ǯȱ ’œȱ ›ŽœŽŠ›Œ‘ȱ ’—Ž›Žœœȱ ’—Œ•žŽȱ ‘’—ŽœŽȱ ‹žœ’—Žœœȱ institutions, organizational structures, accounting systems, and crossŒž•ž›Š•ȱ‹žœ’—Žœœȱ™›ŠŒ’ŒŽœǯȱ Žȱ’œȱ‘ŽȱŠž‘˜›ȱ˜ȱBusiness Expansion and Structural Change in Pre-War China: Liu Hongsheng and His Enterprises, 1920–1937ȱǻ ˜—ȱ ˜—ǼǰȱŠœȱ Ž••ȱŠœȱœŽŸŽ›Š•ȱŠ›’Œ•Žœȱ˜—ȱ‘’—ŽœŽȱ‹žœ’—Žœœȱ ’—œ’ž’˜—œȱŠ—ȱꗊ—ŒŽǰȱœžŒ‘ȱŠœȱ‘ŽȱŒ˜–™›Š˜›ȱœ¢œŽ–ǰȱ™›’ŸŠŽȱ‹Š—”ing, trade associations, and grain trade networks, and on the migration, social and economic history, and costume business of the Taiwan Š‹˜›’’—Žœǯȱ Žȱ ’œȱ Œž››Ž—•¢ȱ Œ˜—žŒ’—ȱ Šȱ ›ŽœŽŠ›Œ‘ȱ ™›˜“ŽŒȱ ˜—ȱ ‘’—ŽœŽȱ grain-trade networks and transformations in business organization. Ž™‘Š—’Žȱ˜Ȭ¢’—ȱ  ȱǻ‘ž—ȱ˜Ȭ¢’—ȱ˜›ȱ‘˜—ȱŠ˜¡’Š—Ǽȱ’œȱŠȱ™›˜Žœœ˜›ȱ ’—ȱ‘ŽȱŽ™Š›–Ž—ȱ˜ȱ ’œ˜›¢ȱŠȱ‘ŽȱŠ™’œȱ—’ŸŽ›œ’¢ȱ˜ȱ ˜—ȱ ˜—ǯȱ She holds a D.Phil. from the University of Oxford and focuses her research on social and economic history, business history, and the history of business laws and customs, as well as migration and enterprises in south China and Southeast Asia. She is the author of Chinese Business Groups in Hong Kong and Political Changes in South ChinaȱǻŠŒ–’••Š—Ǽǰȱ˜ȱ published articles in major journals such as Modern Asian Studies and

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The Treaty Port Economy in Modern China

Asia Europe Journal, and of chapters in books such as Corporate Globalization: Business Cultures in Europe and in Asia and Chinese Transnational —Ž›™›’œŽœDZȱž•ž›Š•ȱĜ—’¢ȱŠ—ȱžœ’—Žœœȱ›ŠŽ’Žœ. Š–Žœȱ Š’Ȭœ’—ȱ  ȱ ǻ ž—ȱ Š’Ȭœ’—ȱ ˜›ȱ ˜—ȱ ’œ‘Ž—Ǽȱ ’œȱ Šȱ ™›˜Žœœ˜›ȱ ˜ȱ œ˜Œ’Š•ȱ œŒ’Ž—ŒŽȱ Šȱ ‘Žȱ ˜—ȱ ˜—ȱ —’ŸŽ›œ’¢ȱ ˜ȱ Œ’Ž—ŒŽȱ Š—ȱ ŽŒ‘—˜•˜¢ǯȱ ŽȱŒ˜–™•ŽŽȱ‘’œȱ˜Œ˜›ŠŽȱ’—ȱŽŒ˜—˜–’ŒœȱŠȱ‘Žȱ—’ŸŽ›œ’¢ȱ˜ȱ Cambridge. With a broad research interest spanning China’s political economy and economic development and history, Kung has published in Economic History Review, The China Quarterly, China Journal, Modern China, Economic Development and Cultural Change, and the Journal of Comparative Economics, among others. Žȱ‘ŠœȱŠ•œ˜ȱŒ˜—›’‹žŽȱ˜ȱœŽŸeral volumes, including Property Rights and Economic Reform in China. •‹Ž›ȱ ǯȱ ȱ ǻŽŽȱ ‘žȱ žŠ—Ǽȱ ’œȱ Š—ȱ ’—Ž™Ž—Ž—ȱ ›ŽœŽŠ›Œ‘Ž›ȱ ˜ȱ •Š ȱ Š—ȱ œ˜Œ’Š•ȱ œŒ’Ž—ŒŽœǯȱ Žȱ ›ŽŒŽ’ŸŽȱ ‘’œȱ ǯǯȱ ›˜–ȱ ‘Žȱ Š•’˜›—’Šȱ —œ’žŽȱ ˜ȱ Technology in Electrical Engineering and Economics and a J.D. from

Š›ŸŠ›ȱŠ ȱŒ‘˜˜•ǯȱ Žȱ ŠœȱŠȱ›’’œ‘ȱŠ›œ‘Š••ȱœŒ‘˜•Š›ȱŠ—ȱŽŠ›—Žȱ‘’œȱ ‘ǯǯȱ’—ȱŠ ȱŠȱ›’—’¢ȱ˜••ŽŽǰȱŠ–‹›’Žȱ—’ŸŽ›œ’¢ǯȱ ’œȱŠŒŠŽ–’Œȱ interests are in the area of interdisciplinary study that includes economic and systems theory, socioeconomic and political institutions, business organizations, law reforms, comparative law, and legal his˜›¢ǯȱ Žȱ’œȱŠȱ–Ž–‹Ž›ȱ˜ȱ‹˜‘ȱ‘ŽȱŠ•’˜›—’ŠȱŠŽȱŠ›ȱŠ—ȱ‘Žȱ—’Žȱ ŠŽœȱŠŽ—ȱŠ—ȱ›ŠŽ–Š›”ȱĜŒŽǯ Š—’Ž•ȱ ’žȬŠ’ȱ ȱ Šž‘ȱ Šȱ ‘Žȱ ˜—ȱ ˜—ȱ —’ŸŽ›œ’¢ȱ ˜ȱ Œ’Ž—ŒŽȱ Š—ȱ ŽŒ‘—˜•˜¢ǯȱ ’œȱ ›ŽœŽŠ›Œ‘ȱ ˜—ȱ ‘˜žœŽ‘˜•ȱ ŽŒ˜—˜–’Œȱ ‹Ž‘ŠŸ’˜›ȱ ’—ȱ ›ž›Š•ȱ China focuses on income distribution, female labor supply, and family™•Š——’—ȱ ™˜•’Œ¢ǯȱ Žȱ ™ž‹•’œ‘Žȱ ’—ȱ Economic Development and Cultural Change and China Economic Review. Ž‹’—ȱȱ‘Šœȱ‹ŽŽ—ȱŠȱ•ŽŒž›Ž›ȱ’—ȱ‘ŽȱŽ™Š›–Ž—ȱ˜ȱŒ˜—˜–’Œȱ ’œ˜›¢ȱŠȱ the London School of Economics and Political Science since the sum–Ž›ȱ ˜ȱ ŘŖŖŜǯȱ Žȱ ›ŽŒŽ’ŸŽȱ ‘’œȱ ˜Œ˜›Š•ȱ Ž›ŽŽȱ ›˜–ȱ ‘Žȱ —’ŸŽ›œ’¢ȱ ˜ȱ ˜›‘ȱ Š›˜•’—Šȱ Šȱ ‘Š™Ž•ȱ ’••ȱ Š—ȱ ‘Šœȱ ˜—Žȱ ›ŽœŽŠ›Œ‘ȱ Š—ȱ ™ž‹•’œ‘Žȱ extensively on economic history, comparative economic systems, and ’—Ž›—Š’˜—Š•ȱŽŒ˜—˜–’Œœǯȱ ’œȱ ˜›”œȱ‘ŠŸŽȱŠ™™ŽŠ›Žȱ’—ȱ‘ŽȱJournal of Economic History, Economic History Review, Explorations in Economic History, Economic Development and Cultural Change, Review of Income and Wealth, and others, and he has contributed to various edited volumes and encyclopedia entries. Kentaro MATSUBARA is an associate professor of legal history at the UniŸŽ›œ’¢ȱ˜ȱ˜”¢˜ǯȱ Žȱ‘˜•œȱŠ—ȱǯǯǯȱ›˜–ȱ‘Žȱ—’ŸŽ›œ’¢ȱ˜ȱ˜”¢˜ȱŠ—ȱ Šȱǯ‘’•ǯȱ›˜–ȱ‘Žȱ—’ŸŽ›œ’¢ȱ˜ȱ¡˜›ǯȱ ’œȱ›ŽœŽŠ›Œ‘ȱ‘ŠœȱŒŽ—Ž›Žȱ˜—ȱ traditional Chinese property rights and lineage social structuring, especially on the interaction of these with the colonial legal system in

˜—ȱ ˜—ǯȱ ’œȱ™ž‹•’ŒŠ’˜—œȱ’—Œ•žŽȱȃ˜£˜”žȱ˜ȱ˜”žœŠ—ȱ ˜ȱ–Žž›žȱ

Contributors

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Ž—˜žȱ‘ž˜”žȱ‘Š”Š’DZȱ ˜—”˜—ȱŒ‘’’”’ȱ—˜ȱœ‘˜Ȭ“’›Ž’ȱ—’ȱ›’””¢Š”žȱœ‘’Šȱ kozo bunseki” (Lineage property holding and social structures in tradi’˜—Š•ȱ‘’—ŠDZȱ—ȱŠ—Š•¢œ’œȱ‹ŠœŽȱ˜—ȱŒŠœŽœȱ›˜–ȱ‘Žȱ ˜—ȱ ˜—ȱ›Ž’˜—Ǽǰȱ serialized in the Hogaku kyokai zassi. Š–˜—ȱ ǯȱ ǰȱ œŽ—’˜›ȱ Ž••˜ ȱ Šȱ ‘Žȱ ˜˜ŸŽ›ȱ —œ’ž’˜—ǰȱ ’œȱ Œž››Ž—•¢ȱ Š•œ˜ȱŒž›Š˜›ȱ˜ȱ‘ŽȱŠœȱœ’Š—ȱŠ›Œ‘’ŸŽœǯȱ Žȱ›ŽŒŽ’ŸŽȱ‘’œȱ‘ǯǯȱ’—ȱŽŒ˜—˜–’Œœȱ›˜–ȱ‘Žȱ—’ŸŽ›œ’¢ȱ˜ȱŠœ‘’—˜—ǯȱ ’œȱŠ›ŽŠœȱ˜ȱŽ¡™Ž›’œŽȱ’—clude international relations, the economic history of East Asia, and the political and economic development of East Asia. The author of more than one hundred journal articles and book reviews, he was associate editor of the Journal of Asian Studies and also edited Ch’ing-shih wen-t’i. Myers’s major works on Chinese economic history are The Chinese Peasant Economy, The Chinese Economy: Past and Present, and two essays in The Cambridge History of China (in volume 9, part 1, and volume 13, part ŘǼǯȱ Žȱ‘ŠœȱŒ˜Ž’Žȱ‹˜˜”œȱ˜—ȱ‘Žȱ‘’œ˜›¢ȱ˜ȱ‘ŽȱŽ™ž‹•’ŒȱœžŒ‘ȱŠœȱStorm Clouds over China: The Memoir of Ch’en Li-fu, 1900–1993, Last Chance in Manchuria: The Diary of Chang Kia-ngau, and Prescription for Saving China: Selected Writing of Sun Yat-Sen. On post-1949 China, he has coedited ‘ŽȱŽ ȱ‘’—ŽœŽȱŽŠŽ›œ‘’™DZȱ‘Š••Ž—ŽœȱŠ—ȱ™™˜›ž—’’ŽœȱŠĞŽ›ȱ‘Žȱ Sixteenth Party Congress, Making China Policy: Lessons from the Bush and Clinton Administrations, and Understanding Communist China: Communist China Studies in the United States and the Republic of China, 1949–78. ˜–˜”˜ȱ ȱ›ŽŒŽ’ŸŽȱ‘Ž›ȱ‘ǯǯȱ›˜–ȱ Š›ŸŠ› Š—ȱ’œȱŒž››Ž—•¢ȱ Šȱ™›˜Žœœ˜›ȱ’—ȱ‘Žȱ ›ŠžŠŽȱŒ‘˜˜•ȱ˜ȱŒ˜—˜–’Œœǰȱ ’˜œž‹Šœ‘’ȱ—’ŸŽ›œ’¢ǰȱ˜”¢˜ǯȱ Ž›ȱ›ŽœŽŠ›Œ‘ȱ’—Ž›Žœœȱ’—Œ•žŽȱ‹žœ’—Žœœȱ‘’œ˜›¢ǰȱ‘Žȱ‘’œ˜›¢ȱ ˜ȱꗊ—ŒŽȱŠ—ȱ‹Š—”’—ȱ’—ȱ–˜Ž›—ȱ‘’—ŠǰȱŠ—ȱ‘Žȱ ˜›•ȱŽŒ˜—˜–¢ȱ’—ȱ the nineteenth and twentieth centuries, with a special interest in China Š—ȱ˜‘Ž›ȱŠœȱœ’Š—ȱŒ˜ž—›’Žœǯȱ Ž›ȱ–Š“˜›ȱ™ž‹•’ŒŠ’˜—œȱ’—Œ•žŽȱȃ˜–panies in Debt: Financial Arrangements in the Textile Industry in the ˜ Ž›ȱŠ—£’ȱŽ•ŠǰȱŗŞşśȮŗşřŝǰȄȱ’—ȱContract and Property in Early Modern China, edited by Madeleine Zelin, Jonathan K. Ocko, and Robert Gardella. She authored China during the Great Depression: Market, State, and the World Economy, 1929–1937ȱǻ Š›ŸŠ›ȱ—’ŸŽ›œ’¢ȱœ’ŠȱŽ—Ž›Ǽǯȱ ’••¢ȱ ǯȱǯȱȱǻ˜ȱ ŽŽȬ•˜—ȱ˜›ȱžȱ ’•Š—Ǽȱ’œȱŠȱŒ‘Š’›ȱ™›˜Žœœ˜›ȱ˜ȱ‘ž–Š—’’Žœȱ Šȱ ˜—ȱ ˜—ȱ —’ŸŽ›œ’¢ȱ ˜ȱ Œ’Ž—ŒŽȱ Š—ȱ ŽŒ‘—˜•˜¢ǯȱ Žȱ ŽŠ›—Žȱ ‘’œȱ Ph.D. at Australian National University and has published extensively in the areas of Chinese social and economic history, historical geogra™‘¢ǰȱ Š—ȱ •ŽŠ•ȱ ‘’œ˜›¢ǯȱ ’œȱ  ˜›”œȱ ‘ŠŸŽȱ Š™™ŽŠ›Žȱ ’—ȱ œžŒ‘ȱ “˜ž›—Š•œȱ Šœȱ T’oung Pao, Journal of Song-Yuan Studies, Journal of the American Oriental Society, Journal of Southeast Asian Studies, Journal of the Economic and Social History of the Orient, Lishi yanjiu, Journal of Chinese Studies, Annales: Histoire, Sciences Sociales, and Hong Kong Law Journal.ȱ ŽȱŠž‘˜›Žȱ Prosperity, Region, and Institutions in Maritime China: The South Fukien

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The Treaty Port Economy in Modern China

ŠĴŽ›—ǰȱşŚŜ–ŗřŜŞȱǻ Š›ŸŠ›ȱ—’ŸŽ›œ’¢ȱœ’ŠȱŽ—Ž›ǼǰȱŒ˜Ž’ŽȱPower and Ž—’¢ȱ’—ȱ‘Žȱ‘’—ŽœŽȱ˜›•ȱ›Ž›DZȱŽœœŒ‘›’Ğȱ’—ȱ ˜—˜ž›ȱ˜ȱ›˜Žœœ˜›ȱŠ—ȱ Gungwuȱ ǻ ˜—ȱ ˜—Ǽǰȱ Š—ȱ Œ˜—›’‹žŽȱ Ž—›’Žœȱ ˜ȱ ‘Žȱ Oxford International Encyclopedia of Legal History.

˜—Ȭ–’—ȱȱǻ’™ȱ ˜—ȱ’—ȱ˜›ȱŽȱ Š—–’—Ǽȱ›ŽŒŽ’ŸŽȱ‘Ž›ȱ‘ǯǯȱ›˜–ȱ the University of California, Los Angeles, and is a professor in the De™Š›–Ž—ȱ˜ȱ ’œ˜›¢ȱŠȱ‘Žȱ‘’—ŽœŽȱ—’ŸŽ›œ’¢ȱ˜ȱ ˜—ȱ ˜—ǯȱ Ž›ȱ›Žsearch interests are in the areas of modern and contemporary Chinese social and economic history, the local history of north and south China, ‘Žȱ‘’œ˜›¢ȱ˜ȱ˜ŸŽ›œŽŠœȱ‘’—ŽœŽǰȱ ˜—ȱ ˜—Ȯ–Š’—•Š—ȱ‘’—Šȱ›Ž•Š’˜—œȱ and overseas networks, and women’s and gender history. She is cocompiler of two editions of Women in China: Bibliography of Available English Language Materials, chief compiler of Indexes of the Dianshizhai Pictorial ǻ’—ȱ‘’—ŽœŽǼǰȱŠ—ȱŒ˜Ž’˜›ȱ˜ȱž—ȱ‘ž—ȱ‹Ž˜›ŽȱŠ—ȱŠĞŽ›ȱ‘ŽȱŽ ȱ’›™˜›DZȱ An Ethnographic and Historical Study of a Community in Hong Kong and Gender and Women’s Studies in Chinese Societiesȱǻ’—ȱ‘’—ŽœŽǼǯ Ž›ȱ™ž‹•’cations include Social History and the Study of Chinese Women, In Search of Subjectivities: Historical Studies of Chinese Women, and The Tung Wah ˜Ĝ—ȱ ˜–ŽȱŠ—ȱ‘Žȱ •˜‹Š•ȱ‘Š›’¢ȱŽ ˜›”DZȱŸ’Ž—ŒŽȱŠ—ȱ’—’—œȱ›˜–ȱ Archival Materials ǻŠ••ȱ‘›ŽŽȱ’—ȱ‘’—ŽœŽǼǰȱŠœȱ Ž••ȱŠœȱ–Š—¢ȱŠ›’Œ•Žœȱ’—ȱJournal of the Hong Kong Branch of the Royal Asiatic Society, Journal of Chinese Studies, New History, Lishi yanjiu, and Jindaishi yanjiu, among others. ‘Žȱ ‘Šœȱ Š•œ˜ȱ  ›’ĴŽ—ȱ Œ‘Š™Ž›œȱ ’—ȱ ‹˜˜”œȱ ™ž‹•’œ‘Žȱ ‹¢ȱ ‘Žȱ —œ’žŽȱ ˜ȱ

’œ˜›¢ȱŠ—ȱ‘’•˜•˜¢ȱŠ—ȱ‘Žȱ—œ’žŽȱ˜ȱ˜Ž›—ȱ ’œ˜›¢ǰȱŒŠŽ–’Šȱ ’—’ŒŠȱǻŠ’™Ž’ǼǰȱŠ—ȱ‘Žȱ‘’—ŽœŽȱ—’ŸŽ›œ’¢ȱ›Žœœȱǻ ˜—ȱ ˜—Ǽǯ

The banks of the Pearl River in Guangzhou. The tallest building on the facing page is the ž—ȱ˜–™Š—¢ǯȱŗşřŖœǯȱǻ˜ž›Žœ¢ȱ˜ȱ‘Žȱ’œœ’˜—œȱ1›Š—¸›ŽœȱŽȱŠ›’œǯǼ

Map 1. The fifty-four treaty ports of China as reported by the British War Office in 1910 (modern place-names on a 2016 geopolitical map). Source: “Map of China: Shewing Railways, Telegraphs & Treaty Ports,” first p roduced b y t he War O ffice, Gre at Bri tain, Aug ust 190 8, corrected July 1910, and printed at the Ordnance Survey Office, Southampton, 1911. Toyobunko collection, Tokyo.

Year designated treaty port

Modern place-name and (province)

Chinese place-name (modern)

Place-name on source map

Chinese place-name (historical)

1842

Shanghai (Shanghai Municipality)

上海

Shanghai

1842

Ningbo (Zhejiang)

寧波

Ning-po

1842

Fuzhou (Fujian)

福州

Fu-chou

1842

Xiamen (Fujian)

廈門

Amoy

1842

Guangzhou (Guangdong)

廣州

Canton

1858

Nanjing (Jiangsu)

南京

Nanking

1858

Zhenjiang (Jiangsu)

鎮江

Chinchiang

1858

Hankou (Hubei)

漢口

Hankow

1858

Jiujiang (Jiangxi)

九江

Kiukiang

1858

Shantou (Guangdong)

汕頭

Swatow

1858

Yantai (Shandong)

烟台

Chih-fu

芝罘

1858

Near Yingkou (Liaoning)

營口附近

Niu-chuang

牛莊

1858

Yingkou (Liaoning)

營口

Ying-k’ou

1858

Qiongzhou (Hainan)

琼州

Ch’iung-chou

1860

Kowloon (Hong Kong SAR)

九龍

Chiu-lung

1860

Tianjin (Tianjin Municipality)

天津

Tientsin

1876

Wuhu (Anhui)

蕪湖

Wu-hu

1876

Wenzhou (Zhejiang)

温州

Wen-chou

1876

Yichang (Hubei)

宜昌

Ichang

1876

Beihai (Guangxi)

北海

Pakhoi

1887

Mengzi (Yunnan)

蒙自

Meng-tzu

1887

Longzhou (Guangxi)

龍州

Lung-chou

1890

Chongqing (Chong­ qing Municipality)

重慶

Chungking

1895

Hangzhou (Zhejiang)

杭州

Hang-chou

1895

Simao (Yunnan)

思茅

Ssu-mao

1895

Hekou (Yunnan)

河口

Ho-kou

1897

Tengchong (Yunnan)

騰沖

Teng-yueh

1897

Wuzhou (Guangxi)

梧州

Wu-chou

京江

騰越

Year designated treaty port

Modern place-name and (province)

Chinese place-name (modern)

Place-name on source map

Chinese place-name (historical)

1898

Wusong (Shanghai Municipality)

吳淞

Wu-sung (by Qing)

1898

Jiaozhou (Shandong)

膠州

Chiao

1898

Qingdao (Shandong)

青島

Tsingtau

1898

Weihai (Shandong)

威海

Wei-hai-wei

1898

Qinhuangdao (Hebei)

秦皇島

Ch’in-wang-tao (by Qing)

1899

Sanduao (Fujian)

三都澳

San-tu-ao (by Qing)

1899

Dalian (Liaoning)

大連

Dairen

1899

Zhanjiang (Guangdong)

湛江

Kwang-chou-wan

1899

Yuezhou (Hunan)

岳州

Yo-chou (by Qing)

1902

Changsha (Hunan)

長沙

Ch’ang-sha

1902

Jiangmen (Guangdong)

江門

Chiang-men

1903

Suzhou (Jiangsu)

蘇州

Su-chou

1903

Shashi (Hubei)

沙市

Sha-shih

1903

Shenyang (Liaoning)

瀋陽

Mukden

1903

Dandong (Liaoning)

丹東

An-tung

安東

1903

Dandong Harbor (Liaoning)

丹東港

Ta-tung-k’ou

大東溝

1904

Jinan (Shandong)

濟南

Chi-nan (by Qing)

1904

Zhoucun (Shandong)

周村

Ch’ou-ts’un (by Qing)

1904

Weifang (Shandong)

濰坊

Wei (by Qing)

濰

1905

Changchun (Jilin)

長春

Kuan-ch’eng-tzu

寛城子

1905

Jilin (Jilin)

吉林

Kirin

1905

Tongjiangkou (Liaoning)

通江口

T’ung-chiang-kou

1905

Faku (Liaoning)

法庫

Fa-k’u-men

1905

Tieling (Liaoning)

鐵嶺

Tieh-ling

1905

Liaoyang (Liaoning)

遼陽

Liao-yang

1905

Fengcheng (Liaoning)

鳳城

Feng-huang

膠 威海衛

廣州灣

法庫門

鳳凰

ONE

Modern China’s Treaty Port Economy in Institutional Perspective: An Introductory Essay BILLY K. L. SO

The eight empirical studies presented in this volume illustrate the complex ›Ž•Š’˜—œ‘’™ȱ˜ȱ’—œ’ž’˜—Š•ȱŒ‘Š—ŽȱŠ—ȱ‘’‘Ž›ȱŽĜŒ’Ž—Œ¢ȱŽŒ˜—˜–’Œȱ™Ž›˜›mance within the historical context of modern China. Together they suggest  ‘ŠȱŠ—ȱ’—œ’ž’˜—Š•ȱŠ™™›˜ŠŒ‘ȱŒŠ—ȱ˜ěŽ›ȱ’—ȱŠœœŽœœ’—ȱ‘’—ŠȂœȱ•˜—ȬŽ›–ȱŽŒ˜nomic development.1 These studies also suggest how the discourse on instiž’˜—ȱŠ—ȱ™Ž›˜›–Š—ŒŽȱŒŠ—ȱ‹Žȱ’—˜›–Žȱ‹¢ȱœ™ŽŒ’ęŒȱŒŠœŽȱœž’Žœȱ˜—ȱ‘’—Šǯ —ȱ‘’œȱ’—›˜žŒ˜›¢ȱŽœœŠ¢ǰȱȱ˜ěŽ›ȱ‘ŽȱŠ—Š•¢’ŒŠ•ȱ›Š–Ž ˜›”ȱž—Ž›ȱ ‘’Œ‘ȱ the empirical studies are organized so as to address the previously men’˜—Žȱ’œœžŽœǯȱȱ›Š ȱꛜȱ˜—ȱ ˜‘—ȱ ’—ȱŠ’›‹Š—”ȂœȱŒ•Šœœ’ŒŠ•ȱŠŒŒ˜ž—ȱ˜ȱ‘Žȱ treaty port system and an extended conceptualization of this historical phenomenon, which leads to the notion of a form of regional economy in modern China that we refer to as the “treaty port economy.” Following that, I outline the rise of the treaty port economy based on the well-documented context of China’s economic development from the middle of the nineteenth century to the early decades of the twentieth century. The third section contextualizes the institutional framework of Douglass C. North in light of the ‘’—ŽœŽȱ ›ŽŠ¢ȱ ™˜›ȱ ŽŒ˜—˜–¢ǯȱ ‘Žȱ ꗊ•ȱ  ˜ȱ œŽŒ’˜—œȱ ’ŸŽȱ Šȱ ‹›’Žȱ ŠŒŒ˜ž—ȱ of each empirical case and organize them under the two themes of performance under institutional change and of dynamics in institutional change. ‘’œȱ ’—˜žŒ˜›¢ȱ Œ‘Š™Ž›ȱ ‘Ž—ȱ Œ˜—Œ•žŽœȱ  ’‘ȱ ‘Ž˜›Ž’ŒŠ•ȱ ›ŽĚŽŒ’˜—œȱ ‘Šȱ arise from the themes and empirical studies presented in this book.

Naturally, this does not mean that every contributor to this volume shares the same institutional concerns. Rather, the diverse approaches of their individual research agendas on the modern Chinese economy converge in a mutually reinforced institutional conceptualization that is the main task of this introductory essay. ŗȲȱ

2

Billy K. L. So

The Advent of the Treaty Port System The Genesis and Evolution of the Treaty Port System The treaty port system in China began with the Opium War and the Treaty of Nanjing in 1842. The series of treaties signed between China and various foreign powers during the nineteenth and early twentieth centuries were unprecedented in Chinese history. Fairbank and other scholars have meticulously detailed the evolutionary process of this political structure over the past four decades. This system did not start to decline until the 1930s and was not formally abolished until 1943, primarily as a result of the new China policy formed by Great Britain and the United ŠŽœȱ’—ȱ‘ŽȱŽŒ˜—ȱ˜›•ȱŠ›ȱǻ ’›‹¢ȱŘŖŖŖǼǯȱ‘ŽȱŒ˜›ŽȱŒ˜–™˜—Ž—ȱ˜ȱ‘Žȱ œ¢œŽ–ȱ ŠœȱŠȱ›˜ž™ȱ˜ȱ›ŽŠ¢ȱ™˜›œǰȱ ‘˜œŽȱ—ž–‹Ž›ȱ’—Œ›ŽŠœŽȱ›˜–ȱ꟎ȱ ’—ȱŗŞŚŘȱ˜ȱ—’—Ž¢Ȭ ˜ȱ‹¢ȱŗşŗŝȱǻŽžŽ› Ž›”Ž›ȱŗşŞřǰȱŗŘşǼǯȱŠ’›‹Š—”ǰȱ’—ȱ‘’œȱ ꗊ•ȱœ¢—‘Žœ’œȱ˜ȱ‘Žȱ›ŽŠ¢ȱ™˜›ȱœ›žŒž›Žǰȱ™›˜Ÿ’ŽœȱŠȱœžŒŒ’—ŒȱŠŒŒ˜ž—ȱ˜ȱ ’œȱŒ˜––˜—ȱ’—œ’ž’˜—Š•ȱŽŠž›ŽœȱǻŗşşŘǰȱŘŖŗȮŘŖśǼǰȱŠœȱ˜ž•’—Žȱ’—ȱ‘Žȱ˜•lowing sections. ‘Žȱ ›ŽŠ¢ȱ ™˜›ȱ  Šœȱ ¢™’ŒŠ••¢ȱ Š—ȱ ž›‹Š—ȱ œŽĴ’—ǰȱ ”—˜ —ȱ Šœȱ Šȱ Œ˜—ŒŽœœ’˜—ȱ˜›ȱœŽĴ•Ž–Ž—ǰȱ ‘’Œ‘ȱ Šœȱ’—‘Š‹’Žȱ™›’–Š›’•¢ȱ‹¢ȱ˜›Ž’—Ž›œȱŠ—ȱŠ—ȱ ever-growing population of Chinese nationals. The concessions were —˜›–Š••¢ȱ •˜ŒŠŽȱ Š“ŠŒŽ—ȱ ˜ȱ ˜›ȱ  ’‘’—ȱ Šȱ –Š“˜›ȱ Œ’¢ȱ Š—ȱ –˜œȱ ˜ĞŽ—ȱ ’—ȱ close proximity to a waterway for ease of transport. The treaty port was regulated and governed by a consul or by individuals with similar diplomatic standing. Foreign establishments such as clubs, churches, and racecourses were prominent features of the concessions. In certain major treaty ports such as Guangzhou, Xiamen, and Fuzhou, landed foreign garrisons protected the concessions, and in other cases foreign gunboats regularly patrolled the neighboring waters. Extraterritoriality granted by treaties enabled foreign nationals to avoid being subject to Chinese civil or criminal law. Instead, they were answerable to the laws of their respective countries. In certain larger concessions such as those of Shanghai, the treaty port legal system was so pervasive that even Chinese nationals Œ˜ž•ȱ‹Žȱ›’Žȱ’—ȱ‘Šȱœ¢œŽ–ȱǻû‘•‘Š‘—ȱŘŖŖŝǰȱŗşŗȮŗşřǼǯȱ‘Ž›Žȱ ŠœȱŠȱ‘’‘ȱ concentration of foreign business interests in these enclaves, originally ˜ŒžœŽȱ’—ȱ›Š’—ǰȱ‹žȱŠĞŽ›ȱ‘ŽȱŗŞşŖœȱŽ¡™Š—’—ȱ’—˜ȱŠ›ŽŠœȱ˜ȱ’›ŽŒȱ’—ŸŽœ–Ž—ȱ’—ȱœŽŒ˜›œȱœžŒ‘ȱŠœȱ’—žœ›¢ȱŠ—ȱꗊ—ŒŽǯȱ‘Žȱ‹žœ’—ŽœœŽœȱ’—ȱ›ŽŠ¢ȱ ™˜›œȱ  Ž›Žȱ ꛜȱ ˜–’—ŠŽȱ ‹¢ȱ ‘Žȱ ˜›Ž’—ȱ Š’™Š—œȱ Š—ȱ ‘Ž’›ȱ ‘’—ŽœŽȱ compradors. Again following the 1890s, there were increasingly more Chinese business interests either independently run or managed in collaboration with foreign businesses. On the one hand, these concessions contained immense pockets of wealth and prosperity; on the other, they  Ž›ŽȱŒ‘Š›ŠŒŽ›’£Žȱ‹¢ȱŒ›˜ œȱ˜ȱŒ‘ŽŠ™ȱ–Š—žŠ•ȱ•Š‹˜›Ž›œȱǻŒ˜˜•’ŽœǼȱŠ—ȱ‘Žȱ ™˜˜›ǯȱ›ŽŠ’Žœȱ’–™˜œŽȱŠȱę¡Žǰȱ•˜ ȱŠ›’ěȱ˜—ȱ‘’—Šȱ‘Šȱ Šœȱ’–™•Ž–Ž—Žȱ

Modern China’s Treaty Port Economy

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through the Chinese Maritime Customs Service. This organization was •Žȱ‹¢ȱŽ¡™Š›’ŠŽœȱ ‘˜œŽȱ‹›Š—Œ‘ȱ˜ĜŒŽœȱ˜™Ž›ŠŽȱ’—ȱ–˜œȱ›ŽŠ¢ȱ™˜›œǯȱ—ȱ this way, the Customs Service maintained control over foreign trade. It is important to note that the aforementioned treaty port institution was not engineered by a single architect with a rational design. Rather, it was the product of successive generations of foreign diplomats who, with the best interest of their individual countries in mind, gradually shaped a structure by either force or negotiation. The most-favored-nation clause in these treaties allowed each foreign power to share whatever privileges other powers might receive, which resulted in a considerable amount ˜ȱŒ˜—œ’œŽ—Œ¢ȱ’—ȱ‘ŽȱŽŸ˜•ž’˜—ȱ˜ȱ‘Žȱ›ŽŠ¢ȱ™˜›ȱœ¢œŽ–ȱǻŠ’›‹Š—”ȱŗşŜŞǰȱ ŘśŝȮŘŝśDzȱŗşŝŞǰȱŒ‘Š™ǯȱśDzȱŗşŞřǰȱŘŖȮŘŝDzȱŽžŽ› Ž›”Ž›ȱŗşŞřǰȱŗŘŞȮŘŖŝǼǯȱ—ȱœ‘˜›ǰȱ the system provided internationalization, urbanization, and industrialization to an urban population on Chinese soil under a politically and legally stable environment, which proved conducive to the development of a large-scale industrialized market economy characterized by heavy investment. China entered into these disastrous international treaties primarily as the result of military defeats or due to its inferior international position. Although the treaties were signed as international treaties, the agreements were perceived by the Chinese as being highly inequitable. And as Chinese nationalism emerged at the turn of the twentieth century and quickly evolved into a major political and social force in Chinese society, the treaty ports increasingly became a symbol of national humiliation and Western imperialism.2 Despite the specter of imperialism, the treaty port system was, as Fairbank demonstrated, the single most important means by which China came into contact with the outside world from the nineteenth century. It therefore also accounted for many new developments in modern China.3 Whether intended or not, these consequences demand more scrutiny, and it is the economic aspect of these consequences that is the focus of the eight studies in this book. The Treaty Port System and Treaty Port Economy ‘Ž›ŽŠœȱ ‘Žȱ ŽœŒ›’™’ŸŽȱ —˜’˜—ȱ ˜ȱ ‘Žȱ ›ŽŠ¢ȱ ™˜›ȱ œ¢œŽ–ȱ ‘Šœȱ ‹Ž—ŽęŽȱ immensely from the excellent scholarship of Fairbank and others, there ŘȲȱ ŽŽȱ‘ŽȱŒ˜—Ž–™˜›Š›¢ȱŽ‹ŠŽȱ˜—ȱ‘Žȱ’œœžŽȱ˜ȱŽ¡›ŠŽ››’˜›’Š•’¢ȱ’—ȱ˜˜‘ŽŠȱǻŗşŘşǼǯȱ˜›ȱ more recent work on the inequitable treaties, in particular on the backdrop of nationalism, œŽŽȱŠ—ȱ ’Š—•Š—ȱǻŘŖŖŖǼǰȱ’ȱž–’—ȱǻŘŖŖśǼǰȱŠ—ȱŠ—ȱǻŘŖŖśǼǯ řȲȱ ‘Šȱ ŽȱŽŠ•ȱ ’‘ȱ’—ȱ‘’œȱŸ˜•ž–ŽȱŠ›Žȱ™›’–Š›’•¢ȱ—Ž ȱ’—œ’ž’˜—œȱ‘Šȱ’—ĚžŽ—ŒŽȱ‘Žȱ ŽŒ˜—˜–¢ȱ›Š‘Ž›ȱ‘Š—ȱ‘Žȱ˜•ȱ’œœžŽȱ˜ȱ–˜Ž›—’¢ȱŸŽ›œžœȱ›Š’’˜—ǯȱŽŽȱ˜‘Ž—ȱǻŗşşŝǰȱŘŖŖřǼȱ˜›ȱ his landmark criticism of Eurocentrism in both modernization theory and modern/tradition approaches in American scholarship on modern China.

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Billy K. L. So

have been relatively few examinations of the treaty port economy per se. The term “treaty port” has been used historically as a synonym for the modern economic sector, the treaty port urban economic sector, or ‘Žȱ’—žœ›’Š•’£ŽȱœŽŒ˜›ȱǻŽ›¸›ŽȱŗşŞş‹Ǽǯȱ••ȱ˜ȱ‘ŽœŽȱžœŠŽœȱ’–™•¢ȱ‘Šȱ it was only under the treaty port system within the Chinese treaty port œŽŒ˜›œȱ  ‘Ž›Žȱ ˜—Žȱ Œ˜ž•ȱ ˜‹œŽ›ŸŽȱ œ’—’ęŒŠ—ȱ ŽŒ˜—˜–’Œȱ –˜Ž›—’£Š’˜—ǰȱ as measured by the growth of internationalization, urbanization, and industrialization—the three key indicators of modern Western economic ™Ž›˜›–Š—ŒŽǯȱ ˜ ŽŸŽ›ǰȱ‘Ž›Žȱ’œȱŒŽ›Š’—•¢ȱ–˜›Žȱ™˜Ž—’Š•ȱ’—ȱ‘Žȱ‘Ž˜›Ž’cal implications of the term “treaty port economy,” and it is in this new context of potential implications that the current volume organizes its empirical cases, thereby illustrating a broader theme that transcends local details. First, what is meant by “treaty port economy”? On the surface, it ap™ŽŠ›œȱ ˜ȱ ’—’ŒŠŽȱ Š—ȱ ŽŒ˜—˜–¢ȱ ‘Šȱ  Šœȱ ŒŽ—Ž›Žȱ Šȱ Šȱ ›ŽŠ¢ȱ ™˜›ǯȱ ˜ ŽŸŽ›ǰȱ‘’œȱŽ—Ž›’ŒȱŽę—’’˜—ȱ’œȱ˜˜ȱœ’–™•’œ’Œȱ˜›ȱ˜ž›ȱ™ž›™˜œŽœǰȱŠœȱŽŸŽ›¢ȱ ›ŽŠ¢ȱ™˜›ȱ—ŽŒŽœœŠ›’•¢ȱŒ˜—Š’—ŽȱŠ—ȱŽŒ˜—˜–¢ǰȱŠ—ȱ‘Ž›Žȱ Šœȱ˜ĞŽ—ȱŠȱ›ŽŠȱ disparity between the economic fortunes of the various treaty ports and their respective economies. Certain of these economies performed well based on the standards of Western economic performance, whereas others remained in a stagnant and preindustrial state. What are of most interest to us in this study are those treaty port economies that supported modern businesses, industries, and urbanization. In this sense, we are primarily discussing treaty port economies that were highly internationalized, industrialized, and urbanized. In the 1910s, there were perhaps no more than twenty out of the ninety-two treaty port economies that would have met these guidelines. Barely four decades earlier, in the midst of the Self-Strenghtening Movement, even Shanghai did not satisfy these standards, not to mention other treaty ports, some of which had already existed for more than a few decades. This means that a historical treaty port by itself did not necessarily develop a “treaty port economy,” as the Ž›–ȱ’œȱŽę—Žȱ‘Ž›Žǯ Our second meaning refers to the spatial scope of the economy. When  Žȱ–Ž—’˜—ȱŠȱ™Š›’Œž•Š›ȱŽŒ˜—˜–¢ǰȱ Žȱ˜ĞŽ—ȱ’–™•¢ȱœ˜–Žȱœ™Š’Š•ȱŒ˜——˜Štion in order to qualify its scope for measurement. Without exception,  ‘Ž—ȱ Žȱ›ŽŽ›ȱ˜ȱŠȱ›ŽŠ¢ȱ™˜›ȱŽŒ˜—˜–¢ȱ‘Šȱ‘ŠœȱŠȱŒ’¢ȱǻ›ŽŠ¢ȱ™˜›ǼȱŠœȱ ’œȱ ŒŽ—Ž›ǰȱ ’ȱ Œ˜—Š’—œȱ Šȱ œ™Š’Š•ȱ ’–Ž—œ’˜—ǯȱ ǯȱ ’••’Š–ȱ ”’——Ž›ȱ ǻŗşŝŝ‹Ǽȱ described China’s economy as the aggregate of many interrelated and multilayered regional and local economies. The treaty port economy can also be viewed as an economy with a spatial context that is centered at ‘Žȱ ›ŽŠ¢ȱ ™˜›ȱ ǻŠȱ ŒŽ—›Š•ȱ ™•ŠŒŽǼǰȱ  ‘’Œ‘ȱ œž‹œŽšžŽ—•¢ȱ œ™’••Žȱ ˜ŸŽ›ȱ ŽŒ˜nomically into the neighboring territories. To the extent that there was a

Modern China’s Treaty Port Economy

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considerable degree of economic integration between the outlying areas Š—ȱ ‘Ž’›ȱ ŒŽ—Ž›ȱ ǻ›ŽŠ¢ȱ ™˜›Ǽǰȱ ˜Ž‘Ž›ȱ ‘Ž¢ȱ ŒŠ—ȱ ‹Žȱ Œ˜—ŒŽ’ŸŽȱ ˜ȱ Šœȱ Š—ȱ ’Ž—’ꊋ•ŽȱŽŒ˜—˜–¢ǰȱŽŸŽ—ȱ ’‘ȱŸŠ›¢’—ȱŽ›ŽŽœȱ˜ȱ’—Ž›Š’˜—ȱ ’‘’—ȱ‘Žȱ spatial unit, radiating from its core to the periphery. ž›‘Ž›–˜›Žǰȱ‘Žȱ‹˜ž—Š›’Žœȱ˜ȱ‘ŽœŽȱŽŒ˜—˜–’Žœȱ Ž›Žȱ—ŽŸŽ›ȱę¡ŽǯȱŽ—ǰȱ‘Ž¢ȱ’ȱ—˜ȱ˜••˜ ȱŠ–’—’œ›Š’ŸŽȱ‹˜ž—Š›’ŽœȱŠ—ȱꛜȱŠ—ȱ˜›Ž–˜œȱ  Ž›ŽȱŽę—Žȱ˜—ȱŽŒ˜—˜–’ŒȱŽ›–œǯȱ›˜œ™Ž›˜žœȱ›ŽŠ¢ȱ™˜›ȱŽŒ˜—˜–’ŽœȱŠ™pear to have been expansive and pervasive in many cases. This geographically expansive nature of the treaty port economy leads to our third and œ˜–Ž ‘Šȱ ™Š›Š˜¡’ŒŠ•ȱ Žę—’’˜—ȱ ˜ȱ ‘Žȱ Ž›–ǯȱ•‘˜ž‘ȱ ŽŒ˜—˜–’Œȱ ’—Žgration took place in an increasingly expanded hinterland of a treaty port economy, this does not imply that the institutional structure of the treaty port system followed this expansion. In the more powerful treaty port economies, the enforcement characteristics of their institutions should have been proportionally stronger at the core than in the peripheries. Re•ŠŽȱ˜ȱ‘’œǰȱ‘ŽȱŒ’’Žœȱ˜›ȱŸ’••ŠŽœȱ˜žœ’Žȱ˜ȱ‘Žȱ›ŽŠ¢ȬŽę—Žȱ“ž›’œ’Œtion of extraterritoriality should have contained a diminishing order of enforcement in regards to the institutional matrix. Finally, from an economic viewpoint, we may venture conceptually to extract key components from the previous description of the treaty port economy, that is, the treaty port itself and its inherent imperialist elements. What then remains are forms of internationalization, urbanization, and industrialization under a politically and legally stable environ–Ž—ǯȱ‘ŽœŽȱœžŽœȱ‘ŽȱŽ¡’œŽ—ŒŽȱ˜ȱǻœ˜ŸŽ›Ž’—¢ȱ’œœžŽœȱŠœ’ŽǼȱŠȱȃ›ŽŠ¢ȱ port economy” without a treaty port. Few examples of this existed in the Œ˜—Ž¡ȱ˜ȱ–˜Ž›—ȱ‘’—Šǰȱ‘˜ž‘ȱ‘ŽȱŽħ’—ȱŽŒ˜—˜–¢ȱ˜ȱ‘ŽȱŗşŗŖœȱŠ—ȱ 1920s comes close to this notion. ’‘’—ȱ‘ŽȱŒ˜—ę—Žœȱ˜ȱŽħ’—ȱ‘Ž›Žȱ ŠœȱŠȱŒŽ›Š’—ȱŽ›ŽŽȱ˜ȱ™˜•’’ŒŠ•ȱ stability and established rule of law. Despite the successive civil wars Š–˜—ȱ‘ŽȱŽ’¢Š—ȱ Š›•˜›œǰȱ›Ž•Š’ŸŽ•¢ȱ•’Ĵ•ŽȱŠŒžŠ•ȱꐑ’—ȱ˜ŒŒž››Žȱ’—ȱ ‘Žȱž›‹Š—ȱŠ›ŽŠœȱ˜ȱŽħ’—ȱǻ‘˜ž‘ȱ‘Ž›Žȱ Šœȱ˜ŒŒŠœ’˜—Š•ȱ•˜˜’—Ǽǯȱ˜›Ž’—ȱ Š››’œ˜—œȱ Ž›ŽȱœŠ’˜—Žȱ’—ȱ‘Žȱ‘ŽŠ›ȱ˜ȱ‘ŽȱŒ’¢ȱŠĞŽ›ȱ‘Žȱ˜¡Ž›ȱŽ‹Ž••’˜—ȱ for the purpose of guarding the diplomatic community. The city was effectively regulated by its gendarmeries and new police force (Dray-Novey ŘŖŖŝǼǰȱŠ—ȱ’ȱŒ˜—Š’—ŽȱŠ—ȱŽ–Ž›’—ȱ–˜Ž›—ȱ’—žœ›’Š•ȱŠ—ȱŒ˜––Ž›Œ’Š•ȱ sector as in Shanghai. Although its scale and output could not match that ˜ȱ‘Žȱ•ŠĴŽ›ȱŒ’¢ǰȱŽħ’—ȱ’ȱ‘˜žœŽȱ‘Žȱ•Š›Žœȱ—ž–‹Ž›ȱ˜ȱ–˜Ž›—ȱ‹Š—”œȱ’—ȱ ‘’—Šȱ™›’˜›ȱ˜ȱ‘Žȱ•ŠŽȱŗşŘŖœǯȱ˜Ž›—ȱ‹žœ’—ŽœœŽœȱ’—ȱŽħ’—ȱŠ•œ˜ȱ›Ž ȱ˜ȱ the extent that an increasingly assertive Chinese Chamber of Commerce gradually took shape and began to perform functions not dissimilar to ’œȱ Œ˜ž—Ž›™Š›œȱ ’—ȱ ‘Š—‘Š’ȱ Š—ȱ ˜‘Ž›ȱ ›ŽŠ¢ȱ ™˜›œȱ ǻ›Š—ȱ ŗşŞşǼǯȱ ‘Žȱ ‘’‘•¢ȱŽĜŒ’Ž—ȱ‘’—ŽœŽȱŠ›’’–Žȱžœ˜–œȱŽ›Ÿ’ŒŽȱŠŒžŠ••¢ȱŽœŠ‹•’œ‘Žȱ

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Billy K. L. So

’œȱ‘ŽŠšžŠ›Ž›œȱ’—ȱŽħ’—ǯ4 The central judiciary of the Republican govŽ›—–Ž—ȱ’—ȱŽħ’—ȱ ŠœȱŒ˜––’ĴŽȱ˜ȱ•ŽŠ•ȱ›Ž˜›–ȱŠ—ǰȱ˜Ž‘Ž›ȱ ’‘ȱ‘Žȱ ’—’œ›¢ȱ ˜ȱ žœ’ŒŽǰȱ –ŠŽȱ ŽŸŽ›¢ȱ Žě˜›ȱ ˜ȱ Ž—‘Š—ŒŽȱ ‘Žȱ ˜ŸŽ›Š••ȱ šžŠ•’¢ȱ ˜ȱ civil litigation and the enforcement of the judicial decisions on commerŒ’Š•ȱ •’’Š’˜—œȱ ǻžȱ ŘŖŖŞǼǯȱ ŠœŽȱ ˜—ȱ ‘ŽœŽȱ ŠŒ˜›œǰȱ ’ȱ ’œȱ ™˜œœ’‹•Žȱ ˜ȱ Ÿ’Ž ȱ Žħ’—ȂœȱŽŒ˜—˜–¢ȱŠœȱŠ—ȱŠ‹œ›ŠŒȱ—˜’˜—ȱ˜ȱ‘Žȱ›ŽŠ¢ȱ™˜›ȱŽŒ˜—˜–¢ǯȱ —˜‘Ž›ȱ›ŽŠ¢ȱ™˜›ȱŽŒ˜—˜–¢ȱ‘ŠȱꝜȱ ’‘’—ȱ‘’œȱŒ˜—ŒŽ™žŠ•ȱŒ˜—Ž¡ȱ’œȱ

˜—ȱ ˜—ǰȱ˜›ȱ ‘’Œ‘ȱ‘Žȱ˜—•¢ȱ’œœžŽȱ ˜ž•ȱ‹Žȱœ˜ŸŽ›Ž’—¢ǯȱЎ›ȱ‘Žȱ•ŽŸŽ•ȱ of abstraction allows the removal of the components of the treaty port and œ˜ŸŽ›Ž’—¢ǰȱ’ȱ’œȱŒ˜—ŒŽ’ŸŠ‹•Žȱ‘Šȱ ˜—ȱ ˜—ȱœ•Š—ǰȱ ˜ •˜˜—ǰȱŠ—ȱ‘Žȱ New Territories—along with adjacent Guangdong counties—constituted an increasingly integrated regional economy in the early decades of the twentieth century. Of the empirical studies presented here, chapters 7 and ŞȱŽŠ•ȱœ™ŽŒ’ęŒŠ••¢ȱ ’‘ȱ‘’œȱ›ŽŠ¢ȱ™˜›ȱ¢™Žȱ˜ȱ›Ž’˜—Š•ȱŽŒ˜—˜–¢ǯȱ —Žȱꗊ•ȱ™˜’—ȱ‘Šȱ›Žšž’›ŽœȱŒ•Š›’ęŒŠ’˜—ȱ’œȱ‘ŽȱŽ¡ŠŒȱžœŠŽȱ˜ȱ‘ŽȱŽ›–ȱ “treaty port economy” in this volume. When it is used to refer to a particular treaty port economy, such as the Shanghai treaty port economy, or with the connotation of referring to a treaty port economy centered in Š—ȱž—œ™ŽŒ’ꮍȱœ’—•Žȱ›ŽŠ¢ȱ™˜›ȱ˜›ȱŠȱŒ•žœŽ›ȱ˜ȱ‘’Ž›Š›Œ‘Š•ȱ›ŽŠ¢ȱ™˜›œǰȱ’œȱ –ŽŠ—’—ȱ’œȱŒ˜—ę—Žȱ˜ȱŠȱœ’—•ŽȱŽŒ˜—˜–’ŒȱŽ—’¢ǯȱ ˜ ŽŸŽ›ǰȱŠȱ’–Žœǰȱ‘Žȱ term may be used more generically to refer to the treaty port economy as a whole, which represents the aggregate of all the treaty port economies. ‘Žȱ’쎛Ž—ȱŒ˜——˜Š’˜—œȱ˜ȱ‘ŽœŽȱ ˜ȱžœŠŽœȱ ’••ȱ–Š—’Žœȱ‘Ž–œŽ•ŸŽœȱ in the context of further discussion. The Emergence of the Treaty Port Economy Performance Converging with Industrialized Economies Although the treaty port economy never constituted more than 10 percent of the GNP of the entire country, it is well documented that it developed slightly faster than the economies of other regions of the country and began to gain real momentum beginning in the 1890s, achieving its most ›Š™’ȱ›˜ ‘ȱ‘›˜ž‘˜žȱ‘ŽȱŗşŘŖœȱŠ—ȱŗşřŖœǯȱ‘˜–ŠœȱŠ œ”’ȱǻŗşŞşǰȱŝŖǼȱ found that the annual growth of the manufacturing sector of this econo–¢ȱ›˜–ȱŗşŗŘȱ˜ȱŗşřŜȱ›Ž ȱŠȱŠ—ȱŽœ’–ŠŽȱŞǯŗƖǰȱ ‘’Œ‘ȱŒ˜–™Š›ŽœȱŒ˜–fortably with other advanced and industrializing countries such as Japan ǻŞǯŞƖǼȱŠ—ȱ‘Žȱ—’ŽȱŠŽœȱǻŘǯŞƖǼǯȱ’‘ȱ’—žœ›’ŽœȱœžŒ‘ȱŠœȱŽ¡’•Žœǰȱ̘ž›ȱ –’••’—ǰȱŒ’Š›ŽĴŽœǰȱŠ—ȱ–ŠŒ‘Žœȱ Ž›ŽȱŽœ™ŽŒ’Š••¢ȱ›˜‹žœȱŽŒ˜—˜–’ŒȱœŽŒ˜›œǰȱ and although there were important foreign interests, an increasingly large segment of Chinese investments and enterprises started to play

Š–Šœ‘’ŠȱǻŗşŞşǼȱ’ŸŽœȱŠȱœžŒŒ’—ŒȱŠŒŒ˜ž—ȱ˜ȱ‘Žȱ ˜›”’—œȱ˜ȱ‘ŽȱŠ›’’–Žȱžœ˜–œȱ Service in the treaty ports. ŚȲȱ

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a vital role in this sector. Output from this “enclave industrialization” established markets both overseas and across China (Naughton 2007, ŚřȮŚśǼǯȱ ‘˜Šœȱ ž›™‘Ž¢Ȃœȱ •Š—–Š›”ȱ œž¢ȱ ǻŗşŝŚǼȱ ŽœŒ›’‹Žœȱ ‘Žȱ ›ŽŠ¢ȱ ™˜›œȱŠ—ȱ‘Ž’›ȱ’—ĚžŽ—ŒŽȱ˜—ȱ‘’—ŠȂœȱ–˜Ž›—’£Š’˜—ȱ‘›˜ž‘ȱ‘Žȱ˜™Ž—’—ȱ of these cities to international trade. According to him, the treaty ports “increased stimulus of commercial production for export” by developing “concentrated commercial structure” and witnessed the outstanding ›˜ ‘ȱ ˜ȱ –˜Ž›—ȱ ’—žœ›’Žœȱ œžŒ‘ȱ Šœȱ Œ˜Ĵ˜—ȱ Ž¡’•Žœȱ ǻ™™ǯȱ śŗȮśŝǼǯȱ ˜ ŽŸŽ›ǰȱž›™‘Ž¢ȱ Šœȱœ”Ž™’ŒŠ•ȱ˜ȱ‘Žȱ˜ŸŽ›Š••ȱŽěŽŒȱ˜ȱ‘Žȱ›ŽŠ¢ȱ™˜›ȱœ¢œŽ–ȱ ˜—ȱ‘Žȱ‘’—ŽœŽȱŠ›Š›’Š—ȱŽŒ˜—˜–¢ȱǻ™ǯȱřşǼǯȱ‘Š™Ž›ȱŘȱ›ŽŸ’œ’œȱ‘’œȱ›˜ ‘ȱ trend as a result of internationalization. ‘Žȱ ›ŽŠȱŽ™›Žœœ’˜—ȱ’—ȱ‘ŽȱŗşŘŖœȱ‘ŠȱŠȱœ’—’ęŒŠ—ȱ’–™ŠŒȱ˜—ȱ‘’—Šȱ as a whole and the treaty port economy in particular because of its high degree of internationalization. The hardest hit areas were in the exports Š—ȱ’–™˜›œȱœŽŒ˜›ǯȱŽ›¸›ŽȱǻŗşŞş‹Ǽȱ™˜’—œȱ˜žȱ‘ŠȱŠ–’ȱ‘Žȱ™˜œ Š›ȱŽpression from 1921 to 1923, Chinese foreign trade declined, yet its modern industries, concentrated in the treaty port economies, continued to ex™Š—ȱ’—ȱŽ›–œȱ˜ȱŒŠ™’Š•ȱ’—ŸŽœ–Ž—ȱŠ—ȱ˜ž™žǯȱ¢Ž›œȱǻŗşŞşǼȱ‘Šœȱœ‘˜ —ȱ ‘Šȱ›˜–ȱŗşřŗȱ˜ȱŗşřŜȱ‘ŽȱŽŒ•’—Žȱ’—ȱ˜›Ž’—ȱ›ŠŽȱ Šœȱ‹˜•œŽ›Žȱ‹¢ȱ‘Žȱ expansion in domestic trade. Although the agricultural annual growth ›ŠŽȱ Œ˜—›ŠŒŽȱ ‹¢ȱ ŖǯŖŘƖǰȱ –Š—žŠŒž›’—ȱ Š—ȱ œŽ›Ÿ’ŒŽœǰȱ –Š’—•¢ȱ Œ˜—ŒŽ—›ŠŽȱ’—ȱ‘Žȱ›ŽŠ¢ȱ™˜›ȱŽŒ˜—˜–’ŽœǰȱŽ¡™Š—ŽȱŠȱ›ŠŽœȱ˜ȱŘǯŗŗƖȱŠ—ȱŗǯśśƖȱ ›Žœ™ŽŒ’ŸŽ•¢ǰȱ ‘’Œ‘ȱŒ˜—›’‹žŽȱ˜ȱŠ—ȱŠ——žŠ•ȱ ȱ›ŠŽȱ˜ȱŗǯśśƖȱŠ–’ȱ‘Žȱ —ŽŠ’ŸŽȱ›Ž™Ž›Œžœœ’˜—œȱ˜ȱ‘Žȱ ›ŽŠȱŽ™›Žœœ’˜—ǰȱ‘Žȱ˜žĚ˜ ȱ˜ȱœ’•ŸŽ›ǰȱŠ—ȱ a decline in wholesale and factor pricing. These points demonstrate the resilience and adaptability of the treaty port economy in withstanding ‘Žȱ̞ŒžŠ’˜—œȱ˜ȱ’—Ž›—Š’˜—Š•ȱ–Š›”Žœǯ Treaty port economies driven by light industries also expanded into a larger section of the outlying rural areas.ś As growth typically came ›˜–ȱ•’‘ȱ’—žœ›’ŽœȱœžŒ‘ȱŠœȱŽ¡’•ŽœȱŠ—ȱ̘ž›ȱ–’••œǰȱ‘Ž›Žȱ ŠœȱŠ—ȱŠ–Š£ing amount of potential for Chinese entrepreneurs to tap into their local social networks and to develop commercial links with agricultural production households. This assisted them in diversifying not only the production line but also the supply of raw and semiprocessed materials that were used in mechanized assembly-line production in the urban factories. In this regard, Chinese entrepreneurs had an edge over their ˜›Ž’—ȱ Œ˜–™Ž’˜›œǯȱ ‘Š™Ž›ȱ Řȱ ŽœŒ›’‹Žœȱ ‘’œȱ ›ž›Š•ȱ œ™’••˜ŸŽ›ȱ ŽěŽŒȱ ’—ȱ ‘Žȱ˜ Ž›ȱŠ—£’ȱŽ•Šȱ›Ž’˜—ǰȱŠ—ȱŒ‘Š™Ž›œȱŚȱŠ—ȱśȱ™›˜Ÿ’ŽȱŽ¡Š–™•Žœȱ ˜ȱ‘ŽȱŒ˜Ĵ˜—ȱŽ¡’•Žȱ’—žœ›¢ȱŠœȱ Ž••ȱŠœȱ‘Žȱ ‘ŽŠȱŠ—ȱ›’ŒŽȱ̘ž›ȱ’—žœ›’Žœǯȱ‘Š™Ž›ȱŜȱŽ¡™•˜›Žœȱ‘Žȱ›Š’˜—Š•’¢ȱŠ—ȱŒ˜—œŽšžŽ—ŒŽœȱ˜ȱŠ›’Œž•ž›Š•ȱ For a succinct reassessment of the scholarship on and complex estimates of Republican Š›’Œž•ž›Š•ȱ›˜ ‘ǰȱœŽŽȱ›Š—ȱǻŘŖŖŖǼǯ śȲȱ

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Billy K. L. So

household behavior within the context of a set of factor markets in an Š›ŽŠȱ ˜ȱ ’Š—œžȱ ›˜Ÿ’—ŒŽȱ ‘Šȱ –ŠŽȱ ™˜œœ’‹•Žȱ ‘Žȱ œ™’••˜ŸŽ›ȱ ŽěŽŒȱ ˜ȱ ‘Žȱ treaty port economy. Negotiated Convergence of Models and Practices

˜ ȱ  Šœȱ –˜Ž›—ȱ ŽŒ˜—˜–’Œȱ ™Ž›˜›–Š—ŒŽȱ ŠŒŒ˜–™•’œ‘Žȱ ’—ȱ ‘Žȱ ›ŽŠ¢ȱ port economy? It is likely that the many interlocking factors in the enŒ•ŠŸŽœȱ Ž›Žȱ—˜ȱŒ›ŽŠŽȱœ™ŽŒ’ęŒŠ••¢ȱ ’‘ȱ‘Žȱ”’—ȱ˜ȱ›ŽŠ¢ȱ™˜›ȱŽŒ˜—˜–¢ȱ we discuss here in mind. First and foremost among these factors was technology transfer, which constituted a necessary condition for modern industrialization as embodied in machinery-driven factory production. Technology transfer enabled lower transformation cost, standardized ˜ž™žǰȱŠ—ȱ’—Œ›ŽŠœŽȱ–Š—žŠŒž›’—ȱŽĜŒ’Ž—Œ¢ǯȱ‘’œȱ›Š—œŽ›ȱ›Ž ȱ›˜–ȱ a combination of experience learned from foreign factories in the treaty ports and from direct observation, participation, and education abroad ’—ȱ Š™Š—ȱŠ—ȱŸŠ›’˜žœȱŽœŽ›—ȱŒ˜ž—›’Žœȱ‹Ž’——’—ȱ’—ȱ‘Žȱ•ŠŽȱŗŞşŖœǯȱ ˜ ever, technology transfer even took place during the Self-Strengthening Movement in the 1870s and 1880s, but during this movement, the transfer did not generate the type of economic performance witnessed in the early twentieth century in the treaty port economy. Second, beginning in the 1900s, managerial experience and corporate governance became key components of this knowledge transfer. A wide range of new business models and practices developed in the West, beginning with the Industrial Revolution and the advent of the capitalist market, were injected into the millennium-old traditional Chinese business model. Of most importance, these models were actively promoted Š—ȱŠ›’Œž•ŠŽȱ‹¢ȱ‹žœ’—Žœœ™Ž˜™•Žǰȱ˜ŸŽ›—–Ž—ȱ˜ĜŒ’Š•œǰȱŠ—ȱ’—ĚžŽ—’Š•ȱ intellectuals. This leads to the third factor: the implantation of the corporate model into the Chinese business world in the early twentieth century (see chapŽ›œȱ Şȱ Š—ȱ şǼǯȱ —Žȱ ˜ȱ ‘Žȱ –Š“˜›ȱ ’œœžŽœȱ ’—Ÿ˜•ŸŽȱ ’—ȱ ‘Žȱ Š˜™’˜—ȱ ˜ȱ ‘Žȱ corporate model, as outlined in the next section and in more detail in Œ‘Š™Ž›ȱşǰȱ Šœȱ‘˜ ȱ˜ȱœ’—’ęŒŠ—•¢ȱŽ—‘Š—ŒŽȱ‘’—ŽœŽȱ‹žœ’—ŽœœȱŠ—ȱ•Š›ŽȬ scale industrial organizations so that they could compete with foreign enterprises. Many Chinese at the time apparently believed that a corporate model was necessary to promote impersonal investment and a broader capital market in order for Chinese businesses to tap into the required ꗊ—Œ’Š•ȱœž™™˜›ǯȱ ’—Š••¢ǰȱ ˜Œ‘›Š—ȱ ǻŗşŞŖǰȱ ŘŖŖŖǼȱ ‘Šœȱ œ‘˜ —ȱ ‘Žȱ Œ˜–™•Ž¡ȱ ’—Ž›™•Š¢ȯ marked by a combination of rivalry, collaboration, and knowledge transfer—between Chinese and foreign business interests in the modern economic sector, or, in our context, the treaty port economy, as well as

Modern China’s Treaty Port Economy

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‹Ž ŽŽ—ȱ ‘Žȱ ›Š’’˜—Š•ȱ ‘’—ŽœŽȱ –˜Ž•ȱ ǻ—Ž ˜›”Ǽȱ Š—ȱ ŽœŽ›—ȱ –˜Ž•ȱ ǻŒ˜›™˜›Š’˜—Ǽǯȱ‘Žȱ‘¢‹›’ȱŒ˜—ŸŽ›Ž—ŒŽȱ˜ȱ‘’—ŽœŽȱŠ—ȱŽœŽ›—ȱǻ Š™Š—ŽœŽȱ Šœȱ Ž••Ǽȱ‹žœ’—Žœœȱ’—œ’ž’˜—œȱŠ—ȱ™›ŠŒ’ŒŽœȱŽ—Ž›ŠŽȱŠȱ›Ž–Š›”Š‹•Žȱ˜žŒ˜–Žǯȱ ˜ ȱ‘ŽœŽȱ’—œ’ž’˜—œȱŒŠ—ȱ‹ŽȱŒ˜—ŒŽ™žŠ•’£Žȱ˜›ȱ–˜›Žȱœ¢œŽ–Š’Œȱ interpretation is the topic of the next section. The Institutional Matrix of the Treaty Port Economy The Northian Framework in Chinese History —ȱ˜›Ž›ȱ˜ȱ‹ŽĴŽ›ȱž—Ž›œŠ—ȱ‘Žȱ’—Ž›™•Š¢ȱ‹Ž ŽŽ—ȱ’—œ’ž’˜—œȱŠ—ȱŽŒ˜nomic performance in historical as well as modern societies, North (1991, ŗşşśǰȱŘŖŖśǼȱŠ›’Œž•ŠŽȱŠȱŒ˜—ŒŽ™žŠ•ȱŒ˜—œ›žŒȱ‘Šȱ‹ŽŒŠ–Žȱ‘Žȱ˜ž—Š’˜—ȱ ˜›ȱ‘Žȱȃ‘’œ˜›’ŒŠ•ȱ—Ž ȱ’—œ’ž’˜—Š•ȱŽŒ˜—˜–’ŒœȄȱǻ Š››’œȱŘŖŖřǼǯȱ‘Ž›ŽŠœȱ there are a number of successful applications of the Northian framework ’—ȱŸŠ›’˜žœȱ‘’œ˜›’ŒŠ•ȱŒ˜—Ž¡œȱǻ•œ˜—ǰȱŽ›œœ˜—ǰȱŠ—ȱ˜›‘ȱŗşşŜDzȱ ›Ž’ȱ ŘŖŖŜǼǰȱ’œȱ’—ĚžŽ—ŒŽȱ˜—ȱ‘’—ŽœŽȱ‘’œ˜›¢ǰȱ˜›ȱ‘’—ŽœŽȱŽŒ˜—˜–’Œȱ‘’œ˜›¢ȱœ™ŽŒ’ęŒŠ••¢ǰȱ‘Šœȱ—˜ȱ‹ŽŽ—ȱŠœȱ›ŽŠ’•¢ȱŠ™™Š›Ž—ǯŜȱ‘’œȱŸ˜•ž–ŽȱŠĴŽ–™œȱ˜ȱŒ˜—textualize this framework in the case of the treaty port economy. But to begin with, it is imperative to outline the key structure of the Northian framework, in particular that which is most relevant to our study. In North’s conceptual construct, “institution” is a category of abstract ’–™•’ŒŠ’˜—ȱ‹›˜Š•¢ȱŽę—ŽȱŠœȱȃ‘Žȱ›ž•Žœȱ˜ȱ‘ŽȱŠ–Žȱ’—ȱŠȱœ˜Œ’Ž¢ȄȱŠ—ȱ ’œȱ’쎛Ž—’ŠŽȱ›˜–ȱŠȱ–˜›Žȱœ™ŽŒ’ęŒȱžœŠŽȱ˜ȱ‘ŽȱŽ›–ȱȃ˜›Š—’£Š’˜—ǰȄȱ referring to such social entities formed within the given institutional ma›’¡ȱ˜ȱŠȱœ˜Œ’Š•ȱŽ—Ÿ’›˜—–Ž—ȱǻŗşşŗǰȱřȮŚǰȱŝřȮŝŚǼǯ7 In a nutshell, the Northian framework postulates an institutional matrix for any market economy. ‘Ž›ŽȱŠ›Žȱ‘›ŽŽȱ”Ž¢ȱŠŒ˜›œȱ‘ŠȱŒ˜—œ’žŽȱ‘’œȱ–Š›’¡DZȱǻŗǼȱ˜›–Š•ȱ’—œ’ž’˜—œȱ œžŒ‘ȱ Šœȱ ‘Žȱ •ŽŠ•ȱ œ¢œŽ–ȱ Š—ȱ ˜‘Ž›ȱ ˜ĜŒ’Š•ȱ ›Žž•Š˜›¢ȱ ’—›Šœ›žŒž›Žœȱ‘ŠȱŒ˜—œ›Š’—ȱ›Š—œŠŒ’˜—Š•ȱ‹Ž‘ŠŸ’˜›DzȱǻŘǼȱ’—˜›–Š•ȱ’—œ’ž’˜—œȱœžŒ‘ȱ There are only a few examples of the use of this approach and none published prior to 2000. I have explicitly incorporated the Northian framework with the spatial approach of Skinner to create an analytical framework for the interpretation of a premodern Chinese maritime economy in the southern part of Fujian from the tenth to the fourteenth century ǻ˜ȱŘŖŖŖǼǯȱŽŽȱŠ•œ˜ȱž˜¢ŽȱǻŘŖŖŖǼǯȱ˜Žȱ‘Žȱ Š›—’—œȱŠ‹˜žȱ‘Žȱ–’œžœŽȱŠ—ȱŠ‹žœŽȱ˜ȱŽœŽ›—ȱ legal categories such as civil law, property rights, and contracts in scholarship on China by Œ˜’—ȱǻŗşşŚǼǰȱŽ•’—ȱǻŘŖŖŚŠǼǰȱŠ—ȱŒ”˜ȱǻŘŖŖŚǼǯ ŝȲȱ For further explanation of these categories and terminologies of “new institutional ŽŒ˜—˜–’ŒœǰȄȱœŽŽȱ˜ Ž••ȱŠ—ȱ’Š’˜ȱǻŗşşŗǼȱŠ—ȱ·—Š›ȱŠ—ȱ‘’›•Ž¢ȱǻŘŖŖŞǼǯȱ˜›ȱ’œŒžœœ’˜—ȱ ˜ȱ ‘Žȱ Œž•ž›Š•ȱ ’–Ž—œ’˜—ȱ ˜ȱ ’—œ’ž’˜—œǰȱ œŽŽȱ Ž¢Ž›ȱ Š—ȱ Œ˜Ĵȱ ǻŗşşŘǼDzȱ Œ˜Ĵǰȱ Ž¢Ž›ǰȱ Š—ȱ œœ˜Œ’ŠŽœȱǻŗşşŚǼDzȱŠ—ȱ›’—˜—ȱŠ—ȱŽŽȱǻŗşşŞǼǰȱŽœ™ŽŒ’Š••¢ȱ‘ŽȱŠŒŒ˜ž—ȱ˜ȱ‘Žȱœ˜ž›ŒŽœȱ˜ȱ‘Žȱ —Ž ȱœŒ‘˜•Š›œ‘’™ȱ˜—ȱ’—œ’ž’˜—Š•’œ–ȱ’—ȱœ˜Œ’˜•˜¢ȱŠ—ȱŽŒ˜—˜–’Œœȱ‹¢ȱ’Œ˜›ȱŽŽȱǻŗşşŞǰȱŗȮŗŜǼǯȱ ›’Œ•Žœȱ Œ˜••ŽŒŽȱ ’—ȱ ŽŽȱ Š—ȱ  Ž‹Ž›ȱ ǻŘŖŖśǼȱ ’ŸŽȱ Š—ȱ Ž¡ŒŽ••Ž—ȱ ˜ŸŽ›Ÿ’Ž ȱ ˜ȱ ‘Žȱ ’ŸŽ›œŽȱ meanings of institution in the social sciences, in particular that which is applied in the economic sociology of capitalism. ŜȲȱ

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Šœȱ Œ˜Žœȱ ˜ȱ Œ˜—žŒȱ Š—ȱ œ˜Œ’Š•ȱ ™ŠĴŽ›—œȱ ‘Šȱ Š•œ˜ȱ ›Žœ›Š’—ȱ ›Š—œŠŒ’˜—Š•ȱ ‹Ž‘ŠŸ’˜›DzȱŠ—ȱǻřǼȱ‘Ž’›ȱŽ—˜›ŒŽ–Ž—ȱŒ‘Š›ŠŒŽ›’œ’Œœǯȱȱ’œȱ‘Žȱ’—Ž› ˜ŸŽ—ȱ —Šž›Žȱ˜ȱ‘ŽœŽȱ‘›ŽŽȱŠŒ˜›œȱ‘ŠȱŠěŽŒœȱ‘ŽȱŽŒ˜—˜–¢Ȃœȱ›Š—œŠŒ’˜—ȱŒ˜œǯȱ ˜›‘ȱŽę—Žœȱȃ›Š—œŠŒ’˜—ȱŒ˜œȄȱŠœȱ‘ŽȱŽ¡™Ž—œŽœȱ—ŽŒŽœœŠ›’•¢ȱ’–™•’Žȱ’—ȱ –Š›”Žȱ›Š—œŠŒ’˜—œǰȱœžŒ‘ȱŠœȱ–ŽŠœž›Ž–Ž—ȱŒ˜œǰȱŠ›ŽŽ–Ž—ȱǻŒ˜—›ŠŒǼȱŽ—forcement cost, and the cost of maintaining property rights, among others.8ȱ‘Ž—ȱŠ—ȱŽŒ˜—˜–¢Ȃœȱ›Š—œŠŒ’˜—ȱŒ˜œȱ’œȱ›ŽžŒŽȱ’—ȱŠȱœ’—’ęŒŠ—ȱ Š¢ǰȱ —Ž ȱ ˜™™˜›ž—’’Žœȱ ˜›ȱ ‘’‘Ž›ȱ ™›˜ęȱ –Š›’—œȱ Š›’œŽǰȱ Šœȱ ˜ȱ ‘Žȱ ’—ŒŽ—’ŸŽœȱ for entrepreneurs to seize upon such opportunities. This process generates dynamics of growth, which in turn improves economic performance. ‘Žȱ–˜œȱŽĜŒ’Ž—ȱ Š¢ȱ˜ȱ›ŽžŒŽȱ›Š—œŠŒ’˜—ȱŒ˜œȱ ’‘ȱŠȱ™Ž›™ŽžŠŽȱŠ—ȱ œ’—’ęŒŠ—ȱ’–™ŠŒȱ’œȱ˜ȱŠ•Ž›ȱ–Š“˜›ȱ–Š›”Žȱ’—œ’ž’˜—œȯœ˜ȬŒŠ••Žȱ’—œ’žtional change. Institutional change can occur in all three aspects—formal institutions, informal institutions, and enforcement characteristics. The –˜›ŽȱŠœ™ŽŒœȱ˜ȱ‘Žȱ–Š›’¡ȱ‘ŠȱŠ›ŽȱŠěŽŒŽȱ‹¢ȱŒ‘Š—Žǰȱ‘Žȱ›ŽŠŽ›ȱ‘Žȱ’–pact the institutional change will have on transaction cost and economic performance. To account for the West’s modern economic success since ‘Žȱ—žœ›’Š•ȱŽŸ˜•ž’˜—ǰȱ˜›‘ȱž›‘Ž›ȱŠ›žŽœȱ‘Šȱ‘Žȱ™ŠĴŽ›—ȱ˜ȱ’—œ’žtional change underscores the enormous dynamism behind the growth, in particular the development of the rule of law for third-party impartiality within the formal institutional dimension, which enables widespread impersonal investment in large-scale business ventures. This, in turn, is a necessary condition for large-scale investment in the manufacturing industrialization sector to take full advantage of modern science and technology. The remaining issue is how and why institutions change, ul’–ŠŽ•¢ȱ›Žœž•’—ȱ’—ȱ‘’‘Ž›ȱŽĜŒ’Ž—Œ¢ǯȱ‘Žȱ˜›‘’Š—ȱ›Š–Ž ˜›”ȱ’œȱ‹ž’•ȱ on an assumption of the culturally bounded rationality of entrepreneurs  ‘˜ȱ œŽŽ”ȱ ˜ȱ –Š¡’–’£Žȱ ™›˜ęȱ ‹¢ȱ Ž•’‹Ž›ŠŽ•¢ȱ –Š—ŽžŸŽ›’—ȱ ˜ȱ Š•Ž›ȱ ‘Žȱ ’—œ’ž’˜—Š•ȱ–Š›’¡ȱ˜ȱ‘Ž’›ȱŠŸŠ—ŠŽǯȱœȱ‘Žȱ–Š›’¡ȱœ‘’Ğœȱ‘›˜ž‘ȱ‘Žȱ Žě˜›ȱ˜ȱ‘ŽȱŠŽ—œȱ˜ȱŒ‘Š—Žǰȱ˜‘Ž›œȱ˜••˜ ȱ’—ȱ’œȱ Š”ŽȱŠ—ȱ–˜–Ž—ž–ȱ builds, resulting in the overall upward performance of the economy.

˜ ȱ –’‘ȱ ‘’œȱ ›Š–Ž ˜›”ȱ ‹Žȱ ’••žœ›ŠŽȱ ’—ȱ Šȱ ‘’—ŽœŽȱ ›ŽŠ¢ȱ ™˜›ȱ economy? We have already outlined the remarkable economic growth ŠŒ‘’ŽŸŽȱ ’—ȱ ‘Žȱ ›ŽŠ¢ȱ ™˜›ȱ ŽŒ˜—˜–¢ȱ ‘›˜ž‘ȱ ‘Žȱ ꛜȱ Ž ȱ ŽŒŠŽœȱ ˜ȱ ‘Žȱ  Ž—’Ž‘ȱ ŒŽ—ž›¢ǯȱ ˜ǰȱ ‘Žȱ šžŽœ’˜—ȱ ‘Ž—ȱ ‹ŽŒ˜–ŽœDZȱ ˜ ȱ ’ȱ ’ȱ ‘Š™pen? Numerous supply and demand factors were at work, given the economy’s internationalized background. For instance, the relative prices of the factor and demand markets linked the modern production sector of the treaty port economy with the overseas markets of advanced countries such as the Western powers and Japan. But to account for this ˜›ȱ Šȱ ’œŒžœœ’˜—ȱ ˜ȱ ›Š—œŠŒ’˜—ȱ Œ˜œǰȱ œŽŽȱ ˜›‘ȱ ǻŗşşŘǼǯȱ •’ŸŽ›ȱ ’••’Š–œ˜—ȱ Š•œ˜ȱ ’ŸŽœȱ Ž•Š‹˜›ŠŽȱ›ŽĚŽŒ’˜—œȱ˜—ȱ‘Žȱ’œœžŽœȱ˜ȱ›Š—œŠŒ’˜—ȱŒ˜œȱǻŗşŞśǰȱŗśȮŚŘDzȱŗşşřDzȱŗşşŞDzȱŘŖŖŖǼǯ ŞȲȱ

Modern China’s Treaty Port Economy

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™Ž›˜›–Š—ŒŽǰȱ ‘’Œ‘ȱ ŠœȱœžœŠ’—Žȱ˜›ȱŽŒŠŽœǰȱŽŸŽ—ȱ‘›˜ž‘ȱ‘Žȱꗊ—cial turmoil of the postwar years and the Great Depression, relative prices in supply and demand alone may not be adequate explanation. It is useful also to look at the institutional dimension of the story. In the following subsections, we will relate salient developments of the treaty port economy in light of the three key factors of the Northian framework so as to illustrate the institutional change that took place concurrently with the economy’s expansion. Formal Institutions and Their Enforcement Characteristics In a treaty port economy, the major formal institution is a legal frame ˜›”ǰȱ ‘’Œ‘ȱ’—Œ•žŽœȱŠȱ’œ™žŽȬœŽĴ•Ž–Ž—ȱœ›žŒž›Žǰȱ™›˜™Ž›¢ȱ›’‘œȱŽę—’—ȱ˜ —Ž›œ‘’™ǰȱŠȱ›Žž•Š˜›¢ȱ›Š–Ž ˜›”ȱ˜›ȱ‹žœ’—Žœœȱꛖȱ˜›Š—’£Š’˜—ǰȱ and contract law to regulate transactions between owners of exchanged items. One of the basic features of the treaty port system was its Western legal framework. This was used as a powerful argument for any Western power to justify the imposition of unequal treaties on China. Treaty ports were created based on the belief that Chinese law was too outdated Š—ȱ ’—ŽěŽŒ’ŸŽȱ ˜ȱ ›Ž—Ž›ȱ Š’›ȱ Š—ȱ “žœȱ ›’Š•œȱ Š—ȱ ’œ™žŽȱ œŽĴ•Ž–Ž—ȱ ˜›ȱ foreigners on Chinese soil, which ultimately led to the aforementioned extraterritoriality. Extraterritoriality was embodied in and implemented through exactly such a treaty port system. In the Shanghai concessions, there were locally formed municipal courts, but in other treaty ports, those that lacked a structured court system autonomous from the Chinese local judiciary, adjudicating mechanisms were managed by the local foreign consuls. Treaty port economies generally contained a formal judicial infrastructure where commercial disputes could be adjudicated, usually applying Western commercial laws. This legal system was widely ›ŽŠ›Žȱ‹¢ȱ‹˜‘ȱ˜›Ž’—Ž›œȱŠ—ȱ’—ĚžŽ—’Š•ȱ‘’—ŽœŽȱŠœȱ–˜›ŽȱŠ’›•¢ȱ’–™•Ž–Ž—ŽȱŠ—ȱŽĜŒ’Ž—•¢ȱŽ—˜›ŒŽȱ‘Š—ȱ‘Žȱ‘’—ŽœŽȱ—Š’˜—Š•ȱ•ŽŠ•ȱœ¢œŽ–ȱ ǻŽ™‘Ž—œȱŗşşŘǼǯȱ—ȱ–Š“˜›ȱ›ŽŠ¢ȱ™˜›œȱœžŒ‘ȱŠœȱ‘Š—‘Š’ǰȱ‘Ž›ŽȱŒ˜ž•ȱ‹Žȱ found not only well-established court systems but also a legal professional community including both foreign and Chinese practitioners. The professional standard of legal practice in these major cities was reasonŠ‹•¢ȱ‘’‘ȱǻžȱŘŖŖŗǼǯȱœȱ‘Žȱ•ŽŠ•ȱ›Š–Ž ˜›”ȱ’—ȱ‘Žȱ›ŽŠ¢ȱ™˜›œȱ™›’–Š›’•¢ȱ followed that of the Western powers, it converged with the broader legal institutions in the Western business world. Under this broad Western leŠ•ȱ ›Š–Ž ˜›”ǰȱ ™›’ŸŠŽȱ ™›˜™Ž›¢ȱ ›’‘œȱ  Ž›Žȱ –˜›Žȱ Œ•ŽŠ›•¢ȱ Žę—Žȱ Š—ȱ ™›˜ŽŒŽȱ‘Š—ȱž—Ž›ȱ‘’—ŽœŽȱ’–™Ž›’Š•ȱ•Š ǯȱ‘’œȱꝜȱ Ž••ȱ ’‘ȱ‘Žȱ˜›thian theoretical underpinnings of lower transaction cost, clearer property rights, and improved contract enforcement, all under a theoretically more impartial third-party legal system of adjudication. Because the only

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Billy K. L. So

way to achieve economic growth at the turn of the twentieth century was ˜ȱ˜••˜ ȱ‘Žȱ™ŠĴŽ›—ȱ˜ȱŽœŽ›—ȱ’—žœ›’Š•’£Š’˜—ȱŠ—ȱ•Š›ŽȬœŒŠ•Žȱ’—ŸŽœ–Ž—ȱ ’—ȱ –Šœœȱ ™›˜žŒ’˜—ǰȱ œžŒ‘ȱ Šœȱ ’—ȱ Žħ’ȱ Š™Š—ǰȱ ’ȱ ’œȱ ž—Ž›œŠ—Š‹•Žȱ that the treaty port economy possessed exactly this kind of institutional –Š›’¡ȱ‘Šȱ‘Šȱ‹ŽŽ—ȱŒ˜—œ›žŒŽȱ˜›ȱ‘Žȱ™ž›™˜œŽȱ˜ȱ™›˜ęȱ–Š¡’–’£Š’˜—ǯȱ This precise structure and its underlying maximization code of conduct ‹ŽŒŠ–Žȱ–˜›Žȱ™›ŽŸŠ•Ž—ȱ’—ȱ‘ŽȱŽœŽ›—ȱ‹žœ’—Žœœȱ ˜›•ȱŠĞŽ›ȱŠ–ȱ–’‘ǯ

˜ ŽŸŽ›ǰȱŠȱŒ›žŒ’Š•ȱ’œ’—Œ’˜—ȱ›Ž–Š’—œȱ‹Ž ŽŽ—ȱ‘Žȱ•ŽŠ•ȱœ¢œŽ–ȱ˜ȱŠȱ treaty port economy and that of the rule of law in Western societies. It is common sense that the liberal ideal of the rule of law cannot be realized without the separation of powers among the executive, legislature, and judiciary.9 But under the treaty port system, the judicial apparatus was always a component of colonial or semicolonial rule, which by nature ‹˜›Žȱ•’Ĵ•Žȱ›ŽœŽ–‹•Š—ŒŽȱ˜ȱ‘ŽȱœŽ™Š›Š’˜—ȱ˜ȱ™˜ Ž›œȱ’—ȱŠȱŽ–˜Œ›Š’ŒȱŒ˜—œ’ž’˜—Š•ȱ˜›Ž›ȱǻŽ’—ŠœȱŗşşŝǼǯȱ“ž’ŒŠ’˜—ȱ‹¢ȱŒ˜—œž•œȱ’—ȱŠȱŒ˜—ŒŽœœ’˜—ȱ demonstrated no institutional autonomy of judicial decision. Nor could the more professional Shanghai Mixed Court claim to be independent from the interference of the foreign diplomatic community in China or ’—ȱ ‘Ž’›ȱ ‘˜–ŽȬŒ˜ž—›¢ȱ ˜›Ž’—ȱ ŠěŠ’›œȱ ˜ĜŒŽœǯȱ —ȱ ‘’œȱ œŽ—œŽǰȱ ‘Žȱ ŽĜŒ’Ž—ȱ legal system was hardly a representation of the Western liberal ideal of the rule of law, even though it did serve certain Chinese and foreign business interests and does account for the economic performance from an institutional perspective. Under the legal framework of the treaty port economy, apart from the legal enforcement of contracts and the legal protection of private propŽ›¢ȱ ’‘ȱ Ž••ȬŽę—Žȱ™›˜™Ž›¢ȱ›’‘œǰȱŠȱœ’—’ęŒŠ—ȱ—Ž ȱ’—œ’ž’˜—ȱ Šœȱ the Western-style corporation, or joint-stock company with limited liability. Chapters 8 and 9 further elucidate the impact of this institutional ’–™•Š—Š’˜—ȱ˜—ȱ‘Žȱ•ŽŠ•ȱœ¢œŽ–ȱ’—ȱ ˜—ȱ ˜—ȱ›˜–ȱŗŞŜśȱŠ—ȱ’—ȱ‘’—Šȱ ›˜–ȱŗşŖŚǯȱžĜŒŽȱ’ȱ˜ȱœŠ¢ȱ‘Šȱ‘’œȱ’—œ’ž’˜—ȱ ŠœȱœŽŽ—ȱ‹¢ȱ–Š—¢ȱŒ˜—temporaries as a crucial force that would shape the competitiveness of Chinese businesses to the extent that it would determine the outcome of competition between Chinese and foreign enterprises. It represented the model of modern business that cherished expansionism and scale of ŽŒ˜—˜–¢ȱ˜›ȱ™›˜ęȱ–Š¡’–’£Š’˜—ǯȱȱŠ•œ˜ȱŽ—Š‹•Žȱ’–™Ž›œ˜—Š•ȱ’—ŸŽœ–Ž—ȱ Š—ȱ ™›˜Žœœ’˜—Š•ȱ –Š—ŠŽ–Ž—ȱ ǻœ˜–Žȱ ™Ž˜™•Žȱ ›ŽŽ››Žȱ ˜ȱ ’ȱ Šœȱ œŒ’Ž—’ęŒȱ –Š—ŠŽ–Ž—ȱŠȱ‘Žȱ’–ŽǼǰȱ ‘’Œ‘ȱœŽȱ‘Žȱ˜ž—Š’˜—ȱ˜›ȱ‘ŽȱŽŸŽ•˜™–Ž—ȱ ˜ȱ‘Žȱœ˜Œ”ȱ–Š›”ŽœȱŠ—ȱŠȱ—Ž ȱœŽŒ˜›ȱ˜ȱꗊ—Œ’Š•ȱŠ—ȱŒŠ™’Š•ȱ–Š›”Žœȱ’—ȱ China at the turn of the twentieth century.

A voluminous amount of literature is available on this topic. For its implication for the ‘’—ŽœŽȱ•ŽŠ•ȱœ¢œŽ–ǰȱœŽŽȱŽŽ›Ž—‹˜˜–ȱǻŘŖŖŘǼȱŠ—ȱžȱǻŘŖŖŞǼǯ şȲȱ

Modern China’s Treaty Port Economy

13

‘Ž‘Ž›ȱ ‘Žȱ Œ˜›™˜›ŠŽȱ –˜Ž•ȱ Š—ȱ ‘Žȱ œ˜Œ”ȱ Š—ȱ ꗊ—Œ’Š•ȱ –Š›”Žœȱ would work depended largely on the support of a service industry of law and accountancy that needed to be highly professional and selfregulated. In the treaty port economy, these professional services were ꛜȱœž™™˜›Žȱ‹¢ȱ˜›Ž’—ȱ•Š ¢Ž›œȱŠ—ȱŠŒŒ˜ž—Š—œȱŽ–™•˜¢Žȱ‹¢ȱ˜›Ž’—ȱ companies, but from the turn of the century there were an increasing number of Chinese practitioners. Again, supply and demand was conŒŽ—›ŠŽȱ’—ȱ–Š“˜›ȱ›ŽŠ¢ȱ™˜›œȱœžŒ‘ȱŠœȱ‘Š—‘Š’ȱǻžȱŘŖŖŗǼǯ —ȱ œ‘˜›ǰȱ  ’‘ȱ ˜ŸŽ›—Š—ŒŽȱ ’—ȱ ™•ŠŒŽȱ ‘Šȱ  Šœȱ –˜›Žȱ ŽĜŒ’Ž—ȱ ‘Š—ȱ ‘Žȱ governance of surrounding areas, these treaty port economies not only had their own established court systems and law enforcement, but also Ž—“˜¢Žȱ Šȱ ‹ŽĴŽ›ȱ œž™™•¢ȱ ˜ȱ ‘Žȱ ™›˜Žœœ’˜—Š•ȱ œŽ›Ÿ’ŒŽœȱ Œ›žŒ’Š•ȱ ˜›ȱ ‘Žȱ Ž—forcement of a formal infrastructure that facilitated Western-style economic growth, especially in terms of scale and industrialization. Informal Institutions and Their Enforcement Characteristics It is simple enough to understand why Western business communities operating in a Chinese treaty port economy thought it necessary to bring abroad informal institutions and mind-sets from their home countries. Their innate sense of superiority under the veil of imperialism as well as their missionary zeal to save the unenlightened world were incorporated œŽŠ–•Žœœ•¢ȱ’—˜ȱ‘Žȱ›ŽŠ¢ȱ™˜›ȱœ¢•Žȱ˜ȱšžŠœ’ȱ›ž•Žȱ˜ȱ•Š ǯȱ ˜ ŽŸŽ›ǰȱŠ••ȱ˜ȱ this was new to China, and the Chinese response is a more complicated story. Is it possible to identify new mind-sets and informal institutions in the Chinese communities within the treaty ports, especially in the segments engaged in modern businesses and industries? ˜—ȱ‹Ž˜›Žȱ‘Žȱž›—ȱ˜ȱ‘Žȱ Ž—’Ž‘ȱŒŽ—ž›¢ǰȱ‘Ž›Žȱ Ž›Žȱ’—ĚžŽ—’Š•ȱ veins of criticism of traditional Chinese culture and its institutions by ‘Žȱ‘’—ŽœŽȱ‘Ž–œŽ•ŸŽœǯȱ‘’œȱ–˜–Ž—ž–ȱ›ŽŠŒ‘Žȱ—Ž ȱ‘Ž’‘œȱŠĞŽ›ȱ‘Žȱ 1911 Revolution, which expanded into the antitraditionalism and anti˜—žŒ’Š—’œ–ȱ˜ȱ‘ŽȱŗşŗŖœȱŠ—ȱ‘ŽȱŠ¢ȱ˜ž›‘ȱ˜ŸŽ–Ž—ȱǻ‘˜ ȱŗşŜŝDzȱ ’—ȱŗşŝşDzȱŠ—ȱŘŖŖŜǼǯȱ‘’œȱœŽ—’–Ž—ȱ ŠœȱŽœ™ŽŒ’Š••¢ȱœ›˜—ȱŠ—ȱŽěŽŒ’ŸŽ•¢ȱ disseminated in the treaty port urban areas. Familial and business ethics that had intermingled for centuries in the market economy of late imperial China suddenly encountered internal challenges. These traditional modes of behavior were controversial in the society at large, and they •˜œȱ–žŒ‘ȱ˜ȱ‘Ž’›ȱ–Š›”Žȱ’—ĚžŽ—ŒŽȱž—Ž›ȱ‘’œȱ ŠŸŽȱ˜ȱŠ—’›Š’’˜—Š•’œ–ǯ New values also emerged in urban areas and soon became dominant ideologies; these include nationalism and social Darwinism, which were ‘’‘•¢ȱ ™Ž›ŸŠœ’ŸŽȱ ’—ȱ ‘Žȱ ’—Ž••ŽŒžŠ•ȱ Œ˜––ž—’’Žœȱ ǻŠ—ȱ Š—œŽ—ȱ ŘŖŖŞǼǯȱ Chinese merchants were immersed in these new values and ideals in their daily urban lives through the mass media and educational system.

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Billy K. L. So

The notion that China might be facing the extinction of not only its sovereign state but also its nation, or race, was particularly widespread. This fear of extinction soon translated into a movement to strengthen and save China by bolstering its industry and economy, which was enthusiastiŒŠ••¢ȱ ™›˜–˜Žȱ ‹¢ȱ Ž–’—Ž—ȱ ’—Ž••ŽŒžŠ•œǰȱ ˜ŸŽ›—–Ž—ȱ ˜ĜŒ’Š•œǰȱ Š—ȱ ‘Žȱ ‹žœ’—ŽœœȱœŽŒ˜›ȱǻœŽŽȱŒ‘Š™Ž›ȱşǼǯȱ‘’œȱ–˜ŸŽ–Ž—ȱŒ›ŽŠŽȱŠȱ—Ž ȱœŽ›’Žœȱ˜ȱ business ethics and an increasingly more positive view of merchants in Chinese society. Although an improved image of the merchants can be ›ŠŒŽȱŠœȱŠ›ȱ‹ŠŒ”ȱŠœȱ‘Žȱ Ž•Ğ‘ȱŠ—ȱ‘’›ŽŽ—‘ȱŒŽ—ž›’Žœȱǻ˜ȱŘŖŖŖǼȱŠ—ȱ ‹ŽŒŠ–Žȱ–žŒ‘ȱ–˜›Žȱ—˜’ŒŽŠ‹•Žȱ‹¢ȱ‘Žȱœ’¡ŽŽ—‘ȱŒŽ—ž›¢ȱǻžȱ’—œ‘’ȱŘŖŖŚǼǰȱ imbuing business enterprises with a high moral order of importance in Chinese society was a decidedly new invention. The business community  ŠœȱŠě˜›ŽȱŠ—ȱŠœœŽ›’ŸŽȱ—Ž ȱ’Ž—’¢ȱŠ—ȱŒ˜ž•ȱ—˜ ȱŒ•Š’–ȱ‘Šȱ’œȱŠŒtions were in the best interest of the public good while at the same time removing the traditional embarrassment of maximizing self-interest. —•¢ȱ‘Žȱ•ŽŠ•ȱ›Š–Ž ˜›”ȱ—˜ ȱ›Žœ›’ŒŽȱ‘ŽȱŽœ’›Žȱ˜›ȱ™›˜ęǯȱ ‘’œȱ ’ŽŠȱ ˜ȱ ™›˜ęȱ –Š¡’–’£Š’˜—ǰȱ œ˜ȱ Œ›žŒ’Š•ȱ ˜ȱ ‘Žȱ Ž—›Ž™›Ž—Žž›œ‘’™ȱ of modern and Western-style market economies, was not entirely absent ›˜–ȱ ‘’—ŽœŽȱ ‘’œ˜›¢ȱ ǻ›˜˜”ȱ ŗşşŞǼǰȱ ‹žȱ ’ȱ  Šœȱ ŒŽ›Š’—•¢ȱ —˜ ȱ ˜™Ž›Š’—ȱ at an unprecedented level of social endorsement. Championed by the current Western, hence modern, knowledge of business and economics, –˜œȱ—˜Š‹•¢ȱ‹¢ȱ‘Žȱž›—ȱ˜ȱ‘Žȱ Ž—’Ž‘ȱŒŽ—ž›¢ǰȱ™›˜ęȱ–Š¡’–’£Š’˜—ȱ ęȱ Ž••ȱ ’‘ȱ‘ŽȱŽŸŽ›Ȭ™˜™ž•Š›ȱ‘’—ŽœŽȱ‹Ž•’Žȱ’—ȱœ˜Œ’Š•ȱŠ› ’—’œ–ȱŠ—ȱ’œȱ —Šž›Š•ȱ™›’—Œ’™•Žȱ˜ȱœž›Ÿ’ŸŠ•ȱ˜ȱ‘ŽȱęĴŽœȱǻ  ˜”ȱŗşŜśDzȱžœŽ¢ȱŗşŞřDzȱŠ—ȱ Š—œŽ—ȱŘŖŖŞǼǯȱ—ȱ‘Žȱ‹žœ’—ŽœœȱŒ˜––ž—’¢ǰȱœ˜Œ’Š•ȱŠ› ’—’œ–ȱŠœȱŠ™™•’Žȱ˜ȱ the market seemed to make sound sense. Furthermore, Western urbanism and its associated rich cultural milieu in the late nineteenth and early  Ž—’Ž‘ȱŒŽ—ž›’ŽœȱŠ•œ˜ȱŠěŽŒŽȱ‘’—ŽœŽȱž›‹Š—ȱŒž•ž›Š•ȱŒ‘Š—Žȱ’—ȱ›ŽŠ¢ȱ port cities, particularly in Shanghai (Yeh 1997, 2000, 2007; Esherick 2000; ˜Œ‘›Š—ǰȱ›Š—ǰȱŠ—ȱŽ‘ȱŘŖŖŝǼǯȱŽŒŽ—ȱœž’Žœȱ‘ŠŸŽȱ’—Œ›ŽŠœŽȱ˜ž›ȱž—derstanding of the consumerism in these cities (Bergère 1989a; Cochran ŘŖŖŜDzȱ Ž›‘ȱŘŖŖřDzȱ’”ãĴŽ›ȱŘŖŖŝǼǯȱȱ’œȱ‘Ž›Ž˜›Žȱ—˜ȱœž›™›’œ’—ȱ˜ȱœŽŽȱ‘Žȱ ™›˜ęȬ–Š¡’–’£Š’˜—ȱ –’—ȬœŽȱ ž—•ŽŠœ‘Žȱ ›˜–ȱ ’œȱ ™›ŽŸ’˜žœȱ ’—˜›–Š•ȱ ’—stitutional constraints on market behavior in Chinese society. These new ‹žœ’—ŽœœȱŽ‘’Œœȱ Ž›Žȱ’—ȱ•’—Žȱ ’‘ȱ—Šž›Žǰȱ‘Ž—ŒŽȱœŒ’Ž—’ęŒǰȱŠ—ȱ Ž›Žȱ™ž›™˜›Žȱ ˜ȱ ‹Žȱ ‘Žȱ ‹žœ’—Žœœȱ –˜Ž•ȱ ˜ȱ –˜Ž›—’¢ǯȱ ȱ ’œȱ •’Ĵ•Žȱ  ˜—Ž›ǰȱ ‘Ž—ǰȱ that the new mind-set was most evident in Shanghai, where, as observed ‹¢ȱŽ˜ȱžȬŠ—ȱŽŽȱǻŗşşşǼǰȱ‘’—ŽœŽȱ–˜Ž›—’¢ȱ‹ŽŠ—ǯȱ Following the emergence of this new treaty port economy mind-set, business mechanisms began to witness more widespread qualitative change. The traditional network and familial bonds, which used to hold a ›Š’’˜—Š•ȱ‹žœ’—Žœœȱꛖȱ˜Ž‘Ž›ȱ’—Ž›—Š••¢ȱŠ—ȱŠŒ’•’ŠŽȱ’œȱ›Š—œŠŒ’˜—œȱ

Modern China’s Treaty Port Economy

ŗś

 ’‘ȱ˜‘Ž›ȱꛖœȱŠ—ȱ’—’Ÿ’žŠ•œȱŽ¡Ž›—Š••¢ǰȱ‹ŽŠ—ȱ˜ȱ’ŸŽȱ Š¢ȱ˜ȱ–˜›Žȱ legalistic organizational order and transactions. Although traditional ties remained important, Chinese entrepreneurs now had more options at their disposal. The new social fabric evolved into new networks, such as membership in social or jockey clubs, Christian churches, alumni net ˜›”œȱ˜ȱ–˜Ž›—ȱœŒ‘˜˜•œȱǻ’—ȱ™Š›’Œž•Š›ȱ‘˜œŽȱ›ž—ȱ‹¢ȱ–’œœ’˜—Š›’ŽœǼǰȱ™›˜fessional associations, and so on. Of these various groups, the single most œ’—’ęŒŠ—ȱ’—˜›–Š•ȱ‹žœ’—Žœœȱ’—œ’ž’˜—ȱ˜ȱŽ–Ž›Žȱ’—ȱ–˜Ž›—ȱ‘’—Šȱ Šœȱ perhaps the Chamber of Commerce, which sprang up in major treaty ™˜›œȱŠ—ȱ‹Ž˜›Žȱ•˜—ȱ’—ȱ–˜œȱ‘’—ŽœŽȱŒ’’Žœȱ ’‘ȱœ’—’ęŒŠ—ȱŒ˜––Ž›Œ’Š•ȱ activity. There is already a substantial amount of literature on this institution, and what needs to be highlighted here is the fact that this institution enjoyed unprecedented autonomy from governmental authority in cities with treaty port economies, whether or not the chambers were actually located in treaty ports. The clearest example of this phenomenon can be ˜ž—ȱ ’—ȱ ‘Žȱ Žħ’—ȱ ‘Š–‹Ž›ȱ ˜ȱ ˜––Ž›ŒŽȱ ’—ȱ ‘Žȱ ŗşŘŖœǯȱ —ȱ Œ‘Š™Ž›ȱ şǰȱ the institution’s role in shaping the second legislation of company law in China is noted. These informal institutions soon became viable options for the Chinese business community. They provided new opportunities and at the same time also created behavioral constraints through implanted codes of conduct and virtue. To this we must add the notion of individual’œ–ǰȱ Š—ȱ ’œȱ ŠŒŒ˜–™Š—¢’—ȱ œŽ—œŽȱ ˜ȱ ›’‘ȱ ǻŠ—ȱ ŗşşŗǰȱ Œ‘Š™ǯȱ şǼǰȱ  ‘’Œ‘ȱ went hand in hand with the principle of an individual’s legal rights and the range of commercial laws that evolved to render protection to these entitlements. At the time, the missionary schools provided the best form of modern education and thus the best chance for upward mobility to increasingly –˜›Žȱ™Ž˜™•Žȱ’—ȱ‘’—Šǯȱ‘’œȱ ŠœȱŽŸ’Ž—ȱꛜȱ’—ȱ‘Žȱ›ŽŠ¢ȱ™˜›œǰȱŠ—ȱœžŒ‘ȱ schools eventually penetrated into the adjacent cities and outlying rural areas, as well as into the interior provinces. This system produced a major supply of new forms of native human resources with the skills and technological knowledge necessary to support the demands of a modern ŽŒ˜—˜–¢ǯȱ‘Žȱ£ŽŠ•ȱ˜›ȱ–˜Ž›—’¢ȱ˜Ž‘Ž›ȱ ’‘ȱ‘ŽȱŠĴ›ŠŒ’˜—ȱ˜ȱ›ŽŠŽ›ȱ income may well account for the prosperity of this educational sector, Š—ȱ ‘Žȱ –’œœ’˜—Š›¢ȱ œŒ‘˜˜•ȱ –˜Ž•ȱ  Šœȱ ˜ĞŽ—ȱ ’–’ŠŽȱ ‹¢ȱ ‘Žȱ —Š’˜—Š•ȱ œŒ‘˜˜•œȱǻ’ȱ žŠ¡’—ȱŗşşŝǼǯȱ The treaty port economy witnessed a wide range of new, interlocking, informal institutions and mind-sets with a greater deal of dynamism than in other parts of China. The enforcement characteristics of these institutions made the treaty port economy the center of gravity for economic modernity.

ŗŜ

Billy K. L. So

Institutional Change in the Treaty Port Economy The institutional matrix of the treaty port economy witnessed enormous changes both in the formal regulatory domain as well as in the underlying informal social fabric and mind-set. Both the formal and the informal institutions were also enmeshed and mutually reinforced in the unique ž›‹Š—ȱœŽĴ’—œȱŒ›ŽŠŽȱ‹¢ȱ‘Žȱ›ŽŠ’Žœǯȱ‘Žȱ—Ž •¢ȱŽ–Ž›Žȱ’—œ’ž’˜—Š•ȱ –Š›’¡ȱœŽ›ŸŽȱ˜ȱ•˜ Ž›ȱ›Š—œŠŒ’˜—ȱŒ˜œœȱŠ—ȱ’—Œ›ŽŠœŽȱŽĜŒ’Ž—Œ¢ȱ˜›ȱ‘Žȱ ›ŽŠ¢ȱ™˜›ȱŽŒ˜—˜–¢ȱŠœȱŠȱ ‘˜•Žǯȱ‘ŽȱŒ˜—ŒŽ™ȱ˜ȱœž›Ÿ’ŸŠ•ȱ˜ȱ‘ŽȱęĴŽœȱŠ—ȱ ‘Žȱ Œ˜—›˜••Žȱ ̘ ȱ ˜ȱ ‘Žȱ —˜—™›˜žŒ’ŸŽȱ ™˜™ž•Š’˜—ȱ ’—ȱ ‘ŽœŽȱ Ž—Œ•ŠŸŽœȱ Ž—œž›ŽȱŒ˜—’—žŽȱŽĜŒ’Ž—Œ¢ǯȱȱ’œȱ—˜ȱœž›™›’œŽȱ‘Šȱ‘’—ŠȂœȱ–˜Ž›—’£Žȱ ŽŒ˜—˜–¢ȱ Š—ȱ ’œȱ ꗊ—Œ’Š•ȱ Š—ȱ ’—žœ›’Š•ȱ œŽŒ˜›œȱ Š™™ŽŠ›Žȱ ˜—•¢ȱ ’—ȱ ‘Žȱ treaty ports. There is a logical link between the remarkable performance of the Chinese treaty port economy and its new institutional matrix.10 ˜ ȱ Žȱ ’••ȱŒ˜—Ž¡žŠ•’£Žȱ‘Žȱꗊ•ȱ’œœžŽȱ˜ȱ‘Žȱ˜›‘’Š—ȱ›Š–Ž ˜›”ȱ ’—ȱŽ›–œȱ˜ȱ‘’—ŠDZȱ‘Žȱ–ŠĴŽ›ȱ˜ȱ’—œ’ž’˜—Š•ȱŒ‘Š—Žǯȱ‘Žȱ›ŽŠ¢ȱ™˜›ȱŽŒ˜—omy and its institutional matrix provide a good case study for the theory. ‘ŽȱŠŽ—œȱ˜ȱŒ‘Š—Žȱ˜›ȱ‘ŽȱŽœŠ‹•’œ‘–Ž—ȱ˜ȱ‘Žȱ›ŽŠ¢ȱ™˜›ȱœ¢œŽ–ȱꛜȱ and foremost came from the foreign diplomats, who developed the sysŽ–ȱ˜ŸŽ›ȱ‘›ŽŽȱœžŒŒŽœœ’ŸŽȱŽ—Ž›Š’˜—œȱ ’‘˜žȱŒ˜—ŒŽ›ŽȱŽě˜›ȱ˜›ȱŠȱœŠ›ing blueprint. The system came into being largely as an evolutionary proŒŽœœǯȱ ˜ ŽŸŽ›ǰȱ‘Žȱ’™•˜–Šœȱ˜ĞŽ—ȱ›ŽŠŒŽȱ˜ȱŠ—ȱŠ›ŽœœŽȱ™›Žœœž›Žœȱ and demands from entrepreneurs from their respective home countries. —ȱ ‘’œȱ ŒŠœŽǰȱ ‘Žȱ ŠŽ—œȱ ˜ȱ Œ‘Š—Žȱ –žœȱ Š•œ˜ȱ ’—Œ•žŽȱ ‘Žȱ •ŠĴŽ›ǯȱ ‘Š™Ž›ȱ Şȱ ‘’‘•’‘œȱ ‘Žȱ ŠŒȱ ‘Šȱ ˜›ȱ œŽŸŽ›Š•ȱ ŽŒŠŽœȱ ‘Žȱ ˜—ȱ ˜—ȱ ˜–™Š—’Žœȱ ›’—Š—ŒŽȱ ŠĴ›ŠŒŽȱ ‘Žȱ ›Ž’œ›Š’˜—ȱ ˜—•¢ȱ ˜ȱ ˜›Ž’—ȱ ŸŽ—ž›Žœȯ—˜ȱ Chinese enterprises. This scenario of institutional change by agents of Œ‘Š—Žȱ ‘˜ȱ‘ŠŸŽȱŠ—ȱŽŒ˜—˜–’Œȱ’—Ž›ŽœȱŠĴŽœœȱ˜ȱ‘Žȱ‘Ž˜›Ž’ŒŠ•ȱ™˜œž•Štion of the Northian framework. The Chinese entrepreneurs are a more complicated case. Were they also agents of change? Before the 1890s, most Chinese involved in the treaty port economy were compradors hired by foreign employers. Some –’‘ȱ‘ŠŸŽȱ‘Šȱ•’–’Žȱ’—ĚžŽ—ŒŽȱ˜—ȱ‘Ž’›ȱ˜›Ž’—ȱŠ’™Š—œǰȱ‹žȱ‘Ž¢ȱŒ˜ž•ȱ hardly be seen as agents of any real change or importance within the institutional matrix, either in the formal or informal domain. Beginning ’—ȱ‘ŽȱŗŞşŖœǰȱ’쎛Ž—ȱ›˜ž™œȱ˜ȱ‘’—ŽœŽȱŽ—›Ž™›Ž—Žž›œȱ‹ŽŠ—ȱ˜ȱŽ–Ž›Žȱ in the treaty port economy, and they eventually played a crucial role in ‘ŽȱŗşŘŖœȱŠ—ȱŗşřŖœǯȱ‘ŽȱꛜȱŒ•Šœœȱ˜ȱŽ—›Ž™›Ž—Žž›ȱ Šœȱ˜›’’—Š••¢ȱ›˜–ȱ the segment of compradors—either compradors-turned-entrepreneurs or second- or third-generation compradors. They were familiar with the system and had a solid international background and network. Their I have discussed at length this logical link between institutional change and economic ™Ž›˜›–Š—ŒŽȱ’—ȱ‘Žȱ›Ž’˜—Š•ȱŽŒ˜—˜–¢ȱ˜ȱ™›Ž–˜Ž›—ȱ–Š›’’–Žȱ‘’—Šȱǻ˜ȱŘŖŖŖǼǯȱ ŗŖȲȱ

Modern China’s Treaty Port Economy

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™˜•’’ŒŠ•ȱŠ—ȱœ˜Œ’Š•ȱ’—ĚžŽ—ŒŽȱ’—ȱ‘Žȱ›ŽŠ¢ȱ™˜›œȱŠ••˜ Žȱ‘Ž–ȱ˜ȱœ‘Š™Žȱ the formal and informal institutions. The second type of Chinese entrepreneur evolved from the migrant-returnees. This group consisted of individuals who had migrated to foreign countries, most notably the —’ŽȱŠŽœȱŠ—ȱžœ›Š•’Šǰȱ’—ȱ‘Žȱ•ŠĴŽ›ȱŽŒŠŽœȱ˜ȱ‘Žȱ—’—ŽŽŽ—‘ȱŒŽ—tury. While abroad they learned new business methods, accumulated œ’—’ęŒŠ—ȱ ŽŠ•‘ȱ‘›˜ž‘ȱ‘Š›ȱ ˜›”ǰȱŠ—ȱ‘Ž—ȱŽŸŽ—žŠ••¢ȱ›Žž›—Žȱ˜ȱ China because of unfavorable legislation introduced in the 1880s in those foreign countries. Chapter 8 gives examples of the migrant-returnees in

˜—ȱ ˜—ǯȱ‘ŽœŽȱ›Žž›—ŽŽœȱ‘ŠȱŠ—ȱŽŸŽ—ȱ–˜›ŽȱŽŸŽ•˜™Žȱ’—Ž›—Š’˜—Š•ȱ —Ž ˜›”ȱ Š—ȱ ‹ŽĴŽ›ȱ ”—˜ •ŽŽȱ ˜ȱ ‘Žȱ ˜›Ž’—ȱ ™˜ Ž›œȱ Š—ȱ ‘Ž’›ȱ œ˜Œ’Žies, as compared to the compradors. Their local networks were also well maintained, which gave them a considerable advantage in tapping reœ˜ž›ŒŽœȱ‹ŠŒ”ȱ‘˜–Žǯȱ’‘ȱꛜ‘Š—ȱŽ¡™Ž›’Ž—ŒŽȱ˜ȱ™Š›’Œ’™Š˜›¢ȱ™˜•’’Œœȱ’—ȱ ŽœŽ›—ȱŒ˜ž—›’Žœǰȱ‘Ž¢ȱŠ•œ˜ȱŽ—Žȱ˜ȱ‹Žȱ–˜›ŽȱŠœœŽ›’ŸŽȱ’—ȱꐑ’—ȱ˜›ȱ their interests and rights. They soon became an important force of change in a number of institutions. The third group of entrepreneurs were the Chinese merchants who had no comprador or international background but who were invested with the business vision to see the myriad opportunities of the treaty port economy. Engaging with the treaty port economy was simply an investment strategy for them. The institutions of the treaty port economy were not entirely within their control, but they were subject to their negotiations. From the 1910s, they constituted a majority of the newly emerging informal business institutions, for example, the Chambers of Commerce. By this time, they also had formed the majority in the Chinese business communities in every treaty port economy. Their role as agents of change varied but became increasingly crucial. Within the Northian framework, these various Chinese entrepreneurs were the postulated agents of change who could alter the matrix out of personal economic interest. The last source of change was individuals not engaged directly in business. These included Chinese who had converted to a Western lifestyle and value system—through either education, travel, immigration, or re•’’˜—ǯȱ˜–Žȱ‘Šȱ‹ŽŽ—ȱ’—ĚžŽ—ŒŽȱ‹¢ȱ‘Žȱ—Ž ȱŒž•ž›Š•ȱ–˜ŸŽ–Ž—œȱŠŸ˜ŒŠŽȱ‹¢ȱ’—ĚžŽ—’Š•ȱ’—Ž••ŽŒžŠ•œȱŠ—ȱ‘ŽȱŽŸŽ›ȬŽ¡™Š—’—ȱ–Šœœȱ–Ž’Šǯȱȱ good deal of this was initiated by people—both Chinese and foreign—  ‘˜ȱ‘Šȱ•’Ĵ•ŽȱŒ˜—ŒŽ›—ȱ˜›ȱ™Ž›œ˜—Š•ȱŽŒ˜—˜–’Œȱ’—Ž›Žœǯȱ‘Ž’›ȱŠŒ’ŸŽȱ›˜•Žȱ ’—ȱœ‘Š™’—ȱ‘Žȱ—Ž ȱ’—œ’ž’˜—œȱ Šœȱ›’ŸŽ—ȱ–˜›Žȱ‹¢ȱŠ•›ž’œ–ȱ‘Š—ȱ™›˜ęȱ maximization. To these we must add those who embraced nationalism and held the view that it was imperative for the sake of national salvation to compete successfully with foreign enterprises in the business world,  ‘’Œ‘ȱ Šœȱ›ŽĚŽŒŽȱ’—ȱ‘Žȱ’—’ŒŽœȱ˜ȱ’—žœ›’Š•’£Š’˜—ǰȱž›‹Š—’£Š’˜—ǰȱŠ—ȱ

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Billy K. L. So

internationalization. They also abandoned the traditional legal and business cultures and fully embraced the Western legal and business system as a model of modernity and a worthwhile national goal. The unintended consequence of their zealous social missions turned out to be favorable ˜›ȱ ™›˜ęȱ –Š¡’–’£Š’˜—ǯȱ žȱ ›ŽŠ›•Žœœȱ ˜ȱ ’—Ž—’˜—ǰȱ ‘Ž’›ȱ —˜‹•Žȱ Žě˜›œȱ did help enhance the informal institutions that promoted Western-style modern economic growth in the treaty port economy. There were, of course, exceptions to this maximization mentality, such Šœȱ‘ŽȱŠ›¡’œœȱŠ—ȱ˜‘Ž›œȱ˜—ȱ‘Žȱ•ŽĞȱ ‘˜ȱ Ž›Žȱ—˜ȱ’—ȱŠŸ˜›ȱ˜ȱ‘Žȱ›ŽŠ¢ȱ port economy, which was seen as nothing but an exploitative product of Western capitalism and imperialism. One intriguing example is the ’—œ’ž’˜—ȱ˜ȱ•Š ¢Ž›œǯȱ•’œ˜—ȱ˜——Ž›ȱǻŘŖŖŝǼȱŽŠ’•Žȱ‘Žȱ—ŽŠ’ŸŽȱ’–ŠŽȱ ˜ȱ•Š ¢Ž›œȱ’—ȱ•ŽĞȬ ’—ȱ–˜Ÿ’Žœȱ˜ȱ‘ŽȱŗşŘŖœȱŠ—ȱŗşřŖœǯȱȱ’œȱŠ’›ȱ˜ȱœŠ¢ȱ‘Šȱ —˜ȱŠ••ȱ‘’—ŽœŽȱ’—Ž••ŽŒžŠ•œȱ Ž›Žȱ›ŽŒŽ™’ŸŽȱ˜ȱ™›˜ęȱ–Š¡’–’£Š’˜—ȱŠ—ȱ’œȱ ›Ž•ŠŽȱ ’—˜›–Š•ȱ ’—œ’ž’˜—œǰȱ ž™ȱ ˜ȱ ŽœŽ›—ȱ ŒŠ™’Š•’œ–ȱ ’œŽ•ǯȱ ˜ ŽŸŽ›ǰȱ ‘ŽȱŠ—’•Š ¢Ž›ȱ‹ŠŒ”•Šœ‘ȱ’—ȱ‘’—ŽœŽȱœ˜Œ’Ž¢ȱ Šœȱ—˜ȱœ’—’ęŒŠ—ȱŽ—˜ž‘ȱ˜ȱ hinder the trend up through the 1930s,11 and lawyers certainly held even more power within the treaty ports. The issue of disparity and the disadvantageous position of rural farmers engaged in contractual borrowing Šœȱ’ȱ’œȱ•’—”Žȱ˜ȱ‘Žȱ›ŽŠ¢ȱ™˜›ȱŽŒ˜—˜–¢ȱŠ›Žȱ˜žŒ‘Žȱž™˜—ȱ’—ȱŒ‘Š™Ž›ȱśǯ ȱ ’••ȱ—˜ ȱ‹›’ŽĚ¢ȱ˜ž•’—Žȱ‘ŽȱŽ’‘ȱŽ–™’›’ŒŠ•ȱŒŠœŽœȱ™›ŽœŽ—Žȱ’—ȱ‘’œȱ volume in light of the current framework. The cases will be grouped ’—˜ȱ ˜ȱŒŠŽ˜›’ŽœDZȱ꟎ȱŽŠ•’—ȱ ’‘ȱ™Ž›˜›–Š—ŒŽȱ’—ȱ‘ŽȱŒ˜—Ž¡ȱ˜ȱ’—stitutional change, and the other three with institutional change and its dynamics. Performance of the Treaty Port Economy under Institutional Change: Five Cases Chapter 2 begins by presenting a new quantitative account of the economic growth in the Lower Yangzi Delta region with Shanghai’s industrialization of the 1880s to the 1930s as a backdrop; Debin Ma next narrates the urban-based municipal institutional change that transpired in the city ˜›ȱ‘ŽȱœŠ–Žȱ™Ž›’˜ǯȱŠȱŠ›žŽœȱ’—ȱ‘’œȱŒ‘Š™Ž›ȱ˜›ȱ‘Žȱœ’—’ęŒŠ—ȱ’–™ŠŒȱ of the infrastructure and foreign elements—ranging from business networks to various forms of expertise in every aspect of urban life—on the economic performance of the city under the treaty port system. In the Far East, the city was transformed into a modern metropolis. But, it was the autonomous status of these enclaves that unleashed the immense Chinese dynamism of the market economy in a modern sense. A conducive environment for modernity created in the treaty port concessions was For information on Marxism and the labor movements in modern China, see Dirlik ǻŗşşşǼȱŠ—ȱŽ››¢ȱǻŗşşřǼǯ ŗŗȲȱ

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unmatched by anywhere else in China. In this way, Shanghai generated not only new and unprecedented commercial wealth but also a rich milieu of cultural transplantation and innovation, in which was embedded ‘Žȱ —Ž ȱ ‹žœ’—Žœœȱ Ž‘˜œȱ ˜ȱ ™›˜ęȱ –Š¡’–’£Š’˜—ǯȱ Šȱ Š•œ˜ȱ ™’—™˜’—œȱ ‘Žȱ paradoxical phenomenon that although the treaty port system opened up abundant new economic opportunities to Chinese entrepreneurs who took advantage of this new institutional matrix, and subsequently did extremely well in the business world, the safe havens largely denied them ›ŽŠŽ›ȱ™˜•’’ŒŠ•ȱ™Š›’Œ’™Š’˜—ȱ’—ȱ‘Ž’›ȱ–ž—’Œ’™Š•ȱœŽ•Ȭ˜ŸŽ›—Š—ŒŽǯȱ Žȱ‘Ž—ȱ concludes with the fact that whereas Western institutional implants resulted in rapid economic growth in terms of industrialization and GDP indexes, economic development in modern China must still be observed in terms of the political economy rather than as pure market force. Tomoko Shiroyama provides in chapter 3 a detailed narrative of the Shanghai real estate boom in the early twentieth century against the related institutional change. This chapter discusses how and why Shanghai’s wealth grew in a well-constructed real estate market. Urban markets made it possible for private and public individuals to expand their perœ˜—Š•ȱ ˜›ȱ ™ž‹•’Œȱ  ŽŠ•‘ǯȱ —ȱ œ˜–Žȱ ˜›Ž’—ȱ œŽĴ•Ž–Ž—œǰȱ œžŒ‘ȱ Šœȱ ‘Š—‘Š’ǰȱ land was leased, based on a complex contractual basis between Chinese landowners and foreign tenants. This institutional framework for land property evolved over time within the treaty port urban governance structure. Major instruments are discussed at length to illustrate how the new institutions helped secure property rights. This development induced a dynamism in the Shanghai real estate market that engaged Chinese and foreigners in a complex form of landownership and tenancy. ‘Žȱ’—œ’ž’˜—Š•ȱ›Š–Ž ˜›”ȱ˜›ȱ‘Žȱ‹ŽĴŽ›ȱ™›˜ŽŒ’˜—ȱ˜ȱ’—’Ÿ’žŠ•ȱ™›˜™erty rights in Shanghai also generated a prosperous real estate dealership business. The Shanghai real estate boom no doubt supported the remarkŠ‹•Žȱ›˜ ‘ȱ˜ȱŠȱꗊ—Œ’Š•ȱŠ—ȱŒŠ™’Š•ȱ–Š›”Žȱ›Ž•ŠŽȱ˜ȱ‘Žȱ–˜›ŠŽȱ’—dustry, equity loans on landed property, and business lending on landed collateral by modern banks. It also promoted large-scale investment vital to modern businesses. ‘Žȱ ‘’›ȱ ŒŠœŽȱ ǻŒ‘Š™Ž›ȱ ŚǼȱ Œ˜—ŒŽ›—œȱ ‘Žȱ ’ŸŽ›Ž—ȱ ™Š‘œȱ ˜ȱ ‘Žȱ ›’ŒŽȱ Š—ȱ  ‘ŽŠȱ ̘ž›ȱ ’—žœ›’Žœȱ Š—ȱ ‘Žȱ ›Ž•ŠŽȱ ’—œ’ž’˜—Š•ȱ Œ‘Š—Žǯȱ ›˜–ȱ ŗşŖŖȱ˜ȱŗşřŜǰȱ›’ŒŽȱŠ—ȱ̘ž›ȱ–Š›”Žœȱ‹˜‘ȱŽ¡™Š—Žǰȱ‹žȱ‘Žȱ˜›–Ž›ȱœŠ ȱ a proliferation of market agents without vertical integration as a result of the constraints of local customs, that is, informal institutions. In con›Šœǰȱ‘Žȱ ‘ŽŠȱ̘ž›ȱ›ŠŽǰȱž—Œ˜—œ›Š’—Žȱ‹¢ȱ•˜ŒŠ•ȱŒžœ˜–œǰȱŽ¡™Š—Žȱ ’œȱ™›˜žŒ’˜—ȱŒŠ™ŠŒ’¢ǰȱ ‘’Œ‘ȱ–˜’ŸŠŽȱꛖœȱ’—ȱ‘Š—‘Š’ȱ˜ȱž—Ž›Š”Žȱ institutional change, signifying the vertical integration of production, purchasing, and distribution. The vertical model of organization, which

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was conducive to large-scale investment, mechanization, the application of new technology, and widespread marketing and retailing networks ŒŠŽ›’—ȱ˜ȱ–ŠœœȱŒ˜—œž–™’˜—ǰȱ ŠœȱŠ›ȱ‹ŽĴŽ›ȱŠŒ’•’ŠŽȱ‹¢ȱ‘Žȱ—Ž ȱ’—œ’tutional frameworks, for example, corporate law and the capital market, that emerged in treaty ports such as Shanghai. Through Kai-yiu Chan’s contrastive study of two trades that linked agrarian production to the urban markets of mass consumption, the correlation between institutional change and productivity and performance becomes discernible. The ŒŠœŽœȱ˜ȱ›’ŒŽȱŠ—ȱ̘ž›ȱŠ•œ˜ȱ–Š”ŽȱŠ™™Š›Ž—ȱ‘Šȱ‘Žȱ›ŽŠ¢ȱ™˜›ȱŽŒ˜—˜–¢ȱ was able to achieve economic integration with rural regions beyond the boundaries of the treaty ports. —ȱŒ‘Š™Ž›ȱśǰȱŽ’ȱ˜ž—¢ȱ’—ȱ‘Š—˜—ȱ›˜Ÿ’—ŒŽȱ’••žœ›ŠŽœȱ‘ŽȱŽŒ˜nomic integration that took place between the treaty port economy and ‘Žȱ•˜ŒŠ•ȱŽŒ˜—˜–’Žœǰȱ ‘’Œ‘ȱ‘Ž›Ž‹¢ȱŒ‘Š—Žȱ‘Žȱ Š¢ȱ•˜ŒŠ•ȱŒ˜Ĵ˜—ȱŽ¡’•Žȱ production was conducted in institutional terms. Wei County experienced major economic transformations in the 1920s and early 1930s up until the outbreak of war. Treaty port economic forces from Tianjin and ˜‘Ž›ȱ›ŽŠ¢ȱ™˜›œǰȱ‘›˜ž‘ȱ‘’—ŽœŽȱǻŠ—ȱ•ŠŽ›ȱŠ•œ˜ȱ Š™Š—ŽœŽǼȱ–Ž›Œ‘Š—œǰȱ penetrated the highly stagnant structure of native cloth weaving, which  ŠœȱŽ¡›Ž–Ž•¢ȱ›Žœ’œŠ—ȱ˜ȱ‘Žȱ–˜›ŽȱŽĜŒ’Ž—ȱ–ŽŒ‘Š—’£ŽȱŽŒ‘—˜•˜¢ȱ˜ȱ handloom weaving; this factor assisted in relegating it to a household Œ˜ĴŠŽȱ ’—žœ›¢ǯȱ ˜—Ȭ–’—ȱ ’™ȱ ‘Šœȱ ˜Œž–Ž—Žȱ ‘’œȱ œ›žŒž›Žȱ Š—ȱ ’œȱ path of change following the advent of new institutions such as the ™žĴ’—Ȭ˜žȱœ¢œŽ–ǯȱ‘’œȱœ¢œŽ–ȱŽ—Š‹•Žȱ–˜›Žȱ–Ž›Œ‘Š—œȱ˜ȱ–Š”ŽȱžœŽȱ˜ȱ ‘ŽȱŒ˜—›ŠŒžŠ•ȱ’—Ž›•˜Œ”’—ȱ™›˜žŒ’˜—ȱ™ŠĴŽ›—ǰȱ ‘’Œ‘ȱ›Š’œŽȱ™›˜žŒ’Ÿity and lowered their transaction and transformation costs per unit of –Š›”ŽŽȱ˜ž™žǯȱ••ȱ˜ȱ‘’œȱ›Š—œ™’›ŽȱŠ–’ȱ‘ŽȱŽ¡™Š—’—ȱ’—ĚžŽ—ŒŽȱ˜ȱ the treaty port economy in terms of institutional change, the construction ˜ȱŠȱ›Š—œ™˜›Š’˜—ȱ’—›Šœ›žŒž›ŽǰȱŠ—ȱꗊ—Œ’Š•ȱ™Ž—Ž›Š’˜—ȱ’—˜ȱ‘’œȱ›žral county. Regardless of who gained the upper hand in the Wei County –Š›”Žǰȱ‘Žȱ‘’—ŽœŽȱ˜›ȱ Š™Š—ŽœŽǰȱ‘Žȱ›Žœž•ȱ ŠœȱŠȱ̘ž›’œ‘’—ȱ—Š’ŸŽȱŒ˜ton textile industry that was able to compete with both the modern cotton textile factories in the treaty ports and with manufactured textiles imported from overseas. By the 1920s, the larger treaty ports had integrated with the economies of their neighboring counties. Making use of a set of village-level œ˜Œ’Š•ȱœž›ŸŽ¢œȱŒ˜—žŒŽȱ’—ȱŗşŘşǰȱŗşřŜǰȱŠ—ȱŗşŚŞǰȱŒ‘Š™Ž›ȱŜȱŽœŒ›’‹Žœȱ‘Žȱ integration process between Shanghai and the land and labor markets ŽŸŽ•˜™Žȱ’—ȱ‘Žȱ—ŽŠ›‹¢ȱž¡’ȱ˜ž—¢ȱ˜ȱ ’Š—œžȱ›˜Ÿ’—ŒŽǯȱ Ž›Žǰȱ‘ŽȱŸ’••ŠŽȱŠ–’•¢ȱ’—Œ˜–Žȱ›˜œŽȱ‹¢ȱŠ•–˜œȱśŖȱ™Ž›ŒŽ—ȱž›’—ȱ‘ŽȱŗşřŖœǰȱœ’—’¢’—ȱ a substantial increase in crop output, manufactured silk, and associated services. Market integration with Shanghai accounted for this remarkable

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ꗊ—Œ’Š•ȱ’–™›˜ŸŽ–Ž—ǰȱ‹žȱ–˜›Žȱ’–™˜›Š—•¢ȱ‘Žȱ—Ž ȱ–Š›”Žȱ˜™™˜›ž—’’Žœȱ Ž›Žȱ—˜ ȱŠŸŠ’•Š‹•Žȱ˜ȱ ˜–Ž—ǰȱ–Š—¢ȱ˜ȱ ‘˜–ȱ Ž›ŽȱŠ•œ˜ȱꗍ’—ȱ employment opportunities in Shanghai. The expanding treaty port economy created an urban labor market, skilled and unskilled, of service inžœ›’ŽœȱŠ—ȱ–Š—žŠŒž›’—ǯȱěȬŠ›–ȱ ŠŽȱŽ–™•˜¢–Ž—ȱ’—ȱ‘ŽȱŸ’••ŠŽœȱ and townships, which grew as a spillover of Shanghai’s prosperity, also ŠĴ›ŠŒŽȱ Š–™•Žȱ •Š‹˜›ȱ ˜›ŒŽœǰȱ Š•‘˜ž‘ȱ ’ȱ Ž–Ž›Žȱ  ’‘˜žȱ Šȱ ȃ›Š—œ˜›mative growth” breakthrough in the Wuxi agrarian economy. As James Kung, Daniel Lee, and Nansheng Bai observe, there were signs of an early “Green Revolution,” as the Wuxi local economy slowly adapted to become a high-yield, surplus-marketed agrarian system based on sustained commercialization and industrialization with the help of experimental public sericulture institutes that transferred technologies to rural areas. The authors argue against the notion that the county experienced Š—¢ȱ¢™Žȱ˜ȱ’—Ÿ˜•ž’˜—ȱ˜›ȱž—Ž›ŽŸŽ•˜™–Ž—ǯȱ‘ŽȱŒ‘Š™Ž›ȱŒ˜—ę›–œȱ‘Žȱ economic rationality of the village households in Wuxi in response to the opportunities created by the treaty port economy. Dynamics in Institutional Change: Three Cases In chapter 7, Kentaro Matsubara provides a succinct account of the complex traditional landed property rights and land transactions in Qing ‘’—Šǰȱ ’‘ȱŠȱ˜Œžœȱ˜—ȱ‘ŽȱŽ ȱŽ››’˜›’Žœȱ˜ȱ‘Žȱ—˜›‘ȱ˜ȱ ˜—ȱ ˜—ȱ Island, which had been leased to Britain for ninety-nine years by the Qing ˜ŸŽ›—–Ž—ȱ’—ȱŗŞşŞǯȱ ŽȱŽ¡™•˜›Žœȱ’—ȱŽŠ’•ȱ‘Žȱ™˜Ž—’Š•ȱŒ˜—žœ’˜—ȱ’—ȱ‘Žȱ traditional mode of landownership transactions, in particular those that Š••˜ Žȱ ˜›ȱ ‘Žȱ ’쎛Ž—’Š’˜—ȱ ‹Ž ŽŽ—ȱ œž›ŠŒŽȱ Š—ȱ œž‹œ˜’•ȱ ›’‘œǰȱ Š—ȱ contextualizes this issue in detailed court cases from the New Territories. Matsubara highlights the strong association of the legal aspect of property rights transactions with the social, religious, and political relationships among the parties concerned. This association prevented absolute ownership from developing in the modern sense. Although the state might have preferred for absolute ownership to exist so as to reduce the amount of litigation, the state itself simply was not conducive to market›’ŸŽ—ȱ•Š—ȱ›Š—œŠŒ’˜—œǯȱ ’œȱŒ˜—Œ•žœ’˜—ȱ’œȱ‘Šȱ ‘Ž›ŽŠœȱ‘Ž›Žȱ Ž›Žȱ‹˜‘ȱ detrimental and compatible elements in traditional land-property rights, for both private parties and the Qing government, the market had never been a primary consideration. This was the local situation prior to the end ˜ȱ‘Žȱ—’—ŽŽŽ—‘ȱŒŽ—ž›¢ǯȱЎ›ȱ‘ŽȱŽ ȱŽ››’˜›’Žœȱ‹ŽŒŠ–Žȱ™Š›ȱ˜ȱ‘Žȱ ›ŽŠ¢ȱ™˜›ȱŽŒ˜—˜–¢ȱ˜ȱ ˜—ȱ ˜—ǰȱ‘Žȱ•˜ŒŠ•ȱ’—œ’ž’˜—œȱ˜ȱ•Š—ȱ™›˜™erty were bound to change. As Matsubara discusses in this chapter, the British colonial government established a Land Court to handle disputes in the New Territories and introduced the institution of “crown land” in

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which land ownership had to be clearly registered with the colonial govŽ›—–Ž—ȱŠœȱ•ŽŠœŽǯȱ‘’œȱŽěŽŒ’ŸŽ•¢ȱŠ•Ž›Žȱ‘Žȱ›Š’’˜—Š•ȱ’—œ’ž’˜—ȱŠ—ȱ Ž•’–’—ŠŽȱ‘Žȱœž›ŠŒŽȱŠ—ȱœž‹œ˜’•ȱ˜ —Ž›œ‘’™ȱ’쎛Ž—’Š’˜—ǯȱ In an expanding market economy such as that of Guangdong Prov’—ŒŽȱŠ—ȱ ˜—ȱ ˜—ǰȱ‹žœ’—Žœœȱ˜›Š—’£Š’˜—œȱ Ž›ŽȱŒ›žŒ’Š•ǯȱ—ȱŒ‘Š™Ž›ȱŞǰȱ Stephanie Chung explores the interplay between the traditional institution of the tongȱ’—ȱ žŠ—˜—ȱŠ—ȱ ˜—ȱ ˜—ȱŠ—ȱ‘Žȱ—Ž •¢ȱ’–™•Š—Žȱ corporation legalized under British company ordinances beginning in ‘ŽȱŗŞŜŖœǯȱ‘Žȱ™›˜ŒŽœœǰȱŠœȱœ‘ŽȱŽ–˜—œ›ŠŽœȱ‘›˜ž‘ȱŒ˜™’˜žœȱŽŠ’•œȱ˜ȱ business cases and lawsuits, was far from being the straightforward and linear transplantation of Western legality resulting in Chinese adaptation Š—ȱŽŒ˜—˜–’Œȱ™›˜œ™Ž›’¢ǯȱ‘Žȱ‘’—ŽœŽȱꛖœȱœ‘˜ Žȱ•’Ĵ•Žȱ’—Ž›Žœȱ’—ȱ‘’œȱ new mode of corporate governance, which required registration with the ˜ŸŽ›—–Ž—ȱŠ—ȱ‘Žȱ–˜›Žȱ›Š—œ™Š›Ž—ȱ’œŒ•˜œž›Žȱ˜ȱŠȱꛖȂœȱŠœœŽœȱŠ—ȱ ˜ —Ž›œ‘’™ǯȱ‘Žȱ‘’—ŽœŽȱꛖœȱ™›ŽŽ››Žȱ‘ŽȱŠ–‹’ž’¢ȱ˜ȱ‘Ž’›ȱ›Ž¢ȱ•ŽŠ•ȱ status in cross-border economic activities. The situation changed when ‘Žȱ žŠ—˜—ȱ –’•’Š›¢ȱ ˜ŸŽ›—–Ž—ȱ ŠĴŽ–™Žȱ ˜ȱ ’—›˜žŒŽȱ •Š—ȱ ›Žistration in 1923 that ignored ambiguous land claims. The subsequent ˜ĜŒ’Š•ȱŠžŒ’˜—’—ȱ˜ȱŒ˜—ęœŒŠŽȱ™ž‹•’Œȱ•Š—œȱ›’Ž›ŽȱŠȱ›ŽŠ•ȱŽœŠŽȱ–Š›”Žȱ‹˜˜–ǯȱŽŠ— ‘’•Žǰȱ‘Žȱ ˜—ȱ ˜—ȱŒ˜ž›œȱ‹ŽŠ—ȱ˜ȱŽŸŽ•˜™ȱŒ˜––˜—ȱ law rules at the turn of the century that repealed the legal status of the ambiguous corporate institutions in traditional Chinese business models. ‘ŽœŽȱ™˜•’’ŒŠ•ȱŠ—ȱŽŒ˜—˜–’ŒȱŒ‘Š—Žœȱ’—ȱ žŠ—˜—ȱŠ—ȱ ˜—ȱ ˜—ȱ•Žȱ ˜ȱ‘Žȱ—˜’ŒŽŠ‹•Žȱ’—Œ›ŽŠœŽȱ˜ȱ‘’—ŽœŽȱꛖœȱ–’›Š’—ȱ˜ȱŠ—ȱ›Ž’œŽ›’—ȱ ’—ȱ ˜—ȱ ˜—ǯȱŠ’—ǰȱ‘ž—ȱ’••žœ›ŠŽœȱ‘›˜ž‘ȱŒŠœŽœȱ‘Šȱ‘Žȱ‘’—ŽœŽȱ –Ž›Œ‘Š—œȱŽ—ŠŽȱ’—ȱ ˜—ȱ ˜—ȱŒ˜›™˜›ŠŽȱ•Š ȱ Ž›Žȱ—˜ȱ˜™Ž›Š’—ȱ’—ȱŠȱ homogeneous fashion. Some merchants had considerable overseas experience, primarily the migrant-returnees, who actively exploited the corporate institutions to their own best interest. There were also merchants with far less overseas experience, who perceived the new institution strictly in terms of a strong traditional vision. Clashes of understanding Œ˜—ŒŽ›—’—ȱ‘Žȱ—Ž ȱ’—œ’ž’˜—ȱ Ž›Žȱ’—ŽŸ’Š‹•ŽǰȱŠ—ȱ‘Žȱ˜žŒ˜–Žœȱ˜ĞŽ—ȱ  Ž›Žȱ—˜ȱŽ—’›Ž•¢ȱŽŒ’Žȱ‹¢ȱ‘ŽȱŒ˜ž›ȱ’—ȱŠŒŒ˜›Š—ŒŽȱ ’‘ȱ‘Žȱ•ŽĴŽ›ȱ˜ȱ‘Žȱ law because of the complex social and political networks at work. In any event, the treaty port legal framework regarding business organizations did open up new business opportunities and modes of conduct for the ‘’—ŽœŽȱ–Ž›Œ‘Š—œȱ’—ȱ‘Žȱ ˜—ȱ ˜—ȱ›ŽŠ¢ȱ™˜›ȱŽŒ˜—˜–¢ǯȱ ‘Žȱ ꗊ•ȱ Ž–™’›’ŒŠ•ȱ ŒŠœŽȱ Œ˜—ŒŽ›—œȱ ‘Žȱ ŽŸŽ•˜™–Ž—ȱ ˜ȱ Œ˜›™˜›ŠŽȱ •Š ȱ ’—ȱ‘’—Šȱ›˜–ȱŠȱ•ŽŠ•ȱ‘’œ˜›’ŒŠ•ȱ™Ž›œ™ŽŒ’ŸŽǯȱ—Žȱ˜ȱ‘Žȱ–˜œȱ’—ĚžŽ—’Š•ȱ economic institutions implanted from the West to modern China is, as mentioned previously, the corporation, or joint-stock company with limited liability. This was a decidedly exogenous implant with no Chinese

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›˜˜œȱŠ—ȱ‘Žȱ˜ž—Š’˜—ȱ˜ȱ–˜Ž›—ȱ•Š›ŽȬœŒŠ•Žȱꛖœȯœ˜ȬŒŠ••ŽȱŒŠ™’Š•’œȱ ‹žœ’—Žœœȱ˜™Ž›Š’˜—œȱ ’‘’—ȱ‘Žȱ–˜Ž›—ȱꗊ—Œ’Š•ȱŠ—ȱŒŠ™’Š•ȱ–Š›”Žǯȱȱ’—duced and made possible capital formation that was vital for technologydriven modern industries in China. The importance of the corporation was ŽŒ‘˜Žȱ’—ȱ‘Žȱ ›’’—œȱ˜ȱ’—ĚžŽ—’Š•ȱ‘’—ŽœŽȱ’—Ž••ŽŒžŠ•œȬŒž–Ȭ˜ĜŒ’Š•œȱŠȱ the turn of the last century, including Wu Tingfang, Liang Qichao, and Zhang Jian, among others. In this chapter, Albert Lee and I trace the legislative evolution of three succeeding Chinese company law regimes from 1904 to 1929, examining the regulatory framework of each with a focus ˜—ȱ ‘Žȱ •ŽŠ•ȱ ™›˜Ÿ’œ’˜—œȱ Žę—’—ȱ ‘Žȱ ›’‘œȱ Š—ȱ ž’Žœȱ ˜ȱ ’›ŽŒ˜›œȱ Š—ȱ shareholders. The chapter seeks to show that there were clear intentions on each occasion to improve the law so as to promote the corporation –˜Ž•ǯȱ‘ŽȱŠœ”ȱ ŠœȱŒ˜–™•Ž¡ǰȱŠœȱŠȱꗎȱ‹Š•Š—ŒŽȱ Šœȱ›Žšž’›Žȱ‹Ž ŽŽ—ȱ‘Žȱ ™›˜ŽŒ’˜—ȱ˜ȱ‘Žȱ’›ŽŒ˜›œȱǻ˜›ȱ‹žœ’—Žœœ™Ž˜™•ŽǼȯœ˜ȱ‘Šȱ‘Ž¢ȱ ˜ž•ȱŠ˜™ȱ this model instead of more conventional forms such as private companies or partnerships—and the protection of shareholders (large and small inŸŽœ˜›œȱŠ•’”ŽǼȱ ‘˜ȱ Ž›Žȱœž™™˜œŽȱ˜ȱ’—ŸŽœȱ˜—ȱŠ—ȱ’–™Ž›œ˜—Š•ȱ‹Šœ’œȱŠ—ȱ  ‘˜œŽȱ’—Ž›ŽœȱŒ˜ž•ȱ‹Žȱ™›˜ŽŒŽȱ˜—•¢ȱ‹¢ȱŒ˜›™˜›ŠŽȱ•Š ǯȱЎ›ȱŽŠ’•Žȱ discussions of the agents of change, the models they adopted, and the complex legislative process for each time that the law was enacted and reenacted, we conclude that whereas there was no large-scale adoption of the corporate model in the Chinese business world, successive regimes clearly had taken this legislation seriously, placing it among their top leg’œ•Š’ŸŽȱ™›’˜›’’Žœǰȱ’—ȱŠ—ȱŠĴŽ–™ȱ˜ȱ–Š”Žȱ‘Žȱ•Š ȱ–˜›ŽȱŽěŽŒ’ŸŽǰȱŠœȱ ’›‹¢ȱ observed. Also, there was indeed enthusiasm among some Chinese entrepreneurs who wanted to adopt the model, and, more importantly, some of them had done well. We urge future studies to explore structural problems such as weak government enforcement characteristics and the lack of complementary informal institutions in early twentieth-century China. Both factors may account for the absence of wholesale transplanting of the model in that country. From this conclusion, we may infer that a majority of Chinese companies incorporated in the 1920s and 1930s would have been situated in or near the treaty port economies where enforcement was strongest and the cultural atmosphere most conducive to this model. ‘’œȱœŠŽ–Ž—ȱŠ™™ŽŠ›œȱ˜ȱŒ˜››˜‹˜›ŠŽȱ‘Žȱꗍ’—œȱ’—ȱŒ‘Š™Ž›ȱŞǰȱ ‘Ž›Žȱ‘Žȱ –˜Ž•ȱ ŠœȱŽ¡Š–’—Žȱ’—ȱ‘ŽȱŒ˜—Ž¡ȱ˜ȱ ˜—ȱ ˜—ǯ Concluding Remarks ¢ȱꛜȱ›ŽĚŽŒ’˜—ȱŒ˜—ŒŽ›—œǰȱŠœȱ™›ŽŸ’˜žœ•¢ȱ—˜ŽǰȱŠȱ•˜’ŒŠ•ȱ•’—”ȱ‘ŠȱŽ¡’œœȱ between the remarkable performance of the Chinese treaty port economy Š—ȱ ’œȱ —Ž ȱ ’—œ’ž’˜—Š•ȱ –Š›’¡ǯȱ Š—ȱ ‘’œȱ •’—”ȱ ‹Žȱ ŽœŠ‹•’œ‘Žȱ ꛖ•¢ȱ Šœȱ Šȱ ŒŠžœŽȬŠ—ȬŽěŽŒȱ ›Ž•Š’˜—œ‘’™ȱ ˜›ȱ Šȱ œŠ’œ’ŒŠ••¢ȱ Œ˜››Ž•ŠŽȱ ›Ž•Š’˜—œ‘’™ȱ

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based on direct evidence? In order to establish a consequential and causal relationship, or any correlation between the two, we must sketch the details of at least certain select enterprises. These details must include all major decisions of structural change in the context of the trajectory of institutional change for the individual institutions, both formal and informal, in each and every treaty port economy. Does that level of knowledge exist? Or, is there an adequate amount of information for the creation of such knowledge? Despite great advancements in our understanding of –˜Ž›—ȱ‘’—ŠȱŠ—ȱŠȱ›ŽŒŽ—ȱ›ŽŸ’ŸŠ•ȱ˜ȱ’—Ž›Žœȱ’—ȱ‘’œȱꎕǰȱŠȱŒ˜—œ’Ž›Š‹•Žȱ gap remains in our present ability to substantiate whatever conclusions we might reach at this preliminary stage. The empirical studies in this volume provide a few qualitative and quantitative cases with discernable links. These links are then meant to generate more constructive and ›ŽĚŽŒ’ŸŽȱŽ‹ŠŽȱ›Š‘Ž›ȱ‘Š—ȱ˜ȱ™›˜Ÿ’ŽȱŒ˜—Œ•žœ’ŸŽȱŠ—œ Ž›œǯȱž›‘Ž›ȱœž’ŽœȱŠ”Ž—ȱ›˜–ȱŠȱ–žŒ‘ȱ•Š›Ž›ȱ™˜˜•ȱ˜ȱŒŠœŽœȱ–’‘ȱ‹ŽȱŠ‹•Žȱ˜ȱŽěŽŒ’ŸŽ•¢ȱ substantiate certain claims or conclusions, but that is beyond the scope of the present volume. ŽŒ˜—ǰȱ ‘Ž—ȱ‘’—ŠȱꛜȱŽ—ŠŽȱ ’‘ȱ‘Žȱ›ŽŠ¢ȱ™˜›ȱœ¢œŽ–ǰȱŽŸ˜•Ÿing along a line of internationalization, urbanization, and industrialization by, in part, imitating the West, it was inevitable that the nation’s economy would become increasingly sensitive to the impact of international –Š›”Žȱ̞ŒžŠ’˜—œǯȱ‘’—ŠȂœȱ›ŽŠ¢ȱ™˜›ȱŽŒ˜—˜–¢ȱ Šœȱ’ŽȱŒ•˜œŽ•¢ȱ˜ȱ‘Žȱ global economy, and it shared in the international market’s prosperity Š—ȱ™•’‘ǯȱ ˜ ŽŸŽ›ǰȱŠœȱ—˜ŽȱŽŠ›•’Ž›ǰȱ‹ŽŒŠžœŽȱ‘Žȱ›ŽŠ¢ȱ™˜›ȱŽŒ˜—˜–¢ȱ represented only a small portion of China’s economy as a whole, both in terms of space and total output, China was able to absorb the impact of ’—Ž›—Š’˜—Š•ȱ–Š›”Žȱ̞ŒžŠ’˜—œȱ›Ž–Š›”Š‹•¢ȱ Ž••ǯȱ‘ŽȱŠŒȱ‘Šȱ‘Žȱ•˜‹Š•ȱꗊ—Œ’Š•ȱ–Ž•˜ —ȱ‘Šȱ‹ŽŠ—ȱ’—ȱ–’ȬŘŖŖŞȱ‘Šœȱ—˜ȱ¢Žȱœ’—’ęŒŠ—•¢ȱ›ŽžŒŽȱ‘’—ŠȂœȱ›˜ ‘ȱ›ŠŽȱœŽŽ–œȱ˜ȱœžŽœȱŠȱ›ŽŒž››’—ȱ™ŠĴŽ›—ȱ’—ȱŽ›–œȱ of China’s involvement in the world economy since the early twentieth century. On the contrary, the recent globalization of China also implies problems of equality and disparity in the distribution of opportunities Š—ȱ™›˜œ™Ž›’¢ȱŠ–˜—ȱ’쎛Ž—ȱœ˜Œ’Š•ȱ›˜ž™œȱŠ—ȱŒ˜––ž—’’Žœǰȱ‹Ž ŽŽ—ȱ urban and rural areas, and between coastal and inland China. These cur›Ž—ȱŒ›’’Œ’œ–œȱ˜ȱ•˜‹Š•’£Š’˜—ȱŠ—ȱŒŠ™’Š•’œ–ȱǻœŽŽȱ’›•’”ȱŗşşŚǰȱŗşşŝǼȱŠ›Žȱ also valid for the treaty port economy. But, the treaty port system was not developed with equality, social justice, or human rights in mind. Rather, it was constructed for the privileges of foreigners on Chinese soil. The treaty port economy was never intended to be a response to inequality, disparity, or injustice; it was created primarily for the market, competition, and growth.

Modern China’s Treaty Port Economy

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‘Žȱ‘’›ȱ›ŽĚŽŒ’˜—ȱŽŠ•œȱ ’‘ȱŠȱŒ˜–™Š›’œ˜—ȱ‹Ž ŽŽ—ȱ‘Žȱ›ŽŠ¢ȱ™˜›ȱ economy and the special economic zones created in the 1980s and 1990s. ™ŽŒ’Š•ȱŽŒ˜—˜–’Œȱ£˜—Žœȱ Ž›ŽȱꛜȱŽœ’—Žȱ’—ȱŗşŝşȱ˜ȱ˜™Ž›ŠŽȱ’—ȱŽœ’—ŠŽȱŽ››’˜›’Žœȱ’—ȱ‘’—Šȱ ’‘ȱœ™ŽŒ’Š•ȱŽŒ˜—˜–’ŒȱŠ—ȱ’—œ’ž’˜—Š•ȱǻ•ŽŠ•Ǽȱ œŽĴ’—œDzȱ ‘Ž¢ȱ  ˜ž•ȱ ‹Žȱ Š••˜ Žȱ ˜ȱ ž’•’£Žȱ —Ž ȱ ’——˜ŸŠ’˜—œǰȱ ŠĴ›ŠŒ’—ȱ foreign investment and experimenting with Western-style economic organizations, while China embarked on a course of economic moderniza’˜—ȱž—Ž›ȱŠ—ȱ˜™Ž—ȱ˜˜›ȱ—Š’˜—Š•ȱ™˜•’Œ¢ȱǻŠ••ȱŗşşŗDzȱŠ”ȱŗşşŝǼǯȱ‘Ž—£‘Ž—ȱ  Šœȱ ‘Žȱ ꛜȱ œ™ŽŒ’Š•ȱ ŽŒ˜—˜–’Œȱ £˜—Žǰȱ ŽœŠ‹•’œ‘Žȱ Š•˜—ȱ Š—ȱ ž—ŽŸŽ•˜™Žȱ Š—ȱ™˜˜›ȱ‹˜›Ž›ȱ˜ —ȱœ’žŠŽȱŠ“ŠŒŽ—ȱ˜ȱ ˜—ȱ ˜—ȂœȱŽ ȱŽ››’˜›’Žœǯȱ Since then, it has become a vibrant industrial and commercial city with –’••’˜—œȱ˜ȱ›Žœ’Ž—œȱŠ—ȱŠȱ‘’‘ȱ™Ž›ȱŒŠ™’Šȱ ȱǻžȱŗşşşǼǯȱ Are these special economic zone economies a shadow of the treaty port economy? There is no issue of sovereignty in this case. Special economic zones have always operated under Chinese sovereignty. Their inœ’ž’˜—Š•ȱ ›Š–Ž ˜›”ǰȱ ’—Œ•ž’—ȱ ‘Žȱ •ŽŠ•ȱ œ¢œŽ–ǰȱ ’쎛œȱ ›˜–ȱ ‘Šȱ ˜ȱ other areas of China in terms of being more conducive to foreign invest–Ž—ȱŠ—ȱ’—Ž›—Š’˜—Š•’£Š’˜—ȱǻŠž‘˜—ȱŘŖŖŝǰȱŒ‘Š™ǯȱŗŝǼǯȱ—ȱ‘’œȱœŽ—œŽǰȱ there is a similarity between the special economic zone economy and the treaty port economy. Regarding formal institutional enforcement in the ŽœŽ›—ȱœŽ—œŽȱ˜ȱ•ŽŠ•’¢ǰȱ‘Ž›Žȱ–’‘ȱ‹Žȱ–˜›Žȱ’쎛Ž—ŒŽœȱ‘Š—ȱœ’–’•Š›’ties, but in terms of lacking the separation of powers and a democratic constitutional order as the basis for the rule of law, the two do not diverge from each other very much. In any event, the treaty port economy led China on the path of economic modernization, but it also generated enormous change within institutions and the overall business culture, in ™Š›’Œž•Š›ȱ’—ȱŽ›–œȱ˜ȱ™›˜ęȱ–Š¡’–’£Š’˜—ǯȱ—’•ȱ‘Žȱ•ŠŽȱŗşşŖœǰȱœ™ŽŒ’Š•ȱ economic zones had not created a comparable impact, but a belief in maximization had already swept across China. The privileges of special economic zones have since been made available to more Chinese territories, making the institutional matrix in these zones not quite as special anymore. They have also lost their historical importance within the formidable rise of major international metropolises such as Shanghai, žŠ—£‘˜žǰȱŠ—ȱŽħ’—ǯȱžŒ‘ȱ˜ȱ‘Žȱ’—œ’ž’˜—Š•ȱŒ‘Š—Žȱ‘Šȱ‘Šȱ‹ŽŽ—ȱ borrowed from the West, reinvented, and tested earlier in these special economic zones has since been transplanted into other regions of China, including the three aforementioned metropolitan areas.12 In this sense, the special economic zone as an institutional matrix played a role similar to that of the treaty port economy in early twentieth-century China. Both provided the impetus for market-related institutional change that was For a succinct account of China’s economic reform since 1978 as a backdrop for the role ˜ȱ‘Žȱœ™ŽŒ’Š•ȱŽŒ˜—˜–’Œȱ£˜—ŽœǰȱœŽŽȱŠž‘˜—ȱǻŗşşśǰȱŘŖŖŝǼǯ ŗŘȲȱ

ŘŜ

Billy K. L. So

conducive to China’s remarkable economic growth, and both were also based largely on privilege and disparity. In any event, both became platforms where China reconnected with the global economy and its various institutions. ˜ž›‘ǰȱ’ȱ’œȱ’–™Ž›Š’ŸŽȱ˜ȱ›ŽĚŽŒȱ˜—ȱ‘ŽȱœŠŽȂœȱ›˜•Žȱ’—ȱ‘ŽȱŽŸŽ•˜™–Ž—ȱ of China’s market economy and perhaps more tangentially to political ŽŒ˜—˜–¢ȱ’—ȱŠȱ‘Ž˜›Ž’ŒŠ•ȱœŽ—œŽǯȱ•‹Ž›ȱŽžŽ› Ž›”Ž›ȱǻŗşŞŚǼȱ‘Ž•ȱ‘Šȱ‘Žȱ œŠŽȱ˜ȱ•ŠŽȱ’–™Ž›’Š•ȱ‘’—Šȱ’ȱ•’Ĵ•Žȱ˜ȱŽ—Ž›ŠŽȱ–˜Ž›—ȱŽŒ˜—˜–’ŒȱŽvelopment, which was awaiting a modern state to engage in necessary infrastructure building. This is in line with the established literature on ŽŒ˜—˜–’Œȱ ‘Ž˜›’Žœȱ ’—ȱ ȃ—Ž ȱ ’—œ’ž’˜—Š•ȱ ŽŒ˜—˜–’ŒœȄȱ ǻ˜›‘ȱ ŘŖŖśǼDzȱ Š•œ˜ȱ  ’‘ȱ‘Žȱ ˜›”ȱ˜ȱ•›Žȱ‘Š—•Ž›ȱǻŗşŝŝǰȱŗşşŖǼǰȱ ‘˜ȱ™˜œž•ŠŽȱ‘ŽȱŒ˜–plex vertical organizational structure of capitalist corporations, backed  ’‘ȱ ‘Žȱ —ŽŒŽœœŠ›¢ȱ •ŽŠ•ȱ Š—ȱ ™˜•’’ŒŠ•ȱ ›Š–Ž ˜›”ȯ ’—ŽœœŽȱ ꛜȱ ’—ȱ the United States and Western Europe in the late nineteenth and early twentieth centuries—as a necessary condition of modern economic deŸŽ•˜™–Ž—ǰȱŠ—ȱŽ’•ȱ•’œŽ’—ȱǻŘŖŖśǼǰȱ ‘˜ȱŽ–™‘Šœ’£Žȱ‘ŽȱŸ’Š•ȱ›˜•Žȱ˜ȱ the state in providing a necessary regulatory and legal framework for the functioning of modern economic development, to cite just a couple of exŠ–™•Žœǯȱ—ȱ‘ŽȱŒ˜—›Š›¢ǰȱŠŽ•Ž’—ŽȱŽ•’—ȱǻŘŖŖŚŠǰȱŘŖŖŚ‹ǰȱŘŖŖśǰȱŘŖŖşDzȱŽ•’—ǰȱ Œ”˜ǰȱŠ—ȱ Š›Ž••ŠȱŘŖŖŚǼȱ‘ŠœȱŽ–˜—œ›ŠŽȱŠȱ–˜›ŽȱŒ˜—œ›žŒ’ŸŽȱŠŒŽȱ˜ȱ the Chinese state in late imperial China, which together with the private sector created a market institutional infrastructure that might have been more conducive to modern economic development than previously believed. This also accounts for the continuity of many features of Chinese business practices into the twentieth-century, when the wholesale introduction of Western-style business institutions took place in China. Ken—Ž‘ȱ ˜–Ž›Š—£Ȃœȱ  ˜›”ȱ ǻŘŖŖŖǼȱ ›Ž™›ŽœŽ—œȱ Š—˜‘Ž›ȱ ™˜œ’’ŸŽȱ ›ŽŠœœŽœœ–Ž—ȱ of China’s traditional economic performance up to 1800, just before its encounter with the British in the Opium War.13 This is echoed by recent  ˜›”œȱ˜—ȱ‘’—ŽœŽȱŒ˜–™Š—’Žœȱ’—ȱ‘ŽȱŘŖŖŖœȱǻŽŽȱŘŖŖśDzȱ’•‘Šž™ȱŠ—ȱ’œ˜›ȱ ŘŖŖŞǰȱŗŘśȮŗŚŞǼǰȱ ‘’Œ‘ȱꗍȱ‘ŠȱŽœŽ›—Ȭœ¢•Žȱ•Š ȱ‘Šœȱ•’Ĵ•ŽȱŽŽ›–’—Š—ȱ ŽěŽŒȱ˜—ȱ‘Žȱ˜žŒ˜–Žȱ˜ȱ‘’—ŽœŽȱŽŒ˜—˜–’Œȱ™Ž›˜›–Š—ŒŽȱŠȱ‘ŽȱŒ˜›™˜›ŠŽȱ •ŽŸŽ•ǯȱ•Š—ȱŒ‘ Š›£ȱǻŘŖŖŝǼȱŽŸŽ—ȱŠ›žŽœȱ‘Šȱž—Ž›ȱŒ•˜œŽȱœŒ›ž’—¢ȱ–˜ern contract law may be irrelevant to economic life amid the advent of a modernized Chinese economy, whereas Barry Naughton has adopted a more positive narrative of the Chinese traditional economy as a backdrop for his recent account of China’s outstanding current economic growth ǻŘŖŖŝǰȱřŚȮŚŘǼǯ ŗřȲȱ ˜›ȱ–Ž’Œž•˜žœȱŠ›ž–Ž—œȱ‹¢ȱ˜–Ž›Š—£ȱŠ—ȱ‘’œȱŒ˜••ŽŠžŽœǰȱœŽŽȱ˜—ȱǻŗşşŝǼDzȱŽŽȱŠ—ȱ Š—ȱǻŗşşşǼDzȱŠ—ǰȱ’—ȱ™Š›’Œž•Š›ǰȱ˜–Ž›Š—£Ȃœȱ›ŽŒŽ—ȱŠ›ž–Ž—ȱǻŘŖŖŞǼȱ‹ŠœŽȱ˜—ȱ‘Žȱ›˜•Žȱ˜ȱ‘Žȱ state and land markets from imperial to Republican China.

Modern China’s Treaty Port Economy

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If this emerging scholarship on the traditional Chinese economy withstands future countercriticism from adherents to the former mainstream —Š››Š’ŸŽǰȱ Žȱ ’••ȱ—ŽŽȱ˜ȱ›ŽĚŽŒȱž›‘Ž›ȱ˜—ȱ‘Žȱ›˜•Žȱ‘Šȱ‘Žȱ›ŽŠ¢ȱ™˜›ȱ economy played in the transformation of the Chinese economy from the second half of the nineteenth century. This volume seeks to show the complexity of this issue and suggests that it is oversimplistic to ask whether the treaty port economy, built upon the treaty port system, came into being in China as an invading villain or a descending angel. The Chi—ŽœŽȱ›Žœ™˜—œŽȱ˜ȱ‘Žȱ›Ž•ŠŽȱ’—œ’ž’˜—Š•ȱŒ‘Š—ŽǰȱŠœȱ›ŽĚŽŒŽȱ’—ȱŸŠ›’˜žœȱ ŽŠž›Žœȱ˜ȱŽŒ˜—˜–’Œȱ™Ž›˜›–Š—ŒŽǰȱ–’‘ȱ’—ȱŠŒȱ–ŠĴŽ›ȱ–˜›Žȱ‘Š—ȱ™›ŽŸ’ously perceived. If so, then the broader discourse of state and economic development will need to take into account more seriously the nonrational human factors embedded in the cultural and linguistic environments, Šœȱ Ž••ȱŠœȱ‘Žȱœ™ŽŒ’ęŒȱŒ’›Œž–œŠ—ŒŽœȱ’—ȱ ‘’Œ‘ȱ‘ŽœŽȱŠŒ˜›œȱ Ž›Žȱ’—ȱ˜›ŒŽǯȱ Such factors may partially account for the eventual outcomes resulting from behaviors of both the individual and the market. Finally, the construct of the “treaty port economy” postulated in this essay may accidentally open a new way to compare the economic modernization trajectories of China and Japan.14 There were treaty ports in Š™Š—ȱ ’—ȱ ‘Žȱ •ŠŽȱ —’—ŽŽŽ—‘ȱ ŒŽ—ž›¢ǯȱ ˜ ŽŸŽ›ǰȱ —˜—Žȱ ˜ȱ ‘ŽœŽȱ Š™Š—ŽœŽȱ treaty ports played a role in Japan’s modern economic development from ‘ŽȱŽħ’ȱ™Ž›’˜ȱ˜— Š›ȱ‘ŠȱŒŠ—ȱ‹Žȱ›Ž–˜Ž•¢ȱŒ˜–™Š›Š‹•Žȱ˜ȱ‘Žȱœ™ŽŒ’Š•ȱ type of treaty ports in China that generated a treaty port economy as discussed. Indeed, probably none of the Japanese treaty ports can be –ŽŠœž›Žȱž™ȱ˜ȱ‘ŽȱŽę—’’˜—œȱ ŽȱŽ–™•˜¢Žȱ‘Ž›Žǰȱ—Š–Ž•¢ǰȱ’—Ž›—Š’˜—alization, industrialization, and urbanization on a massive scale. In other words, Japanese economic modernization was never driven by any treaty port economy, whereas China was quite the opposite. In our institutional perspective, this divergence may help account for the more comfortable blend of old and new in Japan, in contrast with the radical antitraditionalism in China’s new business culture that has radiated from the major treaty port economies such as Shanghai. This issue is not within the scope ˜ȱ˜ž›ȱŒž››Ž—ȱ’—šž’›¢ȱ‹žȱ–Š¢ȱŽœŽ›ŸŽȱž›‘Ž›ȱœŒ‘˜•Š›•¢ȱŠĴŽ—’˜—ǯ

I am indebted to Kaoru Sugihara for his comment on the transnational phenomenon of treaty ports. ŗŚȲȱ

Ling Nam shop, Canton. 1919–1920. (Copyright John Swire & Sons, Ltd. Ž›–’œœ’˜—ȱ ›Š—Žǯȱ ˜ž›Žœ¢ȱ ˜ȱ ‘Žȱ ’œ˜›’ŒŠ•ȱ ‘˜˜›Š™‘œȱ ˜ȱ ‘’—Šȱ ™›˜“ŽŒǰȱ—’ŸŽ›œ’¢ȱ˜ȱ›’œ˜•DZȱ‘Ĵ™DZȦȦŒ‘™ǯ’œ‘Ȭ•¢˜—ǯŒ—›œǯ›ȦǯǼ

Canton from the Sun Building. 1919–1920. (Copyright John Swire & Sons, Ltd. Ž›–’œœ’˜—ȱ ›Š—Žǯȱ ˜ž›Žœ¢ȱ ˜ȱ ‘Žȱ ’œ˜›’ŒŠ•ȱ ‘˜˜›Š™‘œȱ ˜ȱ ‘’—Šȱ ™›˜“ŽŒǰȱ —’ŸŽ›œ’¢ȱ˜ȱ›’œ˜•DZȱ‘Ĵ™DZȦȦŒ‘™ǯ’œ‘Ȭ•¢˜—ǯŒ—›œǯ›ȦǯǼ

Steamships Linan and Pekin and the French Bund, Shanghai. 1911–1912. ǻ˜™¢›’‘ȱ ˜‘—ȱ ’›Žȱǭȱ˜—œǰȱǯȱŽ›–’œœ’˜—ȱ›Š—Žǯȱ˜ž›Žœ¢ȱ˜ȱ‘Žȱ ’œ˜›’ŒŠ•ȱ ‘˜˜›Š™‘œȱ˜ȱ‘’—Šȱ™›˜“ŽŒǰȱ—’ŸŽ›œ’¢ȱ˜ȱ›’œ˜•DZȱ‘Ĵ™DZȦȦŒ‘™ǯ’œ‘Ȭ•¢˜—ǯŒ—›œǯ›ȦǯǼ

PART ONE Institutional Change and Economic Growth

TWO

The Rise of Modern Shanghai, ŗşŖŖȮŗşřŜDZ An Institutional Perspective

DEBIN MA

Max Weber remarked that cities in China or Asia in general, unlike those ’—ȱ‘ŽȱŽœǰȱ‘Šȱ—˜ȱœ™ŽŒ’ęŒȱ™˜•’’ŒŠ•ȱ›˜•Žǯȱ‘Žȱ‘’—ŽœŽȱŒ’¢ȱ‘Šȱ—˜ȱŒ’¢ȱ•Š ǰȱ —˜ȱ™˜•’’ŒŠ•ȱŠœœ˜Œ’Š’˜—œȱ˜ȱ–Ž›Œ‘Š—ȱŠ—ȱŒ›ŠĞȱž’•œȱ‹ŠŒ”Žȱž™ȱ‹¢ȱ’—Žpendent military power, no privileges or freedoms granted by a charter ǻŽ‹Ž›ȱŗşŞřǰȱśşǼǯȱ’’Žœȱ’—ȱ‘ŽȱŽœȱ‹ŽŒŠ–Žȱ’—œŽ™Š›Š‹•¢ȱ•’—”Žȱ˜ȱ‘Žȱ›’œŽȱ of both the modern state and capitalism; but according to Weber, cities in ›Š’’˜—Š•ȱ‘’—Šȱ Ž›Žȱ˜ĞŽ—ȱ‘Žȱ™•Š——Žȱ™›˜žŒȱ˜ȱŠ–’—’œ›Š’˜—ȱž—Ž›ȱ ŠȱŒŽ—›Š•’£ŽȱŽ–™’›Žȱǻ™ǯȱŜŗǼǯȱ Around the time Weber was musing about the contrasting features of cities in the East and West, the Chinese empire was crumbling. During ‘Žȱ•ŠĴŽ›ȱ‘Š•ȱ˜ȱ‘Žȱ—’—ŽŽŽ—‘ȱŒŽ—ž›¢ǰȱ‘Žȱ‘’—ŽœŽȱ›Žœ™˜—œŽȱ˜ȱ‘ŽȱŽœern imperialist challenge was timid and conservative. Reforms such as the Tongji Restoration and the Self-Strengthening Movement all aimed at preœŽ›Ÿ’—ȱ‘ŽȱœŠžœȱšž˜ȱ ’‘ȱ–’—’–Š•ȱ˜›ȱœž™Ž›ęŒ’Š•ȱ–˜’ęŒŠ’˜—œȱǻ›’‘ȱ ŗşŜŘDzȱŠ’›‹Š—”ȱŗşŝŞǰȱŒ‘Š™œǯȱŗŖȮŗŗǼǯȱžȱ‘Žȱ’–™Ž›’Š•ȱŠ—ȱ‹ž›ŽŠžŒ›Š’Œȱœž™˜›ȱ Šœȱœ‘ŠĴŽ›Žȱ’—ȱ‘ŽȱŗŞşŚȮŗŞşŜȱ™Ž›’˜ȱ‹¢ȱ‘’—ŠȂœȱ‘ž–’•’Š’—ȱ–’•’Š›¢ȱ defeat by Japan—long regarded as China’s humble student. The Treaty ˜ȱ‘’–˜—˜œŽ”’ǰȱ’–™˜œŽȱ˜—ȱ‘’—ŠȱŠĞŽ›ȱ‘Žȱ’—˜Ȭ Š™Š—ŽœŽȱŠ›ǰȱ’—ȱŗŞşŜȱ granted foreigners the right to establish industrial enterprises in the treaty ™˜›œȱŠ—ȱ•’ĞŽȱ‘Žȱ̘˜ŠŽȱ˜›ȱ˜›Ž’—ȱ’›ŽŒȱ’—ŸŽœ–Ž—ǰȱ ‘’Œ‘ȱ’—Švertently legitimized modern Chinese enterprise. ‘Žȱ •ŠŽȬ’—ȱ Œ˜—œ’ž’˜—Š•ȱ ›Ž˜›–ȱ ǻŗşŖŚȮŗşŗŗǼǰȱ ’œŽ•ȱ –˜Ž•Žȱ ŠŽ›ȱ‘Žȱ›Š’ŒŠ•ȱŽħ’ȱ›Ž˜›–ȱ’—ȱ Š™Š—ǰȱ–Š›”ŽȱŠȱ–Š“˜›ȱ’Ž˜•˜’ŒŠ•ȱ‹›ŽŠ”through and the beginning of fundamental institutional change. Yet, this ›Ž˜›–ȱ—ŽŸŽ›ȱ‘Šȱ‘Žȱ‹ŠŒ”’—ȱ˜ȱ‘ŽȱŽħ’ȱ”’—ȱ˜ȱœ›˜—ȱœŠŽǯȱ‘Žȱ’—ȱ

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Debin Ma

˜ŸŽ›—–Ž—ȱ Šœȱ‹¢ȱ‘Ž—ȱ™˜•’’ŒŠ••¢ȱ ŽŠ”ȱŠ—ȱ꜌Š••¢ȱ’—œ˜•ŸŽ—ǰȱŠ—ȱ’ȱęnally collapsed in 1911. The political fortune of China’s new military ruler, žŠ—ȱ‘’”Š’ǰȱ Šœȱœ‘˜›ȱ•’ŸŽǯȱ ’œȱŽŠ‘ȱ’—ȱŗşŗŜȱ–Š›”Žȱ‘Žȱ‹Ž’——’—ȱ˜ȱ the warlord era, which was to bring enormous damage if not complete disaster to the national economy. According to James Sheridan, the warlords ˜ĞŽ—ȱ‹›˜ž‘ȱŽ››˜›ȱŠ—ȱŽ¡™•˜’Š’˜—DZȱȃǽ‘Ž’›ǾȱŽ–Š—ȱ˜›ȱ–˜—Ž¢ȱ Šœȱ’—satiable and the militarists wrung an astonishing array of taxes from the population. They printed worthless currency on a large scale.… In many areas, the actions of organized crimes were less serious than hordes of uncontrolled soldiers who roamed the countryside preying on the peasŠ—›¢ȄȱǻŗşŞřǰȱřŗŞǼǯ

˜žœŽȱŠ››Žœǰȱ”’—Š™™’—ǰȱŠ—ȱ‘›ŽŠœȱŠŠ’—œȱ‹Š—”Ž›œȱ‹ŽŒŠ–Žȱ ’Žspread practices of warlords for revenue extortion (Du Xuncheng 2000, ŘŘŝśȮŘŘŝŜǼǯȱ ȱ ’œȱ ›žŽȱ ‘Šȱ  Š›•˜›’œ–ȱ ’ȱ —˜ȱ Š• Š¢œȱ Š”Žȱ ˜—ȱ Ÿ’˜•Ž—•¢ȱ Žœ›žŒ’ŸŽȱ ˜›–œǰȱ Šœȱ ’••žœ›ŠŽȱ ‹¢ȱ ‘Žȱ ˜••˜ ’—ȱ Ž¡Š–™•Žǯȱ —ȱ ŗşŘŜǰȱ ‘Žȱ Shandong warlord placed the manager of the Jinan branch of the Bank of China under house arrest. When the bank agreed to lend the Shandong ˜ŸŽ›—–Ž—ȱśŖŖǰŖŖŖȱ¢žŠ—ǰȱ‘Žȱ‘›ŽŠœȱŠŠ’—œȱ‘Žȱ ’—Š—ȱ–Š—ŠŽ›ȱŒŽŠœŽǯȱ Later, the manager of the bank’s Tianjin branch noted, “Actually, if we ‘Šȱ™Ž›œŽŸŽ›Žȱœ˜–Žǰȱ‘ŽȱŠ–˜ž—ȱ–’‘ȱ‘ŠŸŽȱŽŒ›ŽŠœŽȱŠȱ•’Ĵ•ŽȄȱǻ‘ŽŽ‘Š—ȱ ŘŖŖřǰȱŗŖŗǼǯȱ‘Žȱ•˜’Œȱ˜ȱ‘’—ŽœŽȱ Š›•˜›ȱ™˜•’’Œœȱ’—œ™’›ŽȱŠ—Œž›ȱ•œ˜—Ȃœȱ Œ•Šœœ’Œȱ’œ’—Œ’˜—ȱ‹Ž ŽŽ—ȱœŠ’˜—Š›¢ȱŠ—ȱ›˜Ÿ’—ȱ‹Š—’›’ŽœȱǻŗşşřǰȱśŜŞǼǯ Surprisingly, it was this period of political instability and civil strife ‘Šȱ œŠ ȱ ‘Žȱ Ž–Ž›Ž—ŒŽȱ ˜ȱ Šȱ œ’—’ęŒŠ—ȱ Š—ȱ œ˜–Ž ‘Šȱ ž—ŽŸŽ—ȱ œ™ž›ȱ ˜ȱ industrialization. Calculations from the data compiled by Du Xuncheng show that the nominal annual industrial investment by Chinese nationals ’—ȱ‘Žȱ™Ž›’˜ȱ›˜–ȱŗşŗŚȱ˜ȱŗşŘśȱ ŠœȱŽ•ŽŸŽ—ȱ’–Žœȱ‘Šȱ˜ȱ‘ŽȱŗŞŚŖȮŗşŗŗȱ™Žriod. The capital of a modern Chinese banking sector, largely nonexistent ‹Ž˜›Žȱ‘Žȱ–’ȬŗŞşŖœǰȱ–ž•’™•’ŽȱŠȱŠ—ȱŠ——žŠ•ȱ›ŠŽȱ˜ȱŗŖǯŘƖȱ‹Ž ŽŽ—ȱŗŞşŝȱ Š—ȱŗşřŜǯȱǯȱǯȱŽ–Ž›ȱꗍœȱŠȱŒ˜››Žœ™˜—’—ȱ›˜ ‘ȱ’—ȱ˜›Ž’—ȱ’—ŸŽœ–Ž—ȱ ŠȱŠ——žŠ•ȱ›ŠŽœȱ˜ȱŞǯřƖǰȱśƖǰȱŠ—ȱŚǯřƖȱ˜›ȱ‘Š—‘Š’ǰȱŠ—Œ‘ž›’ŠǰȱŠ—ȱ‘Žȱ rest of China, respectively, between 1902 and 1931. The amount of railroad –’•ŽŠŽȱ ‹ž’•ȱ œž›Žȱ ›˜–ȱ Šȱ –Ž›Žȱ řŜŚȱ ”’•˜–ŽŽ›œȱ ’—ȱ ŗŞşŚȱ ˜ȱ ˜ŸŽ›ȱ ŘŗǰŖŖŖȱ by 1937. The national industrial output index constructed by John Chang œ‘˜ œȱŠ—ȱŠ——žŠ•ȱ›ŽŠ•ȱ›˜ ‘ȱ›ŠŽȱ˜ȱŗŖƖȱ˜›ȱ‘Žȱ™Ž›’˜ȱ›˜–ȱŗşŗŘȱ˜ȱŗşřŜǰȱ a phenomenal growth rate by the standard of the time. A somewhat provocative study by Thomas Rawski even contends that China’s per capita ȱ›˜ ‘ȱ›˜–ȱŗşŗŗȱ˜ȱŗşřŜȱŠĴŠ’—ŽȱŠȱ›ŠŽȱ›˜ž‘•¢ȱŒ˜–™Š›Š‹•Žȱ˜ȱ‘Šȱ of Japan in the same period.1

˜ ȱ’ȱŽŒ˜—˜–’Œȱ›˜ ‘ȱŒ˜–ŽȱŠ‹˜žȱ’—ȱŠ—ȱŽ›Šȱ˜ȱ™˜•’’ŒŠ•ȱ’—œŠ‹’•’¢ǵȱ This chapter argues that the missing piece to this puzzle is the external ŗȲȱ

˜›ȱ›ŽŽ›Ž—ŒŽœȱ˜—ȱ‘ŽœŽȱꐞ›ŽœǰȱœŽŽȱŠȱǻŘŖŖŞǼǯȱ

The Rise of Modern Shanghai

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or Western imperialist factor. In the nineteenth and twentieth centuries, Western imperialism did not subjugate China to full colonization but manifested itself through trading rights, leased territories, and treaty ports with extraterritoriality or spheres of interest. In the early twentieth century, when central control was weakened, Western treaty ports expanded rapidly at the expense of Chinese sovereignty. Most notable is the growth of the treaty port cities of Shanghai, Tianjin, and Wuhan, all strategically located in China’s major economic regions. These treaty ports became the •’—Œ‘™’—œȱ˜ȱŽŒ˜—˜–’Œȱ›˜ ‘ȱ’—ȱ‘Žȱꛜȱ‘›ŽŽȱŽŒŠŽœȱ˜ȱ‘Žȱ Ž—’Ž‘ȱ century. Large-scale investment, modern banking, and industry were disproportionately concentrated in those “pockets” of relative stability. Clearly, these privileges and extraterritorialities were politically unjust and socially discriminating, but their expansion in an era of political chaos and national disintegration turned out to be a blessing in disguise for two reasons. First, some of these “privileges” happened to coincide with necessary conditions needed for growth, namely, the maintenance of peace and public order, the security of property rights and contract Ž—˜›ŒŽ–Ž—ǰȱ‘Žȱ›ŽŽ˜–ȱ›˜–ȱŠ›‹’›Š›¢ȱŠ¡Š’˜—ȱ˜›ȱ˜ĜŒ’Š•ȱŽ¡ŠŒ’˜—ǰȱŠ—ȱ the right to transparent rules and predictable jurisprudence. Second, as œ‘˜ —ȱ•ŠŽ›ǰȱȃ™›’Ÿ’•ŽŽœȄȱ’—ȱ‘Žȱ›ŽŠ¢ȱ™˜›œȱ Ž›Žȱ˜ĞŽ—ǰȱ˜›–Š••¢ȱ˜›ȱ’—˜›mally, used by Chinese business and residents. ‘’œȱŒ‘Š™Ž›ȱ˜ŒžœŽœȱ˜—ȱ’—œ’ž’˜—Š•ȱŒ‘Š—Žȱ’—ȱ‘Žȱ—Ž›—Š’˜—Š•ȱŽĴ•Žment of Shanghai, China’s largest and most important treaty port territory ruled by Western business interests. I show that the phenomenal growth ˜ȱ‘Š—‘Š’ȱ’—ȱ‘ŽȱŽŠ›•¢ȱ Ž—’Ž‘ȱŒŽ—ž›¢ȱ’›ŽŒ•¢ȱ‹Ž—ŽęŽȱ›˜–ȱ‘ŽȱŽ¡™Š—œ’˜—ȱ˜ȱ‘Žȱȃ™›’Ÿ’•ŽŽœȄȱŠ—ȱŠž˜—˜–¢ȱ‘Šȱ˜ěŽ›ŽȱœŠ‹’•’¢ȱŠ—ȱ™›Ždictability to the growth of not only Western but, increasingly, Chinese business and industry. The so-called golden era of growth in the 1910s and 1920s fell in the period when Western-controlled Shanghai wrested almost complete political and legal autonomy from China. Shanghai in the 1920s looked increasingly like an autonomous Western-style city in the Ž‹Ž›’Š—ȱœŽ—œŽǯȱ˜••˜ ’—ȱ˜›‘ȱŠ—ȱŽ’—ŠœȱǻŗşŞşǼǰȱ•œ˜—ȱǻŗşşřǼǰȱŠ—ȱ Ž˜—ȱ Š—ȱ ‘•Ž’Ž›ȱ ǻŗşşřǼǰȱ ȱ Š›žŽȱ ‘Šȱ ’—œ’ž’˜—Š•ȱ Œ‘Š—Žȱ Ž—Ž›ŠŽȱ from this political process is crucial to understanding long-term economic change in China. The chapter is divided into two main sections followed by a concluœ’˜—ǯȱ‘ŽȱꛜȱœŽŒ’˜—ȱ›ŽŸ’Ž œȱ‘ŽȱšžŠ—’Š’ŸŽȱ›ŽŒ˜›ȱ˜ȱŽŒ˜—˜–’Œȱ›˜ ‘ȱ ’—ȱ‘Š—‘Š’ȱŠ—ȱ‘ŽȱŽěŽŒȱ˜ȱ’œȱœ™’••˜ŸŽ›ȱ’—ȱ‘Žȱ›Ž’˜—ǰȱ‹ŠœŽȱ•Š›Ž•¢ȱ˜—ȱ my recent quantitative reconstruction of a region-based GDP estimate ˜ȱ‘Žȱ ˜ȱ˜ Ž›ȱŠ—£’ȱ™›˜Ÿ’—ŒŽœȱ’—ȱ‘ŽȱŗşřŖœȱǻ ’Š—œžȱŠ—ȱ‘Ž“’Š—Ǽǰȱ  ‘’Œ‘ȱ ’—Œ•žŽœȱ ‘Žȱ Œ’¢ȱ ˜ȱ ‘Š—‘Š’ȱ ǻŠȱ ŘŖŖŞǼǯȱ ‘Žȱ œŽŒ˜—ȱ œŽŒ’˜—ȱ —Š›rates the evolution of political and institutional changes, especially the rise of Shanghai as a “city-state” in the early twentieth century.

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Debin Ma

Shanghai-Based Industrialization: A Quantitative Analysis in the Regional Context —ȱ‘ŽȱŗşřŖœǰȱ‘Š—‘Š’ȱŠ•˜—Žȱ™›˜žŒŽȱŚŗƖȱ˜ȱ‘’—ŠȂœȱ—Š’˜—Š•ȱ–Š—žŠŒž›’—ȱ˜ž™žȱǻŚŞƖȱ’ȱŽ¡Œ•ž’—ȱŠ—Œ‘ž›’ŠǼDzȱ‘˜žœŽȱśŖȱ˜ȱŜŖƖȱ˜ȱŒ˜Ĵ˜—ȱ œ™’—•Žœȱ ‘›˜ž‘˜žȱ ‘Žȱ ŗşŗŖœȱ Š—ȱ ŗşřŖœDzȱ Š—ȱ Ž—Ž›ŠŽȱ Š‹˜žȱ śŖƖȱ ˜ȱ national electricity in the 1920s, almost twice that of the major British industrial cities of Manchester and Glasgow. In the 1930s, Shanghai alone Š‹œ˜›‹ŽȱŚŜǯŚƖȱ˜ȱ˜Š•ȱ˜›Ž’—ȱ’›ŽŒȱ—ŸŽœ–Ž—ȱǻǼȱ’—ȱ‘’—ŠȱŠ—ȱŜŝƖȱ ˜ȱȱ’—ȱ–Š—žŠŒž›’—ǰȱŠ—ȱ’ȱŒ•Š’–ŽȱŚŝǯŞƖȱ˜ȱ‘’—ŠȂœȱꗊ—Œ’Š•ȱŒŠ™’Š•ǯȱ ’‘ȱ–˜›Žȱ‘Š—ȱ‘Š•ȱ˜ȱ‘’—ŠȂœȱ˜›Ž’—ȱ›ŠŽȱŠ—ȱ˜—ŽȱęĞ‘ȱ˜ȱ‘Žȱ‘’—ŽœŽȱ shipping tonnage sailing through the harbor, Shanghai was the commerŒ’Š•ǰȱꗊ—Œ’Š•ǰȱŠ—ȱ’—žœ›’Š•ȱŒ’¢ȱ˜ȱ‘’—Šȱ’—ȱ‘ŽȱŽŠ›•¢ȱ Ž—’Ž‘ȱŒŽ—ž›¢ǯȱ The city’s population doubled from only half a million in the 1890s, to over a million in the 1910s, and to about three and a half million in the 1930s, –Š”’—ȱ ‘Š—‘Š’ȱ ‘Žȱ  ˜›•Ȃœȱ œŽŸŽ—‘ȱ •Š›Žœȱ Œ’¢ȱ ǻŠȱ ŘŖŖŞǰȱ řśŞǼǯȱ ‘ŽœŽȱ staggering statistics lead some scholars to refer to China’s early twentiethcentury growth as Shanghai-based industrialization. ȱ ꛜȱ ’••žœ›ŠŽȱ ‘Žȱ Ž¡Ž—ȱ ˜ȱ ‘’œȱ ’—žœ›’Š•’£Š’˜—ȱ ‹¢ȱ Šȱ Œ˜–™Š›Š’ŸŽȱ analysis of the modern industrial sector. The growth rate in the widely used Chang industrial output index for China, which covers the output of the modern “factory” employing seven or more workers, is known to be ž™ Š›ȱ‹’ŠœŽȱžŽȱ˜ȱ’œȱ’—œžĜŒ’Ž—ȱŒ˜ŸŽ›ŠŽǯ2 Recently, Toru Kubo reŸ’œŽȱ‘Š—ȂœȱŠ——žŠ•ȱœŽ›’Žœȱ‹¢ȱž™Š’—ȱ‘ŽȱŒ˜Ĵ˜—ȱ˜ž™žȱœŽ›’ŽœȱŠ—ȱŠ’—ȱ’–™˜›Š—ȱ•’‘ȱ’—žœ›’Š•ȱ™›˜žŒœȱœžŒ‘ȱŠœȱœ’•”ȱŠ—ȱ̘ž›ǯȱ‘Žȱ ž‹˜ȱ ’—Ž¡ȱŠœȱ™›ŽœŽ—Žȱ’—ȱŠ‹•ŽȱŘǯŗȱ›Š’œŽœȱ‘Žȱ˜Š•ȱŒ˜ŸŽ›ŠŽȱ˜ȱŝŘƖȱŠ—ȱ›ŽžŒŽœȱ ‘Žȱ›ŽŠ•ȱŠ——žŠ•ȱ›˜ ‘ȱ›ŠŽȱ˜ȱŞǯŚƖȱ˜›ȱ‘ŽȱŗşŗŘȱȮŗşřŜȱ™Ž›’˜ǯȱ Table 2.1. Annualized Real Growth Rates of Modern Industry Output ’—ȱ‘’—ŠȱŠ—ȱ Š™Š—ȱǻ’—ȱŗşřŖœȱ˜—œŠ—ȱ›’ŒŽǼ China ‘Š—‘Š’ȱǻƖǼ Š™Š—ȱǻƖǼ ‘Š—ȱ—Ž¡ȱǻƖǼ ž‹˜ȱ—Ž¡ȱǻƖǼ ŗŞŞŖȮŗŞşś 10 ŗŞşśȮŗşŗŘ 9.4 śǯŝ ŗşŗŘȮŗşŘś ŗŘǯŜ 10 12 ŞǯŜ ŗşŘśȮŗşřŜ 7.4 śǯŚ Ŝǯś şǯś ŗşŗŘȮŗşřŜ 10.2 8.4 şǯŜ 8.3 Source:ȱŽŽȱŠȱǻŘŖŖŞǰȱŠ‹•ŽȱŗǼǯȱ

I shall now compare these national indices with the new modern indus›’Š•ȱ›˜œœȱ˜ž™žȱœŽ›’Žœȱ˜›ȱ‘Š—‘Š’ȱŒ˜—œ›žŒŽȱ‹¢ȱžȱ’— žȱŠ—ȱ žŠ—ȱ

Š—–’—ǰȱ˜›ȱ‘Žȱ‹Ž—Œ‘–Š›”œȱ˜ȱŗŞşśǰȱŗşŗŗǰȱŗşŘśǰȱŠ—ȱŗşřŜȱ‹ŠœŽȱ˜—ȱŗşřřȱ ŘȲȱ ‘Žȱ ›ŠŽȱ ’œȱ ‹Ž ŽŽ—ȱ ŚŖȱ Š—ȱ śŖȱ ™Ž›ŒŽ—ȱ ˜ȱ ‘Žȱ ˜Š•ȱ –˜Ž›—ȱ ŠŒ˜›¢ȱ ˜ž™žDzȱ œŽŽȱ ‘Š—ȱ ǻŗşŜşǰȱřŜǼǯ

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™›’ŒŽœǯȱ ‘Žȱ ‘Š—‘Š’ȱ ’—Ž¡ȱ ‹¢ȱ žȱ Š—ȱ žŠ—ǰȱ Šœȱ ™›ŽœŽ—Žȱ ’—ȱ Š‹•Žȱ Řǯŗǰȱ œ‘˜ ȱ‘Šȱ‘Š—‘Š’ȱŠĴŠ’—ŽȱŠȱ›ŽŠ•ȱŠ——žŠ•ȱ›˜ ‘ȱ›ŠŽȱ˜ȱşǯŜƖǰȱŠœŽ›ȱ‘Š—ȱ ‘Žȱ‘’—ŽœŽȱ—Š’˜—Š•ȱŠŸŽ›ŠŽȱ˜ȱŞǯŚƖȱŠœȱ›ŽŸŽŠ•Žȱ‹¢ȱ‘Žȱ ž‹˜ȱ’—Ž¡ǯȱ’—ŒŽȱ the national average includes the fast-growing Shanghai and Manchuria, ‘Žȱ’쎛Ž—ŒŽȱ’—ȱ›˜ ‘ȱ›ŠŽœȱ‹Ž ŽŽ—ȱ‘Š—‘Š’ȱŠ—ȱ‘Žȱ›Žœȱ˜ȱ‘’—Šȱ˜žside of these regions should be larger than is shown in table 2.1. Modern industrial growth in Shanghai compares favorably with Japanese industrial performance as measured by those items produced by –˜Ž›—ȱŠŒ˜›’ŽœȱŽ–™•˜¢’—ȱ–˜›Žȱ‘Š—ȱ꟎ȱ ˜›”Ž›œǯȱŠ‹•ŽȱŘǯŗȱœ‘˜ œȱ‘Šȱ ‘Žȱ‘Š—‘Š’ȱ›˜ ‘ȱ›ŠŽȱ•ŽŠœȱ Š™Š—ȱ‹˜‘ȱ˜›ȱ‘ŽȱŗŞşśȮŗşŗŗȱŠ—ȱŗşŗŘȮ ŗşřŜȱ ™Ž›’˜œǰȱ –ŠŒ‘Žȱ ™˜œœ’‹•¢ȱ ˜—•¢ȱ ‹¢ȱ ˜›ŽŠȱ ’—ȱ ‘Žȱ Š™Š—ŽœŽȱ Œ˜•˜—’Š•ȱ Ž›Šȱ˜ȱŗşŗŘȱ˜ȱŗşřŜǯ3 Shanghai-based industrialization spilled over to the rest of China but most directly to the immediate hinterland, the Lower Yangzi region. For the Lower Yangzi, Shanghai became a massive draw for labor and a major source of capital and entrepreneurship. Shanghai capital supported the renowned scholar-bureaucrat-entrepreneur Zhang Jian to turn Nantong in Jiangsu Province into an industrial city. Capital infusion from Wuxi-born industrial tycoons in Shanghai transformed the –Š›”Žȱ˜ —ȱ˜ȱž¡’ȱ’—˜ȱ‘’—ŠȂœȱęĞ‘ȱ•Š›Žœȱ’—žœ›’Š•ȱŒ’¢ȱ‹¢ȱ‘ŽȱŗşřŖœǰȱ  ‘’Œ‘ȱ Šœȱ‘Ž—ȱž‹‹Žȱȃ’Ĵ•Žȱ‘Š—‘Š’ǯȄȱǻ‘Š™Ž›ȱŜȱ˜ȱ‘’œȱ‹˜˜”ȱ’ŸŽœȱ ž›‘Ž›ȱŽŠ’•œȱ˜—ȱ‘’œȱž¡’ȱœ˜›¢ǯǼȱ‘Š—‘Š’Ȭ‹ŠœŽȱ’—žœ›’Š•’£Š’˜—ȱŠ•œ˜ȱ had an impact on the agriculture sector. Industrial demand brought direct ’–™Žžœȱ˜ȱ‘Žȱ’–™›˜ŸŽ–Ž—ȱ˜ȱ–Š“˜›ȱ’—žœ›’Š•ȱŒŠœ‘ȱŒ›˜™œȱœžŒ‘ȱŠœȱŒ˜Ĵ˜—ȱ œŽŽœȱŠ—ȱœ’•”ȱŒ˜Œ˜˜—œȱ‘›˜ž‘ȱ‘Žȱ’ěžœ’˜—ȱ˜ȱ—Ž ȱœŒ’Ž—’ęŒȱœŽŽœȱŠ—ȱ practices; the demand also accelerated the adoption of commercial fertilizers and the introduction of power-driven agricultural machines such as  ŠŽ›ȱ™ž–™œȱŠ—ȱ›’ŒŽȱŠ—ȱ̘ž›ȱ–’••Ž›œȱǻŠȱŘŖŖŞǰȱřŜŗȮřŜŘǼǯȱ Using a region-based production account, I reexamined the quantita’ŸŽȱ ŽěŽŒȱ ˜ȱ ‘Š—‘Š’Ȭ‹ŠœŽȱ ’—žœ›’Š•’£Š’˜—ȱ ˜—ȱ ‘Žȱ ’––Ž’ŠŽȱ ‘’—Ž›•Š—ȱ˜ȱ‘Š—‘Š’ǰȱ‘Žȱ˜ Ž›ȱŠ—£’ǰȱŽę—Žȱ‘Ž›ŽȱŠœȱŒ˜—œ’œ’—ȱ˜ȱ‘Žȱ ˜ȱ ™›˜Ÿ’—ŒŽœȱ˜ȱ ’Š—œžȱŠ—ȱ‘Ž“’Š—ȱǻ‘Ž›ŽŠĞŽ›ȱ›ŽŽ››Žȱ˜ȱŠœȱ ’Š—Ȭ‘ŽǼǯȱ‘Žȱ method uses provincial and regional data to tease out the share of the two ™›˜Ÿ’—ŒŽœȱ ǻ’—Œ•ž’—ȱ ‘Š—‘Š’Ǽȱ ’—ȱ ‘Žȱ ˜Š•ȱ —Žȱ ŸŠ•žŽȱ ŠŽȱ ˜ȱ Š••ȱ ‘’›ŽŽ—ȱœŽŒ˜›œȱžœŽȱ‹¢ȱ’žȱŠ—ȱŽ‘ȱǻŗşŜśǼȱ˜›ȱŽœ’–Š’—ȱ‘Žȱŗşřřȱ—Š’˜—Š•ȱ GDP.4 The estimated result shows that in 1933, Jiang-Zhe, with a popu•Š’˜—ȱ˜ȱŗŘȱ™Ž›ŒŽ—ǰȱŒ˜—›’‹žŽȱŠȱœ‘Š›Žȱ˜ȱŗśȱ™Ž›ŒŽ—ȱ’—ȱŠ›’Œž•ž›ŽǰȱŘŖȱ ™Ž›ŒŽ—ȱ’—ȱ‘Š—’Œ›ŠĞǰȱśŝȱ™Ž›ŒŽ—ȱ’—ȱ–˜Ž›—ȱŠŒ˜›¢ȱ˜ž™žǰȱŜśȱ™Ž›ŒŽ—ȱ’—ȱ ꗊ—ŒŽǰȱŠ—ȱŚśȱ™Ž›ŒŽ—ȱ’—ȱ–˜Ž›—ȱž’•’’ŽœȱœŽ›Ÿ’ŒŽœǯȱ••ȱ˜Ž‘Ž›ǰȱ‘Žȱ ˜ȱ ˜Žȱ ‘Šȱ Šœȱ ‘Žȱ ›˜ ‘ȱ œ™ž›ȱ ˜ȱ –˜Ž›—ȱ ’—žœ›¢ȱ ’—ȱ Š™Š—ȱ œŠ›Žȱ  Ž••ȱ ‹Ž˜›Žȱ ŗŞşśǰȱ Japanese industrial expansion in the twentieth century started from a larger base than Shanghai’s. For industrial growth in Taiwan and Korea during this period, see Mizoguchi Š—ȱ–Ž–ž›ŠȱǻŗşŞŞǰȱŘŝřȱŠ—ȱŘŝŜǰȱ›Žœ™ŽŒ’ŸŽ•¢Ǽǯȱȱ ŚȲȱ ŽŽȱŠȱǻŘŖŖŞǰȱřśŝǼȱ˜›ȱŠȱ–Š™ȱ˜ȱ‘ŽœŽȱ™›˜Ÿ’—ŒŽœǯ řȲȱ

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Debin Ma

provinces had a 19 percent share in China’s NDP, making the area’s per ŒŠ™’Šȱȱŗǯśśȱ’–Žœȱ‘Šȱ˜ȱ‘Žȱ—Š’˜—Š•ȱŠŸŽ›ŠŽǯȱ‘Žȱ˜ž™žȱ™›˜žŒŽȱ ‹¢ȱ–˜Ž›—ȱŠŒ˜›’Žœȱ‘ŠȱŠȱ–žŒ‘ȱ•Š›Ž›ȱŽěŽŒȱ’—ȱ ’Š—Ȭ‘Žǰȱ ’‘ȱŠȱœ‘Š›Žȱ ’—ȱȱ˜ȱŠ‹˜žȱŜȱ™Ž›ŒŽ—ǰȱŒ˜–™Š›Žȱ˜ȱŘȱ™Ž›ŒŽ—ȱ˜›ȱ‘Šȱ’—ȱ‘’—ŠȱŠœȱŠȱ whole. The ratio of modern factory output to total manufacturing output ǻ ‘’Œ‘ȱ’—Œ•žŽœȱ‹˜‘ȱŠŒ˜›¢ȱŠ—ȱ›Š’’˜—Š•ȱ‘Š—’Œ›ŠĞȱ™›˜žŒ’˜—Ǽȱ Šœȱ ŖǯřŜȱ˜›ȱ ’Š—Ȭ‘ŽǰȱŒ˜–™Š›Žȱ˜ȱŖǯŘŚȱ˜›ȱ‘’—ŠȱŠœȱŠȱ ‘˜•Žǯȱ‘’œȱ›Š’˜ȱ™žœȱ the Lower Yangzi on about the same level as Japan in the 1900s or even the ŗşŗŖœȱǻŠȱŘŖŖŞǰȱřŜŚȮřŜśǼǯ Based on very preliminary backward projections using sectoral real ›˜ ‘ȱ›ŠŽœȱ˜ȱ‘Žȱ‘’›ŽŽ—ȱœŽŒ˜›œǰȱ–¢ȱŘŖŖŞȱŠ›’Œ•ŽȱŠ•œ˜ȱŒ˜—ę›–œȱ‘Šȱ‘Žȱ economic structures of Jiang-Zhe NDP in the periods 1914–1918 and 1931– ŗşřŜȱ Ž›ŽȱŠ•›ŽŠ¢ȱœ’—’ęŒŠ—•¢ȱ’쎛Ž—ȱ›˜–ȱ‘Žȱ–Š’—•¢ȱŠ›Š›’Š—ȱ‘’—Šȱ as a whole, making the region more comparable to industrialized Japan and its colonies of Korea and Taiwan. In particular, industrial growth had ŠȱŠ›ȱ›ŽŠŽ›ȱŽěŽŒȱ˜—ȱœ›žŒž›Š•ȱŒ‘Š—Žȱ’—ȱ‘Žȱ˜ Ž›ȱŠ—£’ȱ‘Š—ȱ’—ȱ‘’—Šȱ ˜ŸŽ›Š••ǯȱ——žŠ•ȱ™Ž›ȱŒŠ™’Šȱȱ›˜ ‘ȱ’—ȱ‘Žȱ ˜ȱ™›˜Ÿ’—ŒŽœȱǻŗƖǼȱž›’—ȱ ‘’œȱ™Ž›’˜ȱ ŠœȱŠ•–˜œȱ ˜ȱ’–Žœȱ‘Šȱ˜ȱ‘’—ŠȱǻŖǯśřƖǼǰȱ—ŽŠ›•¢ȱŒ˜–™Š›Šble to that of Japan and Japanese colonies during this period. Preliminary comparisons based on the 1930s exchange rates also show that per capita income in Jiang-Zhe was higher than that of Korea and Manchuria and  Šœȱ›Š—”Žȱ‘’›ȱŠĞŽ›ȱ‘Šȱ˜ȱ Š™Š—ȱŠ—ȱŠ’ Š—ǯȱžȱ‘Žȱ˜ Ž›ȱŠ—£’ǰȱ with its population almost the size of Japan’s and more than ten times that of Taiwan in the 1930s, had clearly emerged as the second largest indus›’Š•ȱ›Ž’˜—ȱ’—ȱŠœȱœ’Šȱǻ™Ž›‘Š™œȱŽŸŽ—ȱ’—ȱœ’ŠȱŠœȱŠȱ ‘˜•ŽǼǯ The Growth of Shanghai: An Institutional Narrative In the traditional Lower Yangzi, Shanghai was a market town at the pe›’™‘Ž›¢ȱ˜ȱ‘ŽȱŒ’¢ȱ˜ȱž£‘˜žǯȱЎ›ȱ˜™Ž—’—ȱŠœȱŠȱŽœ’—ŠŽȱ›ŽŠ¢ȱ™˜›ȱ in the middle of the nineteenth century, Shanghai grew and developed ’—˜ȱŠȱŒ’¢ȱ ’‘ȱ‘›ŽŽȱ˜ŸŽ›—–Ž—œȯ‘˜œŽȱ˜ȱ‘Žȱ—Ž›—Š’˜—Š•ȱŽĴ•Ž–Ž—ǰȱ ‘Žȱ›Ž—Œ‘ȱ˜—ŒŽœœ’˜—ǰȱŠ—ȱ‘Žȱ‘’—ŽœŽȱžŠ›Ž›ǯȱ‘Žȱ—Ž›—Š’˜—Š•ȱŽĴ•Žment, produced by a merger of the British and American Concessions, started as a segregated community for Western expatriates. But follow’—ȱ‘Žȱ•Š›Žȱ’—Ěž¡ȱ˜ȱ‘’—ŽœŽȱ›ŽžŽŽœȱž›’—ȱ‘ŽȱŠ’™’—ȱŽ‹Ž••’˜—ǰȱ‘Žȱ œŽĴ•Ž–Ž—ȱ Šž‘˜›’¢ǰȱ ™›ŽœœŽȱ ‹¢ȱ ›ŽŠ•ȱ ŽœŠŽȱ –Ž›Œ‘Š—œǰȱ ‹ŽŠ—ȱ ˜ȱ ŠŒŒŽ™ȱ ‘’—ŽœŽȱ›Žœ’Ž—œȱŠĞŽ›ȱŗŞśŚǯ ‘Žȱ ™˜•’’ŒŠ•ȱ ’—œ’ž’˜—œȱ ˜ȱ ‘Žȱ —Ž›—Š’˜—Š•ȱ ŽĴ•Ž–Ž—ȱ ŽŸŽ•˜™Žȱ from those of a typical colonial enclave toward a Western-style autono–˜žœȱŒ’¢ȱ ‘Ž—ȱ‘ŽȱœŽĴ•Ž–Ž—ȱŽœŠ‹•’œ‘ŽȱŠȱž—’Œ’™Š•ȱ˜ž—Œ’•ȱ ’‘ȱ—’—Žȱ members chosen by an electorate made up of foreigners (largely British œž‹“ŽŒœǼȱ˜ —’—ȱ•Š—ȱ˜ȱ—˜ȱ•Žœœȱ‘Š—ȱśŖŖȱŠŽ•œȱ’—ȱŸŠ•žŽǯȱ‘ŽȱŒ˜ž—Œ’•ȱ‘Šȱ

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around two thousand electoral members, which was less than 10 percent of the foreign population. The municipal employees of the International ŽĴ•Ž–Ž—ȱœŽ›ŸŽȱŠœȱ‘ŽŠœȱ˜ȱ–Š’—ȱŽ™Š›–Ž—œȯ ŽŠ•‘ǰȱž‹•’Œȱ˜›”œǰȱ Finances, and Disposal, as well as the Fire Brigade, Shanghai Municipal Police, and others. The Municipal Council had its own mini constitution, the Land Legislation. As part of the extraterritorial rights, judicial powers over foreigners were vested in the consular courts of the foreigners or, for unrepresented foreigners or Chinese, in the Mixed Court. Chinese residents could be ar›ŽœŽȱ˜—•¢ȱ‹¢ȱ™Ž›–’œœ’˜—ȱ˜ȱ˜›Ž’—ȱœŽĴ•Ž–Ž—ȱŠž‘˜›’’Žœǯȱ—ȱ‘Žȱ‘Š—‘Š’ȱ—Ž›—Š’˜—Š•ȱŽĴ•Ž–Ž—ǰȱŒ’Ÿ’•ȱ˜›ȱŒ›’–’—Š•ȱŒŠœŽœȱ‹Ž ŽŽ—ȱ‘’—ŽœŽȱ Ž›Žȱ ›’Žȱ‹Ž˜›ŽȱŠȱ–’¡ŽȱŒ˜ž›ȱ˜ĞŽ—ȱ˜–’—ŠŽȱ’—ȱ™›ŠŒ’ŒŽȱǻ—˜ȱ‹¢ȱ›ŽŠ¢ȱ›’‘Ǽȱ ‹¢ȱ˜›Ž’—ȱŠœœŽœœ˜›œȱǻŠ’›‹Š—”ȱŗşŞřǰȱŗřŘǼǯȱ‘ŽȱœŽĴ•Ž–Ž—ȱ‘Šȱ’œȱ˜ —ȱŸ˜•unteer army and police, as well as a prison system, but could make no arrests, as a general rule, except on a warrant of the proper court. The Municipal Council had a right to sue in these courts and in turn to be sued in a court elected from the consuls of the Treaty Powers, known as the Court of ˜—œž•œǯȱ‘’œȱ’—œ’ž’˜—Š•ȱœ›žŒž›Žȱ™•ŠŒŽȱ‘ŽȱœŽĴ•Ž–Ž—ȱ˜—ȱŠȱ˜ž—Š’˜—ȱ of limited power and rule of law.śȱ ‘’œȱ˜ŸŽ›—Š—ŒŽȱœ›žŒž›Žȱ˜ȱ‘ŽȱœŽĴ•Ž–Ž—ȱ’œȱ›Ž–’—’œŒŽ—ȱ˜ȱ‘ŽȱŽ’eval European political tradition where incorporated urban communities ™›ŠŒ’ŒŽȱœŽ•Ȭ›ž•Žȱž—Ž›ȱ–Ž›Œ‘Š—ȱŽ•’Žœȱ˜›ȱ˜•’Š›Œ‘’Žœȱ˜ĞŽ—ȱ ’‘ȱŒ‘Š›Ž›œȱ ›Š—Žȱ‹¢ȱ•Š›Ž›ȱŽ››’˜›’Š•ȱ›ž•Ž›œǯȱ›˜–ȱ‘ŽȱœŽĴ•Ž–Ž—ȂœȱŸŽ›¢ȱŽŠ›•¢ȱŠ¢œǰȱ its Western merchant elites had desired and fought for self-rule. This is Š—ȱ’—œ’ž’˜—Š•ȱŽŠž›Žȱ‘Šȱ’œ’—ž’œ‘Žȱ‘ŽȱœŽĴ•Ž–Ž—ȱ›˜–ȱ–˜œȱ˜‘Ž›ȱ treaty ports in China or even the neighboring French Concession, which ‘Šȱ ‹ŽŽ—ȱ ž—Ž›ȱ ‘Žȱ Š–’—’œ›Š’ŸŽȱ ›ž•Žȱ ˜ȱ ›Ž—Œ‘ȱ Œ˜—œž•Š›ȱ ˜ĜŒ’Š•œȱ Š™pointed from Paris.Ŝ œȱŠ•’Ž—ȱŠœȱ‘ŽȱœŽĴ•Ž–Ž—ȱ’—œ’ž’˜—ȱ Šœȱ˜ȱ‘Žȱ‘’—ŽœŽȱ™˜•’’ŒŠ•ȱ›Š’’˜—ǰȱ ’œȱ œ’—’ęŒŠ—ŒŽȱ  Šœȱ —˜ȱ •˜œȱ ˜—ȱ ‘Žȱ ‘’—ŽœŽȱ –Ž›Œ‘Š—ȱ Ž•’Žœȱ ’—ȱ Shanghai. Taking advantage of the self-government movement under the late-Qing constitutional reform, Chinese gentry and merchants set up the Shanghai City Council in 1904 and practiced what Mark Elvin has called “gentry democracy” in the Chinese Quarter in direct imitation of the Mu—’Œ’™Š•ȱ˜ž—Œ’•ȱ’—ȱ‘Žȱ—Ž›—Š’˜—Š•ȱŽĴ•Ž–Ž—ǯȱ‘Žȱ‘Š—‘Š’ȱ’¢ȱ˜ž—Œ’•ȱ experimented with the separation of powers between legislative and executive branches, having open debates and majority votes, standardizing śȲȱ ŽŽȱ˜ĴȱǻŗşŘŞǰȱŗŗŚǼǯȱ›Œ‘’ŸŠ•ȱ–ŠŽ›’Š•œȱ›ŽŸŽŠ•Žȱ‹¢ȱž—ȱ ž’ȱœ‘˜ ȱ‘Šȱ‘Žȱž—’Œ’™Š•ȱ ˜ž—Œ’•ȱ šž’Žȱ ˜ĞŽ—ȱ •˜œȱ œž’œǰȱ ’—Œ•ž’—ȱ ‘˜œŽȱ ŒŠœŽœȱ ’—Ÿ˜•Ÿ’—ȱ ‘’—ŽœŽȱ •’’Š—œȱ ǻŘŖŖřǰȱ ŘŗśȮŘŘŞǼǯȱ ŜȲȱ ˜›ȱŠȱ›ŽŒŽ—ȱŽ¡™˜œ’’˜—ȱ˜ȱ‘ŽȱŒ’¢ȬœŠŽȱ›Š’’˜—ȱ’—ȱŽœŽ›—ȱž›˜™ŽǰȱœŽŽȱ™œŽ’—ȱǻŘŖŖŖǼǯȱ ˜›ȱ ‘Žȱ ’쎛Ž—ŒŽȱ ‹Ž ŽŽ—ȱ ‘Žȱ ™˜•’’ŒŠ•ȱ œ¢œŽ–œȱ ˜ȱ ‘Žȱ —Ž›—Š’˜—Š•ȱ ŽĴ•Ž–Ž—ȱ Š—ȱ ‘Žȱ ›Ž—Œ‘ȱ˜—ŒŽœœ’˜—ǰȱœŽŽȱŽ›¸›ŽȱǻŘŖŖśǰȱŒ‘Š™ǯȱśǼǯȱ

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Š¡ȱŒ˜••ŽŒ’˜—ȱǻ’—ȱ™•ŠŒŽȱ˜ȱŠ¡ȱŠ›–’—Ǽǰȱ–Š’—Š’—’—ȱŠ—ȱ’–™›˜Ÿ’—ȱ™ž‹•’Œȱ facilities, developing its own merchant militia and courts of justice with elected judges, and promulgating various regulative laws and moral codes that seem like a distant echo of Lee Kuan Yew’s modern Singapore. ‘ŽȱŒ˜ž—Œ’•ȱ Šœȱ›Ž–Š›”Š‹•¢ȱŒ˜››ž™’˜—ȱ›ŽŽȱǻ•Ÿ’—ȱŗşşŜǰȱŒ‘Š™œǯȱśȮŜǼǯ In 1913, Yuan Shikai’s policy of recentralization forcibly ended this short-lived Chinese experiment in local self-government. By then, only ŽœŽ›—’£Žȱ‘Š—‘Š’ȱǻ‘Žȱ—Ž›—Š’˜—Š•ȱŽĴ•Ž–Ž—ȱŠ—ȱ‘Žȱ›Ž—Œ‘ȱ˜—ŒŽœœ’˜—Ǽȱœž›Ÿ’ŸŽȱŠ—ȱ‘›’ŸŽȱ’—ȱ‘Žȱ Š”Žȱ˜ȱ‘Žȱ’—ȂœȱŒ˜••Š™œŽǰȱ‹ŠŒ”Žȱ by international treaties, and, more importantly, by Western gunboats. By ŗşŗŗǰȱ‘Žȱ—Ž›—Š’˜—Š•ȱŽĴ•Ž–Ž—ȱŠ—ȱ‘Žȱ›Ž—Œ‘ȱ˜—ŒŽœœ’˜—ȱ‘Šȱ–Š—ŠŽȱ to extend their territories in Shanghai to 33 square kilometers (approx. ŞǰŗŖŖȱŠŒ›ŽœǼǰȱŠ—ȱŠ›ŽŠȱŗǯśȱ’–Žœȱ‘Žȱ˜Š•ȱœ’£Žȱ˜ȱ‘Žȱ’—Ž›—Š’˜—Š•ȱœŽĴ•Ž–Ž—œȱ in the other twenty-three treaty ports in China combined (Fei Chengkang ŗşşŘǼǯȱ‘Ž—ȱ‘Žȱ’—ȱ–Š’œ›ŠŽȱ’—ȱ‘Š—‘Š’ȱŠ‹œŒ˜—ŽȯŠ••ŽŽ•¢ȱ ’‘ȱ ™ž‹•’Œȱž—œȯž›’—ȱ‘ŽȱŽŸ˜•ž’˜—ȱ˜ȱŗşŗŗǰȱ‘Žȱ—Ž›—Š’˜—Š•ȱŽĴ•Ž–Ž—ȱ seized control of the Qing’s Shanghai Mixed Court and began to appoint its own Chinese personnel. By then, Westernized Shanghai had become somewhat of a de facto “city-state” with full territorial jurisdiction over its residents, Western and Chinese, a feature that set it apart from the other foreign concessions in China. Shanghai’s Golden Age: 1911–1925 Ў›ȱŗşŗŗǰȱ‘Žȱ‘Š—‘Š’ȱ’¡Žȱ˜ž›ȱž—Ž› Ž—ȱŠȱ™›˜˜ž—ȱ’—œ’ž’˜—Š•ȱ and procedural transformation and became an indispensable legal arm ˜ȱ‘ŽȱœŽĴ•Ž–Ž—ȱŠ–’—’œ›Š’˜—ȱ‘Šȱ˜ŸŽ›œŠ ȱ‘Žȱž—™›ŽŒŽŽ—Žȱ›˜ ‘ȱ from 1911 to 1927. Despite the stigma of being a foreign-run court on Chinese soil, the Mixed Court reached an annual average of thirty-two thouœŠ—ȱ •Š œž’œȱ ›˜–ȱ ‘’—ŽœŽȱ •’’Š—œȱ ‹Ž ŽŽ—ȱ ŗşŗřȱ Š—ȱ ŗşŘŜǰȱ ˜ĞŽ—ȱ ˜žstripping the court’s capacity. The Mixed Court handled the largest civil caseload of all Shanghai courts, with a secular rise in the share of Chinese lawsuits in the total. In 1908, the court for purely Chinese suits was in sesœ’˜—ȱ˜—•¢ȱŠ‹˜žȱ˜—Žȱ˜ž›‘ȱŠœȱ–žŒ‘ȱŠœȱ‘Šȱ˜›ȱ˜›Ž’—ȱœž’œǰȱ‹žȱ‹¢ȱŗşŘśȱ ‘’œȱ›Š’˜ȱ‘Šȱ’—ŸŽ›ŽȱǻŽŽȱŗşşřǰȱŗřŚŞȮŗřŚşǼǯȱ The Mixed Court successfully outcompeted other courts established in early twentieth-century Shanghai due to several advantages. The ruling or adjudication of the Mixed Court was credible and enforceable with the backing of a highly armed and well trained municipal police force. Distinct from the Chinese tradition of discouraging formal legal litigation, the Œ˜ž›ȱŒŠŽ›Žȱ˜ȱ‘Žȱ™•Š’—’ěœȱ ‘˜ȱ’—’’ŠŽȱ‘Žȱ•Š œž’œȱŠ—ȱŽŠ•ȱ’—ȱŠȱ›’Œ‘ȱ variety of suits civil, commercial, or otherwise from a wide spectrum of ‘’—ŽœŽȱǻŽŽȱŗşşřǰȱŗřśŖǼǯȱ‘ŽȱŒ˜ž›ȱž— ŠŸŽ›’—•¢ȱ™›˜œŽŒžŽȱŠ—¢ȱŠĴŽ–™ȱ

The Rise of Modern Shanghai

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Šȱ’••ŽŠ•ȱŠ¡Š’˜—ȱž™˜—ȱŠ—¢ȱ™Ž›œ˜—ȱ ’‘’—ȱ‘ŽȱœŽĴ•Ž–Ž—ȱ‘Šȱ’–™’—Žȱ on private property rights.7 Shanghai, as Thomas Stephens aptly put it, was “an oasis of peace, order and good government, in a China torn into Œ˜—Ÿž•œ’˜—œȱ‹¢ȱ›ŽŸ˜•ž’˜—ǰȱ‹Š—’›¢ȱŠ—ȱŒ’Ÿ’•ȱ Š›ȄȱǻŗşşŘǰȱŗŖŚȮŗŖŜǼǯ ‘Žȱ›˜•Žȱ˜ȱ‘Žȱ’¡Žȱ˜ž›ȱ’—ȱ‘Žȱ›’œŽȱ˜ȱ‘Š—‘Š’ȱŠœȱŠȱꗊ—Œ’Š•ȱŒŽ—Ž›ȱ ’œȱ‹Žœȱ’••žœ›ŠŽȱ‹¢ȱ‘Žȱ›Š–Š’ŒȱŗşŗŜȱ’—Œ’Ž—ȱ˜ȱ‘Žȱ‹Š—”Ȭ—˜Žȱœžœ™Ž—œ’˜—ȱ ˜›Ž›ǯȱ —ȱ ‘Žȱ ŗşŗŖœǰȱ Žħ’—ȱ  Šœȱ Š—˜‘Ž›ȱ ’–™˜›Š—ȱ ꗊ—Œ’Š•ȱ ŒŽ—Ž›ȱ because of the presence of large state-backed banks such as the Bank of ‘’—ŠȱŠ—ȱŠ—”ȱ˜ȱ˜––ž—’ŒŠ’˜—ȱ’—ȱ‘ŽȱŒ’¢ǯȱ ˜ ŽŸŽ›ǰȱ’—ȱŗşŗŜȱ‘ŽȱŽ™ž‹•’ŒŠ—ȱ ˜ŸŽ›—–Ž—ȱ ’—ȱ Žħ’—ȱ ›Žœ˜›Žȱ ˜ȱ ‘Žȱ ™›’—’—ȱ ™›Žœœȱ ˜›ȱ ꜌Š•ȱ revenue and ordered the suspension of paper note conversion to silver, a –˜ŸŽȱ‘Šȱ‹›˜ž‘ȱ™Š—’ŒȱŠ—ȱ›ž’—ȱ˜ȱꗊ—Œ’Š•ȱœŽŒ˜›œȱ‘›˜ž‘˜žȱ‘’—Šǯȱ With the backing of the Mixed Court, the Shanghai branch of the Bank ˜ȱ‘’—ŠȱœžŒŒŽœœž••¢ȱ›Žœ’œŽȱ‘Žȱ˜›Ž›ǯȱ‘Žȱ¢ŽŠ›ȱŗşŗŜȱ‹ŽŒŠ–ŽȱŠȱž›—’—ȱ ™˜’—ȱ ‘Ž—ȱ‘Š—‘Š’ȱŽ–Ž›ŽȱŠœȱ‘’—ŠȂœȱœ˜•Žȱꗊ—Œ’Š•ȱŒŽ—Ž›ǯȱ‘Š—‘Š’ȱ bankers later played a leadership role in privatizing the government’s state banks and inducing the rise of a modern Chinese banking sector, with almost all the important banks being located in the foreign concesœ’˜—ȱŠ›ŽŠœȱ˜ȱ•Š›Žȱ›ŽŠ¢ȱ™˜›œǯȱ¢ȱŗşŘśǰȱ‘Žȱœ‘Š›Žȱ˜ȱŒŠ™’Š•ȱ™˜ Ž›ȱ’—ȱ‘’nese banks was 41 percent, higher than the 37 percent held by the once dominant foreign banks.8 The impact of the Mixed Court reached far beyond the courtroom, with ’œȱ ›ž•’—œȱ ˜ĞŽ—ȱ  ’Ž•¢ȱ ™ž‹•’Œ’£Žȱ ’—ȱ —Ž œ™Š™Ž›œȱ Š—ȱ ˜‘Ž›ȱ –Ž’Šǯ9 In this era of legal reform, Shanghai nurtured China’s largest professional legal association and highest number of lawyers and law schools (Lee 1993, ŗŚŖşȮŗŚŗŖDzȱ ’›‹¢ȱŗşşśǰȱŚŞȮśŖǼǯȱŽ™‘Ž—œǰȱ’—ȱ‘’œȱŗşşŘȱœž¢ȱ˜ȱ‘Žȱ’¡Žȱ Court during 1911–1927 period, emphasizes the transformation of legal Œž•ž›Žǯȱ ŽȱŒ‘Š›ŠŒŽ›’£Žœȱ‘Žȱ—Šž›Žȱ˜ȱ‘Žȱ›Š’’˜—Š•ȱ‘’—ŽœŽȱ•ŽŠ•ȱœ¢œtem as “disciplinary,” meaning that it places priority on the maintenance For a comparison with the taxation system in Shanghai and the Mixed Court’s repeated ›’Š•œȱ˜ȱ’••ŽŠ•ȱ‘’—ŽœŽȱŠ¡Š’˜—ȱ’—ȱ‘Žȱ—Ž›—Š’˜—Š•ȱŽĴ•Ž–Ž—ǰȱœŽŽȱŽŽ‘Š–ȱǻŗşřŗǰȱŗŖřȮŗŖŝǼǯ ŞȲȱ For details on the note-suspension incident and on the role of the Shanghai Bankers’ Association in privatizing modern state banks in China and the shares of capital power, œŽŽȱ ‘Ž—ȱ ǻŘŖŖřǰȱ śŚȮŜŘǰȱ ŗŜŘȮŗŜŞǰȱ ŘŚŗǼǯȱ ˜›ȱ ‘Žȱ Œ˜—›’‹ž’˜—ȱ ˜ȱ –˜Ž›—ȱ ‹Š—”œȱ ˜ȱ ‘’—ŠȂœȱ –˜—Ž’£Š’˜—ǰȱœŽŽȱŠ œ”’ȱǻŗşŞşǰȱŗśśȮŗŝşǼǯ şȲȱ ‘ŽȱŽěŽŒȱ˜ȱ‘Žȱ›ž•Žȱ˜ȱ•Š ȱŒŠ—ȱ‹ŽȱŠĴŽœŽȱ‹¢ȱ‘Žȱ˜••˜ ’—ȱŸ’Ÿ’ǰȱ‘˜ž‘ȱœ’–™•’œ’Œǰȱ observation made in 1917: ‘Žȱ‘’—ŽœŽȱ›Žœ’’—ȱ’—ȱ‘Žȱ—Ž›—Š’˜—Š•ȱŽĴ•Ž–Ž—ȱ‘ŠŸŽȱ—ž–‹Ž›ŽȱŞŖŖǰŖŖŖǯȱ•‘˜ž‘ȱ ‘Ž¢ȱ Š›Žȱ ž—œ™ŽŠ”Š‹•¢ȱ •˜ ȱ ’—ȱ ”—˜ •ŽŽȱ Š—ȱ ǽŽžŒŠ’˜—Ǿȱ •ŽŸŽ•ǰȱ ž—Ž›ȱ ‘Žȱ ’—ĚžŽ—ŒŽȱ ˜ȱ ›’’œ‘ȱ Œžœ˜–ǰȱ ‘Ž’›ȱ ‘Š‹’ȱ ˜ȱ ˜••˜ ’—ȱ ‘Žȱ •Š ȱ ’œȱ œž™Ž›’˜›ȱ ˜ȱ ǽ‘Žȱ ™Ž˜™•Žȱ ’—Ǿȱ ‘Žȱ ’—Ž›’˜›dzǯȱǽ—ȱ‘Žȱ’—Ž›’˜›ǰǾȱ˜ĜŒ’Š•œȱ‹ž••¢ȱ‘Žȱ™Ž˜™•ŽȱŠ—ȱ‘Žȱ™Ž˜™•ŽȱŠ›Žȱ—˜ȱ›Žœ˜›ȱ˜ȱ ‘Žȱ•Š ǰȱ ‘Ž›ŽŠœȱ‘Žȱ›Žœ’Ž—œȱ’—ȱ‘ŽȱŽĴ•Ž–Ž—ȱŠ••ȱ”—˜ ȱ‘ŠȱŽŠ’—’—ȱ™Ž˜™•Žȱ ’‘˜žȱ  Š››Š—ȱ ’œȱ ”’—Š™™’—ǰȱ Š—ȱ Šȱ ”’—Š™™Ž›ǰȱ  ‘Ž‘Ž›ȱ Š—ȱ ˜ĜŒ’Š•ȱ ˜›ȱ Šȱ Œ˜––˜—ȱ ™Ž›œ˜—ǰȱ  ˜ž•ȱ‹Žȱ™ž—’œ‘Žǯȱǻ’Žȱ’—ȱžȱŘŖŖŗǰȱŚŗǼ ŝȲȱ

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of social order and group solidarity over abstract and transcendent legal rules. The Mixed Court, he argued, resorted to this “disciplinary” legal tradition but, more importantly, strived for the ideal of dispute resolution according to predetermined and known standards. Moreover, the Œ˜ž›ȱŠœœŽœœ˜›œȂȱŠĴŽ–™ȱ˜ȱŒ˜—œ›žŒȱœžŒ‘ȱŠȱ›Š–Ž ˜›”ȱ’—ȱ‘ŽȱŠ“ž’ŒŠ’ŸŽȱ model of Western jurisprudence brought legal certainty and calculability previously lacking in the Chinese legal tradition.10 ‘Žȱ ›ž•Žȱ ˜ȱ •Š ȱ ™Š’ȱ ˜ěȱ ˜›ȱ ‘Žȱ œŽĴ•Ž–Ž—ǯȱ ˜Ž›—ȱ ™›˜™Ž›¢ȱ ›’‘œȱ adopted there—particularly, transparency and security—laid the foundation for the rise of modern real estate that further fueled the growth of modern banking.11 Zhao Jin’s work shows that land values per mou in the —Ž›—Š’˜—Š•ȱŽĴ•Ž–Ž—ȱœ‘˜ȱž™ȱ‹¢ȱŠȱœž——’—ȱ Ž—¢ȱ’–Žœȱ‹Ž ŽŽ—ȱŗŞŜśȱ Š—ȱ ŗşřŖǰȱ  ’‘ȱ Šȱ ‘›ŽŽ˜•ȱ ’—Œ›ŽŠœŽȱ ‹Ž ŽŽ—ȱ ŗşŗŗȱ Š—ȱ ŗşřŖȱ ǻŗşşŚǰȱ ŗŚśǼǯȱ More important, by 1930, the average per mou land value in the Inter—Š’˜—Š•ȱŽĴ•Ž–Ž—ȱ Šœȱ˜ŸŽ›ȱ Ž—¢Ȭœ’¡ȱ’–Žœȱ‘Šȱ˜ȱ‘ŽȱŽ—’›Žȱ‘’—ŽœŽȱ Quarter and three times that of the highest-valued area in the Chinese žŠ›Ž›ǰȱ‘ŽȱŠ—œ‘’ȱ’œ›’Œǰȱ ‘’Œ‘ȱ ŠœȱŠ“ŠŒŽ—ȱ˜ȱ‘Žȱꗊ—Œ’Š•ȱŒŽ—Ž›ȱ’—ȱ ‘ŽȱœŽĴ•Ž–Ž—ǯ12 ȱœ’–’•Š›ȱ™ŠĴŽ›—ȱŒ˜ž•ȱ‹Žȱ˜ž—ȱ’—ȱ‘ŽȱŽ˜›Š™‘’Œȱ’œ›’‹ž’˜—ȱ˜ȱ‹žœ’ness establishments. Data culled by Marie-Claire Bergère illustrate that over 70 percent of highly contract-intensive sectors such as banks and insurance, trading, and other service companies were located in the Interna’˜—Š•ȱŽĴ•Ž–Ž—ǰȱ ‘Ž›ŽŠœȱ•Žœœȱ‘Š—ȱŘŖȱ™Ž›ŒŽ—ȯ–˜œ•¢ȱ›Š’’˜—Š•ȱ—Š’ŸŽȱ banks and pawnshops—were in the Chinese Quarter. In the case of the capital-intensive sector of the mechanical engineering industry, 84 percent ˜ȱ’œȱŽœŠ‹•’œ‘–Ž—œȱ Ž›Žȱœ’žŠŽȱ’—ȱ‘ŽȱœŽĴ•Ž–Ž—ǯȱ—ȱ‘ŽȱŒ˜—›Š›¢ǰȱ˜—•¢ȱ Š‹˜žȱŜŖȱ™Ž›ŒŽ—ȱ˜ȱŠŒ˜›’Žœȱ’—ȱ›Ž•Š’ŸŽ•¢ȱ•Š‹˜›Ȭ’—Ž—œ’ŸŽȱœŽŒ˜›œȱœžŒ‘ȱŠœȱ Ž¡’•ŽœȱŠ—ȱ˜˜Ȭ™›˜ŒŽœœ’—ȱ’—žœ›’Žœȱ Ž›Žȱ‹ž’•ȱ’—ȱ‘ŽȱœŽĴ•Ž–Ž—ǰȱ ‘’•Žȱ the Chinese Quarter took in more than 30 percent (Bergère 1989a, 108–109, Š‹•ŽȱřǯřǼǯȱ•˜–Ž›Š’˜—ȱŽŒ˜—˜–’Žœȱ’—ȱ‘Š—‘Š’ȱ˜˜”ȱ˜—ȱŠȱ’œ’—Œ’ŸŽ•¢ȱ institutional demarcation: the number of industrial and commercial enti’Žœȱ™Ž›ȱœšžŠ›Žȱ”’•˜–ŽŽ›ȱ’—ȱ‘Žȱ—Ž›—Š’˜—Š•ȱŽĴ•Ž–Ž—ȱ Šœȱ Ž••ȱ˜ŸŽ›ȱŽ—ȱ ’–Žœȱ‘Šȱ˜ȱ‘Žȱ‘’—ŽœŽȱžŠ›Ž›ȱǻŠ—ȱŽ’ž˜ȱŘŖŖŘǰȱŘŘŗȮŘŘŘǼǯȱ’œ’—ȱ•Š—ȱ ŸŠ•žŽȱŽȱ’—˜ȱŠ—ȱŽ¡™Š—’—ȱŠ¡ȱ‹ŠœŽȱ˜ȱꗊ—ŒŽȱŠ—ȱŽĜŒ’Ž—ȱŠ–’—’œ›Š’˜—ȱ ŗŖȲȱ ŽŽȱŽ™‘Ž—œȱǻŗşşŘǰȱŗŖŝȮŗŖŞȱŠ—ȱŒ‘Š™œǯȱŗȮřǼȱ˜›ȱ‘Žȱ›Š’’˜—Š•ȱ‘’—ŽœŽȱ•ŽŠ•ȱœ¢œŽ–ǯȱ˜›ȱ Šȱ›ŽŒŽ—ȱœž––Š›¢ȱ˜ȱ‘’—ŽœŽȱ•ŽŠ•ȱ›Š’’˜—ǰȱœŽŽȱŠȱǻŘŖŖŜǼǯȱ ŗŗȲȱ ˜›ȱ Šȱ ŒŠ›Žž•ȱ Š—Š•¢œ’œȱ ˜ȱ ‘Žȱ ŽěŽŒȱ ˜ȱ ‘Žȱ ŽœŽ›—ȱ ™›’ŸŠŽȱ ™›˜™Ž›¢ȱ ›’‘œȱ œ¢œŽ–ȱ ˜—ȱ ‘Žȱ˜ Ž›ȱŠ—£’ǰȱœŽŽȱŠȱžŽš’Š—ȱǻŘŖŖŘǰȱŒ‘Š™ǯȱřǼǯȱ‘Žȱ˜›Ž’—ȱŒ˜—ŒŽœœ’˜—ȱ•Š—ȱŒŽ›’ęŒŠŽȱ (daoqiǼȱœŽ›ŸŽȱŠœȱ‘Žȱ–˜œȱœŽŒž›Žȱ•˜Š—ȱŒ˜••ŠŽ›Š•ȱǻ‘Š˜ȱ ’—ȱŗşşŚǰȱŒ‘Š™ǯȱŗǼǯȱŽŽȱŠ•œ˜ȱ‘’›˜¢Š–ŠȂœȱ Œ˜—›’‹ž’˜—ȱ ˜ȱ ‘’œȱ Ÿ˜•ž–Žȱ ǻŒ‘Š™Ž›ȱ řǼȱ ˜›ȱ ›ŽŠ•ȱ ŽœŠŽȱ ŽŸŽ•˜™–Ž—ȱ ’—ȱ ‘Š—‘Š’ȱ ˜›ȱ ‘’œȱ period. ŗŘȲȱ Overall, per mouȱ•Š—ȱŸŠ•žŽœȱ’—ȱ‘ŽȱœŽĴ•Ž–Ž—ȱ Ž›ŽȱŠ‹˜žȱŘŞȱ™Ž›ŒŽ—ȱ‘’‘Ž›ȱ‘Š—ȱ‘˜œŽȱ ’—ȱ‘Žȱ›Ž—Œ‘ȱ˜—ŒŽœœ’˜—ȱǻ‘Š˜ȱ ’—ȱŗşşŚǰȱŗśřǰȱŗśŜǼǯȱ˜›ȱ‘Žȱ˜›Ž’—ȱŒ˜—ŒŽœœ’˜—ȱ•Š—ȱŒŽ›’ęŒŠŽǰ œŽŽȱŠȱžŽš’Š—ȱǻŘŖŖŘǰȱŒ‘Š™ǯȱřǼǰȱ‘Š˜ȱ ’—ȱǻŗşşŚǰȱŒ‘Š™ǯȱŗǼǰȱŠ—ȱŠ•œ˜ȱŽŽ‘Š–ȱǻŗşřŗǰȱřŗŝȮřŚŞǼǯ

The Rise of Modern Shanghai

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Š—ȱŠȱ ˜›•ȬŒ•Šœœȱ’—›Šœ›žŒž›Žȱ‘Šȱ–ŠŽȱ‘ŽȱœŽĴ•Ž–Ž—ȱ‘ŽȱŽ—Ÿ¢ȱ˜ȱ‘’na in the 1920s.13 It was in Westernized Shanghai that a new generation of Chinese entrepreneurs was born. They came from modest backgrounds and gained fortunes without the bureaucratic patronage and rent-seeking tendencies that œ˜ȱ˜ĞŽ—ȱŒ‘Š›ŠŒŽ›’£Žȱ›Š’’˜—Š•ȱ–Ž›Œ‘Š—œȱ˜›ȱ‘Žȱ‹ž›ŽŠžŒ›ŠȬ–Ž›Œ‘Š—œȱ of earlier periods. Whereas Shanghai’s business class was dominated by entrepreneurs of the Lower Yangzi, the city had become a magnet for Chinese merchants nationwide. The virtuous merchants of old China were no longer the executive role models sought by the young merchants who had already become successful compradors. Wen-hsin Yeh has given this phenomenon a succinct account: “What set the compradors apart from the late imperial predecessors was not what they might have lost, but what had become necessary for them to learn. This included both younger language skills and knowledge of the world that lay beyond China.” Further, this new breed of Chinese sought the “pragmatic value of the learning of Œ˜––Ž›ŒŽȄȱ ǻŽ‘ȱ ŘŖŖŝǰȱ ŗśǼǯȱ Ž ȱ œ˜Œ’Ž’Žœȱ  Ž›Žȱ ˜›–Žȱ ˜ȱ ŽŠŒ‘ȱ –˜Ž›—ȱ techniques, including foreign languages, new comparative business practices, a variety of business concepts, new contracts, and so on (Yeh 2007, Œ‘Š™œǯȱŗȮŘǼǯȱ žȱ ’— žȱ Š—ȱ žŠ—ȱ Š—–’—Ȃœȱ ŠŠȱ œ‘˜ ȱ ‘Šȱ œ‘Š›Žœȱ ˜ȱ ‘’—ŽœŽȱ ownership in nine major modern industries in Shanghai were consistently higher than those of foreign ownership from the 1910s through the 1930s. In this sense, Westernized Shanghai, from a colonial perspective, had induced far more vigorous indigenous entrepreneurship than Japanese colonialism did in Taiwan, Korea, or Manchuria. In fact, Japanese entrepreneurs themselves thrived in the highly competitive and mul’—Š’˜—Š•ȱ ‘Š—‘Š’ȱ ǻžȱ ’— žȱ Š—ȱ žŠ—ȱ Š—–’—ȱ ŗşşŞǰȱ řŚŗǼǯ14 This led to the rise of a legendary Shanghai style of freewheeling capitalism Œ‘Š›ŠŒŽ›’£Žȱ‹¢ȱ›ŽŽȱ̘ ȱ˜ȱ›ŠŽȱŠ—ȱŒŠ™’Š•ȱŠ—ȱ›ŽŽȱ‹Š—”’—ȱ ’‘ȱŠȱ small government but a large civil society, a model that stood apart from the acclaimed East Asian model of state-led industrialization in postwar Japan and Korea. —ȱŗşŘŜǰȱ‘Žȱ–’•’Š›¢ȱ Š›•˜›ȱ˜ŸŽ›—’—ȱ ’Š—œžȱ›˜Ÿ’—ŒŽǰȱž—ȱ‘žŠ—Š—ǰȱ›Ž–Š›”ŽDZȱ whenever I come to a treaty port I feel thoroughly humiliated, not only because a treaty port is a standing reminder of our loss of sovereignty, but also because whenever we pass from the concessions into Chinese territory we feel that we are crossing into a ’쎛Ž—ȱ ˜›•ȯ‘Žȱ˜›–Ž›ȱ’œȱ‘Žȱž™™Ž›ȱŠ—ȱ‘Žȱ•ŠĴŽ›ȱ’œȱ‘Žȱž—Ž›Ȭ ˜›•ǰȱ˜›ȱ—˜‘’—ȱ in the Chinese territory—roads, buildings, or public health—can be compared with the concessions. This is the greatest of our national humiliations, much greater in my ˜™’—’˜—ȱ‘Š—ȱ‘Žȱ•˜œœȱ˜ȱœ˜ŸŽ›Ž’—¢ǯȱǻž˜Žȱ’—ȱŽŽ‘Š–ȱŗşřŗǰȱŘŚŘǼȱ ŗŚȲȱ For the share of Japanese capital in industries in Taiwan and Korea, especially in largeœŒŠ•ŽȱŽœŠ‹•’œ‘–Ž—œǰȱœŽŽȱ’£˜žŒ‘’ȱŠ—ȱ–Ž–ž›ŠȱǻŗşŞŞǰȱŝŝǼǯȱ ŗřȲȱ

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The City and the Empire Beneath the prosperity of Westernized Shanghai lay a set of fundamental Œ˜—›Š’Œ’˜—œǯȱ‘Žȱ—Ž›—Š’˜—Š•ȱŽĴ•Ž–Ž—ȱ™›ŠŒ’ŒŽȱ›Ž™›ŽœŽ—Š’˜—ȱ‹žȱ no democracy. Controlled by what was dubbed a “taipan oligarchy,” the Municipal Council was elected by a tiny and powerful Western business class who met the property requirements for voting rights. The council defended the rule of law as much as Western privileges. It denied repreœŽ—Š’˜—ȱ˜ȱ‘’—ŽœŽȱ›Žœ’Ž—œǰȱ ‘˜ȱ–ŠŽȱž™ȱşŜȱ™Ž›ŒŽ—ȱ˜ȱ‘Žȱ™˜™ž•Š’˜—ȱ Š—ȱ™Š’ȱ‘Žȱ‹ž•”ȱ˜ȱŠ¡ȱ›ŽŸŽ—žŽȱ’—ȱŗşŘśǯŗś This is unfortunate as, accord’—ȱ˜ȱŠ›”œȱ˜‹•Žȱ ›ǯȱǻŘŖŖřǼǰȱ‘Ž›ŽȱŽŸŽ•˜™ŽȱŠȱœ¢–‹’˜’Œȱ›Ž•Š’˜—œ‘’™ȱ‹Žtween Chinese entrepreneurs and the treaty port irrespective of the social discrimination these entrepreneurs had felt—perhaps more keenly than average Chinese residents because of their wealth and education. ‘Žȱ ›ŽŽ˜–ȱ ˜ȱ ™›Žœœȱ Š—ȱ œ™ŽŽŒ‘ȱ ž™‘Ž•ȱ ’—ȱ ‘Žȱ —Ž›—Š’˜—Š•ȱ ŽĴ•Žment and French Concession sheltered China’s outspoken intellectuals and creative artists as well as radical dissidents and revolutionary advocates of violence.ŗŜ With three independent jurisdictions in a tight, dense space with open borders (except in brief periods of external military threat  ‘Ž—ȱŽœŽ›—ȱ‘Š—‘Š’ȱ Šœȱ‘ŽŠŸ’•¢ȱ‹Š››’ŒŠŽǼǰȱ‘Žȱ›˜ ’—ȱŒ’¢ȱ Šœȱ’—Œ›ŽŠœ’—•¢ȱ’ĜŒž•ȱ˜ȱ˜ŸŽ›—ǯȱ‘Š—‘Š’ȱŠŸŽȱ‹’›‘ȱ˜ȱ‘Žȱ’—Š–˜žœȱȃ ›ŽŽ—ȱ Š—ǰȄȱ‘’—ŠȂœȱ–˜œȱ™˜ Ž›ž•ȱŠ—ȱ•ŽŽ—Š›¢ȱŒ›’–Žȱ–ŠęŠȱ‘Šȱ’—ę•›ŠŽȱ the French Concession, the Chinese warlord government, and, later, the Nationalist government. In the midst of surging nationalism, advancing Japanese imperialism, and growing communist agitation, Shanghai was increasingly politicized by forces both within and without and saw a fair share of massive labor strikes and sometimes violent protests.17

˜ ŽŸŽ›ǰȱ‘ŽȱŽ¡’œŽ—ŒŽȱ˜ȱŽœŽ›—ȱ‘Š—‘Š’ȱ™˜œŽȱŠȱ›ŽŠŽ›ȱ’•Ž––Šȱ for China: the insertion of an independent political entity into the heart of an empire whose stability had long rested on the elimination of alternative power structures. Western Shanghai thrived during the near absence of empire, a period that seemed to be drawing to a close by the late 1920s. In ŗşŘŞǰȱ‘ŽȱŸ’˜•Ž—ȱŠ”Ž˜ŸŽ›ȱ˜ȱ‘Žȱ›’’œ‘ȱ˜—ŒŽœœ’˜—ȱ’—ȱ‘Žȱ Š—”˜žȱ›ŽŠ¢ȱ ™˜›ȱ‹¢ȱ‘Žȱ•ŽĞȬ ’—ȱŠ’˜—Š•’œȱ›ŽŸ˜•ž’˜—Š›’ŽœǰȱŠŒŒ˜–™Š—’Žȱ‹¢ȱ•˜˜’—ȱ and destruction of property, brought a poignant reminder of the limited reach of Western military power in the face of rising nationalism. Western ŗśȲȱ ŽŽ‘Š–ȱ ǻŗşřŗǰȱ ŗřŞǼȱ ’ŸŽœȱ ‘Žȱ ‘’—ŽœŽȱ Œ˜—›’‹ž’˜—ȱ ˜ȱ Š¡ȱ ›ŽŸŽ—žŽȱ Šȱ śśȱ ™Ž›ŒŽ—ǯȱ

˜ ŽŸŽ›ǰȱ ’Šȱ ’—•’—ȱ ǻŗşşŘǼȱ Š›žŽœȱ ‘Šȱ Šȱ œž‹œŠ—’Š•ȱ Š–˜ž—ȱ ˜ȱ ™›˜™Ž›¢ȱ ’—ȱ ‘Žȱ œŽĴ•Ž–Ž—ȱ ›Ž’œŽ›Žȱž—Ž›ȱŽœŽ›—ȱ—Š–Žœȱ ŠœȱŠŒžŠ••¢ȱ˜ —Žȱ‹¢ȱ‘’—ŽœŽǯȱ ’œȱŽœ’–ŠŽȱœžŽœœȱ‘Šȱ ‘’—ŽœŽȱŠ¡ȱ›ŽŸŽ—žŽȱŒ˜—›’‹ž’˜—ȱ ŠœȱŠȱ•ŽŠœȱŜŖȱ™Ž›ŒŽ—ǰȱŠ—ȱ•’”Ž•¢ȱ–˜›Žȱǻ™ǯȱŗŘŝǼǯȱ ŗŜȲȱ For Shanghai’s emergence as China’s new intellectual capital by the late 1920s, see Ž›¸›ŽȱǻŗşŞŗǰȱŗŘȮŗřǼǯ ŗŝȲȱ ŽŽȱ Š”Ž–Š—ȱ Š—ȱ Ž‘ȱ ǻŗşşŘǼȱ ˜›ȱ Œ‘Š™Ž›œȱ ˜—ȱ •Š‹˜›ȱ œ›’”Žœȱ Š—ȱ œžŽ—ȱ ™›˜Žœǯȱ ŽŽȱ Š›’—ȱǻŗşşŜǼȱ˜›ȱ‘Žȱ ›ŽŽ—ȱ Š—ǯ

The Rise of Modern Shanghai

Śś

‘Š—‘Š’ȱœž›Ÿ’ŸŽȱ ’Š—ȱ ’Žœ‘Žȱǻ‘’Š—ȱ Š’Ȭœ‘Ž”ǼȂœȱ›Ž•Š’ŸŽ•¢ȱ›’‘Ȭ ’—ȱ Š’˜—Š•’œȱ›Ž’–Žȱ‘ŽŠšžŠ›Ž›Žȱ’—ȱŠ—“’—ȱǻ ’Š—œžȱ›˜Ÿ’—ŒŽǼȱ’—ȱŗşŘŝǯȱ Some Western privileges were forsaken: the Mixed Court was reverted to the new Chinese regime; the long-sought Chinese representation was accepted into the Municipal Council; and even the “public” parks were opened to Chinese residents by 1928.18 The Nationalist regime in Nanjing was a mixed blessing for Shanghai capitalists. Not unlike other Chinese governments, Jiang’s extended its grabbing hand to tax revenue and then state control (Coble 1980; Bergère ŗşŞşŠǰȱŽ™’•˜žŽǼǯȱ˜›ȱ‘ŽȱŠ’˜—Š•’œȱ˜ŸŽ›—–Ž—ǰȱ•Š ǰȱŠœȱ™˜’—Žȱ˜žȱ‹¢ȱ

’›‹¢ǰȱ Šœȱ˜ĞŽ—ȱŽŽ–ŽȱŠ—ȱ’—œ›ž–Ž—ȱ˜ȱœŠŽȱŒ˜—›˜•ȱǻŗşşśǰȱśŗǼǯȱ ˜ ever, the Jiang regime did bring back general peace and stability to the Lower Yangzi, which enabled a heightened spillover of Shanghai industrialization to the region. Only ten years later, the Nationalist rule came to an end in the Lower Yangzi following Japan’s full-scale invasion in 1937. It was an irony of ŠŽȱ‘Šȱ Š™Š—ŽœŽȱ’–™Ž›’Š•’œ–ȱ˜ĜŒ’Š••¢ȱŽ—ŽȱŠȱŒŽ—ž›¢ȱ˜ȱŽœŽ›—’£Žȱ ‘Š—‘Š’ȱ’—ȱŗşŚŗȱǻŽ’ȱ‘Ž—”Š—ȱŗşşŘǰȱŚŗśǼǯȱ‘Š—‘Š’ȱŒŠ™’Š•’œ–ǰȱ—˜—Žtheless, survived till the day when Communist troops marched into the heart of the city’s commercial district in 1949. It was then that Shanghai’s once bright evening city lights—a symbol of its freewheeling spirit of ŒŠ™’Š•’œ–ȯ Ž›Žȱœ‘žȱ˜ěǰȱŠ•˜—ȱ ’‘ȱ‘’—ŠȂœȱ˜˜›ȱ˜ȱ‘Žȱ˜žœ’ŽǯȱЎ›ȱ 1949, Shanghai, like other cities in China, returned to being an administrative district—albeit an important one—of a highly centralized state. Meanwhile, Chinese capitalism went on the run. Shanghai capitalists œ›ŽŠ–Žȱ’—˜ȱŒ˜•˜—’Š•ȱ ˜—ȱ ˜—ǰȱ ‘Ž›Žȱ‘Ž’›ȱŒŠ™’Š•ǰȱ’—žœ›’Š•ȱœ”’••œǰȱ Š—ȱŽ—›Ž™›Ž—Žž›’Š•ȱŸ’œ’˜—ǰȱŠœȱŠŒ”—˜ •ŽŽȱ‹¢ȱ‘Žȱ ˜—ȱ ˜—ȱ˜ŸŽ›—–Ž—ǰȱ ŠŸŽȱ ‘Žȱ Œ’¢ȱ Šȱ Ž—Ȭ˜ȬęЎŽ—Ȭ¢ŽŠ›ȱ ‘ŽŠȱ œŠ›ȱ ’—ȱ ’—žœ›’Š•’£Š’˜—ȱ ˜ŸŽ›ȱ–Š—¢ȱœ’Š—ȱŒ˜ž—›’Žœȱǻ˜—ȱŗşŞŞǰȱŘǼǯȱ—ȱŠ’˜—Š•’œȬ›ž•ŽȱŠ’ Š—ǰȱ the educated elite from the Lower Yangzi region made up most of its eco—˜–’Œȱ™•Š——Ž›œȱŠ—ȱŽŒ‘—˜Œ›Šœȱǻ’žȱŗşŞŝǰȱŚşǼǯȱȱ Šœȱ’—ȱ‘ŽœŽȱ—Ž ȱ‘’nese peripheries that capitalism, spared from annihilation, blossomed into two East Asian miracles. Conclusion Against the long history of the Chinese empire, the life cycle of Shang‘Š’ȱŠœȱŠ—ȱŠž˜—˜–˜žœȱŒ’¢ȱœŽŽ–œȱ•’”ŽȱŠȱ̎Ž’—ȱœŽŒ˜—ǯȱ˜—Ž‘Ž•Žœœǰȱ‘Žȱ full extent of its historical implications is yet to be grasped. Cities in the West, from antiquity to the medieval period, were regarded by Weber as forming a crucial transitional phase in the rise of the modern state and of ŗŞȲȱ For the issue of public parks and other municipal services in Shanghai, see Feetham ǻŗşřŗǰȱŗřŞȮŗŚŜǼǯ

ŚŜ

Debin Ma

capitalism. Undoubtedly, the intrusion of Western institutions into China in the form of colonial privileges had been intended for the safeguarding ˜ȱŽœŽ›—ȱ–Ž›ŒŠ—’•Žȱ’—Ž›Žœǰȱ˜ĞŽ—ȱŠȱ‘ŽȱŽ¡™Ž—œŽȱ˜ȱ‘’—ŠȂœȱœ˜ŸŽ›Ž’—¢ǯȱ Yet, many of these privileges happen to coincide with those conditions conducive to growth, namely, the maintenance of public order, the security of property rights and contract enforcement, freedom from arbitrary taxation or extortion, and the right to transparent rules. Thus, their extension to Shanghai, whose overwhelming majority of residents was Chinese, ’—ŠŸŽ›Ž—•¢ȱ˜ěŽ›ŽȱŠ—ȱŠž˜—˜–˜žœȱœ™ŠŒŽȱ˜ȱœŽŒž›Žȱ™›˜™Ž›¢ȱ›’‘œȱŠ—ȱ rule of law to anchor China’s early twentieth-century industrialization ž›’—ȱ‘ŽȱŒ‘Š˜’Œȱ Š›•˜›ȱŽ›Šǯȱ ˜ ŽŸŽ›ǰȱ‘ŽȱŒ˜•˜—’Š•ȱœ’–ŠȱŠ—ȱ—Š››˜ ȱ interest of the business oligarchy embedded in the anachronistic political structure of a “city-state” constrained its potential for a more broad-based growth across China. In this regard, the city-state model of Shanghai was neither sustainable, nor would it be replicable. Nonetheless, the place of Shanghai along China’s tortuous path to inžœ›’Š•’£Š’˜—ȱ’—ȱ‘ŽȱŽŠ›•¢ȱ Ž—’Ž‘ȱŒŽ—ž›¢ȱ˜ěŽ›œȱŠȱŠœŒ’—Š’—ȱ—Šž›Š•ȱ experiment of competing modes of political governance that sheds light on long-term institutional dynamics in China. As demonstrated in this chapter, Chinese entrepreneurs have risen to occasions with commercial acumen, industrial entrepreneurship, and organizational capability, as well as a political consciousness even under the constraints of the political œ›žŒž›Žǯȱ ˜ ŽŸŽ›ǰȱ‘ŽȱŠ‹œŽ—ŒŽȱ˜ȱ’—œ’ž’˜—Š•’£ŽȱŠŒŒŽœœȱ˜ȱ‘Žȱ˜›–Š•ȱ political structure—as articulated in the city-state model of the Interna’˜—Š•ȱ ŽĴ•Ž–Ž—ȯŽ¡™˜œŽȱ ‘Ž’›ȱ ™›˜˜ž—ȱ ›Š’•’¢ȱ Š—ȱ ™˜ Ž›•Žœœ—Žœœȱ especially in a time of national disintegration. The contrasts in the mercantile access to formal political power between Europe and China as revealed here should be part of a larger research agenda including comparative studies of historical institutional evolution to shed light on the ’쎛Ž—’Š•ȱ™ŠĴŽ›—œȱ˜ȱ•˜—ȬŽ›–ȱŽŒ˜—˜–’Œȱ›Š“ŽŒ˜›’Žœǯȱ This chapter, amid the current swirl of excitement about the imminent rise of the world’s largest economy, “Great China,” serves as a reminder ˜ȱ‘Žȱ‘’œ˜›’ŒŠ•ȱœ’—’ęŒŠ—ŒŽȱ˜ȱŠȱœ–Š••ȱœ™ŠŒŽȱ˜ȱŠž˜—˜–¢ȱ‘Šȱœž™™•’Žȱ ›ŽžŽȱ˜ȱŠȱ›’œ”ȬŠ”’—ȱŠ—ȱ˜ĞŽ—ȱ‹Ž•ŽŠžŽ›Žȱȃ–’—˜›Ȅȱ‘’—Šǯ

 

The Shanghai Real Estate Market Š—ȱŠ™’Š•ȱ—ŸŽœ–Ž—ǰȱŗŞŜŖȮŗşřŜ

 ȱ 

From the 1870s to the outbreak of the Sino-Japanese War in 1937, treaty port cities in China—including Shanghai, Tianjin, Guangzhou, and

Š—”˜žȯ Ž›ŽȱŒŽ—Ž›œȱ˜ȱ–˜Ž›—ȱ’—žœ›¢ǯ1 All of these cities underwent rapid appreciation of their real estate values, which induced investments in construction and industries. Shanghai was the largest of these cities, and its foreign area was arguably the city center.2ȱ•‘˜ž‘ȱ‘ŽȱœŽĴ•Ž–Ž—ȱ ˜ŒŒž™’Žȱ•Žœœȱ‘Š—ȱŗŖȱ™Ž›ŒŽ—ȱ˜ȱ‘ŽȱŠ›ŽŠȱ˜ȱ‘Š—‘Š’ȱ’—ȱŗşřśǰȱŠ‹˜žȱŚśȱ™Ž›cent of the city’s population, 70 to 80 percent of its factories, and many of its major shops and banks were located there (Zou Yiren 1980, 90; Zhang ‘˜—•’ȱŗşşŖǰȱŘřǼǯ3 What institutions in the new treaty port cities promoted this concentra’˜—ȱ ˜ȱ  ŽŠ•‘ǵȱ Š›’ŽȬ•Š’›Žȱ Ž›¸›Žȱ ǻŗşŞşŠǰȱ ŜȮŗŖǰȱ ŘŝşȮŘŞŖǼȱ ‘Šœȱ Š›žŽȱ ‘Šȱ Ž—›Ž™›Ž—Žž›œȱ •’Ÿ’—ȱ ’—ȱ ‘Žȱ ‘Š—‘Š’ȱ ˜›Ž’—ȱ œŽĴ•Ž–Ž—œȱ  Ž›Žȱ Š‹•Žȱ to expand their businesses because of the lack of interference by the Chi—ŽœŽȱ˜ŸŽ›—–Ž—ȱž›’—ȱ‘Žȱ™˜•’’ŒŠ•ȱž›‹ž•Ž—ŒŽȱ˜ȱ‘ŽȱꛜȱŽŒŠŽœȱ˜ȱ‘Žȱ Republican era, particularly the period of World War I and its immediŠŽȱŠĞŽ›–Š‘ǯȱ¡™•˜›’—ȱ‘Žȱ’—œ’ž’˜—Š•ȱŒ˜—Ž¡ȱ˜ȱŽ›¸›ŽȂœȱ˜‹œŽ›ŸŠ’˜—ǰȱ Zhonghua minguo tongji tiyao, compiled by the statistics bureau of the Nationalist ˜ŸŽ›—–Ž—ǰȱ ›ŽŠ›Žȱ Š—“’—ǰȱ ‘Š—‘Š’ǰȱ ’Š—“’—ǰȱ Š—”˜žǰȱ ’—Š˜ǰȱ Š—ȱ žŠ—£‘˜žȱ Šœȱ ‘Žȱœ’¡ȱ•Š›ŽœȱŒ’’Žœȱ’—ȱ‘ŽȱŒ˜ž—›¢ǯȱŽŽȱ ž˜–’—ȱ£‘Ž—žȱ£‘ž“’Œ‘žȱ˜—“ħžȱǻŗşřśǰȱŜŖŗǼǯ ŘȲȱ ‘Š—‘Š’Ȃœȱ ˜›Ž’—ȱ Š›ŽŠȱ Œ˜—œ’œŽȱ ˜ȱ Š—ȱ —Ž›—Š’˜—Š•ȱ ŽĴ•Ž–Ž—ȱ Š—ȱ Šȱ ›Ž—Œ‘ȱ ˜—ŒŽœœ’˜—ǯȱ‘’œȱŒ‘Š™Ž›ȱ›Š œȱŒŠœŽœȱ–˜œ•¢ȱ›˜–ȱ‘Žȱ—Ž›—Š’˜—Š•ȱŽĴ•Ž–Ž—ǯȱ ˜ ŽŸŽ›ǰȱ ‘Žȱ™ŠĴŽ›—ȱ˜ȱž›‹Š—ȱŽŸŽ•˜™–Ž—ȱ‘Šȱ‘’œȱ™Š™Ž›ȱ˜ž—ȱ’—ȱ‘Žȱ—Ž›—Š’˜—Š•ȱŽĴ•Ž–Ž—ȱ–Š¢ȱ Š•œ˜ȱ‹ŽȱŠ™™•’ŒŠ‹•Žȱ˜ȱ‘Žȱ›Ž—Œ‘ȱ˜—ŒŽœœ’˜—ǰȱ ‘’Œ‘ȱœ‘Š›Žȱ ’‘ȱ‘Žȱ—Ž›—Š’˜—Š•ȱŽĴ•Ž–Ž—ȱ important features such as land regulations and many Chinese residents. řȲȱ Similarly, in the city of Tianjin, Zhong Ёȱ ǻŽ—Ž›Ǽȱ ›ŽŽǰȱ  ‘’Œ‘ȱ •’—”Žȱ ‘Žȱ Ž›–Š—ǰȱ French, and British Concessions, hosted most of the modern foreign and Chinese banks in ‘ŽȱŒ’¢ȱ’—ȱ‘ŽȱŗşŘŖœȱǻ‘ŽŽ‘Š—ȱŘŖŖřǰȱŚŞǼǯ ŗȲȱ

48

Tomoko Shiroyama

this chapter looks into the realm of real estate transactions.4 The presentation has two parts: First, the chapter discusses how real estate in the ˜›Ž’—ȱœŽĴ•Ž–Ž—œȱ Šœȱ‘’‘•¢ȱ–Ž›Œ‘Š—’£Žǰȱ ’‘ȱ‘’‘ȱŸŠ•žŽȱ™•ŠŒŽȱ˜—ȱ these areas in monetary terms. From the middle of the nineteenth century, ™Ž›œ˜—Š•ȱœŽŒž›’¢ȱŠ—ȱŽ—Ž›Š•ȱœŠ‹’•’¢ȱ’—ȱ‘Žȱ˜›Ž’—ȱœŽĴ•Ž–Ž—œȱŠĴ›ŠŒŽȱ Chinese people there. As the population grew in this limited area, land values inevitably rose. Many foreigners as well as Chinese perceived vast investment opportunities there, so new institutions and organizations evolved to facilitate trading real estate. Second, this chapter explains how wealth generated from real estate transactions sparked urban development and economic expansion (at least before a housing bubble formed ›˜–ȱ•ŠŽȱŗşŘşȱŠœȱŠȱ›Žœž•ȱ˜ȱž—ŠŸ˜›Š‹•Žȱ’—ĚžŽ—ŒŽœȱ›˜–ȱ‹˜‘ȱ ’‘’—ȱŠ—ȱ  ’‘˜žǼǰȱ›Š ’—ȱŠĴŽ—’˜—ȱ˜ȱ‘ŽȱŒ•˜œŽȱ•’—”ȱ‹Ž ŽŽ—ȱ‘Žȱ›ŽŠ•ȱŽœŠŽȱŠ—ȱ ꗊ—Œ’Š•ȱ–Š›”ŽœȱŠ—ȱ™Š›’Œž•Š›•¢ȱ˜Œžœ’—ȱ˜—ȱ–˜›ŠŽœȱ’—ȱ‘Žȱ˜›Ž’—ȱ œŽĴ•Ž–Ž—œǯś I will begin by looking at how institutional changes starting in the middle of the nineteenth century promoted economic change in early twentieth-century China.

ŚȲȱ ŽŠ•ȱŽœŠŽȱ’—ȱ‘Žȱ˜›Ž’—ȱœŽĴ•Ž–Ž—œȱ ŠœȱꛜȱŽ¡Š–’—Žȱ’—ȱ›Ž•Š’˜—ȱ˜ȱ‘ŽȱŽ¡›ŠŽ››’˜›’Š•’¢ȱ Ž—“˜¢Žȱ‹¢ȱ˜›Ž’—Ž›œȱǻŽŠȱŗşŚŗǼǯȱ˜—Ž‘Ž•Žœœǰȱ™˜œœŽœœ’˜—œȱŠ—ȱ›ŽŠ•ȱŽœŠŽȱ›Š—œŠŒ’˜—œȱ’—ȱ ‘ŽȱœŽĴ•Ž–Ž—œȱŒŠ——˜ȱ‹Žȱž—Ž›œ˜˜ȱ›˜–ȱ‘Žȱ•ŽŠ•ȱŠ—ȱŠ–’—’œ›Š’ŸŽȱŠœ™ŽŒœȱ˜ȱ‘Žȱ›ŽŠ¢ȱ systems, which conferred extraterritoriality only on foreigners. In treaty port cities, both ˜›Ž’—Ž›œȱ Š—ȱ ‘’—ŽœŽȱ ˜ —Žȱ ›ŽŠ•ȱ ŽœŠŽȱ ’—ȱ ‘Žȱ œŽĴ•Ž–Ž—œǰȱ Š—ȱ ‘Ž¢ȱ ›ŽšžŽ—•¢ȱ ‹˜ž‘ȱ and sold it. By the 1990s, the institutions and organization of the real estate market in Shanghai, including rules for land registration and for the operation of foreign real estate Œ˜–™Š—’Žœǰȱ‹ŽŒŠ–Žȱ‹ŽĴŽ›ȱž—Ž›œ˜˜ȱǻ‘Ž—ȱž Ž’ȱŗşşŖǰȱŗşşŚǼǯȱ‘Ž—ȱž Ž’ȱœžŽœœȱ‘Šȱ ‘ŽȱŽ¡™Š—œ’˜—ȱ˜ȱ‘Žȱ›ŽŠ•ȱŽœŠŽȱ–Š›”ŽȱŠŽȱœ’—’ęŒŠ—•¢ȱ˜ȱ‘ŽȱŽŸŽ•˜™–Ž—ȱ˜ȱ‘Š—‘Š’Ȃœȱ ŽŒ˜—˜–¢ǯȱ ˜ ŽŸŽ›ǰȱ‘Žȱ›Ž•Š’˜—œ‘’™ȱ‹Ž ŽŽ—ȱœžŒ‘ȱž›‹Š—ȱ’—ŸŽœ–Ž—ȱŠ—ȱ˜ŸŽ›Š••ȱŽŒ˜—˜–’Œȱ ŽŸŽ•˜™–Ž—ȱ Šœȱœ’••ȱ—˜ȱž••¢ȱ’—ŸŽœ’ŠŽǯȱ‘Š˜ȱ ’—ȱǻŗşşŚǼȱœž’Žȱ‘Žȱ›ŽŠ•ȱŽœŠŽȱ–Š›”Žœȱ in coastal cities such as Shanghai, Guangzhou, and Tianjin, and inland cities such as Nanjing and Chongqing; she discovered an upward trend in Chinese land values in the early twentieth century. Zhao detected several factors contributing to this rise—population growth, government spending, and road repairs—but failed to make a convincing case. śȲȱ ›˜–ȱŒ˜‹Ž›ȱŗşŘşȱ˜ȱžžœȱŗşřŗǰȱ‘Š—‘Š’ȱ ’—ŽœœŽȱŠ—ȱ’—Ěž¡ȱ˜ȱœ’•ŸŽ›ȱ›˜–ȱŠ‹›˜Šȱ and from the Chinese interior. Because of the impact of the Great Depression, the international ™›’ŒŽȱ˜ȱœ’•ŸŽ›ȱ›˜™™Žȱœ’—’ęŒŠ—•¢ǰȱ ‘’Œ‘ȱ’—Œž››Žȱ‘Žȱ’—Ě˜ ȱ˜ȱœ’•ŸŽ›ȱ˜ȱ‘’—Šǰȱ‘Žȱ˜—•¢ȱ œ’•ŸŽ›ȬœŠ—Š›ȱŒ˜ž—›¢ǯȱȱ‘ŽȱœŠ–Žȱ’–Žǰȱž—œȱ•ŽĞȱ‘Žȱ’œ›ŽœœŽȱ›ž›Š•ȱŠ›ŽŠœȱ˜›ȱ‘ŽȱŒ’’Žœǰȱ especially Shanghai. As a large portion of the accumulated money was invested in real estate, the Shanghai real estate market saw a speculative boom. From September 1931 on, –Š—¢ȱ˜ŸŽ›—–Ž—œȱŽŸŠ•žŽȱ‘Ž’›ȱŒž››Ž—Œ’Žœȱ’—ȱŠ—ȱŠĴŽ–™ȱ˜ȱ’—ĚŠŽȱ‘Ž’›ȱŽŒ˜—˜–’Žœǯȱœȱ‘Žȱ international price of silver rose, a large amount of silver started to drain out of China. When ‘Žȱ‘’—ŽœŽȱŽŒ˜—˜–¢ȱœŠ—”ȱ’—˜ȱœŽŸŽ›ŽȱŽĚŠ’˜—ǰȱ‘Žȱ›ŽŠ•ȱŽœŠŽȱ‹ž‹‹•Žȱ‹ž›œǰȱ˜—•¢ȱ˜ȱŽŽ™Ž—ȱ ‘Žȱꗊ—Œ’Š•ȱŒ›’œ’œȱ’—ȱ‘Š—‘Š’ǯȱ˜›ȱ‘ŽȱŽŠ’•œȱ˜ȱ‘Žȱ’–™ŠŒȱ˜ȱ‘Žȱ›ŽŠ•ȱŽœŠŽȱ–Š›”ŽȱŒ›Šœ‘ȱ’—ȱ ‘ŽȱŽŠ›•¢ȱŗşřŖœǰȱœŽŽȱ‘’›˜¢Š–ŠȱǻŘŖŖŞǰȱŒ‘Š™ǯȱŜǼǯ

The Shanghai Real Estate Market

49

Early Institutional Change: Chinese Residents in the Foreign ŽĴ•Ž–Ž—œ Rising Urban Land Values in Port Cities Urban land values generally rose in China in the early twentieth century because of the increasing urban population. Social disturbances in rural areas also forced many people to migrate to large cities. Table 3.1 shows the upward trend in land values in the cities of Tianjin and Guangzhou. Table 3.1. Land Values in the Chinese Areas of Tianjin and Guangzhou Year 1912

Tianjin (yuan/muǼ řŜŜǯŜŝ

Index ǻŗşŗŘƽŗŖŖǼ

Guangzhou (yuan/muǼ

Index ǻŗşŗŘƽŗŖŖǼ

100.0

7,434.00

100.0

1913 śŖŗǯşŜ ŗřŜǯşȱ 1914 ŚŘśǯŖŖ ŗŗśǯşȱ ŗşŗś śŖŖǯŖŖ ŗřŜǯŚȱ ŗşŗŜ ŚŝśǯŖŖ ŗŘşǯśȱ 1917 1,331.27 řŜřǯŗȱ 1918 ŚŝśǯŖŖ ŗŘşǯśȱ 1919 ŜŖŖǯŖŖ ŗŜřǯŜȱ 1920 ŚśŖǯŖŖ 122.7 1921 800.00 218.2 1922 1,309.09 řśŝǯŖȱ 1923 ŗǰŜřřǯřř ŚŚśǯŚȱ 1924 ŗǰŞŜŜǯŜŝ śŖşǯŗȱ ŗşŘś 1,790.00 488.2 ŗşŘŜ ŘǰśŗśǯŖŖ ŜŞśǯşȱ 1927 2,940.00 801.8 1928 3,811.11 1,039.4 1929 řǰŘŚśǯŗŘ ŞŞśǯŖȱ 1930 řǰŖřŘǯśş 827.1 1931 řǰŗşśǯśŝ Şŝŗǯśȱ 1932 3,297.89 899.4 1933 řǰśśřǯřŗ şŜşǯŗȱ Source:ȱ‘Š˜ȱ ’—ȱǻŗşşŚǰȱŗŜśǰȱŗŞśǼǯȱ

ŝǰŞŘŜǯŖŖ 10,833.00 8,478.00 8,084.00 şǰŞŜŗǯŖŖ 8,921.00 8,991.00 9,279.00 10,728.00 ŗŗǰŞŜŖǯŖŖ ŗŗǰŘŜśǯŖŖ 10,397.00 12,074 10,929 ŗŖǰŘŜř ŗŖǰŜŝŗ n.a. n.a. n.a. n.a. n.a.

ŗŖśǯřȱ ŗŚśǯŝȱ 114.0 108.7 ŗřŘǯŜȱ 120.0 120.9 124.8 144.3 ŗśşǯśȱ ŗśŗǯśȱ 139.9 ŗŜŘǯŚȱ 147.0 138.1 ŗŚřǯśȱ n.a. n.a. n.a. n.a. n.a.

Table 3.2 compares the land values in eleven Chinese cities, using the ŠŸŽ›ŠŽȱ˜›ȱ˜›Ž’—ȱŒ˜—ŒŽœœ’˜—œȱŠ—ȱ‘’—ŽœŽȱ’œ›’Œœǯȱ Ž›Žǰȱ‘Žȱ›Ž•Š’ŸŽ•¢ȱ high land values in the treaty port cities are obvious.

śŖ

Tomoko Shiroyama

Table 3.2. Comparison of Land Values of Various Areas in China in the 1920s and 1930s Value per muȱǻ¢žŠ—Ǽ

Comparison with Shanghai

Shanghai

ŘŘǰŖŜŘ

100

1930

Xiamen

12,900

śŞ

early 1930s

Guangzhou

ŗŖǰŜŝŗ

48

1928

Š—”˜ž

10,271

ŚŜ

1933

Tianjin

8,110

řŜ

early 1930s

Chongqing

7,320

33

ŗşřŜ

Fuzhou

śǰŘŞŖ

24

ŗşřŜ

Nanjing

řǰŜŜŖ

ŗŜ

1931

Š—£‘˜ž

3,000

13

1929

Kunming

3,000

13

ŗşřŜ

3

1929

City

Beiping 790 Source:ȱ‘Š˜ȱ ’—ȱǻŗşşŚǰȱŘŖŜǼǯ

Year/s

‘Žȱ ‘’‘ȱ •Š—ȱ ŸŠ•žŽœȱ ˜ȱ ‘Žȱ ˜›Ž’—ȱ œŽĴ•Ž–Ž—œȱ Ž›Žȱ •Š›Ž•¢ȱ ›Žœ™˜—sible for raising the average land values in Shanghai. As table 3.3 shows, ‘ŽȱŸŠ•žŽœȱ’—ȱ’—Ž›—Š’˜—Š•ȱœŽĴ•Ž–Ž—œȱŽ—Žȱ˜ȱ‹Žȱ‘’‘Ž›ȱ‘Š—ȱ‘˜œŽȱ’—ȱ Chinese districts in these cities. Š‹•Žȱřǯřǯȱ˜–™Š›’œ˜—ȱ˜ȱŠ—ȱŠ•žŽœȱ’—ȱ‘Žȱ˜›Ž’—ȱŽĴ•Ž–Ž—œȱŠ—ȱ‘Žȱ‘’—ŽœŽȱ ’œ›’Œœȱ’—ȱ‘Š—‘Š’ǰȱ’Š—“’—ǰȱŠ—ȱ Š—”˜žȱ City and

˜›Ž’—ȱŽĴ•Ž–Ž—œ

Chinese Districts

(yuan/muǼ

(yuan/muǼ

Year/s Shanghai

—Ž›—Š’˜—Š•ȱŽĴ•Ž–Ž—

French Concession

1930

37,743

ŘŝǰŖŗś

Tianjin Early 1930s

British

French

Italian

Japanese

ŽĴ•Ž–Ž—

ŽĴ•Ž–Ž—

ŽĴ•Ž–Ž—

ŽĴ•Ž–Ž—

8,000

12,000

7,000

10,000

Special District 1

Special District 2

Special District 3

Š—”˜ž

(former German

(former Russian

(former British

Early 1930s

ŽĴ•Ž–Ž—Ǽ

ŽĴ•Ž–Ž—Ǽ

ŽĴ•Ž–Ž—Ǽ

8,880

13,980

ŗśǰřŜŖ

1,428

řǰśśř

ŘǰŞŜś

Source:ȱ‘Š˜ȱ ’—ȱǻŗşşŚǰȱŘŖŞǼǯ

—ȱ‘Š—‘Š’ǰȱŠŸŽ›ŠŽȱ•Š—ȱŸŠ•žŽœȱ’—ȱ‘Žȱ—Ž›—Š’˜—Š•ȱŽĴ•Ž–Ž—ȱ Ž›Žȱ ŘŜǯŚȱ’–Žœȱ‘’‘Ž›ȱ‘Š—ȱ‘˜œŽȱ’—ȱ‘Žȱ‘’—ŽœŽȱŠ›ŽŠœǰȱŠ—ȱ’—ȱ‘Žȱ›Ž—Œ‘ȱ˜—ŒŽœœ’˜—ǰȱŗŞǯşȱ’–Žœǯȱ—ȱ’Š—“’—ǰȱ•Š—ȱŸŠ•žŽœȱ’—ȱ‘Žȱ›’’œ‘ȱŽĴ•Ž–Ž—ȱ Ž›Žȱ

The Shanghai Real Estate Market

śŗ

ŘǯŘśȱ’–Žœȱ‘’‘Ž›ȱ‘Š—ȱ‘˜œŽȱ’—ȱ‘Žȱ‘’—ŽœŽȱŠ›ŽŠœDzȱ’—ȱ‘Žȱ›Ž—Œ‘ȱ˜—ŒŽœsion, 3.37 times; in the Italian Concession, 1.97 times; and in the Japanese ˜—ŒŽœœ’˜—ǰȱ ŘǯŞŗȱ ’–Žœǯȱ —ȱ Š—”˜žǰȱ •Š—ȱ ŸŠ•žŽœȱ ’—ȱ ‘Žȱ ˜›–Ž›ȱ Ž›–Š—ǰȱ žœœ’Š—ǰȱ Š—ȱ ›’’œ‘ȱ ŽĴ•Ž–Ž—œȱ  Ž›Žȱ řǯŖşǰȱ ŚǯŞŞǰȱ Š—ȱ śǯřŜȱ ’–Žœȱ ‘’‘Ž›ǰȱ respectively, than those in the Chinese areas. ‘Žȱ ‘’‘ȱ •Š—ȱ ŸŠ•žŽœȱ ’—ȱ ‘Š—‘Š’Ȃœȱ ˜›Ž’—ȱ œŽĴ•Ž–Ž—œȱ Š›Žȱ —˜Š‹•Žǯȱ Š—ȱŸŠ•žŽœȱ’—ȱ‘ŽœŽȱœŽĴ•Ž–Ž—œȱ Ž›Žȱ›˜–ȱřǯŗȱ˜ȱśǯřȱ’–Žœȱ‘’‘Ž›ȱ‘Š—ȱ ‘˜œŽȱ’—ȱ˜›Ž’—ȱœŽĴ•Ž–Ž—œȱ’—ȱ’Š—“’—ǰȱŠ—ȱ›˜–ȱŘǯŚȱ˜ȱŚǯŘȱ’–Žœȱ‘’‘Ž›ȱ’—ȱ ‘ŽȱŒŠœŽȱ˜ȱ Š—”˜žǯ ‘Žȱ—Œ›ŽŠœ’—ȱ‘’—ŽœŽȱ˜™ž•Š’˜—ȱ’—ȱ˜›Ž’—ȱŽĴ•Ž–Ž—œ Chinese migration was one of the main factors raising the land value ’—ȱŠ••ȱ˜ȱ‘Žȱ˜›Ž’—ȱœŽĴ•Ž–Ž—œǯȱ—ȱ‘Š—‘Š’ǰȱ‘Žȱ–Ž›Œ‘Š—’œ’—ȱ˜ȱ›ŽŠ•ȱ ŽœŠŽȱ‹ŽŠ—ȱ ‘Ž—ȱ•Š›Žȱ—ž–‹Ž›œȱ˜ȱ‘’—ŽœŽȱ Š›ȱ›ŽžŽŽœȱ̘˜Žȱ’—˜ȱ ‘Žȱ ˜›Ž’—ȱ œŽĴ•Ž–Ž—œȱ ’—ȱ ‘Žȱ –’•Žȱ ˜ȱ ‘Žȱ —’—ŽŽŽ—‘ȱ ŒŽ—ž›¢ǯȱ ›˜–ȱ Ž™Ž–‹Ž›ȱ ŗŞśřȱ ˜ȱ Ž‹›žŠ›¢ȱ ŗŞśśǰȱ ‘Žȱ  Š••Žȱ Œ˜ž—¢ȱ œŽŠȱ ˜ȱ ‘Š—‘Š’ȱ  Šœȱ‘Ž•ȱ‹¢ȱŠȱ›Ž‹Ž••’˜žœȱ‹Š—ȱŒŠ••Žȱ‘Žȱ–Š••ȱ ˜›ǯȱ•‘˜ž‘ȱ‘Žȱꛜȱ •Š—ȱ›Žž•Š’˜—ȱ’—ȱŗŞŚśȱ™›˜‘’‹’Žȱ‘’—ŽœŽȱ›Žœ’Ž—ŒŽȱ’—ȱ‘ŽȱœŽĴ•Ž–Ž—œǰȱ ‘’œȱ Š’•Žȱ ˜ȱ œŽ–ȱ ‘Žȱ ꛜȱ ’Žȱ ˜ȱ ›ŽžŽŽœǯȱ ¢ȱ ŽŠ›•¢ȱ ŗŞśŚǰȱ –˜›Žȱ ‘Š—ȱ twenty thousand refugees from the county seat had entered the foreign ’œ›’Œœǯȱ‘Žȱ—ž–‹Ž›ȱ•ŠŽ›ȱ’—Œ›ŽŠœŽȱ˜ȱŽ’‘¢ȱ‘˜žœŠ—ȱǻžȱŗşşşǰȱŗřśǼǯȱ The second tide of war refugees was driven by the Taiping Rebellion ǻŗŞśŖȮŗŞŜŚǼǯȱ—ȱ‘Žȱ™Ž›’˜ȱŗŞŜŖȮŗŞŜŘǰȱ ‘Ž—ȱŠ’™’—ȱ›˜˜™œȱŠ™™›˜ŠŒ‘Žȱ Shanghai several times, the number of refugees from the Lower Yangzi ›Ž’˜—ȱ ’—Œ›ŽŠœŽȱ œ’—’ęŒŠ—•¢ǯȱ ¢ȱ ŗŞŜśǰȱ ‘Žȱ ™˜™ž•Š’˜—ȱ ˜ȱ ‘Žȱ —Ž›—Š’˜—Š•ȱŽĴ•Ž–Ž—ȱ‘Šȱ’—Œ›ŽŠœŽȱ˜ȱşŘǰŞŞŚǰȱŠ—ȱŠ‹˜žȱśŖǰŖŖŖȱ‘’—ŽœŽȱ‘Šȱ moved into the French Concession. By the end of the Taiping Rebellion, –˜›Žȱ ‘Š—ȱ ŗŗŖǰŖŖŖȱ ‘’—ŽœŽȱ ‘Šȱ –˜ŸŽȱ ’—˜ȱ ‘Š—‘Š’Ȃœȱ ˜›Ž’—ȱ œŽĴ•Ž–Ž—œȱǻ˜žȱ’›Ž—ȱŗşŞŖǰȱřȮŚǰȱşŖȮşŗǼǯ The British consul of the time, Rutherford Alcock, intended to pro‘’‹’ȱ‘’—ŽœŽȱ’––’›Š—œȱ›˜–ȱ›Žœ’’—ȱ’—ȱ‘Žȱ˜›Ž’—ȱœŽĴ•Ž–Ž—œǯȱžȱ ’—ȱ‘ŽȱŠŒŽȱ˜ȱœ›˜—ȱ˜™™˜œ’’˜—ȱ›˜–ȱ›’’œ‘ȱ–Ž›Œ‘Š—œǰȱ‘ŽȱŠ–’ĴŽȱ‘’—ŽœŽȱ ›Žœ’Ž—ŒŽȱ Žȱ ŠŒ˜ǯȱ ‘Žȱ œŽŒ˜—ȱ •Š—ȱ ›Žž•Š’˜—ǰȱ ’—ȱ ŗŞśŚǰȱ ›˜™™Žȱ the clause prohibiting Chinese residence (Zhongguo renmin zhengzhi xieshang huiyi Shanghaishi weiyuanhui and Wenshi ziliao weiyuanhui ŗşŞşǰȱ ŗřŗǼǯȱ ¢ȱ ŗŞŜŖǰȱ ‘Ž›Žȱ  Ž›Žȱ ŞǰŝŚŖȱ ‘˜žœŽœȱ ’—ȱ ‘Žȱ ›’’œ‘ȱ œŽĴ•Ž–Ž—ǰȱ mostly owned by Britons and Americans but inhabited by Chinese renters. The end of the Taiping Rebellion caused a temporary decrease in the ‘’—ŽœŽȱ™˜™ž•Š’˜—ȱŠ—ȱŠȱ›˜™ȱ’—ȱ•Š—ȱŸŠ•žŽœȱ’—ȱ‘Žȱ˜›Ž’—ȱœŽĴ•Ž–Ž—œǯȱ —ȱ‘Žȱœ’¡¢ȱ¢ŽŠ›œȱŠĞŽ›ȱŗŞŝŖǰȱŠœȱ’—’ŒŠŽȱ’—ȱꐞ›ŽȱřǯŗǰȱŠȱ•Š›Žȱ—ž–‹Ž›ȱ ˜ȱ‘’—ŽœŽȱ Ž›Žȱ̘˜’—ȱ’—˜ȱ‘Žȱ‘Š—‘Š’ȱ˜›Ž’—ȱœŽĴ•Ž–Ž—œǰȱŠ—ȱŠœȱ the demand for residence increased, rents and land values rose. Foreign

śŘ

Tomoko Shiroyama

–Ž›Œ‘Š—œȱ˜˜”ȱŠŸŠ—ŠŽȱ˜ȱ‘Žȱ—Ž ȱ˜™™˜›ž—’¢ȱ˜ȱ™›˜ęȱ›˜–ȱ‘’œȱ‹¢ȱ buying land, building houses, and renting them to the Chinese. ’ž›Žȱřǯŗǯȱ˜™ž•Š’˜—ȱ˜ȱ‘Š—‘Š’Ȃœȱ—Ž›—Š’˜—Š•ȱŽĴ•Ž–Ž— ŗǰŘŖŖǰŖŖŖ



ŗǰŖŖŖǰŖŖŖ

ŞŖŖǰŖŖŖ ˜™ž•Š’˜—

ȱ

‘’—ŽœŽ ˜›Ž’—Ž›œȱ

ȱ

ŜŖŖǰŖŖŖ

ȱ

ŚŖŖǰŖŖŖ

ȱ

ŘŖŖǰŖŖŖ

ȱ

Ŗ

ȱ

ŗŞŝŖ

ȱ

ŗŞŝś

ȱ

ŗŞŞŖ

ȱ

ŗŞŞś

ȱ

ŗŞşŖ

ȱ

ŗŞşś

ŗşŖŖ

ŗşŖś

ŗşŗŖ

ŗşŗś

ŗşŘŖ

ŗşŘś

ŗşřŖ

ȱ

ŽŠ›

Source:ȱŽŽ‘Š–ȱǻŗşřŗǰȱŸ˜•ǯȱŗǰȱŠ™™Ž—’¡ȱŘǰȱŠ‹•ŽœȱŚȱŠ—ȱŜǼǯ

From the turn of the century, population grew consistently and land ŸŠ•žŽœȱ ›˜œŽȱ Œ˜—’—žŠ••¢ȱ ’—ȱ ‘Žȱ ˜›Ž’—ȱ œŽĴ•Ž–Ž—œǯȱ ‘Žȱ ꛜȱ ‘›ŽŽȱ Žcades of the twentieth century saw the most rapid population increase in Shanghai’s history. Most immigrants came from other parts of China, •˜˜”’—ȱ˜›ȱ“˜‹œȱ’—ȱ‘ŽȱŒ’¢ȱǻ˜žȱ’›Ž—ȱŗşŞŖǰȱŗŖȮŗřǼǯȱŽ •¢ȱŽŸŽ•˜™’—ȱ businesses—such as commerce in the central district, manufacturing in ‘Žȱ—˜›‘ȱŠ—ȱŽŠœǰȱ˜Œ”¢Š›œȱŠ•˜—ȱ‘Žȱ žŠ—™žȱ’ŸŽ›ǰȱŠ—ȱ›Š—œ™˜›Š’˜—ȱŠ—ȱ˜‘Ž›ȱž›‹Š—ȱœŽ›Ÿ’ŒŽȱ’—žœ›’Žœȯ˜ěŽ›Žȱ’––’›Š—œȱ“˜‹ȱ˜™™˜›ž—’’Žœȱǻ ǯȱ žŠ—ȱŗşşŖǰȱŚŘŘȮŚŘŜǼǯȱ‘Žȱ’—Œ˜–’—ȱ™˜™ž•Š’˜—ȱŠ›ȱŽ¡ŒŽŽed the outgoing population, thereby increasing the urban population. At the turn of the century, Shanghai’s population still had not reached a million, but by 1930 more than three million people lived in the city (Zou ’›Ž—ȱŗşŞŖǰȱŗřǰȱşŖǰȱŗŖŝǼǯ ‘Žȱ ˜›Ž’—ȱ œŽĴ•Ž–Ž—œȱ  Ž›Žȱ œ˜˜—ȱ ˜ŸŽ›Œ›˜ Žǯȱ ‘Žȱ •ŠŒ”ȱ ˜ȱ ›Š—œ™˜›Š’˜—ȱŒ˜——ŽŒ’—ȱ‘ŽȱœŽĴ•Ž–Ž—œȱ˜ȱ‘Žȱ›Žœȱ˜ȱ‘ŽȱŒ’¢ȱ ˜›œŽ—Žȱ‘Žȱ problem. The annual report of the Shanghai Municipal Council in 1928 —˜Žȱ‘Šȱ‘Ž›Žȱ Ž›ŽȱŽ ȱ™›˜œ™ŽŒœȱ˜›ȱ›ŽžŒ’—ȱ‘ŽŠŸ¢ȱ›ŠĜŒǯȱ‘ŽŠ™ǰȱ rapid transport did not reach the sparsely populated areas, and builders had no incentive to invest in the outer limits (Shanghai Municipal

The Shanghai Real Estate Market

śř

˜ž—Œ’•ȱ ŗşŘŞǰȱ ŞśȮŞŜǼǯȱ —ȱ ‘Žȱ Š‹œŽ—ŒŽȱ ˜ȱ Š—¢ȱ Œ˜––ž’—ȱ ’—›Šœ›žŒž›Žǰȱ Ž–™•˜¢ŽŽœȱ˜ȱŽ—Ž›™›’œŽœȱ’—ȱ‘ŽȱœŽĴ•Ž–Ž—œȱ‘Šȱ˜ȱ•’ŸŽȱ—ŽŠ›ȱ‘Ž’›ȱ ˜›”™•ŠŒŽœǯȱ‘’œȱœ’žŠ’˜—ȱŠĴ›ŠŒŽȱ–Š—¢ȱ‘’—ŽœŽȱ ˜›”Ž›œǰȱ ‘˜ȱŽ–Š—Žȱ lodging. The typical Chinese-style residence for Chinese workers in prewar Shanghai was an alleyway dwelling called a lilong 䞠ᓘ. By the end of ŗşŚŖǰȱŝśȱ™Ž›ŒŽ—ȱ˜ȱ›Žœ’Ž—ŒŽœȱ’—ȱ‘Š—‘Š’ȱ Ž›Žȱlilong, in which 70 to 80 ™Ž›ŒŽ—ȱ ˜ȱ ‘Žȱ ™˜™ž•Š’˜—ȱ •’ŸŽȱ ǻǯȱ ž˜ȱ ŗşşŗǰȱ ŗřşǼǯȱ Lilong housing was built by foreigners for refugees from the Small Sword and Taiping Rebellions. Although the general layout of Shanghai’s lilong in rows resembled that of urban workers’ housing in Britain, the interior layout was derived from the traditional Chinese house, known as the siheyuan ಯড়䰶 (Mura–Šœžȱ‘’—ȱŗşşŗǰȱşřǼǯȱœȱꐞ›ŽȱřǯŘȱœ‘˜ œǰȱž›’—ȱ‘Žȱ™Ž›’˜ȱŗşŖśȮŗşřŖǰȱ ‘Žȱœž™™•¢ȱ˜ȱ‘’—ŽœŽȬœ¢•Žȱ‘˜žœŽœȱœ’—’ęŒŠ—•¢ȱ’—Œ›ŽŠœŽȱ’—ȱ‘Žȱ˜›Ž’—ȱ œŽĴ•Ž–Ž—ǯȱ ’ž›ŽȱřǯŘǯȱŽ •¢ȱž’•ȱ ˜žœŽœȱ’—ȱ‘Žȱ—Ž›—Š’˜—Š•ȱŽĴ•Ž–Ž— şŖŖŖ

ȱ

ŞŖŖŖ

ȱ

ŝŖŖŖ

ȱ

ŜŖŖŖ

ȱ

ȱ ȱ

‘’—ŽœŽȱ¢•Ž ŽœŽ›—ȱ¢•Ž

ȱ ȱ ȱ

śŖŖŖ

˜žœŽœ ŚŖŖŖ řŖŖŖ

ȱ

ŘŖŖŖ

ȱ

ŗŖŖŖ

ȱ

Ŗ

ȱ

ŗşŖś

ȱ

ŗşŖŝ

ȱ

ŗşŖş

ȱ

ŗşŗŗ

ȱ

ŗşŗř

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ŗşŗś

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ŗşŗŝ

ŗşŗş

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ŽŠ›

Source:ȱž˜ȱ‘’›žȱǻŗşřŘǰȱŠ‹•ŽœȱŘŘȱŠ—ȱŘřǼǯ

Yet, the supply of housing could not meet the increasing demand. In ŗşŘŜǰȱ ‘Žȱ ž—’Œ’™Š•ȱ ˜ž—Œ’•ȱ ›Ž™˜›Žȱ ‘Šȱ ȃ•Š‹˜›Ž›œȱ ˜›ȱ —Ž •¢ȱ ˜™Ž—Žȱ factories are abundant, but housing for them is needed.” Thus, from ŗşŗśȱ˜ȱŗşŘŖǰȱ›Ž—œȱ˜›ȱ›Žœ’Ž—ŒŽœȱ›˜œŽȱ‹¢ȱ‹Ž ŽŽ—ȱřŖȱŠ—ȱŗŖŖȱ™Ž›ŒŽ—ȱŠ—ȱ Œ˜—’—žŽȱ˜ȱ›’œŽȱž›’—ȱ‘ŽȱŗşŘŖœȱǻ‘Š—‘Š’ȱž—’Œ’™Š•ȱ˜ž—Œ’•ȱŗşŘŗǼǯ

śŚ

Tomoko Shiroyama

Rising Land Values and Other Trends in Shanghai Land values inevitably followed the upward trend in rent. From the middle of the nineteenth century to the 1930s, land values in the Shanghai —Ž›—Š’˜—Š•ȱ ŽĴ•Ž–Ž—ȱ ›˜œŽȱ ›Š™’•¢ǯŜ Table 3.4 shows that land values ’—ȱŗşřřȱ Ž›Žȱ–˜›Žȱ‘Š—ȱ Ž—¢Ȭ꟎ȱ’–Žœȱ‘˜œŽȱ’—ȱŗŞŜśǯȱ‘Š—‘Š’ȱŽ¡™Ž›’Ž—ŒŽȱ’—ĚŠ’˜—ȱ˜—ȱŠȱ‹›˜ŠŽ›ȱ›˜—ȱ’—ȱ‘ŽȱŽŠ›•¢ȱ Ž—’Ž‘ȱŒŽ—ž›¢ǯȱ‘˜•ŽœŠ•Žȱ ™›’ŒŽœȱ ’—ȱ ‘Š—‘Š’ȱ ›˜œŽȱ ŜŞǯŝƖȱ ›˜–ȱ ŗşŗŘȱ ˜ȱ ŗşřŗǯȱ•‘˜ž‘ȱ Ž—Ž›Š•ȱ ’—ĚŠ’˜—ȱ–Š¢ȱ‹Žȱ™Š›•¢ȱ›Ž•ŠŽȱ˜ȱ•Š—ȱŸŠ•žŽœǰȱ’ȱŒŠ——˜ȱž••¢ȱŠŒŒ˜ž—ȱ˜›ȱ the steep rise in land values during this period. Whereas the general trend of wholesale prices was upward, and the rate of change varied year by year—rising in some years and declining in others—the trend for land ™›’ŒŽœȱ ŠœȱŒ˜—’—ž˜žœ•¢ȱž™ Š›ǰȱŽœ™ŽŒ’Š••¢ȱŠĞŽ›ȱŗşŖŖȱ‹žȱŽ¡ŒŽ™ȱ’—ȱŗşŗŗǰȱ ‘Žȱ¢ŽŠ›ȱ˜ȱ‘Žȱ›ŽŸ˜•ž’˜—ȱǻœŽŽȱŠ™™Ž—’¡ȱřǯŗǼǯ Š‹•ŽȱřǯŚǯȱŠ—ȱŠ•žŽœȱ’—ȱ‘Š—‘Š’Ȃœȱ—Ž›—Š’˜—Š•ȱŽĴ•Ž–Ž— Year Area (muǼ Total Value Yuan/mu ŗŞŜś 4,310 śǰŝŜşǰŞŖŜȱ 1,318 ŗŞŝś ŚǰŝśŘȱ śǰşřŜǰśŞŖȱ 1,249 1903 ŗřǰŗŘŜȱ ŜǰŖŚŘřǰŝŝřȱ ŚǰŜŖřȱ 1907 ŗśǰŜŚŘȱ ŗśŗǰŖŚŝǰŘśŝȱ şǰŜśŜȱ 1911 17,093 ŗŚŗǰśśŖǰşŚŜȱ 8,281 ŗşŗŜ ŗŞǰŚśŖȱ ŗŜŘǰŝŗŞǰŘśŜȱ 8,819 1920 ŗşǰŚŜŖȱ ŘŖřǰŞŜśǰŜřŚȱ ŗŖǰŚŝŜȱ 1922 20,338 ŘŚŜǰŗŘřǰŝşŗȱ 12,102 1924 ŘŖǰŝŝśȱ řřŜǰŝŗŘǰŚşŚȱ ŗŜǰŘŖŝȱ 1927 21,441 řşşǰşŘŗǰşśśȱ ŗŞǰŜśŘȱ 1930 22,131 śşŝǰŘŚřǰŗŜŗȱ ŘŜǰşŞŜȱ 1933 22,330 ŝśŜǰŚşřǰşŘŖȱ 33,877 Source:ȱ‘Š—‘Š’œ‘’ȱ’£‘Ž—“žȱǻŗşŚŝǰȱŘŘŞǼǯ

Index 100.00 şŚǯŝŜȱ 349.24 ŝřŘǯŜŘȱ ŜŘŞǯřŖȱ ŜŜşǯŗŘȱ 794.84 918.21 ŗŘŘşǯŜŜȱ ŗŚŗśǯŗŝȱ ŘŖŚŝǯśŖȱ ŘśŝŖǯřřȱ

‘Žȱ —Ž›—Š’˜—Š•ȱ ŽĴ•Ž–Ž—ȱ  Šœȱ ’Ÿ’Žȱ ’—˜ȱ ‘Žȱ ˜ž›ȱ ’œ›’Œœǰȱ ‘Žȱ central, north, east, and west. Land values varied among them, as shown ’—ȱꐞ›Žȱřǯřǯȱ‘Žȱ•ŽŸŽ•œȱ˜ȱ‘Žȱ•Š—ȱŸŠ•žŽœȱ›ŽĚŽŒȱ‘ŽȱŽŒ˜—˜–’ŒȱŽŠž›Žœȱ˜ȱ ‘Žȱ˜ž›ȱ’쎛Ž—ȱ’œ›’Œœǯ ‘Žȱž—’Œ’™Š•ȱ˜ž—Œ’•ȱ˜ȱ‘Žȱ—Ž›—Š’˜—Š•ȱŽĴ•Ž–Ž—ȱ›Ž™˜›Žȱ’œȱŽŸŠ•žŠ’˜—ȱ˜ȱ•Š—ȱ value every few years from 1890 to 1933. Since the land tax and the tax on rents—referred to ŠœȱŽ—Ž›Š•ȱ–ž—’Œ’™Š•ȱŠ¡ȯ Ž›Žȱ’œȱ–Š’—ȱꗊ—Œ’Š•ȱ›Žœ˜ž›ŒŽœǰȱ‘Žȱž—’Œ’™Š•ȱ˜ž—Œ’•ȱ›ŽŸ’œŽȱ ’œȱ ŸŠ•žŠ’˜—ȱ ˜ȱ •Š—ȱ Š¡ȱ ˜ŒŒŠœ’˜—Š••¢ȱ œ˜ȱ ‘Šȱ ’ȱ Œ˜ž•ȱ ‹Ž—Žęȱ ›˜–ȱ ‘Žȱ ‹ž˜¢Š—ȱ ›ŽŠ•ȱ ŽœŠŽȱ –Š›”Žǯȱž›’—ȱ‘Žȱ™Ž›’˜ȱŗŞŜşȮŗşřřǰȱ‘ŽȱŒ˜ž—Œ’•ȱŒ˜—žŒŽȱŠȱ•ŽŠœȱ—’—ŽŽŽ—ȱŠœœŽœœ–Ž—œȱ˜ȱ ™›˜™Ž›¢ȱŸŠ•žŽǯȱ‘ŽȱŒ˜ž—Œ’•ȂœȱŽŸŠ•žŠ’˜—ȱ›ŽĚŽŒŽȱ‘Žȱ–Š›”ŽǰȱŽŸŽ—ȱ’ȱ‘Žȱ–Š›”ŽȱŸŠ•žŽȱ Šœȱ ˜ĞŽ—ȱ‘’‘Ž›ȱ‘Š—ȱ‘ŽȱŸŠ•žŠ’˜—ȱ‹¢ȱ‘ŽȱŒ˜ž—Œ’•ȱǻ‘Ž—ȱŠ—ȱ‘Š—ȱŗşŞśǰȱřŚȮřśǼǯ ŜȲȱ

The Shanghai Real Estate Market

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’ž›ŽȱřǯřǯȱŠ—ȱŠ•žŽœȱ’—ȱ‘Žȱ‘Š—‘Š’ȱ—Ž›—Š’˜—Š•ȱŽĴ•Ž–Ž— ŗŘŖŖŖŖȱ

ŗŖŖŖŖŖȱ

 Ž—›Š• ˜›‘ȱ Šœ Žœȱ

ŞŖŖŖŖȱ žŠ—ȱ ŜŖŖŖŖȱ

ŚŖŖŖŖȱ

ŘŖŖŖŖȱ

Ŗȱ ŗşŖřȱ

ŗşŖŝȱ

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ŽŠ›

Source:ȱž˜ȱ‘’›žȱǻŗşřŘǰȱŠ‹•ŽȱŘŖǼǯ

‘ŽȱŒŽ—›Š•ȱ’œ›’Œȱ•Š—ǰȱ‘Žȱꛜȱ˜ȱ‹ŽȱŽŸŽ•˜™Žǰȱ Šœȱ‘Žȱ–˜œȱ‘’‘•¢ȱ ŸŠ•žŽǯȱ ’‘ȱ ŽŸŽ•˜™–Ž—ȱ ‹Ž’——’—ȱ ’––Ž’ŠŽ•¢ȱ ŠĞŽ›ȱ ‘Žȱ ˜™Ž—’—ȱ ˜ȱ Shanghai in the middle of the nineteenth century, this district became a shopping center. At night, the modern skyline along the Bund and Nan“’—ȱ˜Šǰȱ‘Žȱ–Š’—ȱœ›ŽŽȱ˜ȱ‘Š—‘Š’Ȃœȱ˜›Ž’—ȱœŽĴ•Ž–Ž—œǰȱ’••ž–’—ŠŽȱ the central district’s business center for banking and commerce (Shanghaiœ‘’ȱ žŠ—™žšžȱ›Ž—–’—ȱ£‘Ž—žȱŗşŞşǰȱŗŗȮŗŘǼǯȱ’ž›ŽȱřǯŚȱœ‘˜ œȱ‘Žȱ›’œ’—ȱ values of land on Nanjing Road for eight buildings. At this location for ˜ĜŒŽœǰȱœ‘˜™œǰȱŠ—ȱ›ŽœŠž›Š—œǰȱ‘Žȱ•Š—ȱŸŠ•žŽœȱŠ—ȱ›Ž—œȱ Ž›Žȱ‘’‘Ž›ȱ‘Š—ȱ anywhere else in the city. The prosperity of the central district gradually spread to the north and east districts, where the price of land was lower than in the central dis›’Œǯȱ ‘Žȱ ŽŠœȱ ’œ›’Œȱ  Šœȱ ‘Žȱ ˜›–Ž›ȱ–Ž›’ŒŠ—ȱ ŽĴ•Ž–Ž—ȱ ‘Šȱ –Ž›Žȱ  ’‘ȱ ‘Žȱ ›’’œ‘ȱ ŽĴ•Ž–Ž—ȱ ’—ȱ ŗŞŜřǯȱ ˜——ŽŒŽȱ  ’‘ȱ ‘Žȱ ŒŽ—›Š•ȱ ’œ›’Œȱ by Yangshupu ἞‍⌺ Road, the east district became an industrial center. ›˜–ȱŗŞŝŞȱ˜ȱŗşŗřǰȱŠ›˜ž—ȱ Ž—¢ȱŠŒ˜›’Žœȱ˜›ȱŒ˜Ĵ˜—ȱœ™’——’—ǰȱœ’•”ȱ›ŽŽ•ing, brewing, and chemical manufacturing were built. With World War I, China’s industrialization surged, especially in the east district, and Chi—ŽœŽȱŠ—ȱ Š™Š—ŽœŽȱŒ˜Ĵ˜—Ȭœ™’——’—ȱ–’••œȱ™›Ž˜–’—ŠŽȱ‘Ž›Žȱǻ‘Š—‘Š’œ‘’ȱŠ—œ‘ž™žšžȱ›Ž—–’—ȱ£‘Ž—žȱŗşŞşǰȱŘŝŜȮŘŝŞǼǯȱ ‘Žȱ—˜›‘ȱ’œ›’ŒȱŒ˜—Š’—Žȱ‹˜‘ȱ™Š›ȱ˜ȱ‘Žȱ˜›–Ž›ȱ–Ž›’ŒŠ—ȱŽĴ•Ž–Ž—ȱ Š—ȱ ‘Žȱ Š›ŽŠȱ —Ž •¢ȱ ŠŽȱ ˜ȱ ‘Žȱ œŽĴ•Ž–Ž—ȱ ‹¢ȱ ‘Žȱ ŗŞşşȱ ›ŽŸ’œ’˜—ȱ of real estate regulations. Manufacturing and shipping were the major

śŜ

Tomoko Shiroyama

’—žœ›’Žœȱ’—ȱ‘Žȱ—˜›‘ǯȱ‘’œȱ’œ›’ŒȱŠĴ›ŠŒŽȱ‘Žȱ•Š›Žœȱ—ž–‹Ž›ȱ˜ȱ Š™Š—ŽœŽȱ›Žœ’Ž—œǯȱЎ›ȱ‘ŽȱŗŞşśȱ’—˜Ȭ Š™Š—ŽœŽȱŠ›ǰȱ‘Žȱ Š™Š—ŽœŽȱ™˜™ž•Š’˜—ȱ steadily grew, reaching twenty-eight thousand in 1928. Most of the Japanese in the north district lived along Wusong ਇ⎲ Road, which came to be ŒŠ••Žȱ‘Žȱ Š™Š—ŽœŽȱŽĴ•Ž–Ž—ȱǻ‘Š—‘Š’œ‘’ȱ ˜—”˜žšžȱ›Ž—–’—ȱ£‘Ž—žȱ ŗşŞşǰȱŚȮśǼǯ Figure 3.4. Land Values on Nanjing Road ŚŖŖŖŖŖ

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řśŖŖŖŖ

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řŖŖŖŖŖ

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ŘśŖŖŖŖ ŠŽ•Ȧž

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ȱ ȱ

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ŘŖŖŖŖŖ

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ŗśŖŖŖŖ

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ŗŖŖŖŖŖ

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śŖŖŖŖ Ŗ

Šœœ˜˜—ȱ

Š›˜˜— ’œ‘ž žŠ—Š— ’—¡’— Š¡’—



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ŗŞŚŚ ŗŞŚŝ ŗŞśś ŗŞŜŗ ŗŞŜş ŗŞŝŜ ŗŞŞŘ ŗŞşŖ ŗŞşŜ ŗŞşş ŗşŖř ŗşŖŝ ŗşŗŗ ŗşŗŜ ŗşŘŖ ŗşŘŘ ŗşŘŚ ŗşŘŝ ŗşřŖ ŗşřř

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ŽŠ›

Source:ȱ‘Š—‘Š’ȱŠ—’Œ‘Š—ȱ£‘’ȱ‹’Š—“’ȱ Ž’¢žŠ—‘ž’ȱǻŗşşşǰȱřŚŗǼǯ

The west district was divided into two parts. Its northern part was an industrial district like that of the east and north. The southern part, adjacent to the French Concession, was a residential area for the wealthy ǻ‘Š—‘Š’œ‘’ȱžž˜šžȱ›Ž—–’—ȱ£‘Ž—žȱŗşŞşǰȱŚȮśǼǯȱ‘Žȱœž‹œŠ—’Š•ȱ›’œŽȱ’—ȱ this area’s land prices during the 1920s occurred because of the development of the west district’s southern part. ‘Žȱ‘’‘ȱ•Š—ȱŸŠ•žŽœȱ’—ȱ‘ŽȱŒŽ—›Š•ȱ’œ›’ŒȱŠĴ›ŠŒŽȱ‘Žȱ™ž‹•’ŒȂœȱŠĴŽ—tion, and land values continued to grow in all four districts. Except for 1911, the year of the revolution, land values consistently increased until ‘ŽȱŗşřŖœȯ›’œ’—ȱ›˜–ȱŗşŖřȱ˜ȱŗşŖŝȱ‹¢ȱŜŜȱ™Ž›ŒŽ—ȱ’—ȱ‘ŽȱŽŠœǰȱŠ—ȱ‹¢ȱ–˜›Žȱ than 100 percent in the central, north, and west districts. Land values accelerated in the 1910s, rising from 7 percent in the west to 17 percent in the east in the early 1910s, and from 14 percent in the west to 27 percent in the central district in the late 1910s, and from 17 percent in the east to 88 percent in the west in the 1920s.

The Shanghai Real Estate Market

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Population density rose, and housing and transportation lagged behind. Many complained about these shortages, but as few measures were Š”Ž—ȱ˜ȱ’—Œ›ŽŠœŽȱ‘Žȱœž™™•¢ǰȱ›Ž—œȱŠ—ȱ•Š—ȱŸŠ•žŽœȱ’—ȱ‘ŽȱœŽĴ•Ž–Ž—œȱŒ˜—œŠ—•¢ȱ›˜œŽǰȱŠ—ȱ›ŽŠ•ȱŽœŠŽȱ’—ŸŽœ–Ž—ȱ›Ž–Š’—ŽȱœŽŒž›ŽȱŠ—ȱ™›˜ęŠ‹•Žǯ7 Ž›œ˜—Š•ȱœŠŽ¢ȱ’—ȱ‘Žȱ˜›Ž’—ȱœŽĴ•Ž–Ž—œȱ Šœȱ’–™˜›Š—ȱ˜›ȱ–˜œȱ‘’—ŽœŽǯȱ—ŒŽȱ‘Žȱ‹Š—ȱ˜—ȱ‘’—ŽœŽȱ›Žœ’Ž—ŒŽȱ Šœȱ˜›–Š••¢ȱ•’ĞŽǰȱ–Š—¢ȱ–˜ŸŽȱ ˜ȱ ‘Žȱ œŽĴ•Ž–Ž—œȱ •˜˜”’—ȱ ˜›ȱ Ž–™•˜¢–Ž—ȱ Š—ȱ ‹žœ’—Žœœȱ ˜™™˜›ž—’’Žœǯȱ The later rise in rental and land values made real estate investment in the ˜›Ž’—ȱœŽĴ•Ž–Ž—œȱ‘’‘•¢ȱ™›˜ęŠ‹•Žǯȱ ˜ ŽŸŽ›ǰȱ•Š—ȱ›Žž•Š’˜—œȱœ’™ž•Šed that only foreigners could own land registered at foreign consulates. Despite this rule, many Chinese managed to own land in the concession Š—ȱŽ—“˜¢Žȱ‘Žȱ™›’Ÿ’•ŽŽœȱŠĴŠŒ‘Žȱ˜ȱ˜ —Ž›œ‘’™ǯȱ Institutions and Organizations for Marketing Real Estate Two types of title deed are important in analyzing the dynamics of the Shanghai real estate market: the daoqi 䘧༥ and the quanbingdan ⃞ᶘஂ. Daoqi ‘Žȱ‘’—ŽœŽȱŽ›–ȱ˜›ȱ˜›Ž’—ȱœŽĴ•Ž–Ž—œǰȱzujie ⾳⬠, literally means “eternal lease”—that is, the land has been leased, but not sold, to foreigners— ‹ŽŒŠžœŽȱ‹¢ȱ‘ŽȱŗŞŚśȱ›Žž•Š’˜—œǰȱŠ••ȱ‘’—Šǰȱ’—ȱ™›’—Œ’™•Žǰȱ Šœȱ›ŽŠ›ŽȱŠœȱ the emperor’s property. In certain designated areas, the Chinese were allowed to lend their land permanently to foreigners. For a land transaction, an “eternal” lease was drawn up and served as the equivalent of a contract ˜›ȱŠȱȃœŠ•ŽȄȱǻ’žȱ ’—£‘Š—ȱŠ—ȱžȱ ˜—œžȱŗşŞŖǰȱŚŚȮśŖǼǯȱŽŠœ’—ȱ•Š—ȱ’—ȱ ‘Žȱ˜›Ž’—ȱœŽĴ•Ž–Ž—œȱ Šœȱ‹ŠœŽȱ˜—ȱŠȱ™Ž›œ˜—Š•ȱŒ˜—›ŠŒȱ‹Ž ŽŽ—ȱŠȱ‘’—ŽœŽȱ•Š—•˜›ȱŠ—ȱŠȱ˜›Ž’—ȱŽ—Š—ǯȱ—ȱ‘’œȱœŽ—œŽǰȱ‘ŽȱȃœŽĴ•Ž–Ž—Ȅȱœ¢œŽ–ȱ  Šœȱšž’Žȱ’쎛Ž—ȱ›˜–ȱ‘Šȱ˜ȱ‘ŽȱȃŒ˜—ŒŽœœ’˜—ǯȄȱ—Ž›ȱ‘ŽȱŒ˜—ŒŽœœ’˜—ȱ system, such as that in Tianjin, foreign governments could lease any land conceded to it by the Chinese government to foreign nationals. The daoqiǰȱ Šȱ ŒŽ›’ęŒŠŽȱ ˜ȱ ŽŽ›—Š•ȱ •Š—ȱ •ŽŠœŽǰȱ  Šœȱ Ž¡Œ‘Š—Žȱ ‹Ž ŽŽ—ȱ Chinese landlords and foreign tenants. Once a Chinese landlord and a foreign tenant agreed to the terms of a lease, the land was measured and ŝȲȱ ŽȱŒŠ—ȱœŽŽȱŠȱœ’–’•Š›ȱ›Ž•Š’˜—œ‘’™ȱ‹Ž ŽŽ—ȱ‘Žȱ’—Ě˜ ȱ˜ȱ‘’—ŽœŽȱ™Ž˜™•ŽȱŠ—ȱ‘Žȱ›’œ’—ȱ •Š—ȱŸŠ•žŽœȱ’—ȱ˜‘Ž›ȱ™˜›ȱŒ’’Žœǯȱ Š—”˜žǰȱŠĞŽ›ȱ’œȱ™˜›ȱ˜™Ž—Žȱ’—ȱŗŞŜŗǰȱœŠ›Žȱ˜ȱ›ŽŒ˜ŸŽ›ȱ›˜–ȱ the devastation wrought by the Taiping Rebellion. Urban commerce was concentrated in the —Ž •¢ȱ˜™Ž—Žȱ›’’œ‘ȱŽĴ•Ž–Ž—DzȱœŽŠ¢ȱ™˜™ž•Š’˜—ȱ›˜ ‘ȱ’—Œ›ŽŠœŽȱ‘ŽȱŠ›ŽŠȂœȱ•Š—ȱŸŠ•žŽȱ ǻžȱž—Ž—ȱŗşŞŝǰȱŗŝşǼǯȱ—ȱ’Š—“’—ǰȱ‘Žȱ™˜™ž•Š’˜—ȱ˜ȱ‘Žȱ˜›Ž’—ȱŒ˜—ŒŽœœ’˜—ȱ’—Œ›ŽŠœŽȱ›˜–ȱ ŜŞǰŖśřȱ’—ȱŗşŖŜȱ˜ȱŗŗşǰŗśŖȱ’—ȱŗşŗŝǰȱŠ—ȱ˜ȱŘŘşǰŖŗŚȱ’—ȱŗşŘśǯȱ˜œȱ›Žœ’Ž—œȱ Ž›Žȱ—˜ȱ˜›Ž’—Ž›œȱ ‹žȱ ‘’—ŽœŽȱ ǻž˜ȱ ‘ž Ž’ȱ ŗşşřǰȱ ŚśśǼǯȱ ›˜–ȱ ‘Žȱ –’ȬŗşŘŖœȱ ˜ȱ ‘Žȱ ŽŠ›•¢ȱ ŗşřŖœǰȱ Žœ™ŽŒ’Š••¢ȱ ’—ȱ the 1922 civil war and the 1931 Manchurian Incident, the demand for concession premises increased, and merchants even moved their businesses and residences from the Chinese part ˜ȱ‘ŽȱŒ’¢ȱ˜ȱ‘ŽȱŒ˜—ŒŽœœ’˜—ȱǻž˜ȱ‘ž Ž’ȱŗşşřǰȱśŝŜǰȱśŞŝǼǯ

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Tomoko Shiroyama

registered at the appropriate foreign consulate. Simultaneously, the local magistrate of Shanghai—the daotai 䘧ৄȯ’œœžŽȱ Šȱ •Š—Ȭ•ŽŠœŽȱ ŒŽ›’ęŒŠŽȱ called a daoqi ǻ‘Š—‘Š’ȱ˜—¡’—œ‘ŽȱŗşřŖǰȱŗŗřǼǯ ŒŒ˜›’—ȱ ˜ȱ ‘Žȱ ›ŽŒ˜›œȱ ˜ȱ ‘Žȱ ˜›Ž’—ȱ œŽĴ•Ž–Ž—œȱ ’—ȱ ŗşřřǰȱ ‘Žȱ •Š—ȱ leased to foreigners reached more than 80 percent of the designated area.8 Foreign tenants were obliged to pay an annual land tax to the council of ˜›Ž’—ȱ œŽĴ•Ž–Ž—œǰȱ Šœȱ  Ž••ȱ Šœȱ ˜ȱ ‘Žȱ ‘’—ŽœŽȱ ˜ŸŽ›—–Ž—ǯȱ Š—ȱ ›Ž’œtered under the names of foreigners enjoyed extraterritoriality (Shanghai ˜—¡’—œ‘ŽȱŗşřŖǰȱŗŗřȮŗŘŜǼǯȱ Quanbingdan The rules of the treaty system designated that only foreigners could own land registered as daoqi. But actually, many Chinese did own land in the ˜›Ž’—ȱœŽĴ•Ž–Ž—œǯȱ‘Žȱquanbingdan document was a declaration of trust that enabled Chinese to own land while foreigners registered the land and ™Š’ȱŠ—ȱŠœœ˜Œ’ŠŽȱŠ¡ȱǻçŠȱ”Ž—”¢Ā“˜ȱŗşŚŗǰȱŗǼǯȱ‘Ž—ȱŠȱ‘’—ŽœŽȱ•Š—•˜›ȱ asked a foreigner to register his or her land, they exchanged a quanbingdan, certifying that the Chinese “entrusted” his land to the foreigner (see appendix 3.2 for the quanbingdanȱ˜›–ŠǼǯȱ—ȱ‘Š—‘Š’ǰȱŠȱquanbingdan was customarily regarded as a title deed. If a Chinese person possessed a daoqi ‘Šȱ’Ž—’ꮍȱŠȱ˜›Ž’—Ž›ȱŠœȱ‘ŠŸ’—ȱ›Ž’œŽ›Žȱ‘Žȱ•Š—ȱ ’‘ȱŠȱ˜›Ž’—ȱŒ˜—sulate, and a quanbingdanȱŸŽ›’ꮍȱ‘Šȱ‘Žȱ‘’—ŽœŽȱ™Ž›œ˜—ȱ Šœȱ‘Žȱȃ›ŽŠ•ȱ ˜ —Ž›Ȅȱ˜ȱ‘Žȱ•Š—ǰȱ‘Ž—ȱ‘’œȱ›’‘ȱ˜ŸŽ›ȱ‘Žȱ•Š—ȱ ŠœȱŒ˜—ę›–Žȱǻ’—Š–’ȱ Š—œ‘ĀȱŽœžçȱ”Š‹žœ‘’”’ȱ”Š’œ‘Šȱ‘Š—‘Š’ȱ“’–žœ‘˜ȱŒ‘眊‹žȱŗşŚŘȮŗşŚřǰȱ ŝŚǼǯ ‘Ž—ȱ ‘Žȱ –Š••ȱ  ˜›ȱ Ž‹Ž••’˜—ȱ œ›žŒ”ȱ ‘Š—‘Š’ȱ ’—ȱ ‘Žȱ –’ȬŗŞśŖœǰȱ ˜••˜ Žȱ‹¢ȱ‘ŽȱŗŞŜŖȮŗŞŜŘȱŠ’™’—ȱŽ‹Ž••’˜—ǰȱ–˜›Žȱ‘’—ŽœŽȱ Š—Žȱ˜ȱŠŒšž’›Žȱ•Š—ȱ’—ȱ‘Žȱ˜›Ž’—ȱœŽĴ•Ž–Ž—ǯȱ ˜ ŽŸŽ›ǰȱ•Š—ȱ˜ —Ž›œ‘’™ȱ’—ȱ‘Š—hai became uncertain. In a time of such unrest, Chinese registering land under foreigners’ names while retaining actual ownership hired foreigners to register their land by using a daoqi; at the same time, the Chinese exchanged a quanbingdan declaring that they nominally trusted the land ˜ȱ˜›Ž’—Ž›œǯȱ‘’—ŽœŽȱŒ˜–™›Š˜›œȱǻ–’•Ž–Ž—ǼȱꛜȱŽ—›žœŽȱ‘Ž’›ȱ•Š—ȱ to foreign employers. Foreign employers required compradors to pledge assets as security when they let their Chinese employees handle large Š–˜ž—œȱ˜ȱ–˜—Ž¢ǯȱžȱŠĞŽ›ȱ‘Žȱ–’ȬŗŞŞŖœǰȱ‘Žȱ‘’—ŽœŽȱŠ˜™Žȱ‘ŽȱŒžœ˜–ȱ ˜ȱ ™•Ž’—ȱ ‘Ž’›ȱ •Š—ȱ ˜ȱ ˜›Ž’—Ž›œȱ ˜›ȱ Šȱ ’쎛Ž—ȱ ™ž›™˜œŽȯ˜ȱ ŠŒšž’›Žȱ‘ŽȱœŽŒž›’¢ȱ‘ŠȱŠȱ˜›Ž’—ȱœŽĴ•Ž–Ž—ȱ‹Žœ˜ Žǯȱ

çŠȱ ”Ž—”¢Ā“˜ȱ ŗşŚŗǰȱ śŜȮśŝǯȱ ‘’œȱ –ŠŽ›’Š•ȱ  Šœȱ ‹ŠœŽȱ ˜—ȱ ‘Žȱ ‘Š—‘Š’ȱ ž—’Œ’™Š•ȱ ˜ž—Œ’•Ȃœȱ Š—ȱ œœŽœœ–Ž—ȱ Œ‘Žž•Žȱ ǻ‘Š—‘Š’ȱ ŗşřřǼȱ Š—ȱ Role de la propriete fonciere ǻ‘Š—‘Š’ȱŗşřŚǼǯ ŞȲȱ

The Shanghai Real Estate Market

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Organizations for Real Estate Transactions ‘Žȱ™Ž›œ˜—ȱ ‘˜ȱ›Ž’œŽ›Žȱ•Š—ȱ Šœȱ’쎛Ž—ȱ›˜–ȱ‘Žȱ›ŽŠ•ȱ˜ —Ž›ǰȱŠ—ȱ land ownership secured by a combination of daoqi and quanbingdan was potentially insecure. Nonetheless, this method of registering land under foreigners’ names, called yangshang guahao ⋟ଚ᥯㰳, was preferred in the ˜›Ž’—ȱœŽĴ•Ž–Ž—œǯȱ’Œ‘Š›ȱŽŽ‘Š–ǰȱŠ™™˜’—Žȱ‹¢ȱ‘Žȱž—’Œ’™Š•ȱ˜ž—Œ’•ȱ ˜ȱ’—ŸŽœ’ŠŽȱ‘Žȱ‘Š—‘Š’ȱ˜›Ž’—ȱœŽĴ•Ž–Ž—œǰȱ—˜Žȱ’—ȱŗşŘŜȱ‘Šȱ’ȱ‘Ž›Žȱ was any trouble between foreigners and Chinese landowners, it was never reported. The security of yangshang guahao was provided by professionals such as foreign lawyers, construction companies, and real estate dealers,  ‘˜ȱ˜ěŽ›ŽȱŠȱ˜›Ž’—ȱ›Ž’œ›Š’˜—ȱœŽ›Ÿ’ŒŽȱŠœȱŠȱ™Š›ȱ˜ȱ‘Ž’›ȱ‹žœ’—ŽœœȱœŽ›Ÿ’ŒŽœȱǻ’—Š–’ȱŠ—œ‘ĀȱŽœžçȱ”Š‹žœ‘’”’ȱ”Š’œ‘Šȱ‘Š—‘Š’ȱ“’–žœ‘˜ȱŒ‘眊‹žȱ ŗşŚŘȮŗşŚřǰȱŚŜǼǯȱ‘ŽœŽȱ›ŽŠ•ȱŽœŠŽȱ™›˜Žœœ’˜—Š•œȱœ™ŽŒ’Š•’£Žȱ’—ȱ‘’—ŽœŽȱ•Š—ȱ ›Š—œŠŒ’˜—œȱ’—ȱ‘Š—‘Š’Ȃœȱ˜›Ž’—ȱœŽĴ•Ž–Ž—œǯȱ‘Žȱ‘Š—‘Š’ȱŽŠ•ȱœŠŽȱ Ž—Œ¢ǰȱ˜ž—Žȱ‹¢ȱŠȱ›’’œ‘ȱ—Š’˜—Š•ȱ’—ȱŗŞŝŖǰȱ Šœȱ‘ŽȱꛜȱœžŒ‘ȱŠŽ—Œ¢ǯȱ Ў›ȱ‘Žȱž›—ȱ˜ȱ‘ŽȱŒŽ—ž›¢ǰȱ‘Žȱ—ž–‹Ž›ȱ˜ȱ˜›Ž’—ȱ›ŽŠ•ȱŽœŠŽȱŒ˜–™Š—’Žœȱ increased. In 1914, 30 companies were operating, whereas 140 companies were registered as members of the Shanghai Real Estate Owners AssoŒ’Š’˜—ȱ’—ȱŗşřŖǯȱЎ—ǰȱ‘ŽœŽȱŒ˜–™Š—’Žœȱ˜ěŽ›ŽȱŠȱ›Ž’œ›Š’˜—ȱœŽ›Ÿ’ŒŽǯȱ˜›ȱ example, China Realty Company was an American real estate agency that ›Ž’œŽ›Žȱ˜›ȱ’œȱ‘’—ŽœŽȱŒžœ˜–Ž›œȱśŖŝȱ•˜œȱ’—ȱŗşŘŜDzȱşŗşȱ’—ȱŗşřŖDzȱŠ—ȱŗǰŖŘşȱ ’—ȱŗşřŚȱǻ‘Š—‘Š’ȱŠ—’Œ‘Š—ȱ£‘’ȱ‹’Š—“’ȱ Ž’¢žŠ—‘ž’ȱŗşşşǰȱŗśŗǼǯ By registering land under foreigners’ names, Chinese could enjoy extraterritorial rights and hide their assets from Chinese authorities. Since Chinese landowners registered their property under foreigners’ names ˜ȱœŠŽžŠ›ȱ‘ŽȱœŽŒ›ŽŒ¢ȱ˜ȱ‘Ž’›ȱŠœœŽœǰȱ‘Ž›ŽȱŠ›Žȱ—˜ȱ˜ĜŒ’Š•ȱœŠ’œ’Œœȱ˜›ȱ Chinese ownership. According to data prepared by the Shanghai Mu—’Œ’™Š•ȱ ˜ž—Œ’•ȱ ’—ȱ ŗşŘŜǰȱ •Š—ȱ ŸŠ•žŽœȱ ˜ȱ ŘŞřǰŖŖşǰŚŖŖȱ ŠŽ•œȱ ǻŠ™™›˜¡’–ŠŽ•¢ȱ şŚǰŖŚŗǰřŖŝȱ ǯǯȱ ˜••Š›œǼȱ ‘Šȱ ‹ŽŽ—ȱ ›Ž’œŽ›Žȱ ž—Ž›ȱ ›’’œ‘ȱ —Š–Žœǰȱ Š—ȱ ŗŖřǰřŖŖǰŚŝřȱŠŽ•œȱǻřŜǯśƖǼȱ Ž›Žȱ˜ —Žȱ‹¢ȱ—˜—Ȭ›’’œ‘ȱœž‹“ŽŒœǯȱ—ȱŗşŘŝǰȱ˜ȱŠȱ ˜Š•ȱ˜ȱŗŖǰŖŜśȱ•˜œȱ˜ȱ•Š—ȱ’—ȱ‘Žȱ—Ž›—Š’˜—Š•ȱŽĴ•Ž–Ž—ǰȱ‘’—ŽœŽȱ™Ž˜™•Žȱ ˜ —ŽȱřǰŝŖŖȱ˜ȱ‘Ž–ȱǻřŜǯŝƖǼǯȱ—œ’Žȱ‘Žȱ—Ž›—Š’˜—Š•ȱŽĴ•Ž–Ž—ǰȱ‘’—ŽœŽȱ property was concentrated in the central district, the center of the com–Ž›ŒŽȱŠ—ȱœŽ›Ÿ’ŒŽȱ’—žœ›’Žœǯȱ‘’—ŽœŽȱ’—’Ÿ’žŠ•œȱ˜ —ŽȱśŘŘȱ•˜œȱ˜ȱŝŖŖȱ ǻŝŚǯśƖǼȱ’—ȱ‘ŽȱŒŽ—›Š•ȱ’œ›’ŒǰȱśřŞȱ•˜œȱ˜ȱŗǰŗŞŘȱǻŚśǯśƖǼȱ’—ȱ‘Žȱ—˜›‘ǰȱŗǰŖŜŜȱ •˜œȱ˜ȱŗǰŞśřȱǻŜŝǯřƖǼȱ’—ȱ‘ŽȱŽŠœǰȱŠ—ȱŗǰśŝŞȱ•˜œȱ˜ȱŜǰřřŖȱǻřŜǯŝƖǼȱ’—ȱ‘Žȱ Žœȱ ǻŽŽ‘Š–ȱŗşřŗǰȱřŘŘǼǯ Š—ȱ  Šœȱ Œ˜––˜—•¢ȱ Ž¡Œ‘Š—Žȱ  ’‘’—ȱ Šȱ œŽĴ•Ž–Ž—ȱ žœ’—ȱ daoqi and quanbingdan. For example, of a hundred daoqi listed in the publication Shanghai daoqi, there is only one case without a recorded change of ownerœ‘’™ǯȱ›˜–ȱŗŞŚŝȱ˜ȱŗşŚśǰȱŽŠŒ‘ȱ™’ŽŒŽȱ˜ȱ•Š—ȱ Šœȱ›ŠŽȱŠ—ȱŠŸŽ›ŠŽȱ˜ȱśǯřȱ ’–ŽœȱǻŠ’ȱž’Š—ǰȱŠ—ȱ˜—•’—ǰȱŠ—ȱžȱŽ—ŠȱŗşşŝǼǯ

ŜŖ

Tomoko Shiroyama

‘’—ŽœŽȱ Ž¡Œ‘Š—Žȱ •Š—ȱ ’—ȱ Šȱ ˜›Ž’—ȱ œŽĴ•Ž–Ž—ȱ  ’‘ȱ ŽŠŒ‘ȱ ˜‘Ž›ȱ ‹¢ȱ changing the names on a quanbingdan. The procedure was simple: on the back side of a quanbingdan, a printed text said: “I hereby assign all my ›’‘ǰȱ’•ŽǰȱŠ—ȱ’—Ž›Žœȱ’—ȱ‘’œȱ•˜ȱ˜ȱ•Š—ȱ˜ȱǽ‘Žȱ™ž›Œ‘ŠœŽ›Ȃœȱ—Š–ŽǾȱŠ—ȱ authorize and request you to grant him a new declaration of trust. Upon your so doing, I hereby undertake to indemnify you from any further Œ•Š’–ȱ’—ȱ‘Žȱ–ŠĴŽ›ǯȱ‘Š—‘Š’ǰȱ‘’œȱǽǾȱŠ¢ȱ˜ȱ‘ŽȱǽǾȱ–˜—‘ȱ˜ȱŗşǽ¢ŽŠ›ǾǯȄȱ Once seller and buyer had agreed on the terms, the seller would sign the document and send it to the foreigner to ask for a new contract (Minami Š—œ‘ĀȱŽœžçȱ”Š‹žœ‘’”’ȱ”Š’œ‘Šȱ‘Š—‘Š’ȱ“’–žœ‘˜ȱŒ‘眊‹žȱŗşŚŘȮŗşŚřǰȱ śŚȮŜŗǼǯ9 The daoqi, the institution formally set up under the agreements between China and foreign governments, and the quanbingdan, the local custom developed by both foreign and Chinese participants in the real estate market, legitimated the ownership and exchange of real estate in ‘Žȱ˜›Ž’—ȱœŽĴ•Ž–Ž—œǯȱ’—Š—Œ’Š•ȱ˜›Š—’£Š’˜—œȱ‘žœȱŠŒ”—˜ •ŽŽȱ‘Šȱ a piece of real estate was a safe asset and readily mortgaged properties through this system. The Merchandising of Real Estate: Investment and Mortgage Investment Strategies of the Real Estate Agencies As discussed in the previous section, many foreign real estate agencies made a business out of registering land at foreign consulates for their Chinese customers. Although some small-scale dealers specialized in services with commission, such as registering land with foreigners’ names and collecting rents, many large-scale dealers, such as the Sassoon family’s agent, ’•ŠœȱŠ›˜—ȱ Š›˜˜—ǰȱ‹˜ž‘ȱ‘Ž’›ȱ˜ —ȱ•Š—ǰȱ‹ž’•ȱ˜—ȱ’ǰȱŠ—ȱ•ŽŠœŽȱ˜žȱ the stock, in addition to providing the various services that enabled their foreign and Chinese customers to acquire, manage, and trade real estate in ‘Žȱ˜›Ž’—ȱœŽĴ•Ž–Ž—œǯȱ‘Žȱ’—’Ÿ’žŠ•ȱŒŠœŽœȱ˜ȱ•ŽŠ’—ȱ›ŽŠ•ȱŽœŠŽȱŽŠ•Ž›œȱ illustrate the dynamics of the real estate market. The Sassoons as Early Shanghai Real Estate Investors. The Sassoon family was one of the major real estate investors in Shanghai. Elias David Sassoon, a Baghdadi Jew of British nationality, expanded the family’s business from the opium trade to real estate management in 1877. When Aužœ’—Žȱ ŽŠ›ǰȱŠ—ȱ–Ž›’ŒŠ—ȱŒ˜–™Š—¢ǰȱ ŠœȱŽŒ•Š›Žȱ‹Š—”›ž™ǰȱ‘Žȱ‹˜ž‘ȱ A title deed similar to the daoqiȱ Šœȱ’œœžŽȱ’—ȱ‘Žȱ—Ž›—Š’˜—Š•ȱŽĴ•Ž–Ž—ȱ˜ȱ’Š–Ž—ǰȱ ‘Žȱ ›Ž—Œ‘ȱ ŽĴ•Ž–Ž—ȱ ˜ȱ Š—”˜žǰȱ Š—ȱ ‘Žȱ Š™Š—ŽœŽȱ ŽĴ•Ž–Ž—ȱ ˜ȱ ’Š—“’—ǰȱ Š•‘˜ž‘ȱ ‘Žȱ quanbingdanȱ Šœȱž—’šžŽȱ˜ȱ‘Š—‘Š’ȱǻ‘Š˜ȱ ’—ȱŗşşŚǰȱŗřǼǯȱ‘Žȱ˜™™˜›ž—’’Žœȱ˜›ȱ‘’—ŽœŽȱ˜ȱ ˜ —ȱŠ—ȱ›ŠŽȱ•Š—ȱ’—ȱ˜›Ž’—ȱœŽĴ•Ž–Ž—œȱ™›˜‹Š‹•¢ȱ’—ĚžŽ—ŒŽȱ•Š—ȱŸŠ•žŽœȱ’—ȱ‘Žȱ‘Š—‘Š’ȱ œŽĴ•Ž–Ž—œȱ–˜›Žȱ‘Š—ȱ’—ȱ‘Žȱ˜‘Ž›ȱ™˜›ȱŒ’’Žœǯ şȲȱ

The Shanghai Real Estate Market

Ŝŗ

the company’s property at the corner of the Bund and Nanjing Road and •ŽŠœŽȱ‘Žȱ‹ž’•’—œȱ˜›ȱ™›˜ęǯȱ‘Žȱ‹žœ’—Žœœȱ Šœȱ’—‘Ž›’Žȱ‹¢ȱ‘’œȱœ˜—ǰȱ Šcob Elias Sassoon, in 1880, and then by his grandson, Elice Victor Sassoon, in 1917. By 1921, the company ED Sassoon owned twenty-nine sites, valued at a total of 13,300,000 taels. Deducting their initial investment of ŘǰŖşŖǰŖŖŖȱŠŽ•œǰȱ‘ŽȱŠœœ˜˜—œȱ–ŠŽȱŠȱ™›˜ęȱ˜ȱŘŘǰŗşŖǰŖŖŖȱŠŽ•œǰȱŗŖǯŜȱ’–Žœȱ their capital investment, with an equivalent annual compound interest ›ŠŽȱ˜ȱŘŚȱ™Ž›ŒŽ—ȱǻ‘Ž—ȱŽ——’Š—ȱŠ—ȱ‘Š—ȱ‘˜—•’ȱŗşŞśǰȱŚŘǼǯ When buying and managing properties, the Sassoons carefully evaluated the locations, potential rental returns, and future prospects for Shanghai’s economy. Their purchase of land in the central district in 1911 illustrates how their strategies in the keenly competitive environment of ‘Žȱ‘Š—‘Š’ȱ›ŽŠ•ȱŽœŠŽȱ–Š›”Žȱ™Š’ȱ˜ěǯȱ—ȱŽ™Ž–‹Ž›ȱŗşŗŗǰȱ‘Žȱ‘Š—‘Š’ȱ˜ĜŒŽȱ˜ȱȱŠœœ˜˜—ȱŠ—ȱ˜–™Š—¢ȱ Šœȱ’—Ž›ŽœŽȱ’—ȱ‹ž¢’—ȱ›’’œ‘ȱ Consular Lot 233—Cadastral Lot 239 in the central district—on the north side of Nanjing Road. A group of nine Chinese individuals had bought the property for 340,000 yuan about four years before and had taken a –˜›ŠŽȱ˜—ȱ’ȱ˜ȱŘŜŖǰŖŖŖȱ¢žŠ—ǯȱ‘Ž¢ȱ˜ž—ȱ‘Ž–œŽ•ŸŽœȱ’—ȱꗊ—Œ’Š•ȱ’Ĝculties, owing several thousand taels in back interest on the mortgage for the property. Under pressure from the mortgagee, they agreed to sell the ™›˜™Ž›¢ȱ˜›ȱŘŝŖǰŖŖŖȱ¢žŠ—ǯȱŠœœ˜˜—Ȃœȱ‘Š—‘Š’ȱ˜ĜŒŽȱ›ŽŠ›Žȱ‘Žȱ™›˜™erty as “one of the very best localities with bright future prospects”—a ŸŽ›¢ȱ˜˜ȱ™ž›Œ‘ŠœŽǰȱŠ•‘˜ž‘ȱ‘Žȱ›Žž›—ȱ ˜ž•ȱ’ŸŽȱ‘Š›•¢ȱŜȱ™Ž›ŒŽ—ȱ—Žȱ Šȱ‘Žȱ™›’ŒŽȱ‘ŽȱŸŽ—˜›ȱ ŠœȱŠœ”’—ȱǻŠœœ˜˜—ȱ›Œ‘’ŸŽœǼǯȱ—ȱŒ˜‹Ž›ǰȱ ŠŒ˜‹ȱ Šœœ˜˜—ȱ’—ȱ˜—˜—ȱ’—œ›žŒŽȱ‘’œȱ‘Š—‘Š’ȱ˜ĜŒŽȱ˜ȱ›¢ȱ˜ȱ‹ž¢ȱ‘Žȱ•Š—ȱŠȱ ŘŜŖǰŖŖŖȱ¢žŠ—ȱ˜›ȱ•Žœœǰȱ ‘’Œ‘ȱ‘Žȱ‘Š—‘Š’ȱ˜ĜŒŽȱ˜ž—ȱ’–™˜œœ’‹•Žȱ˜ȱ˜Dzȱ ‘Žȱ‹Žœȱ˜ěŽ›ȱ’ȱ ŠœȱŠ‹•Žȱ˜ȱ—Ž˜’ŠŽȱ ŠœȱŘŜŜǰŖŖŖȱ¢žŠ—ǯȱŠœœ˜˜—ǰȱ‘Ž—ȱ’—ȱ ˜–‹Š¢ǰȱ Šœȱ’œœŠ’œęŽȱ ’‘ȱ‘’œȱ˜ěŽ›ǰȱ‹ŽŒŠžœŽȱ‘Žȱ ŠœȱŒ˜—ŒŽ›—Žȱ‘Šȱ the value of the property might decline because of the Revolution of 1911. ‘Žȱ‘Š—‘Š’ȱ˜ĜŒŽȱŒ˜ž—Ž›Žȱ‘’œȱŸ’Ž ǰȱœŠ’—DZ we have made enquiries from several old residents, property owners and agents, architects and others who are well informed and have great experience in property business, and they all agree that property here will not œžěŽ›ǰȱ‹žȱ˜—ȱ‘ŽȱŒ˜—›Š›¢ǰȱ ’••ȱ’–™›˜ŸŽȱ’—ȱŒ˜—œŽšžŽ—ŒŽȱ˜ȱ‘Žȱ›ŽŸ˜•ž’˜—ǰȱ Šœȱ˜ ’—ȱ˜ȱ‘Žȱ’œž›‹Š—ŒŽȱ’—ȱ‘Žȱ’—Ž›’˜›ȱ‘Ž›Žȱ’œȱŠȱ›ŽŠȱ’—Ěž¡ȱ˜ȱ—Š’ŸŽœȱ˜ȱ‘Žȱ˜›Ž’—ȱœŽĴ•Ž–Ž—œȱ˜ȱ‘Š—‘Š’ȱ ‘Ž›Žȱ›ŽŠ¢ȱ›’‘œȱŠ›Žȱ Ž••ȱ protected by all the treaty Powers; properties outside the limits of the œŽĴ•Ž–Ž—œȱ ’••ȱ˜ȱŒ˜ž›œŽȱœžěŽ›ǯȱ

’—Š••¢ǰȱ˜—ȱŗŘȱ Š—žŠ›¢ȱŗşŗŘǰȱ‘Žȱ‘Š—‘Š’ȱ˜ĜŒŽȱŒŠ‹•ŽȱŠœœ˜˜—ȱ’—ȱ˜–‹Š¢ȱ ‘Šȱ ’ȱ ‘Šȱ œžŒŒŽŽŽȱ ’—ȱ ‹ž¢’—ȱ ‘Žȱ ™›˜™Ž›¢ȱ ˜›ȱ ŘŜŚǰśŖŖȱ ¢žŠ—ȱ —Žǯȱ ›˜žȱ ˜ȱ ‘ŠŸ’—ȱ ˜ĴŽ—ȱ ™›˜™Ž›¢ȱ ȃ’—ȱ ‘Žȱ ‘ŽŠ›ȱ ˜ȱ ‘Žȱ ›’’œ‘ȱ œŽĴ•Ž–Ž—ȱ and in the best part of the most favorable road in Shanghai,” the Shanghai

ŜŘ

Tomoko Shiroyama

˜ĜŒŽȱ Šœȱ˜™’–’œ’Œǰȱ ›’’—ȱ˜ȱŠœœ˜˜—ȱ‘Šȱȃ’ȱ›ŽŠ•¢ȱŽ—‘Š—ŒŽœȱ‘Žȱ’—trinsic value and highly improves your property in Tianjin Road, which is just at the back of this lot.” As discussed earlier, the rising rental returns and land values in the set•Ž–Ž—œȱŠĞŽ›ȱŗşŗŗȱ™›˜ŸŽȱ‘Žȱ‘Š—‘Š’ȱ˜ĜŒŽȱ›’‘ǯȱ‘ŽȱŠœœ˜˜—œȱ ˜ž•ȱ –Š”ŽȱŠȱ•Š›Žȱ™›˜ęȱ›˜–ȱœŽ••’—ȱ‘’œȱ™›˜™Ž›¢ȱŠȱŽ ȱ¢ŽŠ›œȱ•ŠŽ›ǯȱŽŠ•ȱŽœŠŽȱ dealers could sell their assets whenever they found this advantageous, and some of them took that option. For example, in 1904 the Shanghai Š—ȱ —ŸŽœ–Ž—ȱ ˜–™Š—¢ȱ œ˜•ȱ Šȱ ™’ŽŒŽȱ ˜ȱ •Š—ȱ ˜›ȱ şśǰŖŖŖȱ ŠŽ•œǰȱ Šȱ ™›’ŒŽȱ –˜›Žȱ‘Š—ȱŽ—ȱ’–Žœȱ‘’‘Ž›ȱ‘Š—ȱ ‘Šȱ’ȱ‘Šȱ™Š’ȱ˜›ȱ‘Žȱ™ž›Œ‘ŠœŽȱ’—ȱŗŞşśǯȱ When the American company Asia Realty sold 3 muȱǻŠ™™›˜¡ǯȱŖǯŗŜŚŝȱŠŒ›ŽǼȱ ˜ȱ•Š—ȱ’—ȱ‘ŽȱŒŽ—›Š•ȱ’œ›’Œȱ’—ȱŗşŗşȱ˜›ȱśŘǰŖŖŖȱŠŽ•œȱ™Ž›ȱmu, which it had ˜›’’—Š••¢ȱ™ž›Œ‘ŠœŽȱ˜›ȱŚŚǰŗŜŜȱŠŽ•œȱ™Ž›ȱmu in the same year, the net prof’ȱ Š–˜ž—Žȱ ˜ȱ ŘśǰřŖŖȱ ŠŽ•œǰȱ ŽšžŠ•ȱ ˜ȱ Šȱ ŗŝǯŝƖȱ Œ˜–™˜ž—ȱ ›ŠŽȱ ˜ȱ ’—Ž›Žœȱ ǻ‘Š—‘Š’ȱŠ—’Œ‘Š—ȱ£‘’ȱ‹’Š—“’ȱ Ž’¢žŠ—‘ž’ȱŗşşşǰȱŗśřǼǯȱŸŽ—ȱ’ȱ›ŽŠ•ȱŽœŠŽȱ dealers intended to sell their own land, in the interim they were happy to build on it and lease the stock, from which they could receive handsome ™›˜ęœǯ The Sassoons, on the land that they purchased, built not only mag—’ęŒŽ—ȱ–Š—œ’˜—œȱ˜›ȱ‘Žȱ›’Œ‘ȱ‹žȱŠ•œ˜ȱ‘’—ŽœŽȬœ¢•Žȱ ˜›”Ž›œȂȱ‘˜žœŽœǰȱ‘Žȱ lilongȱǻž˜ȱž Ž—ȱŗşşŗǰȱŗřşDzȱž›Š–Šœžȱ‘’—ȱŗşşŗǰȱşřǼǯ Lilong were built Š••ȱ˜ŸŽ›ȱ‘ŽȱœŽĴ•Ž–Ž—œǰȱ˜›ȱ–Ž›Œ‘Š—œȱŠ—ȱŒ˜–™Š—¢ȱŽ–™•˜¢ŽŽœȱ’—ȱ‘ŽȱŒŽ—tral district, and for factory workers in the north and east districts (Mura–Šœžȱ ŗşşŗǰȱ ŞşȮşŘDzȱ ‘Š—‘Š’ȱ Š—’Œ‘Š—ȱ žŠ—•ħžȱ ŗşşřǰȱ śȮŘŖDzȱ ‘Š—‘Š’œ‘’ȱŠ—œ‘ž™žšžȱ›Ž—–’—ȱ£‘Ž—žȱŗşŞşǰȱŘŝşǼǯȱȱ˜›Ž’—ȱ›ŽŠ•ȱŽœŠŽȱŠŽ—ȱ —˜Žȱ‘Šȱ–Š—Š’—ȱ‘’—ŽœŽȬœ¢•Žȱ‘˜žœŽœȱ ŠœȱŽ¡›Ž–Ž•¢ȱ™›˜ęŠ‹•ŽǰȱŽŸŽ—ȱ though the buildings looked “suicidal” to Western people’s eyes. The stock of lilong houses, for which the rent ranged from 8 to 40 yuan per –˜—‘ǰȱ‘ŠȱŠȱ•˜ ȱŸŠŒŠ—Œ¢ȱ›ŠŽǰȱ›ŽŠ›•Žœœȱ˜ȱ̞ŒžŠ’˜—œȱŽ•œŽ ‘Ž›Žȱ’—ȱ‘Žȱ Œ’¢ȱǻ˜™‘Ž›ȱŠ—ȱ˜™‘Ž›ȱŗşřşǰȱŞŘȮŞřǼǯȱ As for the Sassoons, their rental income of 144,412 yuan from eight lilongȱ’—ȱŗşŗśȱ’—Œ›ŽŠœŽȱ˜ȱŗŜŜǰŚşŝȱ¢žŠ—ȱ’—ȱŗşŗşDzȱřŖŞǰŞŞşȱ¢žŠ—ȱ’—ȱŗşŘŜDzȱŠ—ȱ ŚśŗǰŚřŞȱ¢žŠ—ȱ’—ȱŗşřŗǰȱřǯŗřȱ’–Žœȱ–˜›Žȱ‘Š—ȱ’—ȱŗşŗśȱǻ‘Š—‘Š’ȱŠ—’Œ‘Š—ȱ £‘’ȱ ‹’Š—“’ȱ  Ž’¢žŠ—‘ž’ȱ ŗşşşǰȱ ŗŞŘǼǯȱ ‘Žȱ •žŒ›Š’ŸŽȱ •ŽŠœ’—ȱ ˜ȱ lilong was not restricted to the Sassoons: the British-owned Shanghai Land Investment ˜–™Š—¢ȱŠ•œ˜ȱœŠ ȱ›Ž—Š•ȱ’—Œ˜–ŽȱŠœȱŠȱ–Š“˜›ȱœ˜ž›ŒŽȱ˜ȱ™›˜ęȱ’—ȱ‘ŽȱŗşŘŖœǯ10 œȱ ꐞ›Žȱ řǯśȱ œ‘˜ œǰȱ ‘Žȱ ›ŠŽȱ ˜ȱ ’—Œ›ŽŠœŽȱ ’—ȱ ‘Žȱ ™›˜ęǰȱ  ‘’Œ‘ȱ –˜›Žȱ ‘Š—ȱ ŗŖȲȱ Not only in Shanghai but also in Tianjin, foreign real estate agencies constructed buildings to lease as residences. Charles Daniel Tenny, an American missionary, and a group of foreigners founded the Xiannong ‫ܜ‬䖆 Company in 1902. Taking advantage of his close tie  ’‘ȱ’ȱ ˜—£‘Ž—ǰȱŠȱ‘’‘Ȭ›Š—”’—ȱ˜ĜŒ’Š•ȱ˜ȱ‘Žȱ’—ȱŒ˜ž›ǰȱŽ——¢ȱ–ŠŽȱŠȱ‘Š—œ˜–Žȱ™›˜ęȱ from investment in Tianjin foreign concessions that were recovering from the devastation ŒŠžœŽȱ‹¢ȱ‘Žȱ˜¡Ž›ȱŽ‹Ž••’˜—ȱ’—ȱŗşŖŖȱǻŽ—œ‘’—ȱœ‘’ȱ”Ž—”¢Āȱ”Š’ȱŗşşşǰȱŗŚŗǼǯ

The Shanghai Real Estate Market

Ŝř

˜ž‹•Žȱž›’—ȱ‘’œȱ™Ž›’˜ǰȱ Šœȱ˜‹Ÿ’˜žœ•¢ȱ‘’‘Ž›ȱ‘Š—ȱ‘ŽȱŗşŘŖœȱ’—ĚŠ’˜—ȱ rate, around 10 percent. ’ž›Žȱřǯśǯȱ‘Š—‘Š’ȱŠ—ȱ—ŸŽœ–Ž—ȱ˜–™Š—¢Ȃœȱ›˜ęȱ›˜–ȱŽ—ǰȱŗşŘŗȮŗşřŖ řśŖǰŖŖŖǰŖŖŖȱ

řŖŖǰŖŖŖǰŖŖŖȱ



›˜œœȱ›˜’ȱ Žȱ›˜’ȱ

ŘśŖǰŖŖŖǰŖŖŖȱ

ŘŖŖǰŖŖŖǰŖŖŖȱ žŠ—ȱ ŗśŖǰŖŖŖǰŖŖŖȱ

ŗŖŖǰŖŖŖǰŖŖŖȱ

śŖǰŖŖŖǰŖŖŖȱ

Ŗȱ

ŗşŘŗȱ

ŗşŘŘ

ŗşŘřȱ

ŗşŘŚ

ŗşŘś

ŗşŘŜ

ŗşŘŝ

ŗşŘŞ

ŗşŘş

ŗşřŖȱ

ŽŠ›

Note:ȱ—œž›Š—ŒŽȱŽŽœȱŠ—ȱŒ‘Š›Žœȱ˜›ȱ ŠŽ›ȱœž™™•¢ȱŠ›Žȱ’—Œ•žŽȱ’—ȱ‘Žȱ›˜œœȱ™›˜ęǯȱ Source:ȱ‘Š—‘Š’ȱŠ—’Œ‘Š—ȱ£‘’ȱ‹’Š—“’ȱ Ž’¢žŠ—‘ž’ȱǻŗşşşǰȱŗŚśȮŗŚŜǼǯȱ

Hardoon: Mortgage and Urban Investment. The Sassoons established a model for operating in the real estate market, and their employees, both foreigners Š—ȱ‘’—ŽœŽǰȱ˜••˜ Žȱ‘Šȱ–˜Ž•ǯȱ—Žȱ˜ȱ‘Ž–ǰȱ’•ŠœȱŠ›˜—ȱ Š›˜˜—ǰȱ Šœȱ Š•œ˜ȱŠȱŠ‘Š’ȱ Ž ǯȱŠ’œŽȱ’—ȱ˜–‹Š¢ǰȱ‘Žȱ–˜ŸŽȱ˜ȱ‘Š—‘Š’ȱŸ’Šȱ ˜—ȱ

˜—ȱ’—ȱŗŞŝŚȱǻŽĴŠȱŗşşŝǰȱŗŗǼǯȱȱ‘Šȱ’–Žǰȱ‘ŽȱœŠ›ŽȱŠœȱŠȱ–Ž›Žȱ ŠŒ‘–Š—ȱ Š—ȱ›Ž—ȱŒ˜••ŽŒ˜›ȱ˜›ȱȱŠœœ˜˜—ȱŠ—ȱ˜–™Š—¢ǯȱ ˜ ŽŸŽ›ǰȱ‘Žȱ Šœȱœ˜˜—ȱ promoted to a position of responsibility, in which he bought land in unŽ›ŽŸŽ•˜™ŽȱŠ›ŽŠœȱ˜ȱ‘Žȱ˜›Ž’—ȱœŽĴ•Ž–Ž—œǯȱ—ȱŗŞşśǰȱ‘Žȱꛜȱ™ž›Œ‘ŠœŽȱ a large property in the central district. Continuing to increase his acquisition of land, he founded his own company in 1901 and achieved complete ’—Ž™Ž—Ž—ŒŽȱ›˜–ȱ‘ŽȱŠœœ˜˜—œȱŠ›˜ž—ȱŗşŗŗȱǻŽĴŠȱŗşşŝǰȱŗŖŖȮŗŖřǼǯȱ›˜–ȱ that point on, he successfully established himself as Shanghai’s major indiŸ’žŠ•ȱ•Š—˜ —Ž›ǯȱ ’œȱŠœœŽœȱŠ–˜ž—Žȱ˜ȱŚśŖȱmu of land, with 1,200 build’—œǰȱŸŠ•žŽȱŠȱŗśŖǰŖŖŖǰŖŖŖȱ¢žŠ—ȱ ‘Ž—ȱ‘Žȱ’Žȱ’—ȱŗşřŗȱǻŽĴŠȱŗşşŝǰȱŗŖşǼǯ

’œȱ –Š’—ȱ œ›ŠŽ¢ȱ ˜›ȱ ’—Œ›ŽŠœ’—ȱ ‘’œȱ ŠœœŽœȱ  Šœȱ ˜ȱ –˜›ŠŽȱ ™›˜™Ž›¢ȱ in the central district to raise funds for his continuing program of land ŠŒšž’œ’’˜—ǯȱ Žȱ ‘Šȱ Šȱ —ž–‹Ž›ȱ ˜ȱ ™›˜™Ž›’Žœȱ ˜—ȱ Š—“’—ȱ ˜Šǰȱ Š—ȱ ›˜–ȱ ‘ŽœŽȱŠœœŽœȱ‘ŽȱŽ—Ž›ŠŽȱ–˜œȱ˜ȱ‘’œȱ˜›ž—Žǯȱ ŽȱꛜȱŠŒšž’›ŽȱŠȱ™›˜™Ž›¢ȱ

ŜŚ

Tomoko Shiroyama

on Nanjing Road around 1901—the former site of the racecourse—in a segment of the central and western districts. In 1912, he bought a more valuable site in the central district part of Nanjing Road and mortgaged ‹˜‘ȱ˜ȱ‘ŽœŽȱ™›˜™Ž›’Žœȱ˜ȱž—ȱŠ—˜‘Ž›ȱ™ž›Œ‘ŠœŽȱǻŽĴŠȱŗşşŝǰȱŗŗŖȮŗŗŗǼǯȱ Žȱ repeated this process on many occasions over the following decades while –Š’—Š’—’—ȱ Œ•˜œŽȱ ›Ž•Š’˜—œȱ  ’‘ȱ ‘Žȱ ˜—ȱ ˜—ȱ ‘Š—‘Š’ȱ Š—”ȱ ˜›ȱ ‘Šȱ ™ž›™˜œŽȱǻ‘Š—‘Š’ȱŠ—’Œ‘Š—ȱ£‘’ȱ‹’Š—“’ȱ Ž’¢žŠ—‘ž’ȱŗşşşǰȱŗŚŞǼǯ11 Thus, he bought properties in the central district along Nanjing Road and in other Š›ŽŠœȱœžŒ‘ȱŠœȱŠ•˜—ȱ’Œ‘žŠ—ȱŠ—ȱ Š—”˜žȱ˜Šœǯȱ ŽȱŠ•œ˜ȱ‹˜ž‘ȱ™›˜™Ž›’Žœȱ ’—ȱ ‘Žȱ  ŽœŽ›—ȱ ’œ›’Œȱ ǻŽĴŠȱ ŗşşŝǰȱ ŗŗŚȮŗŗśǼǯȱ ȱ ’œȱ œ’—’ęŒŠ—ȱ ‘Šȱ ‘’œȱ ’—ŸŽœ–Ž—œȱŽ˜›Š™‘’ŒŠ••¢ȱ˜••˜ Žȱ‘ŽȱŽŸŽ•˜™–Ž—ȱ˜ȱ‘ŽȱœŽĴ•Ž–Ž—œǰȱ starting in the central district and proceeding westward. In other words, he reinvested in up-and-coming districts the wealth he had generated from his investments in the central district. —ȱ–žŒ‘ȱ˜ȱ‘Žȱ•Š—ȱ‘Šȱ Š›˜˜—ȱ‹˜ž‘ǰȱ‘Žȱ‹ž’•ȱlilong for lease. In some cases, he leased his land to other developers. Dividing the roles of buying and developing property was another popular way to manage real estate, as illustrated in the following case, of Cheng Jinxuan ⿟䄍䒦. Cheng Jinxuan: Renting Land for Development. Cheng Jinxuan, who later was called the “king of real estate,” started his career as a comprador for the Sassoons. Noticing that one of the buildings he managed was in bad con’’˜—ǰȱ‘Žȱ–ŠŽȱŠ—ȱ˜ěŽ›ȱ˜ȱ‘ŽȱŠœœ˜˜—œȱ˜ȱŒ˜—œ›žŒȱŠȱ—Ž ȱ‹ž’•’—ȱ˜—ȱ‘Žȱ œ’Žǯȱ Žȱ›Ž—Žȱ‘Žȱ•Š—ȱ›˜–ȱ‘ŽȱŠœœ˜˜—œȱ˜›ȱŠȱŽ›–ȱ˜ȱ Ž—¢Ȭ꟎ȱ¢ŽŠ›œǯȱ The rent per room of the old building was only 2 to 3 yuan, but he was able ˜ȱŒ‘Š›Žȱ˜ž‹•Žȱ‘’œȱ˜›ȱ›˜˜–œȱ’—ȱ‘’œȱ›Ž™•ŠŒŽ–Ž—ȱ‹ž’•’—ǯȱ ŠŸ’—ȱ™Š’ȱ ˜›ȱ‘ŽȱŒ˜—œ›žŒ’˜—ȱ’—ȱ ˜ȱ¢ŽŠ›œǰȱ‘Ž—ȱ–ŠŽȱ•Š›Žȱ™›˜ęœȱ›˜–ȱ‘ŽȱŽŠ•ȱ for another twenty-three years (Shanghai fangdichan zhi bianji weiyuan‘ž’ȱŗşşşǰȱŗŞşǼǯȱ˜™’—ȱŠȱœ’–’•Š›ȱ–Ž‘˜ȱ˜ȱ Š›˜˜—Ȃœǰȱ‘Ž—ȱžœŽȱ‘’œȱ ŽŠ›•¢ȱ™›˜ęœȱ˜ȱ’—Œ›ŽŠœŽȱ‘’œȱŠœœŽœȱ’—ȱ‘Žȱ ŽœŽ›—ȱ™Š›ȱ˜ȱ‘ŽȱŒŽ—›Š•ȱ’œ›’Œǰȱ for example, near Xizang Road (Zhongguo renmin zhengzhi xieshang ‘ž’¢’ȱ‘Š—‘Š’œ‘’ȱ Ž’¢žŠ—‘ž’ȱŠ—ȱŽ—œ‘’ȱ£’•’Š˜ȱ Ž’¢žŠ—‘ž’ȱŗşŞşǰȱŜşǼǯ Cheng’s success was not unique. Sun Chunsheng ᄿ᯹⫳, who entered a ›’’œ‘ȱꛖǰȱ‘Žȱ‘Š—‘Š’ȱŽŠ•ȱœŠŽȱ˜–™Š—¢ǰȱŠȱ‘ŽȱŠŽȱ˜ȱęЎŽ—ǰȱ˜ž—Žȱ his own real estate company, Jinxing yingye gongsi 䣺㟜➳ὁ݀ৌǰȱ’—ȱŗşŘśǰȱ  ‘Ž—ȱ‘Žȱ Šœȱ˜—•¢ȱ Ž—¢Ȭœ’¡ǯȱ—ȱŗşŘşǰȱ‘Žȱ˜˜”ȱ˜žȱŠȱ Ž—¢Ȭ꟎Ȭ¢ŽŠ›ȱ•ŽŠœŽȱ ˜—ȱŠȱœ’Žȱ‹Ž ŽŽ—ȱ žŠ—˜—ȱŠ—ȱ Ž—Š—ȱ˜Šœǰȱ’—ȱ‘ŽȱŽŠœŽ›—ȱ™Š›ȱ˜ȱ‘Žȱ central district, in the middle of the most prosperous commercial area. Even before the building was constructed, demand was such that he was able to let Other foreign real estate agents also depended on loans from foreign banks. For example, from 1921 onward, the Shanghai Land Investment Company borrowed from 1,000,000 to şǰŖŖŖǰŖŖŖȱ¢žŠ—ȱŠ——žŠ••¢ȱ›˜–ȱ‘Žȱ ˜—ȱ ˜—ȱ‘Š—‘Š’ȱŠ—”ǯ ŗŗȲȱ

The Shanghai Real Estate Market

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the rooms. In less than three years, his constructions costs were paid, and Sun Ž—“˜¢Žȱœ›˜—ȱ™›˜ęœȱ˜›ȱ‘Žȱ Ž—¢Ȭ‘›ŽŽȱ¢ŽŠ›œȱ‘Šȱ›Ž–Š’—Žȱ˜ȱ‘Žȱ•ŽŠœŽȱ ™Ž›’˜ȱǻ‘Š—‘Š’ȱŠ—’Œ‘Š—ȱ£‘’ȱ‹’Š—“’ȱ Ž’¢žŠ—‘ž’ȱŗşşşǰȱŚŚśǼǯ Separating the ownership of land and the construction of a building on the site—zudizaowu ⾳ഄ䗴ሟ—was a popular way to develop properties. Š—˜ —Ž›œȱ˜ž—ȱ‘’œȱ™›ŠŒ’ŒŽȱŠĴ›ŠŒ’ŸŽǰȱ‹ŽŒŠžœŽȱ‘Ž¢ȱŒ˜ž•ȱŽŠ›—ȱ›Ž—Š•ȱ ’—Œ˜–Žȱ›˜–ȱ‘Ž’›ȱ•Š—ȱ ’‘˜žȱ‘ŽȱŽě˜›ȱ˜ȱŒ˜••ŽŒ’—ȱ›Ž—ȱ›˜–ȱ›˜˜–ȱŽ—ants. As was the custom in Shanghai, the building was given to the land˜ —Ž›ȱ ‘Ž—ȱ‘Žȱ•ŽŠœŽȱŽ—Žǰȱ ‘’Œ‘ȱ–ŠŽȱ‘ŽȱŽŠ•ȱŽŸŽ—ȱ–˜›Žȱ™›˜ęŠ‹•Žȱ for landowners. Though the owner of the building lost it at the end of the lease, the practice was also advantageous for him or her. First, the building owner could accumulate from room rents the large amount of money —ŽŽŽȱ ˜ȱ ‹ž¢ȱ •Š—ǰȱ  ‘’Œ‘ȱ  Šœȱ žœžŠ••¢ȱ ™˜œœ’‹•Žȱ ŽŸŽ—ȱ ŠĞŽ›ȱ ™Š¢’—ȱ ‘Žȱ costs of construction and the lease. Not only famous Chinese dealers such as Cheng Jinxuan and Sun Chunsheng, but also businesspeople and shopkeepers participated in the real estate industry by constructing and letting buildings on leased land (Zhongguo renmin zhengzhi xieshang huiyi ‘Š—‘Š’œ‘’ȱ Ž’¢žŠ—‘ž’ȱŠ—ȱŽ—œ‘’ȱ£’•’Š˜ȱ Ž’¢žŠ—‘ž’ȱŗşŞşǰȱśŘȮŜŜǼǯ Because of the foreign backdrop of the property venture, compradors  Ž›ŽȱŠ–˜—ȱ‘Žȱꛜȱ˜ȱ™Š›’Œ’™ŠŽǯȱ—ŽȱŠ–˜žœȱŒ˜–™›Š˜›ǰȱžȱž—ȱᕤ┸, –ŠŽȱ™›˜ęœȱ˜ȱ–˜›Žȱ‘Š—ȱŗŖŖǰŖŖŖȱ¢žŠ—ȱ‹¢ȱ›Ž—’—ȱ–˜›Žȱ‘Š—ȱŗǰŖŖŖȱ™•ŠŒŽœǯȱ ‘ŽȱŠ–’•’Žœȱ˜ȱ‘’‘Ȭ›Š—”’—ȱ˜ĜŒ’Š•œȱŠ•œ˜ȱ‹ŽŒŠ–Žȱ’—Ÿ˜•ŸŽȱ’—ȱ›ŽŠ•ȱŽœŠŽDZȱ ’ȱ ˜—£‘Š—Ȃœȱᴢ匏ゴ family had the British company Alger manage his property on Nanjing West Road, and Sheng Xuanhuai’s ⲯᅷ់ children contracted with another company, Luis and Company, to handle the property in the middle of the city that they had inherited from their father ǻ‘Š—‘Š’ȱŠ—’Œ‘Š—ȱ£‘’ȱ‹’Š—“’ȱ Ž’¢žŠ—‘ž’ȱŗşşşǰȱŗŞŞǼǯ A businessman who engaged in the real estate business in Shanghai recalls that by the end of the 1940s, more than three thousand Chinese ŽŠŒ‘ȱ˜ —Žȱ–˜›Žȱ‘Š—ȱŗǰŖŖŖȱœšžŠ›Žȱ–ŽŽ›œȱǻŠ™™›˜¡ǯȱŗŖǰŝŖŖȱœšžŠ›ŽȱŽŽǼȱ ˜ȱ ™›˜™Ž›¢ȱ ’—ȱ ‘Žȱ Œ’¢ǯȱ ‹˜žȱ ŗŜŖȱ –Ž–‹Ž›œȱ ˜ȱ ‘’œȱ ›˜ž™ȱ ŽŠŒ‘ȱ ˜ —Žȱ more than 10,000 square meters, and thirty each owned more than 30,000 square meters (Zhongguo renmin zhengzhi xieshang huiyi Shanghaishi  Ž’¢žŠ—‘ž’ȱŠ—ȱŽ—œ‘’ȱ£’•’Š˜ȱ Ž’¢žŠ—‘ž’ȱŗşŞşǰȱŗŚȮŗśǼǯȱ•‘˜ž‘ȱ˜›Ž’—ȱ ›ŽŠ•ȱŽœŠŽȱŠŽ—œȱ™•Š¢Žȱ’–™˜›Š—ȱ›˜•Žœȱ’—ȱ›Š’—ȱ›ŽŠ•ȱŽœŠŽȱ’—ȱ‘ŽȱœŽĴ•Žments, they did not monopolize the industry. On the contrary, for Chinese entrepreneurs, real estate transactions and the management of industrial and commercial enterprises were closely integrated. Real Estate as a Source of Credit for Enterprises Chinese entrepreneurs were particularly interested in real estate in the ˜›Ž’—ȱœŽĴ•Ž–Ž—œȱ‹ŽŒŠžœŽȱ›ŽŠ•ȱŽœŠŽȱŸŠ•žŽœȱ Ž›Žȱ›žœŽȱ‹¢ȱ‘Š—‘Š’Ȃœȱ

ŜŜ

Tomoko Shiroyama

ꗊ—Œ’Š•ȱ˜›Š—’£Š’˜—œǰȱŠ—ȱ‘Žȱ’•ŽȱŽŽœȱ Ž›ŽȱŽŠœ’•¢ȱ̘ŠŽȱ˜—ȱꗊ—Œ’Š•ȱ –Š›”Žœǯȱ—ȱ‘Žȱ™›Ž Š›ȱ‘Š—‘Š’ȱꗊ—Œ’Š•ȱ–Š›”Žǰȱ’•ŽȱŽŽœȱ˜›ȱ•Š—ȱ’—ȱ ‘Žȱ˜›Ž’—ȱœŽĴ•Ž–Ž—œȱ Ž›Žȱ‘Žȱ–˜œȱ‘’‘•¢ȱŽœŽŽ–ŽȱŒ˜••ŠŽ›Š•ȱǻ’—Š–’ȱ Š—œ‘ĀȱŽœžçȱ”Š‹žœ‘’”’ȱ”Š’œ‘ŠȱŒ‘眊‹žȱŗşŚřŠǰȱŗŗǰȱŚŜǼǯȱ›žœȱ’—ȱ‘Žȱ›ŽŠ•ȱ ŽœŠŽȱŸŠ•žŽœȱ’—ȱ‘Š—‘Š’Ȃœȱ˜›Ž’—ȱœŽĴ•Ž–Ž—œȱŒ˜——ŽŒŽȱ›ŽŠ•ȱŽœŠŽȱŠ—ȱ ꗊ—Œ’Š•ȱ–Š›”ŽœǯȱŽŽ‘Š–ȱ™˜’—Žȱ˜žȱ‘’œȱ›Ž•Š’˜—œ‘’™ȱŠœȱ˜••˜ œDZȱ ‘Žȱ›ŽŠȱ™’•Žœȱ˜ȱ‹Š—”œǰȱ˜ĜŒŽœȱŠ—ȱ Š›Ž‘˜žœŽœȱŠ•˜—ȱ‘Žȱž—ǰȱŠœȱœŽŽ—ȱ from the deck of an ocean liner steaming up the river, are at once recognized by the newcomer as evidence of the wealth and enterprise of Shanghai, and of the belief which its merchants and citizens have in its žž›Žǯȱžȱ‘Ž¢ȱ‘ŠŸŽȱŠȱŽŽ™Ž›ȱŽŒ˜—˜–’Œȱœ’—’ęŒŠ—ŒŽȱ‘Š—ȱ‘’œDzdz‘Šȱ’œǰȱ the fact that land is held on titles of unquestioned validity and is immune from the risk of illegal exaction—has not only given faith and courage ˜ȱ •˜ŒŠ•ȱ ’—ŸŽœ˜›œǰȱ ‹žȱ ‘Šœȱ Š•œ˜ȱ ‘Šȱ ‹Ž—ŽęŒ’Š•ȱ ›Žœž•œȱ ’—ȱ Šȱ –žŒ‘ȱ  ’Ž›ȱ sphere. It has been one of the factors in enabling Shanghai to function Šœȱ‘Žȱꗊ—Œ’Š•ȱŒŽ—Ž›ȱ˜›ȱŠȱ›ŽŠȱ™Š›ȱ˜ȱ‘’—Šǰȱ ‘’Œ‘ȱ ‘’•Žȱ’ȱŠĴ›ŠŒœȱ large sums of money for investment from outside, also mobilizes credit by providing, in the shape of assets safely held within its borders, a basis of trading operations not only in Shanghai itself, and in adjacent areas, ‹žȱŠ•œ˜ȱ’—ȱ’œŠ—ȱ™Š›œȱ˜ȱ‘ŽȱŒ˜ž—›¢ǰȱ ‘Ž›Žȱ•ŽŠ•ȱ›’‘œȱŠ›Žȱ˜ĞŽ—ȱž—ŒŽ›Š’—ȱ˜›ȱ‘Ž•ȱ˜ȱœ–Š••ȱŠŒŒ˜ž—ǰȱŠ—ȱŒ˜—’’˜—œȱŠ›Žȱ˜ĞŽ—ȱœ˜ȱ’œž›‹ŽȱŠœȱ ˜ȱŠ–’ȱ˜ȱ•’Ĵ•Žȱ˜›ȱ—˜ȱœŽŒž›’¢ȱ˜›ȱŽ’‘Ž›ȱ™Ž›œ˜—ȱ˜›ȱ™›˜™Ž›¢ǯȱǻŗşřŗǰȱřŗŝǼ

Feetham’s insights were echoed by Yang Yinpu ἞㬁⑹, a professor at Guanghua ‫ܝ‬㧃 University who specialized in banking and monetary sysŽ–œǯȱŠ—ȱ—˜Žȱ‘Šȱ•Š—ȱ’—ȱ‘Š—‘Š’Ȃœȱ˜›Ž’—ȱœŽĴ•Ž–Ž—œȱ‘Šȱ ˜ȱœ’—’ęŒŠ—•¢ȱŽœ’›Š‹•ŽȱŽŠž›ŽœDZȱ•ŽŠ•ȱœŽŒž›’¢ȱŠ—ȱ•’šž’’¢ǯȱœȱ˜ȱœŽŒž›’¢ǰȱ‘Žȱ accurate measurement of the property and the legal protection provided by this system were highly regarded by both foreigners and Chinese. At the same time, the perpetual rise in land values made investment in land ŠĴ›ŠŒ’ŸŽǯȱŽŒŠžœŽȱ‘Žȱ’•ŽȱŽŽœȱ˜ȱœŽĴ•Ž–Ž—ȱ™›˜™Ž›¢ȱ Ž›Žȱ ’Ž•¢ȱŠŒŒŽ™Žȱ‹¢ȱꗊ—Œ’Š•ȱ˜›Š—’£Š’˜—œȱ’—ȱ‘Š—‘Š’ǰȱ‘ŽœŽȱ˜›Š—’£Š’˜—œȱ›ŽŠ’•¢ȱ Ž¡Œ‘Š—Žȱ‘ŽȱŽŽȱ˜ȱŠȱ™›˜™Ž›¢ȱ’—ȱŠ—¢ȱ˜›Ž’—ȱœŽĴ•Ž–Ž—ȱ˜›ȱŒŠœ‘ǯȱŠ—ȱ œ›ŽœœŽȱ‘Šȱ‘Žȱ›ŽŠ•ȱŽœŠŽȱ–Š›”Žȱ Šœȱ’—Ž›ŠŽȱ ’‘ȱ‘Žȱ‘Š—‘Š’ȱꗊ—Œ’Š•ȱ–Š›”Žȱǻ’—Š–’ȱŠ—œ‘ĀȱŽœžçȱ”Š‹žœ‘’”’ȱ”Š’œ‘ŠȱŒ‘眊‹žȱŗşŚř‹ǰȱ ŗŖȮŗŗǼǯ ˜›Ž’—ȱ‹Š—”œǰȱ’—ȱ™Š›’Œž•Š›ǰȱŠŸ˜›Žȱ•Š—ȱ’—ȱ‘Žȱ˜›Ž’—ȱœŽĴ•Ž–Ž—œȱŠœȱ collateral. Businesspeople considered title deeds equivalent to securities in other countries, since they could easily be rediscounted at foreign banks. Although foreign banks hesitated to lend money directly to individual Chinese customers, foreign real estate agents would handle mortgage business with foreign banks for Chinese clients. Real estate agents ap™•’Žȱ˜ȱ‹Š—”œȱ˜›ȱ–˜›ŠŽœȱ ’‘ȱ‘ŽȱŒ˜••ŠŽ›Š•ȱ‘Šȱ‘Ž¢ȱ‘Šȱ‹ŽŽ—ȱ˜ěŽ›Žȱ by their Chinese customers, and the agents re-lent with commission the

The Shanghai Real Estate Market

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money that they had borrowed from the banks. In 1930, fourteen foreign Š—ȱ‘’—ŽœŽȱ‹Š—”œȱ˜ —Žȱ›ŽŠ•ȱŽœŠŽȱŸŠ•žŽȱŠȱŗŘŗǰŘŞřǰŜřŗȱŠŽ•œǰȱ ‘’Œ‘ȱ formed half of their collateral holdings. Real estate credits were important for Chinese banks, which depended on foreign banks for working capital. Chinese banks also accepted real estate mortgages, which constituted half ˜ȱ‘Ž’›ȱŒ˜••ŠŽ›Š•Ȭ‹ŠŒ”Žȱ•˜Š—œȱǻŽŽ‘Š–ȱŗşřŗǰȱŗŖŞȮŗŖşǼǯȱ¢ȱŒ˜—ŸŽ—’˜—ȱ’—ȱ ‘Žȱ‘Š—‘Š’ȱꗊ—Œ’Š•ȱ–Š›”ŽǰȱŠ‹˜žȱŞŖȱ™Ž›ŒŽ—ȱ˜ȱ‘Žȱ–Š›”ŽȱŸŠ•žŽȱ˜ȱ›ŽŠ•ȱ ŽœŠŽȱ Šœȱ˜ěŽ›Žȱ˜ȱŠȱ‹˜››˜ Ž›ȱ˜—ȱ‘ŽȱŒ˜—’’˜—ȱ‘Šȱ‘Žȱ‹˜››˜ Ž›ȱ™Š¢ȱ ‘ŽȱŠ——žŠ•ȱ’—Ž›Žœȱ›ŠŽȱ˜ȱŝȱ˜ȱşȱ™Ž›ŒŽ—ȱǻ’—Š–’ȱŠ—œ‘ĀȱŽœžçȱ”Š‹žœ‘’”’ȱ”Š’œ‘Šȱ‘Š—‘Š’ȱ“’–žœ‘˜ȱŒ‘眊‹žȱŗşŚŘȮŗşŚřǼǯ The mortgaging of real estate was an important way for Shanghai entrepreneurs to raise funds for their businesses. Since the market for stock or company bonds had not been developed in China, credit secured with real estate was crucial. When factory managers needed to borrow large amounts of money, ‘Ž¢ȱ˜ěŽ›Žȱ‘ŽȱŠŒ˜›¢ȱœ’Žǰȱ‘Žȱ‹ž’•’—ǰȱŠ—ȱ‘Žȱę¡ŽȱŽšž’™–Ž—ȱ‘Ž¢ȱ had already bought as security for the loan. The loan contract between the Shenxin ⬇ᮄȱŒ˜Ĵ˜—ȱ–’••ȱŠ—ȱŠȱ›˜ž™ȱ˜ȱ‘›ŽŽȱ‹Š—”œȯ‘ŽȱŠ—”ȱ˜ȱ‘’—Šǰȱ the Shanghai Commercial and Savings Bank, and Yongfeng qianzhuang ∌䈤䣶㥞—illustrates how credit was secured through the mortgaging of ™›˜™Ž›¢ȱǻ‘Ž—¡’—ȱŠ—£‘’ȱ£˜—žŠ—•’Œ‘žȱŠ—Š—Ǽǯȱ The contract started with the exchange of information on sale and profit by the parties. This entailed listing as the creditor not only the creditor’s manager but his legal deputy, the shareholders and their heirs, and the shareholders’ deputies. A similar list followed for the debtor—in this case, ‘ŽȱŒ˜Ĵ˜—ȱ–’••ȯ ‘’Œ‘ȱ’—Œ•žŽȱ‘Žȱœ‘Š›Ž‘˜•Ž›œǰȱ‘Žȱœ‘Š›Ž‘˜•Ž›œȂȱ‘Ž’›œǰȱ and the shareholders’ deputies. The contract initiated collecting the money that the creditor was lending to the debtor; each of the three banks lent śŖŖǰŖŖŖȱŠŽ•œǯȱ‘ŽȱŠŒ˜›¢ȱœ’Žœǰȱ‹ž’•’—œǰȱ–ŠŒ‘’—ŽœǰȱŠ—ȱž—œ˜•ȱ™›˜žŒœȱ •’œŽȱ’—ȱ‘ŽȱŠ‹•ŽœȱŠĴŠŒ‘Žȱ˜ȱ‘ŽȱŒ˜—›ŠŒȱŒ˜ž—ŽȱŠœȱŒ˜••ŠŽ›Š•ǯȱ‘ŽȱŒ˜—›ŠŒȱ‘Ž—ȱœŽȱ˜žȱŠȱ•’œȱ˜ȱ Ž—¢ȱ–ŠĴŽ›œǰȱ ‘’Œ‘ȱ–˜œ•¢ȱŒ˜—ŒŽ›—Žȱ‘›ŽŽȱ issues: property rights, the repayment of principal and interest, and penalties for any violation of the terms. Once the contract was drawn up, the creditor could claim property rights over the collateral under the agreed terms. Before signing the contract, the debtor was required to transfer the title deeds to the creditor, to deliver the documents to the creditor, and to agree that the creditor would have ownership rights to machinery and unsold products (term ŗǼǯ12 When the creditor found it necessary to register the transfer of rights ŗŘȲȱ By custom in Shanghai businesses, banks required debtors to transfer title deeds before ‘Žȱ ›’’—ȱ˜ȱŒ˜—›ŠŒœǯȱ ˜ ŽŸŽ›ǰȱ’ȱ‹Š—”œȱ›ŽŠ›ŽȱŽ‹˜›œȱŠœȱ›žœ ˜›‘¢ǰȱ‘Žȱ’—œ’ž’˜—œȱ  ˜ž•ȱ Š••˜ ȱ ‘Ž–ȱ ˜ȱ œž‹–’ȱ ‘Žȱ ’•Žȱ ŽŽœȱ ŠĞŽ›ȱ œ’—’—ȱ ‘Žȱ Œ˜—›ŠŒȱ ǻŠ—ȱ œ‘Ž—ȱ ŗşřřǰȱ ŚşȮśŖǼǯȱ ‘Žȱ Œ˜—›ŠŒȱ ‹Ž ŽŽ—ȱ ‘Ž—¡’—ȱ Š—ȱ ‘Žȱ ›˜ž™ȱ ˜ȱ ‹Š—”œȱ  Šœȱ Šȱ ȃ˜›–Š•Ȅȱ ŸŽ›œ’˜—ȱ ˜ȱ

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Tomoko Shiroyama

over the real estate, machinery, and inventory in the Shanghai courthouse, ‘ŽȱŽ‹˜›ȱ‘Šȱ˜ȱ˜ȱœ˜ȱ‹¢ȱ™Š¢’—ȱ˜›ȱ‘Žȱ›Ž’œ›Š’˜—ȱŽŽȱǻŒ•ŠžœŽȱŗŘǼǯȱ‘Žȱ debtor also had to declare that all the collateral was already paid for in full Š—ȱ Šœȱ—˜ȱ–˜›ŠŽȱ˜ȱŠȱ‘’›ȱ™Š›¢ȱǻŽ›–ȱŜǼǯȱ‘ŽȱŽ›–ȱ˜ȱ‘ŽȱŒ˜—›ŠŒȱ was set at one year—in this case, from the date of signing until 11 November 1933. The debtor could not mortgage or rent out any of the collateral ˜ȱŠ—˜‘Ž›ȱ™Š›¢ȱ‹Ž˜›Žȱ‘ŽȱŒ˜—›ŠŒȱŽ¡™’›Žȱ ’‘˜žȱ‘ŽȱŒ›Ž’˜›Ȃœȱ ›’ĴŽ—ȱ Œ˜—œŽ—ȱ ǻŽ›–ȱ ŗŚǼǯȱ ‘Žȱ Ž‹˜›ȱ Š›ŽŽȱ ‘Šȱ ‹Žœ’Žœȱ ‘Žȱ ˜›’’—Š•ȱ Œ˜••ŠŽ›Š•ȱ •’œŽȱ’—ȱ‘ŽȱŠ‹•ŽœȱŠĴŠŒ‘Žȱ˜ȱ‘ŽȱŒ˜—›ŠŒǰȱŠ••ȱ™›˜™Ž›’ŽœȱŠŽȱ‘Ž›ŽŠŽ›ȱ˜ȱ‘Žȱ‘Ž—¡’—ȱ˜ǯȱśȱŠŒ˜›¢ȱ ˜ž•ȱŠ•œ˜ȱ‹Žȱ–˜›ŠŽȱ˜ȱ‘ŽȱŒ›Ž’˜›ȱ ǻŽ›–ȱŘǼǯȱœȱ‘Žȱ™›˜™Ž›¢ȱ›’‘œȱ˜ȱŠ••ȱ˜ȱ‘ŽȱŒ˜••ŠŽ›Š•ȱ’Ž–œȱ‹Ž•˜—Žȱ˜ȱ‘Žȱ creditor, the debtors would have to rent the equipment from the creditor  ‘Ž—ŽŸŽ›ȱ‘Ž¢ȱžœŽȱ’ǰȱ’—ȱ‘ŽȱŽŸŽ—ȱ˜ȱŠȱŽŠž•ȱǻŽ›–ȱśǼǯȱȱ›Ž—Š•ȱŒ˜—›ŠŒȱ (zujie qiyue ⾳‫׳‬༥㋘Ǽȱ  Šœȱ Š•œ˜ȱ ŠĴŠŒ‘Žȱ ˜ȱ ‘Žȱ Ž‹ȱ Œ˜—›ŠŒDzȱ ’ȱ ŽŒ•Š›Žȱ ‘Šǰȱ ž—Ž›ȱ ‘˜œŽȱ Œ’›Œž–œŠ—ŒŽœǰȱ ‘Žȱ Œ›Ž’˜›ȱ ǻ‘Žȱ ›˜ž™ȱ ˜ȱ ‘›ŽŽȱ ‹Š—”œǼȱ  ˜ž•ȱ•Žȱ˜ȱ‘ŽȱŽ‹˜›ȱǻ‘Ž—¡’—ǼȱŠ••ȱ˜ȱ‘ŽȱŒ˜••ŠŽ›Š•ȱ’Ž–œȱ ’‘˜žȱŒ‘Š›ing any interest.13 There were also regulations concerning the payment of principal and interest. The entire sum of the loan was given to the debtor at the signing ˜ȱ‘ŽȱŒ˜—›ŠŒȱǻŽ›–ȱřǼǯȱŸŽ›¢ȱ–˜—‘ǰȱ‘ŽȱŽ‹˜›ȱ ˜ž•ȱŠ••˜ ȱ‘ŽȱŒ›Ž’˜›ȱ˜ȱŽ¡Š–’—Žȱ‘’œȱꗊ—Œ’Š•ȱ›ŽŒ˜›œȱǻŽ›–ȱŗŗǼǯȱ‘Žȱ’—Ž›Žœȱ›ŠŽȱ˜ȱ‘Žȱ•˜Š—ȱ  ˜ž•ȱ‹ŽȱŞǯŝśȱŠŽ•œȱ™Ž›ȱŗǰŖŖŖȱŠŽ•œ per month. The interest would be paid once every three months. If the debtor did not pay the interest on time, the unpaid amount would be added to the principal. The creditor would allow the debtor two weeks to pay the original interest plus the added interest for the extended period. If the debtor could not pay this amount back within two weeks, the creditor would execute his right as provided ’—ȱ‘ŽȱŒ˜—›ŠŒȱǻŽ›–ȱŚǼǯ ȱ‘ŽȱŽ‹˜›ȱŒ˜––’ĴŽȱŠ—¢ȱ˜ȱ‘Žȱ˜••˜ ’—ȱŠŒœǰȱ‘ŽȱŒ›Ž’˜›ȱ ŠœȱŽ—titled to ask the court to let, sell, or auction the collateral without notifying ‘ŽȱŽ‹˜›ȱǻŽ›–ȱŗŜǼDZȱǻŗǼȱŠ’•’—ȱ˜ȱ›Ž™Š¢ȱ‘Žȱ™›’—Œ’™Š•ȱŠȱ‘ŽȱŽ—ȱ˜ȱ‘ŽȱŒ˜—›ŠŒDzȱǻŘǼȱŠ’•’—ȱ˜ȱ™Š¢ȱ’—Ž›ŽœȱŠ—ȱ˜‘Ž›ȱ—ŽŒŽœœŠ›¢ȱŽ¡™Ž—œŽœȱ ’‘’—ȱ ˜ȱ  ŽŽ”œȱ˜ȱ‘Ž’›ȱžŽȱŠŽDzȱǻřǼȱŽŒ•Š›’—ȱ‘’–œŽ•ȱ‹Š—”›ž™Dzȱ˜›ȱǻŚǼȱŸ’˜•Š’—ȱ any other term of the contract. Upon the debtor’s default, if the collateral items were let, the debtor Œ˜ž•ȱ—˜ȱŒ•Š’–ȱŠ—¢ȱ›’‘œȱ˜ȱ‘Žȱ›Ž—Š•ȱ’—Œ˜–ŽȱǻŽ›–ȱŗŝǼǯȱ›˜–ȱ‘Žȱ™›˜ceeds of the sale or auction of the collateral, the creditor could deduct any expenses he may have incurred before taking the receipts of the sale or auction as payment of the principal owned by the debtor. Any excess Shanghai mortgage. ŗřȲȱ The rental of factory equipment by debtors was a common practice in Shanghai (Yan œ‘Ž—ȱŗşřřǰȱśŗǼǯ

The Shanghai Real Estate Market

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ŒŠ™’Š•ȱ ˜ž•ȱ‹Žȱ›Žž›—Žȱ˜ȱ‘ŽȱŽ‹˜›ǯȱ ˜ ŽŸŽ›ǰȱ’ȱ‘ŽȱŠ–˜ž—ȱŒ˜••ŽŒŽȱ from the sale or auction was less than a full repayment, the debtor would ‘ŠŸŽȱ˜ȱ–Š”Žȱ˜˜ȱ‘Žȱ’쎛Ž—ŒŽȱǻŽ›–ȱŗŞǼǯȱȱ‘ŽȱŒ›Ž’˜›ȱŽŒ’Žȱ—˜ȱ˜ȱ sell the collateral, the debtor would have to repay the principal immediately. The debtor could not urge the creditor to sell or auction the collateral ǻŽ›–ȱŗşǼǯ14 When the debtor repaid the principal and interest in full, the creditor would return the collateral, but if the debtor failed to repay any part of the principal and interest, the creditor could refuse to return the Œ˜••ŠŽ›Š•ȱǻŽ›–ȱŘŖǼǯ ‘Žȱꗊ•ȱ™Š›ȱ˜ȱ‘ŽȱŒ˜—›ŠŒȱœŠŽȱ‘Šȱ˜—Žȱ˜ȱ‘Žȱ꟎ȱŒ˜™’Žœȱ˜ȱ‘ŽȱŒ˜—tract was to be registered at the courthouse, three were to be kept by the creditor, and one by the debtor. As declared in the contract, the title deed covering the mortgaged property as well as the copies of the contract were ˜ȱ‹ŽȱŽ•’ŸŽ›Žȱ‹¢ȱ‘Žȱ–˜›Š˜›ȱǻ’—ȱ‘’œȱŒŠœŽǰȱ‘Ž—¡’—Ǽȱ˜ȱ‘Žȱ–˜›ŠŽŽȱ ǻ‘Žȱ‘›ŽŽȱ‹Š—”œǼȱŠœȱŠȱœŽŒž›’¢ǯȱȱ‘ŽȱœŠ–Žȱ’–ŽǰȱŠȱŽŒ•Š›Š’˜—ȱ˜ȱ›žœȱœŽȱ up in the name of the mortgagee was issued by the real estate company, ŠŒ’—ȱŠœȱ‘Žȱȃ›Ž’œŽ›Žȱ˜ —Ž›ǯȄȱ‘žœǰȱ‘Žȱ–˜›ŠŽŽȱ‹ŽŒŠ–Žȱ‘Žȱȃ‹Ž—Žęcial owner” of the property. At this point, the loan contract was completed ǻ’—Š–’ȱŠ—œ‘ĀȱŽœžçȱ”Š‹žœ‘’”’ȱ”Š’œ‘ŠȱŒ‘眊‹žȱŗşŚř‹ǰȱŗŖŗǼ As the Shenxin case shows, it was important that trading property with a daoqi and quanbingdan was supported by powerful legal organizations. The loan contract usually included the terms of a penalty for failing to pay interest on a due day. Usually, a mortgagee was given the right to declare the whole debt immediately due in case of default (Puyi dichan gongsi ŗşřŘǼǯȱ ‘žœǰȱ ’ȱ Šȱ •Ž—Ž›ȱ ŽŠž•Žȱ Šȱ •˜Š—ȱ œŽŒž›Žȱ  ’‘ȱ •Š—ǰȱ ‘Žȱ •Ž—Ž›ȱ could bring the case to a court, which could sell the land by auction. If the •Š—ȱŠ’•Žȱ˜ȱœŽ••ȱŠĞŽ›ȱ‘›ŽŽȱŠžŒ’˜—œǰȱŠȱŒ˜ž›ȱŒ˜ž•ȱ˜›Ž›ȱ‘Žȱ›Š—œŽ›ȱ˜ȱ ownership to the lender. Since the right to ask for debt redemption was legally protected, a loan secured with land was regarded as safe by both ˜›Ž’—Ž›œȱŠ—ȱ‘’—ŽœŽȱǻ’—Š–’ȱŠ—œ‘ĀȱŽœžçȱ”Š‹žœ‘’”’ȱ”Š’œ‘Šȱ‘Š—‘Š’ȱ“’–žœ‘˜ȱŒ‘眊‹žȱŗşŚŘȮŗşŚřǼǯ ȱ ‘Ž—ȱ ‘Žȱ ™Ž›œ˜—ȱ  ‘˜ȱ ‘Šȱ ›Ž’œŽ›Žȱ •Š—ȱ ’—ȱ Šȱ œŽĴ•Ž–Ž—ȱ  ’‘ȱ ‘Žȱ ˜›Ž’—ȱŒ˜—œž•ŠŽȱ Šœȱ—˜ȱ‘Žȱ›ŽŠ•ȱ˜ —Ž›ȯŠœȱ˜ĞŽ—ȱ˜ŒŒž››Žȯ–˜›Š’—ȱ –’‘ȱ‘ŠŸŽȱ‹ŽŽ—ȱ’ĜŒž•ǯȱ˜—Ž‘Ž•Žœœǰȱ‘Žȱ›Š—œŽ›ȱ˜ȱ‘Žȱ’•ŽȱŽŽȱŠ—ȱ the declaration of trust was considered to bestow full security and was regarded locally as a normal procedure that would always be recognized by the courts, including Chinese ones.ŗś ŗŚȲȱ In contrast to contemporary Western mortgages, in which mortgagees have obligations to liquidate the property, the mortgagee could keep the property without liquidating it and ›Žšž’›Žȱ›Ž™Š¢–Ž—ȱ’—ȱœ˜–Žȱ˜‘Ž›ȱ˜›–ǯȱ•‘˜ž‘ȱ—˜ȱ›ŽŠœ˜—ȱ Šœȱœ™ŽŒ’ꮍȱ˜›ȱ‘’œȱ™›ŠŒ’ŒŽǰȱ Œ›Ž’˜›œȱ ’—ȱ Ž—Ž›Š•ȱ œŽŽ–ȱ ˜ȱ ‘ŠŸŽȱ ‹ŽŽ—ȱ  Ž••ȱ ™›˜ŽŒŽȱ ›˜–ȱ Š—¢ȱ ™˜œœ’‹•Žȱ ꗊ—Œ’Š•ȱ •˜œœŽœȱ caused by mortgages. ŗśȲȱ ‘’œȱ˜‹œŽ›ŸŠ’˜—ȱ Šœȱ–ŠŽȱ‹¢ȱ›ǯȱ˜ĴŽ›ǰȱ‘Žȱ˜›–Ž›ȱ›Ž—Œ‘ȱŒ˜—œž•Š›ȱ˜ĜŒ’Š•ȱ’—ȱ‘Š—‘Š’ȱ

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Tomoko Shiroyama

The mortgaging of factory sites and equipment, called changqi yakuan ᒴ෎ᢐℒ or ħ’ŽšžŠ—ȱ‘Ž˜— ᢉ‫⃞׳‬ড়ৠ, was common (Liu Dajun 1937, ŝŗǼǯȱŠŒ˜›¢ȱ–Š—ŠŽ›œȱ™ž›Œ‘ŠœŽȱ˜›Ž’—ȱœŽĴ•Ž–Ž—ȱ•Š—œȱ—˜ȱ˜—•¢ȱ˜ȱŠŒcumulate assets but also to get working capital for their businesses.ŗŜ They ‹˜››˜ Žȱ–˜—Ž¢ǰȱ˜ěŽ›’—ȱ‘Ž’›ȱ›ŽŠ•ȱŽœŠŽȱŠœȱŒ˜••ŠŽ›Š•Dzȱ’—ȱœ˜–ŽȱŒŠœŽœȱ‘Ž¢ȱ ™Š’ȱ‘Žȱ’—Ž›Žœȱ›˜–ȱ‘Ž’›ȱ™›˜ęȱ›˜–ȱ›Ž—œǰȱŠ—ȱ’—ȱ˜‘Ž›ȱŒŠœŽœȱ›˜–ȱ‘Žȱ operation of their own business.17 The mortgage of land was not new to the Chinese. According to traditional business customs, the ownership of •Š—ȱŠ—ȱ‘Žȱ›’‘ȱ˜ȱžœŽȱ’ȱ Ž›Žȱ’œ’—ŒDzȱ‘Žȱꛜȱ ŠœȱŒŠ••Žȱ‘Žȱ˜™œ˜’•ȱ right, the second the subsoil right. Both subsoil and topsoil rights changed hands frequently through lease or sale contracts.18 It appears that, against ‘Žȱ ‘’œ˜›’ŒŠ•ȱ ‹ŠŒ”›˜ž—ǰȱ ‘’—ŽœŽȱ Ž—›Ž™›Ž—Žž›œȱ ’—ȱ ‘Žȱ ˜›Ž’—ȱ œŽĴ•Žments saw mortgaging as a desirable method of raising capital. The prosperity of the real estate market and the trend toward industrialization and commercialization in the early twentieth century were closely related. The concentration of commerce and industries in the ˜›Ž’—ȱœŽĴ•Ž–Ž—œȱŽ—Š’•Žȱœ’—’ęŒŠ—ȱ’—Œ›ŽŠœŽœȱ’—ȱ‘Žȱœ’£Žȱ˜ȱ‘Žȱž›‹Š—ȱ workforce, which in turn raised the demand for housing. The consequent ›’œŽȱ ’—ȱ ›Ž—œȱ Š—ȱ ‘Žȱ œŽŒž›’¢ȱ Šě˜›Žȱ ‹¢ȱ ‘Žȱ •˜ŒŠ’˜—ȱ ˜ȱ •Š—ȱ  ’‘’—ȱ Šȱ œŽĴ•Ž–Ž—ȱ›Š’œŽȱ‘ŽȱŸŠ•žŽȱ˜ȱ‘Žȱ•Š—ȱŠ—ȱ–ŠŽȱ’ȱŠȱŸŠ•žŠ‹•Žȱꗊ—Œ’Š•ȱŠœset; this, in turn, encouraged further investment in real estate. At the same ’–ŽǰȱŽ—Ž›™›’œŽœȱ•˜ŒŠŽȱ’—ȱ‘Žȱ˜›Ž’—ȱœŽĴ•Ž–Ž—œȱŒ˜ž•ȱŠŒšž’›Žȱ—ŽŽŽȱ funds for businesses through mortgaging. Financial institutions and ordinary investors gave credit for real estate ™ž›Œ‘ŠœŽȱ’—ȱ‘Žȱ˜›Ž’—ȱœŽĴ•Ž–Ž—œȱ‹ŽŒŠžœŽȱ‘Ž¢ȱ›ŽŠ›Žȱ’ȱŠœȱœŽŒž›ŽȱŒ˜•lateral. Entrepreneurs and real estate developers expanded their businesses with the borrowed money, which in turn led to further development of ‘ŽȱœŽĴ•Ž–Ž—œǯȱ‘Žȱ™›ŽŒ˜—’’˜—ȱ˜›ȱ‘’œȱŽŸŽ•˜™–Ž—Š•ȱ¢—Š–’Œȱ Šœȱ‘Žȱ perpetual rise or, at the very least, stability of rents, because all aspects of ‘Žȱ›ŽŠ•ȱŽœŠŽȱ‹žœ’—Žœœȱ Ž›Žȱ‹ŠœŽȱ˜—ȱ™›˜ęœȱ›˜–ȱ›Ž—œǯȱ˜››˜ Ž›œȱŒ˜ž•ȱ ’—ȱŒ‘Š›Žȱ˜ȱ•Š ǰȱ’—Ž›Ÿ’Ž Žȱ‹¢ȱ’—Š–’ȱŠ—œ‘ĀȱŽœžçȱ”Š‹žœ‘’”’ȱ”Š’œ‘ŠȱŒ‘眊‹žȱǻŗşŚř‹ǰȱ ŞŘǰȱŗŖŘǼǯ ŗŜȲȱ ‘Žȱ –˜›ŠŽȱ ˜ȱ •Š—ȱ ’—ȱ ˜›Ž’—ȱ œŽĴ•Ž–Ž—œȱ  Šœȱ —˜ȱ ž—’šžŽȱ ˜ȱ ‘Š—‘Š’ǯȱ —ȱ ’Š—“’—ǰȱ the Yipin ‫۔‬ક Company, a real estate agency founded in 1907 by the Belgian Copagnie —Ž›—Š’˜—Š•ŽȱȂ›’Ž—ǰȱ˜ěŽ›Žȱ•˜Š—œȱ ’‘ȱ›ŽŠ•ȱŽœŠŽȱ’—ȱ˜›Ž’—ȱŒ˜—ŒŽœœ’˜—œȱŠœȱŒ˜••ŠŽ›Š•ǯȱœȱ loan policy was supported by French banking capital closely related to the Belgian company ǻŽ—œ‘’—ȱœ‘’ȱ”Ž—”¢Āȱ”Š’ȱŗşşşǰȱŗŚŗǼǯ ŗŝȲȱ For example, Bei Runsheng 䉱┸⫳, who ran a cosmetics company, entered the real estate trade in 1918. By the 1930s, he owned more than a thousand properties. A famous entrepreneur, Yu Qiaqing 㰲⌑॓ǰȱ ŠœȱŠ•œ˜ȱŠŒ’ŸŽȱ’—ȱ‘Žȱ›ŽŠ•ȱŽœŠŽȱ›ŠŽȱǻ’—Š–’ȱŠ—œ‘Āȱ Žœžçȱ”Š‹žœ‘’”’ȱ”Š’œ‘ŠȱŒ‘眊‹žȱŗşŚřŠǰȱŚřǼǯ ŗŞȲȱ ˜›ȱ•ŽŠ•ȱ’œœžŽœȱŠ‹˜žȱ˜™œ˜’•ȱŠ—ȱœž‹œ˜’•ȱ›’‘œȱ’—ȱ‘’—ŠǰȱœŽŽȱŽ›ŠŠȱ ’›˜Š”’ȱǻŗşŞřǼǯȱŽ•’—ȱ ǻŘŖŖŚŠǼȱ’ŸŽœȱŠ—ȱ˜ŸŽ›Ÿ’Ž ȱ˜ȱŒ˜—›ŠŒœȱŒ˜—ŒŽ›—’—ȱ™›˜™Ž›¢ȱ›’‘œȱŠ—ȱ‘Ž’›ȱŽ—˜›ŒŽ–Ž—ȱ’—ȱ prewar China.

The Shanghai Real Estate Market

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bear an interest rate as high as 7 to 8 percent a year, as long as they could secure 9 to 12 percent of the land’s value as annual rental income. In this way, a large part of Shanghai’s economy revolved around generating, collecting, and investing in rental income. The market economy for real estate was a driving force for the urban market economy from the late nineteenth century until the 1930s. The prosperous run of the real estate market only ended because of a worldwide economic depression in the early 1930s. There was an oversupply ˜ȱŒŠ™’Š•ȱ’—ȱ‘Žȱ‘Š—‘Š’ȱꗊ—Œ’Š•ȱ–Š›”Žȱ›˜–ȱŗşŘşȱ˜ȱŗşřŗǰȱŠœȱ Ž••ȱŠœȱ large amounts of speculative investment in real estate. Land values rose and credit expanded, but funds were not reinvested in productive industries. This unusual speculative boom in real estate became a threat to the Shanghai economy. When the U.S. Silver Purchase Act of 1934 induced a •Š›Žȱ̘˜ȱ˜ȱœ’•ŸŽ›ȱ›˜–ȱ‘’—Šȱ’—ȱŗşřŚǰȱœŽ›’˜žœȱŽĚŠ’˜—ȱœŽȱ’—ǯȱ‘Žȱ˜ŸŽ›Ž¡™Š—ŽȱŒ›Ž’ȱ˜›ȱ›ŽŠ•ȱŽœŠŽȱŽŽ™Ž—Žȱ‘ŽȱŒ›’œ’œȱ˜›ȱ‹˜‘ȱŒ›Ž’˜›ȱꗊ—cial institutions and debtor enterprises. A large drop in land value led to ŠȱŒ›Ž’ȱŒ›’œ’œȱ‘Šȱž›‘Ž›ȱŽŽ™Ž—Žȱ‘Žȱ‹žœ’—ŽœœȱŠ—ȱꗊ—Œ’Š•ȱŒ›’œŽœǯȱ‘Žȱ real estate–inspired mechanisms led to a downward spiral. —’•ȱ‘Žȱ˜ž‹›ŽŠ”ȱ˜ȱ‘Žȱ’—˜Ȭ Š™Š—ŽœŽȱŠ›ȱ’—ȱ ž•¢ȱŗşřŝǰȱ‘Š—‘Š’Ȃœȱęnancial institutions and industrial enterprises searched for ways to revive ‘Žȱ›ŽŠ•ȱŽœŠŽȱ–Š›”Žǯȱ—ȱ‘ŽȱŽ—ǰȱ‘Žȱ™›˜‹•Ž–ȱ Šœȱœ˜•ŸŽȱ˜—•¢ȱŠĞŽ›ȱ Š›ȱ ›ŽžŽŽœȱ ̘˜Žȱ ’—˜ȱ ‘Žȱ œŽĴ•Ž–Ž—œǰȱ ŠŠ’—ȱ ›Š’œ’—ȱ ›Ž—œǯȱ ‘’œȱ ȃ žŠ˜ȱ ᄸዊ period” in Shanghai’s history is beyond the scope of this chapter. Conclusion What were the institutions, new incentives, and economic changes that enabled real estate exchange to drive urban development? ȱꛜǰȱ’—œ’ž’˜—Š•ȱŒ‘Š—Žȱ ŠœȱŽ¡˜Ž—˜žœǯȱ‘Ž—ȱ‘Žȱ™˜›ȱŒ’’Žœȱ Ž›Žȱ ˜™Ž—Žȱ‹¢ȱ›ŽŠ’Žœȱ’—ȱ‘Žȱ–’•Žȱ˜ȱ‘Žȱ—’—ŽŽŽ—‘ȱŒŽ—ž›¢ǰȱ˜›Ž’—ȱœŽĴ•Žments were established. Property rights and human safety were more ꛖ•¢ȱœŽŒž›Žȱ ’‘ȱ•Š œȱŠ—ȱ›Žž•Š’˜—œȱ’—ȱ‘ŽœŽȱœŽĴ•Ž–Ž—œȱ‘Š—ȱ’—ȱ‘’—ŽœŽȱŠ›ŽŠœǯȱœȱ–˜›Žȱ‘’—ŽœŽȱ™Ž˜™•Žȱ–˜ŸŽȱ’—˜ȱ‘Žȱ˜›Ž’—ȱœŽĴ•Ž–Ž—œǰȱ the favorable environment and the economic landscape of the port cities Œ‘Š—Žǯȱ‘ŽȱŽ–Š—ȱ˜›ȱ›ŽŠ•ȱŽœŠŽȱ’—ȱ‘ŽȱœŽĴ•Ž–Ž—œȱ’—Œ›ŽŠœŽǰȱŠ—ȱ—Ž ȱ entrepreneurs and organizations, such as real estate agencies, emerged. ‘Ž¢ȱ –Ž’ŠŽȱ ›Š—œŠŒ’˜—œȱ ’—ȱ ‘Žȱ –Š›”Žȱ Š—ȱ ˜ěŽ›Žȱ Š—ȱ ŽœœŽ—’Š•ȱ œŽ›vice for Chinese investors by lending their names for registering land with foreign consulates. The combination of a formal process (the registration ˜ȱ •Š—ȱ Šȱ ˜›Ž’—ȱ Œ˜—œž•ŠŽœǼȱ Š—ȱ Š—ȱ ’—˜›–Š•ȱ ™›˜ŒŽœœȱ ǻ‘Žȱ Ž¡Œ‘Š—Žȱ ˜ȱ ŽŒ•Š›Š’˜—œȱ˜ȱ›žœȱ‹Ž ŽŽ—ȱŠȱ˜›Ž’—Ž›ȱŠ—ȱŠȱ‘’—ŽœŽȱ•Š—˜ —Ž›ǼȱŽ—Š‹•Žȱ‘’—ŽœŽȱ’—’Ÿ’žŠ•œȱ˜ȱŠŒšž’›Žȱ•Š—ȱ’—ȱ‘ŽȱœŽĴ•Ž–Ž—œǯȱ‘˜œŽȱ™Ž›œ˜—œȱ ‘˜ȱ›Ž’œŽ›Žȱ•Š—ȱ Ž›Žȱ’쎛Ž—ȱ›˜–ȱ‘ŽȱŠŒžŠ•ȱ•Š—˜ —Ž›œǯȱ‘’œȱ

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might have been destabilizing, but professional real estate dealers were Œ˜––’ĴŽǰȱ‹¢ȱ–žžŠ•ȱ›žœǰȱ˜ȱ–Š”Žȱ‘ŽȱžŠ•Ȭ’•ŽȬŽŽȱœ¢œŽ–ȱ›Ž•’Š‹•Žȱ enough for investors to have trust in it. ŽŒž›Žǰȱ ™›˜ęŠ‹•Žǰȱ Š—ȱ ŽŠœ¢ȱ ˜ȱ ›ŠŽǰȱ ›ŽŠ•ȱ ŽœŠŽȱ ’—ȱ ‘Žȱ ˜›Ž’—ȱ œŽĴ•Ž–Ž—œȱ ŠĴ›ŠŒŽȱ ‹˜‘ȱ ˜›Ž’—ȱ Š—ȱ ‘’—ŽœŽȱ ’—ŸŽœ˜›œǰȱ Š—ȱ ‘Šȱ ž›‘Ž›ȱ pushed up its value. Most important, a belief in the value of real estate  Šœȱ ’Ž•¢ȱ‘Ž•ȱ‹¢ȱ‘Š—‘Š’Ȃœȱꗊ—Œ’Š•ȱ˜›Š—’£Š’˜—œǯȱ˜‘ȱ˜›Ž’—ȱŠ—ȱ ‘’—ŽœŽȱ‹Š—”œȱ Ž•Œ˜–Žȱ‘Žȱ–˜›Š’—ȱ˜ȱ•Š—ȱ’—ȱ‘ŽȱœŽĴ•Ž–Ž—œǯȱ ŠŸing acquired land, real estate agents and entrepreneurs could secure extra funds through bank credit to expand their businesses. Since the long-term capital market was underdeveloped, mortgaging real estate was the best  Š¢ȱ˜ȱꗊ—Œ’—ȱ‹žœ’—ŽœœȱŠ—ȱ™›˜™Ž›¢ȱŽŸŽ•˜™–Ž—ȱ’—ȱ‘Žȱ’—Ž›—Š’˜—Š•ȱ œŽĴ•Ž–Ž—œǯȱ œȱ ‘Žȱ ’•Žȱ ŽŽœȱ ˜ȱ œŽĴ•Ž–Ž—ȱ ™›˜™Ž›¢ȱ  Ž›Žȱ ›ŽŠ’•¢ȱ ’œŒ˜ž—Žȱ˜—ȱ‘Žȱꗊ—Œ’Š•ȱ–Š›”ŽǰȱŽ—›Ž™›Ž—Žž›œȱŒ˜ž•ȱŠ’—ȱꗊ—Œ’Š•ȱ̎¡ibility by owning real estate in the area. For the development of port cities Š—ȱ˜ȱ‘Ž’›ȱŽŒ˜—˜–’Œȱ›˜ ‘ǰȱ‘’œȱ•’—”ŠŽȱ‹Ž ŽŽ—ȱ‘Žȱꗊ—Œ’Š•ȱŠ—ȱ›ŽŠ•ȱ ŽœŠŽȱ–Š›”Žœȱ ŠœȱŒ›žŒ’Š•ǯȱ–’ĴŽ•¢ǰȱ‘Žȱ›ŽŠ•ȱŽœŠŽȱ‹ž‹‹•Žȱ‹ž›œȱ•ŠŽ›ȱ due to some complex problems, both internal and external (Shiroyama ŘŖŖŞǰȱŒ‘Š™ǯȱŜǼǰȱ‹žȱ‘Šȱ˜Žœȱ—˜ȱŠ›žŽȱŠŠ’—œȱŠȱ™˜œ’’ŸŽȱ’—Ž›™•Š¢ȱ‹Ž ŽŽ—ȱ the institutions and the market boom up to the late 1920s. The trade and mortgage of real estate always required the transfer of title deeds to buyer or mortgagee. This way of property transaction was simple and required minimal transaction costs but was secure enough to protect participants from the manipulation of property rights. In cases of default, the mortgagee had the right to liquidate the property through auction. This legal protection and the upward trend of the real estate market added to the prevalence of mortgages in the port cities. The initial institutional change sparked by the opening of the ports revealed new opportunities for both foreigners and Chinese. As more busi—ŽœœŽœȱŒ˜—ŒŽ—›ŠŽȱ’—ȱ‘Žȱ˜›Ž’—ȱœŽĴ•Ž–Ž—œǰȱ–˜›Žȱ ˜›”Ž›œȱŠ››’ŸŽǰȱŠ—ȱ rent and land values rose. And as people sought economic prosperity and security, intricate layers of vendor-purchaser and owner-renter relationships among Chinese and foreigners formed around the real estate market.

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Appendix 3.1 Index of Wholesale Prices in Shanghai, 1912–1931 (1926=100) ŽŠ›ȱȱȱ ŗşŗŘȱ ŗşŗřȱ ŗşŗŚȱ ŗşŗśȱ ŗşŗŜȱ ŗşŗŝȱ 1918 1919 1920 ŗşŘŗȱ ŗşŘŘȱ 1923 1924 ŗşŘśȱ ŗşŘŜȱ 1927 ŗşŘŞȱ ŗşŘşȱ 1930 ŗşřŗȱ

ȱ—Ž¡ȱȱȱȱ ŝśǯŗȱ ŝşǯŜȱ Şśǯřȱ ŝŝǯřȱ ŞřǯŞȱ ŝşǯŘȱ 87.3 87.2 94.8 ŗŖŚǯŜȱ şŞǯŜȱ 102.0 97.9 şşǯřȱ ŗŖŖǯŖȱ 104.4 ŗŖŗǯŝȱ ŗŖŚǯśȱ 114.8 ŗŘŜǯŝȱ

ŠŽȱ˜ȱ‘Š—ŽȱǻƖǼ Ȯ ŜǯŖ ŝǯŘ ȮşǯŚ ŞǯŚ ȮśǯŜ 10.2 –0.1 8.7 ŗŖǯř Ȯśǯŝ 3.4 –4.0 ŗǯŚ Ŗǯŝ 4.4 ȮŘǯŜ ŘǯŞ 9.9 ŗŖǯř

Source: Zhongguo kexueyuan Shanghai jingji yanjiusuo and Shanghai she‘ž’ȱ”Ž¡žŽ¢žŠ—ȱ“’—“’ȱ¢Š—“’žœž˜ȱǻŗşśŞǰȱŚǰȱŗŘŜǼǯ

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Appendix 3.2 Format of a Quanbingdan ›˜–ȱ ”Š–˜˜ȱ ˜”Š£žǰȱ ȃ‘Āœ‘’ȱ —’ȱ ˜”Ž›žȱ ”’—¢Āȱ ˜›’œ‘’”ħçȱ —˜ȱ Š—™˜ȱ œŽĴŽ’ȱ ‘˜ž‘˜žȱ —’ȱ œž’ŽǰȄ in ’—Š–’ȱ Š—œ‘Āȱ Žœžçȱ ”Š‹žœ‘’”’ȱ ”Š’œ‘Šȱ ‘Š—‘Š’ȱ“’–žœ‘˜ȱŒ‘眊‹žȱǻŗşŚŘȮŗşŚřǰȱŗŘŗȮŗŘŘǼǯ No. _____ Declaration of Trust Know all men to whom these present shall come that we (foreigner’s nameǼȱ˜ȱǻaddressǼǰȱ‘Š—‘Š’ǰȱ‘’—Šǰȱ˜ȱ‘Ž›Ž‹¢ȱŽŒ•Š›Žȱ‘Šȱ‘Žȱ˜ȱ of Land Registered in our name in the books kept for that purpose at the (foreign country’s nameǼȱ˜—œž•ŠŽȱ Ž—Ž›Š•ȱŠȱ‘Š—‘Š’ȱ—ž–‹Ž›Žȱ (numberǼȱŠ—ȱŒ˜—Š’—Žȱ’—ȱŠ›ŽŠȱŠœȱ™Ž›ȱ’•ŽȱŽŽȱ–ŽŠœž›Ž–Ž—ȱǻXǼȱmou (XǼȱfen (XǼȱli (XǼȱhao is the property of (Chinese nameǼȱŠ—ȱ‘Šȱ Žȱ‘˜•ȱ the same interest for him/them to dispose of as he/they, his/their heirs, ›Ž™›ŽœŽ—Š’ŸŽœǰȱ˜›ȱŠœœ’—œȱ–Š¢ȱ’›ŽŒȱŠĞŽ›ȱœŠ’œŠŒ˜›¢ȱ’Ž—’ęŒŠ’˜—ȱŠ—ȱ on payment of all charges due us in respect thereof. Witness our hands this (XǼȱŠ¢ȱ˜ȱǻXǼȱ˜—Žȱ‘˜žœŠ—ȱ—’—Žȱ‘ž—›Žȱ and (XǼ Signed by the said In the presence of

FOUR

The Rice and Wheat Flour Market Economies in the Lower Yangzi, ŗşŖŖȮŗşřŜ

Ȭȱ 

‘ŽȱŽěŽŒȱ˜ȱ–Š›”ŽȱŽŸŽ•˜™–Ž—ȱ˜—ȱ‹žœ’—Žœœȱœ›žŒž›Žȱ’—ȱ–˜Ž›—ȱ‘’na has institutional implications, as seen in the rice trade and the wheat ̘ž›ȱ ›ŠŽȱ ˜ȱ ‘Žȱ ˜ Ž›ȱ Š—£’ȱ ›Ž’˜—ȱ ›˜–ȱ ŗşŖŖȱ ˜ȱ ŗşřŜǯ1 That region, ˜›ȱ Šȱ •ŽŠœȱ ‘Žȱ ˜ž›ȱ ™›ŽŸ’˜žœȱ ŒŽ—ž›’Žœǰȱ ‘Šȱ Šȱ ̘ž›’œ‘’—ȱ •˜—Ȭ’œŠ—ŒŽȱ private grain trade. As the most industrialized area in pre-1937 China, this region provided a large consumer market and was the most important ˜˜Ȭ™›˜ŒŽœœ’—ȱŒŽ—Ž›ǯȱ‘ŽȱŽěŽŒȱ˜ȱ›ŠŽȱŽ¡™Š—œ’˜—ȱ˜—ȱ’쎛Ž—ȱ–Š›”Žȱ participants in the grain trade was most felt in this region.2

I would like to thank the following people for their encouragement, help, and suggestions ’—ȱ ‘Žȱ ™›Ž™Š›Š’˜—ȱ ˜ȱ ‘’œȱ Œ‘Š™Ž›DZȱ Ž‘ȬŒ‘’Ž—ȱ Š—ǰȱ ž›˜Šȱ ”’—˜‹žǰȱ ’—Šȱ ›˜ŸŽǰȱ ˜ȱ

Š—Ȭ Š’ǰȱŠ—ȱŠŸ’ȱŠž›Žǯȱ‘ŽȱŽ—Ž›˜žœȱŠœœ’œŠ—ŒŽȱ˜ȱ–Š’ȱŠ”Š”˜ȱ’—ȱ˜‹Š’—’—ȱŸŠ•žŠ‹•Žȱ –ŠŽ›’Š•œȱ’—ȱ˜”¢˜ǰȱŠ—ȱ˜ȱ žŠ—ȱ‘žȬ¢žŠ—ǰȱ Š˜ȱŠȬ Ž—ȱǻž£žǼǰȱ’—ȱ ž—Ȭ“žǰȱŠ—ȱ‘’Ž—ȱ Chi-chung in copying, at various stages, the whole set of the Maritime Customs annual ›Ž™˜›œȱ›˜–ȱ–’Œ›˜ę•–ȱ’œȱ›ŠŽž••¢ȱŠŒ”—˜ •ŽŽǯȱ ˜ ŽŸŽ›ǰȱ‘ŽȱŠ‹ž•Š’˜—ȱŠ—ȱœŽ•ŽŒ’˜—ȱ of all data is my responsibility alone. I would like to thank the National Science Council ˜›ȱ‘Ž’›ȱŽ—Ž›˜žœȱꗊ—Œ’Š•ȱœž™™˜›ȱ˜›ȱ–¢ȱ™›˜“ŽŒȱŒ˜••Š‹˜›Š’—ȱ ’‘ȱ›˜Žœœ˜›ȱŽ‘ȬŒ‘’Ž—ȱ Š—ǰȱȃ‘Žȱ›Š—’£Š’˜—ȱŠ—ȱ’—Š—ŒŽȱ˜ȱ‘Žȱ ›Š’—ȱŠ›”Žȱ’—ȱ’—ȱ‘’—ŠȄȱǽ⏙ҷ㊻亳䊓ᯧ ⱘ㌘㐨㟛䞥㵡Ǿȱ ǻŞşȬŘŚŗŗȬ ȬŖŖŗȬŖŜŘǼǰȱ Š—ȱ ˜›ȱ –¢ȱ ˜ —ȱ ™›˜“ŽŒǰȱ ȃŽŸŽ•˜™–Ž—ȱ ˜ȱ ›Š’—ȱ ›ŠŽȱŽ ˜›”œȱŠ—ȱ‘Š—Žœȱ’—ȱžœ’—Žœœȱ›Š—’£Š’˜—ȱ’—ȱ˜Ž›—ȱ‘’—ŠǰȱŗŞŝŖȮŗşřŜǰȱȱŠ—ȱ Ȅȱǽ䖥ҷЁ೟㊻亳䊓ᯧ㎆㌵ⱐሩ㟛ଚὁ㌘㐨䅞䙋ǰȱŗŞŝŖȮŗşřŜǰȱȱŠ—ȱǾȱǻşŗȬŘŚŗŗȬ ȬŖŘşȬŖŗŗȱ Š—ȱşřȬŘŚŗŗȬ ȬŖŘşȬŖŖŝǼǯ ŗȲ ‘Žȱœ™Š’Š•ȱŽę—’’˜—ȱ˜ȱ‘Žȱȃ˜ Ž›ȱŠ—£’ȱ›Ž’˜—Ȅȱ‘ŠȱȱžœŽȱ‘Ž›Žȱ’œȱ‹ŠœŽȱ˜—ȱ‘Šȱ˜ȱ ǯȱ ’••’Š–ȱ”’——Ž›ȱǻŗşŝŝŠǰȱřȮřŗǰȱŘŗŗȮŘŚşǰȱŘśřȮŘŝřǰȱŘŝśȮřśŗǰȱśŘŗȮśśřDzȱŗşŞŖǼǯ ŘȲȱ Š“˜›ȱ‘’—ŽœŽȱŒ’’ŽœȱŠ—ȱ™•ŠŒŽœǰȱ˜›Š—’£Š’˜—œǰȱ™ž‹•’ŒŠ’˜—œǰȱŠ—ȱ™ž‹•’Œȱꐞ›ŽœȱŠ™™ŽŠ›ǰȱ wherever possible, under the English names by which they are regularly known. Where the English names are not known, the Chinese names have been transliterated into pinyin.

ŝŜ

Kai-yiu Chan

ž›’—ȱ‘Žȱ™Ž›’˜ȱž—Ž›ȱ›ŽŸ’Ž ǰȱ•Š›Žȱ̘ž›ȱ–’••’—ȱꛖœȱŠŒ‘’ŽŸŽȱ’—stitutional change in becoming more integrated through lowering transaction costs.3 In the rice trade, the highly competitive market accommodated –˜›Žȱꛖœȱ‘Šȱ™›˜•’Ž›ŠŽȱ’—ȱ•Š›Žȱ—ž–‹Ž›œȱŠ—ȱŠŒ‘’ŽŸŽȱ•’Ĵ•Žȱ’—Ž›Štion. Much of the persistence of the market mechanism in the rice trade had to do with the interrelationship of local customs, specialization, and the problem of standardization. Such an interrelationship, in turn, shaped the ™ŠĴŽ›—ȱ˜ȱŽŸŽ•˜™–Ž—ȱŠ—ȱ›ŠŽȱ˜ȱ›’ŒŽǰȱ ‘’Œ‘ȱ–ŠŽȱ‘Žȱ›’ŒŽȱ–Š›”ŽȱŸŽ›¢ȱ ’쎛Ž—ȱ›˜–ȱ‘Šȱ˜ȱ̘ž›ǰȱŠœȱȱ ’••ȱœ‘˜ ȱ’—ȱ‘Žȱ˜••˜ ’—ǯ Market Development and Trade Expansion ‘Žȱ ™›˜žŒ’˜—ȱ Š—ȱ ›ŠŽȱ ˜ȱ ›’ŒŽȱ Š—ȱ ̘ž›ȱ ’—ȱ ‘Žȱ ˜ Ž›ȱ Š—£’ȱ ›Ž’˜—ȱ greatly expanded in the early twentieth century because of China’s growing foreign trade and the introduction of new technologies in production, transportation, and communications. Chinese Maritime Customs annual reports reveal that the trade volume increased in these two grain markets ž›’—ȱ‘Žȱ꟎ȱŽŒŠŽœȱ‹Ž˜›Žȱ‘Žȱ˜›–Š’˜—ȱ˜ȱ‘Žȱꛜȱ‘’—ŽœŽȱŽ™ž‹•’Œȱ in 1912. Junk trade in the nineteenth century is not included in these an—žŠ•ȱ›Ž™˜›œȱǻŽ›”’—œȱŗşŜşǰȱřŚśȮřŜśDzȱ‘Ž—ȱ˜ž”ž’ȱŗşřŚDzȱ’ȱŠ’Œ‘žȱŗşŜŚǼǯ In the case of rice, as shown in table 4.1, the total trade volume of rice ǻŠ—ȱ™Š¢Ǽȱ˜ȱ‘ŽȱœŽŸŽ—ȱ™˜›œȱ’—ȱ‘’œȱ›Ž’˜—ȱ›˜œŽȱ›˜–ȱ•Žœœȱ‘Š—ȱśǰŖŖŖǰŖŖŖȱ piculs in 1872 to more than 8,000,000 in 1912.4 Most of this expansion was due to domestic rather than foreign factors. The seven ports’ domestic im™˜›œȱ˜ȱ›’ŒŽȱ›˜œŽȱ›˜–ȱŘśǰŞŚŗȱ™’Œž•œȱ’—ȱŗŞŝŘȱ˜ȱŗǰŜşŖǰřśŖȱ™’Œž•œȱ’—ȱŗşŗŘDzȱ•Žœœȱ ‘Š—ȱśǰŖŖŖȱ™’Œž•œȱ˜ȱ›’ŒŽȱŒŠ–Žȱ›˜–ȱ˜›Ž’—ȱœ˜ž›ŒŽœȱ’—ȱŗŞŝŘǰȱŠ—ȱ—˜—Žȱ‹¢ȱ 1912. Exports came mainly from Shanghai, Zhenjiang (Chinkiang 䦂∳ǼǰȱŠ—ǰȱ •ŠŽ›ǰȱ ž‘žȱ ǻ‘Žȱ •Šœȱ  Šœȱ —˜ȱ ˜™Ž—ȱ ˜ȱ ˜›Ž’—ȱ ›ŠŽȱ ’—ȱ ŗŞŝŘǼǯȱ Ž—Ž›Š••¢ȱ speaking, the region’s rice exports constituted the lion’s share of China’s total rice trade. The Maritime Customs statistics do not clearly state the destination of the produce, but one can still observe from the trade rež›—œȱ ‘Šȱ ‘ŽœŽȱ ™˜›œȱ Ž¡™˜›Žȱ ›’ŒŽȱ ǻŠ—ȱ ™Š¢Ǽȱ ˜ȱ ˜‘Ž›ȱ ‘’—ŽœŽȱ ™˜›œȱ instead of overseas. Most of this output must have gone to the domestic –Š›”Žȱ‹ŽŒŠžœŽȱ˜ȱ‘ŽȱŽŸŠœŠ’—ȱŽěŽŒœȱ˜ȱ‘ŽȱŠ’™’—ȱŽ‹Ž••’˜—ȱŠ—ȱ‘Žȱ ˜™Ž—’—ȱ ˜ȱ ›Š’—ȱ ™˜›œȱ ˜ȱ ˜›Ž’—Ž›œȱ ‹¢ȱ ›ŽŠ¢ǰȱ ˜›ǰȱ ŠĞŽ›ȱ ŗşŖŖǰȱ ‹¢ȱ ‘’—ŽœŽȱ˜ĜŒ’Š•ȱ’—’’Š’ŸŽœȱ‘ŠȱŠ’–Žȱ˜ȱŽ—Œ˜ž›ŠŽȱ‘ŽȱŽŸŽ•˜™–Ž—ȱ˜ȱ›’ŒŽȱ exports in several rice-surplus areas, such as Wuhu 㬾␪ in this region ‘Žȱ Žę—’’˜—œȱ ˜ȱ ›Š—œŠŒ’˜—ȱ Œ˜œœȱ Š—ȱ ’—Ž›Š’˜—ȱ ȱ žœŽȱ Š›Žȱ ‹ŠœŽȱ ˜—ȱ ‘˜œŽȱ ˜ȱ ǯȱ ǯȱ ˜ŠœŽȱǻŗşŞŞǼǰȱ˜ž•Šœœȱǯȱ˜›‘ȱǻŗşŞŗǰȱŽœ™ǯȱŒ‘Š™ǯȱŗśǼǰȱŠ—ȱ•›Žȱǯȱ‘Š—•Ž›ȱ ›ǯȱǻŗşŜŘǰȱŗşŝŝǰȱ ŗşşŖǼǯ ŚȲȱ “Paddy” refers to rice grains still in their husk. In Chinese Maritime Customs statistics, rice and paddy are put into one entry and so are treated thus in this chapter. řȲȱ

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77

and Changsha䭋≭’—ȱ‘Žȱ’•ŽȱŠ—£’ȱ›Ž’˜—ȱǻžȱ ˜—œ‘Ž—ȱŠ—ȱ žȱ Minyi 1988, 1–11; Wong Wing-ho 2001; Zhou Shishan 2001; Wang Yong ŗşşŖǼǯȱ‘Žȱœ‘’Ğȱ˜ȱ‘Žȱ›’ŒŽȱŽ¡™˜›ȱ›ŠŽȱ›˜–ȱ‘Ž—“’Š—ȱ˜ȱž‘žȱ˜›ȱŠ¡ȱ ›ŽŠœ˜—œǰȱ Šœȱ ˜Œž–Ž—Žȱ ‹¢ȱ ȬŒ‘ž—ȱ Š—ȱ ǻŗşŞşǼǰȱ –Š¢ȱ ‘ŠŸŽȱ œ˜˜—ȱ ‹Š•Š—ŒŽȱ out the two regions. Rice exports from Wuhu in 1912 doubled those of Zhenjiang in 1872. In short, growth occurred in both import and export of ›’ŒŽȱǻŠ—ȱ™Š¢Ǽȱ’—ȱ‘’œȱ›Ž’˜—ǯ Š‹•ŽȱŚǯŗǯȱ’ŒŽȱǻŠ—ȱŠ¢Ǽȱ›ŠŽȱǻ’—ȱ™’Œž•œǼȱ’—ȱ‘Žȱ˜ Ž›ȱŠ—£’ȱ˜›œǰȱŗŞŝŘȱŠ—ȱŗşŗŘȱ 1872 1912 Foreign Domestic Exports Foreign Domestic Exports Imports Imports ǻ••Ǽ Imports Imports ǻ••Ǽ Chinkiang ǻ‘Ž—“’Š—Ǽ 0 0 1,771,971 0 ŗǰřśŞȱ ŗǰşşŜȱ

Š—Œ‘˜ ȱ ǻ Š—£‘˜žǼ n.o.y.* n.o.y. n.o.y. 0 ŝŝǰŜŖŗȱ 0 Nanking ǻŠ—“’—Ǽ n.o.y. n.o.y. n.o.y. 0 0 ŘǰŗŝŜȱ Ningpo ǻ’—‹˜Ǽ 4,978 0 śŖǰŗŝŜ 0 şřřǰşŚŜȱ Shanghai 0 ŘśǰŞŚŗ ŘǰŜŜřǰŖŝş 0 śřŜǰŗşŜȱ ŚŖŝǰŞŜřȱ Soochow ǻž£‘˜žǼ n.o.y. n.o.y. n.o.y. 0 0 0 Wuhu n.o.y. n.o.y. n.o.y. 0 2,188 ŚǰśŜŘǰŗşśȱ Subtotal for Central China and Yangzi Valley 4,978 ŘśǰŞŚŗ ŚǰŚŞśǰŘŘŜ 0 ŗǰŜşŖǰřśŖ ŜǰŜřŗǰŜŖŚ China Total ŜŝŜǰŘŜŞ śǰŜşŞǰŗŜş ŚǰśŗŜǰŚŖŗ 2,700,274 ŜǰŘŘŗǰŖŚř ŜǰŜŚŝǰśřŞ Source:ȱ—œ™ŽŒ˜›ŠŽȱ Ž—Ž›Š•ȱ˜ȱ‘Žȱ‘’—ŽœŽȱŠ›’’–Žȱžœ˜–œȱǻŗŞŝřǰȱŗşŗśȮŗşřśǼǯ * “N.o.y.” = not open yet.

‘Žȱ ŒŠœŽȱ ˜ȱ ̘ž›ȱ Ž••œȱ Šȱ œ’–’•Š›ȱ ‹žȱ –˜›Žȱ œ™ŽŒŠŒž•Š›ȱ œ˜›¢ǯȱ Š‹•Žȱ ŚǯŘȱ œ‘˜ œȱ‘Šȱ‘Žȱ–Š›”Ž’—ȱ˜ȱ̘ž›ǰȱ˜›ȱ˜–Žœ’Œȱ˜›ȱ˜ŸŽ›œŽŠœȱ–Š›”Žœǰȱ Šœȱ nearly nonexistent in 1872. Flour imports of domestic and foreign origins were less than 10,000 piculs each. But in the next forty years, a growth ’—ȱ ‘Žȱ ̘ž›ȱ ›ŠŽȱ ’—Œ›ŽŠœŽȱ ›Š–Š’ŒŠ••¢ȱ ˜›ȱ ˜›Ž’—ȱ ’–™˜›œǰȱ ˜–Žœ’Œȱ ’–™˜›œǰȱ Š—ȱ Ž¡™˜›œȱ ˜ȱ ‹˜‘ȱ –Š›”Žœǯȱ ˜›Ž’—ȱ ’–™˜›œȱ ›˜œŽȱ ›˜–ȱ ŘǰśŞşȱ ™’Œž•œȱ’—ȱŗŞŝŘȱ˜ȱŘŞśǰŖŚŝȱ™’Œž•œȱ’—ȱŗşŗŘǯȱ’–’•Š›ȱ›˜ ‘ȱ˜ŒŒž››Žȱ’—ȱ˜–Žœ’Œȱ’–™˜›œǯȱŽǰȱ‘Žȱ–˜œȱ›Š–Š’Œȱ™‘Ž—˜–Ž—˜—ȱ Šœȱ‘ŽȱŽ¡™˜›ȱ˜ȱ̘ž›ȱ ›˜–ȱ ‘’œȱ ›Ž’˜—ǰȱ Šœȱ ›ŽĚŽŒŽȱ ’—ȱ ‘Žȱ Š›’’–Žȱ žœ˜–œȱ ›Ž™˜›œǯȱ —ȱ ŗşŗŘǰȱ Shanghai alone accounted for nearly three-quarters of the region’s total Ž¡™˜›œǰȱ ‘’•Žȱ‘Žȱ›Ž’˜—ȱ–ŠŽȱž™ȱ–˜›Žȱ‘Š—ȱŜŖȱ™Ž›ŒŽ—ȱ˜ȱ‘’—ŠȂœȱ˜Š•ȱ ̘ž›ȱŽ¡™˜›œǯȱ‘Žȱ˜ Ž›ȱŠ—£’ȱ›Ž’˜—ȱ‘Šȱ‹ŽŒ˜–Žȱ‘Žȱ™›Ž–’Ž›ȱ̘ž›ȱŽ¡port center in China, with a wide distribution network across the country ǻ‘Š—ȱŠ—ȱŠ—ȱŘŖŖřǰȱŗŞřȮŗŞśǼǯ

78

Kai-yiu Chan

Š‹•ŽȱŚǯŘǯȱ•˜ž›ȱ›ŠŽȱǻ’—ȱ™’Œž•œǼȱ’—ȱ‘Žȱ˜ Ž›ȱŠ—£’ȱ˜›œǰȱŗŞŝŘȱŠ—ȱŗşŗŘȱ 1872 1912 Foreign Domestic Exports Foreign Domestic Exports Imports Imports ǻ••Ǽ Imports Imports ǻ••Ǽ Chinkiang ǻ‘Ž—“’Š—Ǽ 0 0 0 4,431 ŚǰşŜŗȱ şŖǰŘŜŝȱ

Š—Œ‘˜ ȱ ǻ Š—£‘˜žǼ n.o.y.* n.o.y. n.o.y. śǰśŖŝȱ 4,922 0 Nanking ǻŠ—“’—Ǽ n.o.y. n.o.y. n.o.y. 1,411 2,907 0 ’—™˜ȱǻ’—‹˜Ǽ 0 0 0 39,718 ŝŖǰŜśŞȱ 0 Shanghai ŘǰśŞş śǰŘŜŗ 0 ŘŗŜǰśŞŝȱ 97,712 şşŖǰŜśŗȱ Soochow ǻž£‘˜žǼ n.o.y. n.o.y. n.o.y. 0 0 śǰŖŜřȱ Wuhu n.o.y. n.o.y. n.o.y. 1,898 şǰŝŜŞȱ śǰŖŗŞȱ Subtotal for Central China and Yangzi Valley ŘǰśŞş śǰŘŜŗ 0 ŘŞśǰŖŚŝ ŘśŘǰŜśŞ ŗǰřŖśǰŖśş China Total ŞǰŜŞŗ śǰŘŜŗ 0 3,207,921 ŗǰŘşřǰŜŖŚ ŗǰşşŖǰŖŚŜ Source:ȱ—œ™ŽŒ˜›ŠŽȱ Ž—Ž›Š•ȱ˜ȱ‘Žȱ‘’—ŽœŽȱŠ›’’–Žȱžœ˜–œȱǻŗŞŝřǰȱŗşŗśȮŗşřśǼǯ * “N.o.y.” = not open yet.

‘Žȱ›˜ ‘ȱ˜ȱ‘Žȱ›’ŒŽȱŠ—ȱ̘ž›ȱ›ŠŽœȱŒ˜—’—žŽȱ’—ȱ‘ŽȱŽ™ž‹•’ŒŠ—ȱ™Ž›’˜ǰȱŠœȱœ‘˜ —ȱ’—ȱꐞ›ŽȱŚǯŗȱ˜›ȱ꟎Ȭ¢ŽŠ›ȱ’—Ž›ŸŠ•œȱ›˜–ȱŗşŗŘȱ˜ȱŗşřŚǯȱžǰȱ these numbers exclude reexports, as do the Maritime Customs records. ‘’œȱꐞ›Žȱœ‘˜ œȱ‘Šȱ‹˜‘ȱ™›˜žŒœȱŽ—“˜¢Žȱ›˜ ‘ȱ’—ȱŠ›ŽŠŽȱ›ŠŽȱ volume. The total transactions for rice rose from nearly 21,000,000 piculs ’—ȱ‘Žȱ™Ž›’˜ȱŗşŗŘȮŗşŗŜȱ˜ȱ–˜›Žȱ‘Š—ȱřŜǰŖŖŖǰŖŖŖȱ’—ȱ‘Žȱ™Ž›’˜ȱŗşŘŝȮŗşřŗǯȱ ’–’•Š›•¢ǰȱ ˜Š•ȱ ›Š—œŠŒ’˜—œȱ ˜›ȱ ̘ž›ȱ ›Ž ȱ ›˜–ȱ –˜›Žȱ ‘Š—ȱ ŗŘǰŖŖŖǰŖŖŖȱ ™’Œž•œȱ’—ȱ‘Žȱ™Ž›’˜ȱŗşŗŘȮŗşŗŜȱ˜ȱřŞǰŝŖŖǰŖŖŖȱ’—ȱ‘Žȱ™Ž›’˜ȱŗşŘŝȮŗşřŗǯ The growth of these trades in the Lower Yangzi region was rapid even in the decades before the outbreak of the Second Sino-Japanese War ǻŗşřŝȮŗşŚśǼǯȱ’ž›ŽȱŚǯŗȱœ‘˜ œȱ‹˜‘ȱ›Š’—œȱŽ—“˜¢’—ȱ›ŠŽȱŽ¡™Š—œ’˜—ǰȱ‹žȱ ̘ž›ȱ’—Œ›ŽŠœŽȱŠœŽ›ȱ‘Š—ȱ›’ŒŽȱǻŠ—ȱ™Š¢Ǽǯȱ‘Žȱ›ŽŠŽœȱ›˜ ‘ȱ›ŠŽȱ˜ȱ the rice trade came in the period 1927–1931, at a rate of 1.72 times more ‘Š—ȱ‘Šȱ’—ȱ‘Žȱ™Ž›’˜ȱŗşŗŘȮŗşŗŜǯȱ‘’œȱœŠ–Žȱ™Ž›’˜ȱŠ•œ˜ȱœŠ ȱ‘Žȱ‘’‘Žœȱ›˜ ‘ȱ›ŠŽȱ’—ȱ‘Žȱ̘ž›ȱ›ŠŽǰȱřǯŗŖȱ’–Žœȱ–˜›Žȱ‘Š—ȱ‘Šȱ˜ȱ‘Žȱꛜȱ ꟎ȱ¢ŽŠ›œǯȱ—ŠěŽŒŽȱ‹¢ȱ‘ŽȱŽ™›Žœœ’˜—ȱ›˜–ȱŗşřŘȱ˜ȱŗşřŚǰȱ‘ŽȱŠ›ŽŠŽȱ ̘ž›ȱ ›ŠŽȱ ’—ȱ ‘Žȱ ›Ž’˜—ȱ  Šœȱ Š‹•Žȱ ˜ȱ œž›™Šœœȱ ‘Šȱ ˜ȱ ›’ŒŽǰȱ Šȱ ›ŽŸŽ›œŠ•ȱ ˜ȱ ‘Žȱ›Ž—ȱ˜›ȱ‘Žȱꛜȱ꟎ȱ¢ŽŠ›œȱŠĞŽ›ȱ‘Žȱ˜ž—’—ȱ˜ȱ‘ŽȱŽ™ž‹•’Œǯȱ‘Žȱ trade volume of the two grains estimated by the Maritime Customs was ›˜ž‘•¢ȱ ‘Žȱ œŠ–Žȱ ›˜–ȱ ŗşŗŝȱ ˜ȱ ŗşřŗǰȱ  ’‘ȱ ̘ž›ȱ ›ŠŽȱ Ž¡™Š—œ’˜—ȱ –˜›Žȱ spectacular.

The Rice and Wheat Flour Market Economies

79

’ž›ŽȱŚǯŗǯȱ ›˜ ‘ȱ’—ȱ’ŒŽȱǻŠ—ȱŠ¢ǼȱŠ—ȱ•˜ž›ȱ›Š—œŠŒ’˜—œȱ’—ȱ‘Žȱ˜ Ž›ȱŠ—£’ȱ ˜›œǰȱŗşŗŘȮŗşřŚȱǻŸ’Šȱ‘ŽȱŠ›’’–Žȱžœ˜–œǼ 45,000,000 40,000,000

A

35,000,000 30,000,000 25,000,000 20,000,000 15,000,000 10,000,000 1912–16

1917–21

1922–26

1927–31

Riceȱ(andȱPaddy)ȱQty.ȱ(piculs)

1932–34

FlourȱQty.ȱ(piculs)

ȱ

ȱ ȱ 350

B

300

250

200

150

100 1912–16

1917–21

1922–26

1927–31

1932–34

FlourȱGrowthȱIndexȱ(1912–16ȱasȱ100) Riceȱ(andȱPaddy)ȱGrowthȱIndexȱ(1912–16ȱasȱ100)

ȱ

Source:ȱ—œ™ŽŒ˜›ŠŽȱ Ž—Ž›Š•ȱ˜ȱ‘Žȱ‘’—ŽœŽȱŠ›’’–Žȱžœ˜–œȱǻŗşŗśȮŗşřśǰȱȃ˜›Ž’—ȱ›ŠŽȱ˜ȱ‘’—ŠǰȱŗşŗŚȮřŚȄǼǯ

80

Kai-yiu Chan

‘ŽœŽȱœŠ’œ’ŒœȱŽ••ȱžœȱ‘Šȱž›’—ȱ–Š›”ŽȱŽ¡™Š—œ’˜—ǰȱ‘Žȱ̘ž›ȱ›ŠŽȱ›Ž ȱ –˜›Žȱ›Š™’•¢ȱ‘Š—ȱ‘Žȱ›ŠŽȱ’—ȱ›’ŒŽǯȱ ˜ ȱŠ—ȱ ‘¢ȱ’ȱ‘Žȱ™Š›’Œ’™Š—œȱ’—ȱ‘Žȱ ̘ž›ȱ–Š›”ŽȱŽ¡™Š—ȱ‘Ž’›ȱ–Š›”ŽŽȱœž›™•žœȱœ˜ȱ›Š™’•¢ǵȱ‘¢ȱ Šœȱ‘Žȱ›’ŒŽȱ market unable to achieve similar results? Were the technologies, organiza’˜—œǰȱŠ—ȱ’—œ’ž’˜—œȱ˜›ȱŽŠŒ‘ȱ˜ȱ‘ŽœŽȱ–Š›”ŽœȱŸŽ›¢ȱ’쎛Ž—ǵȱŽȱžœȱŽ¡Š–’—Žȱ  ‘Šȱ‘Š™™Ž—ŽȱŠĞŽ›ȱ‘ŽȱœŽŠ–ȱŽ—’—Žȱ Šœȱ’—›˜žŒŽȱ’—ȱ‘ŽœŽȱ ˜ȱ–Š›”Žœǯ The Mechanization of Rice and Flour Milling ‘ŽȱŽ›–œȱȃ–ŽŒ‘Š—’£Š’˜—ȄȱŠ—ȱȃ’—žœ›’Š•’£Š’˜—Ȅȱ–’‘ȱ—˜ȱœžĜŒŽȱ˜ȱŽscribe how grain-processing industries evolved during the period under reŸ’Ž ǯȱ‘Žȱ›’—’—ȱŠ—ȱ–’••’—ȱ˜ȱ›’ŒŽȱŠ—ȱ̘ž›ȱŠȱꛜȱ Ž›Žȱ™Ž›˜›–Žȱ ’‘ȱ mechanical devices in an environment where human or animal power was widely applied. Mechanization, or industrialization, used the steam engine to replace other sources of power in two distinct ways. First, the steam engine  ŠœȱžœŽȱ’—ȱœ˜—Žȱ–’••œǰȱ‘Ž—ȱ’ȱ ŠœȱžœŽȱ’—ȱœŽŽ•ȱ–’••œȱǻ‘Š—‘Š’œ‘’ȱ•’Š—œ‘ħžǰȱ ‘Š—‘Š’œ‘’ȱ ˜—œ‘Š—ȱ ¡’—£‘Ž—ȱ žŠ—•ħžǰȱ Š—ȱ ‘Š—‘Š’ȱ œ‘Ž‘ž’ȱ ”Ž¡žŽȬ ¢žŠ—ȱ“’—“’ȱ¢Š—“’žœž˜ȱ“’—“’œ‘’ȱ¢Š—“’žœ‘’ȱŗşŞŝǰȱřȮŞDzȱ ˜––Ž•ȱŗşřŝǰȱŚŗȮŗśşǼǯ ‘Žȱ–’••’—ȱ˜ȱ›’ŒŽȱŠ•œ˜ȱ’쎛Žȱ›˜–ȱ‘Šȱ˜ȱ̘ž›ǯȱ—ȱ̘ž›ȱ–’••’—ǰȱ‘Žȱ ꛜȱ™›˜ŒŽœœȱ’—Œ•žŽȱ›Ž–˜Ÿ’—ȱ‘Žȱ ‘ŽŠȂœȱ‘ž••œȱŠ—ȱ‘Ž—ȱŒ•ŽŠ›’—ȱœŠ—ȱŠ—ȱ dust from the crop. The second was grinding the inner part of the grain into ̘ž›ȱ‘›˜ž‘ȱŠȱ–ŽŒ‘Š—’ŒŠ•ȱŽŸ’ŒŽȱŒŠ••Žȱ‘Žȱȃ–’••Ȅȱǻmo ⺼Ǽǯȱ—ȱ‘Žȱ̘ž›ȱ–’••ȱ (mofang ⺼᠓Ǽǰȱ‹˜‘ȱ™›˜ŒŽœœŽœȱŒ˜ž•ȱ‹ŽȱžœŽȱǻçŠȱç‹ž—”Š’ȱŗşŖŞ‹ǰȱřřŗȮřřŝǼǯȱ For rice, however, before crushing or polishing (nian ⺒Ǽǰȱ ‘Žȱ ™Š¢ȱ ‘ž••œȱ were removed in a hulling workshop (longfang ⼅᠓Ǽǯȱ‘ŽȱŽ‘ž••Žȱ›’ŒŽȱ Šœȱ called “unpolished rice” and had some husks sticking to the surface. To remove the husks, the product had to be taken to a rice miller or rice polisher (nianfang ⺒ഞ or nianmichang ⺒㉇ᒴǼǯȱ ‘Žȱ ™˜•’œ‘Žȱ ›’ŒŽǰȱ ‘ŠŸ’—ȱ Šȱ  ‘’ŽȬ Œ˜•˜›ŽȱŠ™™ŽŠ›Š—ŒŽǰȱ ŠœȱŒŠ••ŽȱȃŒ•ŽŠ—ȱ›’ŒŽȄȱǻ˜›ȱ™˜•’œ‘Žȱ›’ŒŽǼȱŠ—ȱŒ˜ž•ȱ‹Žȱ œ˜•ȱ’—ȱ‘Žȱ–Š›”ŽȱǻçŠȱç‹ž—”Š’ȱŗşŖŞ‹ǰȱŘŜŝȮŘŝŞǼǯ ˜–Žȱ ŽŸ’Ž—ŒŽȱ œžŽœœȱ ‘Šȱ ‹˜‘ȱ ›’ŒŽȱ Š—ȱ ̘ž›ȱ –’••’—ȱ ’—ȱ ‘Žȱ ˜ Ž›ȱ Š—£’ȱ ›Ž’˜—ȱ ™›˜‹Š‹•¢ȱ Ž—Ž›Žȱ ‘Žȱ œŽŠ–ȱ Ž—’—Žȱ ŠŽȱ ’—ȱ ‘Žȱ ŽŠ›•¢ȱ ŗŞŜŖœǯȱ Steam-powered mills were initially established in the Shanghai area because of the existing technical know-how, personnel, and capital in the foreign Œ˜––ž—’¢ǯȱ Žȱ ‘ŠŸŽȱ —˜ȱ ŽŸ’Ž—ŒŽȱ ˜ȱ ‘˜ ȱ ‘ŽœŽȱ ꛖœȱ ˜™Ž›ŠŽǯȱ Žȱ ˜—•¢ȱ ”—˜ ȱ‘Šȱ‘Žȱꛜȱ–ŽŒ‘Š—’£Žȱ›’ŒŽȱ–’••ȱ ŠœȱœŽȱž™ȱ’—ȱŗŞŜřȱ’—ȱ‘ŽȱœŠ–ŽȱŒ˜–™˜ž—ȱŠœȱŠȱ›’ŒŽȱœ‘˜™ȱǻ‘’¢Ž‹žȱž˜“’ȱ–Š˜¢ħžȱŗşřřǰȱŞȱǽŘǾǰȱȃ˜˜œžěœȱŠ—žŠŒž›’—ǰȄȱřŜŗǼǯȱ‘Žȱꛜȱ̘ž›ȱ–’••ǰȱ‘Žȱ‘Š—‘Š’ȱŽŠ–ȱ•˜ž›ȱ’••ǰȱŠ•œ˜ȱŠ™peared that same year, but it was established and managed by foreigners in Shanghai who did not have the treaty rights to do business (Sun Yutang ŗşśŝǰȱ™Š›ȱŗǰȱŗŖŞȮŗŖşDzȱ‘Š—‘Š’œ‘’ȱ•’Š—œ‘ħžǰȱ‘Š—‘Š’œ‘’ȱ˜—œ‘Š—ȱ¡’—£‘Ž—ȱ žŠ—•ħžǰȱ Š—ȱ ‘Š—‘Š’ȱ œ‘Ž‘ž’ȱ ”Ž¡žŽ¢žŠ—ȱ “’—“’ȱ ¢Š—“’žœž˜ȱ “’—“’œ‘’ȱ ¢Š—“’žœ‘’ȱŗşŞŝǰȱŞǼǯ

The Rice and Wheat Flour Market Economies

81

˜›Ž˜ŸŽ›ǰȱ’ȱœŽŽ–œȱ‘Šȱ‘ŽœŽȱ–’••œȱ’ȱ—˜ȱŽ¡™Š—ǯȱ˜›ȱ’ȱ‘Ž¢ȱŠĴ›ŠŒȱ Š—¢ȱ —Ž Œ˜–Ž›œȱ ’—ȱ ‘Žȱ ˜ Ž›ȱ Š—£’ȱ ›Ž’˜—ȯ‹Ž˜›Žȱ ŗŞşśǰȱ ˜—•¢ȱ ˜—Žȱ –˜›Žȱ –ŽŒ‘Š—’£Žȱ̘ž›ȱ–’••ȱ ŠœȱœŽȱž™ȱ’—ȱ‘Š—‘Š’ȱǻž—ȱžŠ—ȱŗşśŝǰȱ™Š›ȱŘǰȱşŞŜȮ şŞŝDzȱ ‘Š—‘Š’œ‘’ȱ •’Š—œ‘ħžǰȱ ‘Š—‘Š’œ‘’ȱ ˜—œ‘Š—ȱ ¡’—£‘Ž—ȱ žŠ—•ħžǰȱ and Shanghai shehui kexueyuan jingji yanjiusuo jingjishi yanjiushi 1987, ŚŝŖǼǰȱ ‘’•ŽȱŠ—˜‘Ž›ȱ›’ŒŽȱ–’••ȱ Šœȱ›ŽŒ˜›Žȱ’—ȱ Š—£‘˜žȱǻ Š—Œ‘˜ ȱᵁᎲǼȱ ǻ‘’¢Ž‹žȱ‘˜—ž˜ȱ“’—“’ȱ—’Š—“’Š—ȱ‹’Š—£žŠ—ȱ Ž’¢žŠ—‘ž’ȱŗşřŚǰȱ śŞȮśşǼǯȱ‘Žȱ ‘Š—‘Š’ȱ̘ž›ȱ–’••ȱ Šœȱœž™™˜œŽȱ˜ȱŠ•œ˜ȱŽ—ŠŽȱ’—ȱ›’ŒŽȱ–’••’—ȱǻž—ȱžŠ—ȱ ŗşśŝǰȱ™Š›ȱŘǰȱ™ǯȱşŞŝǼǰȱœ˜ȱŠœȱ—˜ȱ˜ȱ•Žȱ‘Žȱ–ŠŒ‘’—Žœȱ‹Žȱ’•Žǯ Ў›ȱŗŞşśǰȱ‹˜‘ȱ’—žœ›’ŽœȱŠĴ›ŠŒŽȱ–˜›ŽȱŠĴŽ—’˜—ȱ›˜–ȱ˜›Ž’—ȱ’—ŸŽœ˜›œǯȱ—Žȱ›ŽŠœ˜—ȱ Šœȱ‘ŽȱŗŞşśȱ›ŽŠ¢ȱ˜ȱ‘’–˜—˜œŽ”’ȱ‘Šȱ›Š—Žȱ˜ȱ Š™Š—ŽœŽȱ—Š’˜—Š•œȱǻŠ—ȱ•ŠŽ›ȱ˜ȱ˜‘Ž›ȱ˜›Ž’—ȱ—Š’˜—Š•œǼȱ’—ȱ‘’—Šȱ‘Žȱ›’‘ȱȃ˜ȱ open factories and engage in industries and manufacturing in China” (Fair‹Š—”ȱ Š—ȱ ’žȱ ŗşŞŖǰȱ ŗŖŞǼǯȱ ˜ȱ ˜—•¢ȱ ’ȱ ‘’œȱ ›ŽŠ¢ȱ ›ŽžŒŽȱ •ŽŠ•ȱ ‘Š£Š›œǰȱ ’ȱ ‹›˜ž‘ȱ—Ž ȱ’—ŸŽœ–Ž—ȱŠ—ȱ—Ž ȱŽŒ‘—˜•˜’Žœǯȱ‘Žȱ•ŠĴŽ›ȱ Ž›Žȱœ˜˜—ȱ›Š—œŽ››Žȱ˜ȱ‘’—ŠǰȱŽ’‘Ž›ȱ‘›˜ž‘ȱ˜›Ž’—ȱ˜›ȱǻ•ŠŽ›Ǽȱ‘’—ŽœŽȱŽŒ‘—’Œ’Š—œǯȱ—ȱŗŞşŜǰȱ British capital established the China Flour Mill in Shanghai.ś Four years later, the Chinese-owned Fu Feng Flour Mill (Fufeng mianfenchang 䯰䈤咉㉝ᒴǼȱ  Šœȱ Š•œ˜ȱ ŽœŠ‹•’œ‘Žȱ ’—ȱ ‘Žȱ Œ’¢ȱ ǻŠ—ȱ ’—¢žȱ ŗşśŝǰȱ şŘŝȮşŘŞDzȱ ‘Š—‘Š’œ‘’ȱ •’Š—œ‘ħžǰȱ‘Š—‘Š’œ‘’ȱ˜—œ‘Š—ȱ¡’—£‘Ž—ȱžŠ—•ħžǰȱŠ—ȱ‘Š—‘Š’ȱœ‘Žhui kexueyuan jingji yanjiusuo jingjishi yanjiushi 1987, 190–191; Chen Zhen Š—ȱŠ˜ȱž˜ȱŗşśŝȮŗşŜŗǰȱŗǯŚŝŚǼǯȱ—ȱ›’ŒŽȱ–’••’—ǰȱŠ—ȱ–Ž›’ŒŠ—Ȭ˜ —Žȱ›’ŒŽȱ–’••ȱ  ŠœȱŽœŠ‹•’œ‘Žȱ’—ȱ‘ŽȱœŠ–Žȱ¢ŽŠ›ȱǻŗşŖŖǼǰȱ ‘Ž›ŽŠœȱŠȱ‘’—ŽœŽȱ˜—Žȱ Šœȱ˜›–Žȱ œ‘˜›•¢ȱ ŠĞŽ› Š›ǰȱ ’—ȱ ŗşŖŗȱ ǻ‘’¢Ž‹žȱ ž˜“’ȱ –Š˜¢ħžȱ ŗşřřǰȱ Şȱ ǽŘǾȱ ȃ˜˜œžěœȱ Š—žŠŒž›’—ǰȄȱřŜŗȮřŜŘǼǯȱ••ȱ‘ŽœŽȱ–’••œȱ‹Ž•˜—Žȱ˜ȱ‘ŽȱœŽŒ˜—ȱŒŠŽ˜›¢ȱ of mechanized mills having steam engines and steel millers. In the three decades before the Second Sino-Japanese War, the rice- and ̘ž›Ȭ–’••’—ȱ ŒŠ™ŠŒ’¢ȱ  Šœȱ Ž¡™Š—’—ǰȱ Šœȱ  Ž›Žȱ ‘Žȱ —ž–‹Ž›ȱ ˜ȱ –’••œǯȱ œȱ œ‘˜ —ȱ ’—ȱ Š‹•Žȱ Śǯřǰȱ ‘Žȱ —ž–‹Ž›ȱ ˜ȱ ̘ž›ȱ –’••œȱ  ’‘ȱ ‘’—ŽœŽȱ ŒŠ™’Š•ȱ ’—ȱ ‘Žȱ region rose from twenty-nine to thirty-eight from 1913 to 1921. Although ‘’œȱ—ž–‹Ž›ȱ›˜™™Žȱœ•’‘•¢ȱ˜ȱ‘’›¢Ȭ꟎ȱ’—ȱŗşřŜǰȱ‘Žȱ™›˜žŒ’˜—ȱŒŠ™ŠŒity continued to grow, from 49,000 bags a day in 1913 to 134,700 bags a day ’—ȱŗşŘŗǰȱŠ—ȱ˜ȱŗŞřǰŘŖŖȱ‹ŠœȱŠȱŠ¢ȱ’—ȱŗşřŜǯȱ‘Žȱ‘’—ŽœŽȬ˜ —Žȱ–’••œȱ’—ȱ‘’œȱ region were so competitive with both domestic and foreign rivals that they accounted for more than 40 percent of the total daily production capacity for all Chinese-owned mills in the country throughout those years. Moreover, foreign-owned competitors were selling out and leaving the market by the eve of the Second Sino-Japanese War. ŽŽȱžȱ‘Ž—•ž˜ȱǻŗşŗşǰȱŘǯŚǼDzȱ ’ȱ’—ȱǻŗşŘśǰȱśŚǼDzȱŠ—ȱŠ—ȱ‘ħž—ȱǻŗşŞşǰȱśŖŜǼǯȱ‘Ž›Žȱ Šœȱ Š•œ˜ȱŠȱȃ Ž›–Š—Ȭ˜ —ŽȄȱ̘ž›ȱ–’••ȱŽœŒ›’‹ŽȱŠœȱ‘Žȱꛜȱ–’••ȱ‹¢ȱœ˜–Žȱ‘’—ŽœŽȱœ˜ž›ŒŽœǰȱ‹žȱ –˜œȱŽŸ’Ž—ŒŽȱœž™™˜›œȱ‘Žȱ›’’œ‘ȱ˜—Žȱ‹Ž’—ȱꛜǯȱ—ȱ‘Žȱ Ž›–Š—Ȭ˜ —Žȱ˜—ŽǰȱœŽŽȱ‘’¢Ž‹žȱ ž˜“’ȱ –Š˜¢ħžȱ ǻŗşřřǰȱ Şȱ ǽŘǾǰȱ ȃ˜˜œžěœȱ Š—žŠŒž›’—ǰȄȱ řřŘǼDzȱ ‘žȱ Š—¡’—ȱ ǻŗşřşǰȱ śŚśǼDzȱ ˜—ȱ ž—ȱǻŗşřřǰȱŚśǼDzȱŠ—ȱ’žȱŠ“ž—ȱǻŗşřŝǰȱŘşǼǯ śȲȱ

Foreign-owned

Chinese-owned

ŗşřŜ Foreign-owned

řśǰśŖŖ

11,900 1,000 ŜŖŖ

49,000

ŝśǰŞŗś

ŗś

12 1 1

29

śŝ

43

1

0 0 0

1

98,739

800

0 0 0

800

137

38

12 1 0

Řś

řŗŘǰŜŚř

134,700

19,200 1,000 0

ŗŗŚǰśŖŖ

14

1

0 0 0

1

ŚşǰśŚŜ

ŘǰśŖŖ

0 0 0

ŘǰśŖŖ

ŗśŘ

řś

13 3 1

18

ŚśŘǰŘŗŞ

183,200

33,800 ŗŖǰŜŖŖ ŗǰŜŖŖ

137,200

17

0

0 0 0

0

śŞǰśŖŖ

0

0 0 0

0

Number Daily Number Daily Number Daily Number Daily Number Daily Number Daily of mills production of mills production of mills production of mills production of mills production of mills production capacity capacity capacity capacity capacity capacity

Chinese-owned

Chinese-owned

Foreign-owned

1921

1913

Note:ȱ‘Žȱž—’ȱ’œȱ‘Žȱȃ‹ŠȄȱǻ‹Ž˜›ŽȱŗşŘŚǰȱśŖȱ™˜ž—œȱ™Ž›ȱ‹ŠDzȱ‘Ž›ŽŠĞŽ›ǰȱŚşȱ™˜ž—œȱ™Ž›ȱ‹ŠǼǯ Source:ȱ‘Š—‘Š’œ‘’ȱ•’Š—œ‘ħžǰȱ‘Š—‘Š’œ‘’ȱ˜—œ‘Š—ȱ¡’—£‘Ž—ȱžŠ—•ħžǰȱŠ—ȱ‘Š—‘Š’ȱœ‘Ž‘ž’ȱ”Ž¡žŽ¢žŠ—ȱ“’—“’ȱ¢Š—“’žœž˜ȱ “’—“’œ‘’ȱ¢Š—“’žœ‘’ȱǻŗşŞŝǰȱřřȮřśǰȱŚŞȮśŗǰȱŜŜȮŜşǼǯ

Shanghai and Wuxi Other Parts of Jiangsu Anhui Zhejiang Regional Total China Total

Location

Š‹•ŽȱŚǯřǯȱ ›˜ ‘ȱ˜ȱŽŒ‘Š—’£Žȱ•˜ž›ȱ’••œȱ’—ȱ‘Žȱ˜ Ž›ȱŠ—£’ȱŽ’˜—ǰȱŗşŗřȮŗşřŜ

82 Kai-yiu Chan

The Rice and Wheat Flour Market Economies

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Incomplete data for the rice trade shows the same trend. In Shanghai, from 1900 to 1931, the number of mechanized rice mills rose from 1 to 49 ǻ‘Š—‘Š’ȱ œ‘Š—¢Žȱ Œ‘ž¡žȱ ¢’—‘Š—ȱ ’Š˜Œ‘Š‹žȱ ŗşřŗǰȱ ŝşȮŞřǼǯȱ ž¡’ȱ ⛵䣿 ‘Šȱ’œȱꛜȱ–ŽŒ‘Š—’£Žȱ›’ŒŽȱ–’••ȱ’—ȱŗşŗŖǰȱŠ—ȱ‹¢ȱŗşřŜȱ‘Ž›Žȱ Ž›Žȱŗřȱ–’••œȱ ǻ‘Ž‘ž’ȱ “’—“’ȱ ’Š˜Œ‘Šœž˜ȱ ŗşřŜǰȱ ŜŘȮŜřǼǯȱ—˜‘Ž›ȱ œž›ŸŽ¢ǰȱ ˜—Žȱ ¢ŽŠ›ȱ ŽŠ›•’Ž›ǰȱ ›ŽŒ˜›Žȱśşȱ–’••œȱ’—ȱ ’Š—œžǰȱşȱ’—ȱ—‘ž’ǰȱŠ—ȱŗŖřȱ’—ȱ‘Ž“’Š—ǰȱ–Š”’—ȱŗŝŗȱ mills all together (Shiyebu Zhongguo jingji nianjian bianzuan weiyuanhui ŗşřśǰȱşȮŗŞǼǯȱ‘Žȱ›˜ ‘ȱ’œȱ˜‹Ÿ’˜žœǯ The mechanization in both industries required successive technological breakthroughs in the 1910s and 1920s, such as using electricity for steam ™˜ Ž›ȱ ǻ‘’¢Ž‹žȱ ž˜“’ȱ –Š˜¢ħžȱ ŗşřřǰȱ Şȱ ǽŝǾDZȱ ŗŗŗřDzȱ Š—ȱ ‘ħž—ȱ ŗşŞşǰȱ ŚşŗDzȱ ‘Š—‘Š’œ‘’ȱ ˜—œ‘Š—ȱ ¡’—£‘Ž—ȱ žŠ—•ħžǰȱ ‘Š—‘Š’œ‘’ȱ ’¢’ȱ “’’Š—ȱ ˜—¢Ž“žǰȱŠ—ȱ ’š’ȱ˜—¢Žȱœ‘’•’Š˜£žȱŗşŝşǰȱŗǯŚŗŜDzȱŠ—ȱŠ“’—ȱŗşřŞǰȱŗǯşŗŜȮ şśŜǼǯȱŠ›’—ȱ’—ȱŗşŗŖǰȱ–˜›Žȱ‘Š—‘Š’ȱ̘ž›ȱ–’••œȱŠ˜™ŽȱŽ•ŽŒ›’ŒŠ•ȱ–’••’—ȱ machines to replace the steam engine (Shanghaishi gongshang xingzheng žŠ—•ħžǰȱ‘Š—‘Š’œ‘’ȱ’¢’ȱ“’’Š—ȱ˜—¢Ž“žǰȱŠ—ȱ ’š’ȱ˜—¢Žȱœ‘’•’Š˜£žȱŗşŝşǰȱ ŗǯŚŗŜǼǯȱ‘Žȱœ™›ŽŠȱ˜ȱ–ŽŒ‘Š—’£Žȱ›’ŒŽȱ–’••œȱ˜ŸŽ›ȱ‘Žȱ›Ž’˜—ǰȱŠœȱ’œȱŽœŒ›’‹Žȱ ’—ȱ˜—Žȱœž›ŸŽ¢ȱ˜ȱ‘Žȱ–’ȬŗşřŖœǰȱ’œȱŠ•œ˜ȱŠĴ›’‹žŽȱ•Š›Ž•¢ȱ˜ȱ‘Žȱ’—›˜žŒ’˜—ȱ of electrical motors and diesel engines (Shiyebu Zhongguo jingji nianjian ‹’Š—£žŠ—ȱ Ž’¢žŠ—‘ž’ȱŗşřŚǰȱ ŚŝǼǯȱ—ȱœ‘˜›ǰȱ‘Žȱ’—žœ›¢ȱŒ‘Š—Žǰȱꛜȱ‹¢ȱ using steam, and then sustaining growth by using electricity. Records of production capacity enable us to distinguish mills by their technology: late vintage mills used steam engines, whereas earlier factories used stone mills. Although we do not have evidence for pre-1890 animal™˜ Ž›Žȱ–’••œȱ’—ȱ‘Žȱ˜ Ž›ȱŠ—£’ǰȱ—˜›ȱ˜ȱ Žȱ‘ŠŸŽȱ‘Žȱꐞ›Žœȱ›Ž•ŠŽȱ˜ȱ‘Žȱ production capacity of any single set of milling machines, we do know that Šœȱ•ŠŽȱŠœȱ‘ŽȱŗşŚŖœǰȱ̘ž›Ȭ–’••’—ȱȃ ˜›”œ‘˜™œȄȱ’—ȱ‘Žȱž‘Š—ȱŠ›ŽŠȱ‘ŠȱžœŽȱ Š—’–Š•ȱ™˜ Ž›ȱŒ˜ž•ȱ™›˜žŒŽȱ˜—•¢ȱ꟎ȱ‹ŠœȱǻŚşȱ™˜ž—œȱ™Ž›ȱ‹ŠǼȱ™Ž›ȱŠ¢ȱ ǻ‘Š—‘Š’œ‘’ȱ•’Š—œ‘ħžǰȱ‘Š—‘Š’œ‘’ȱ˜—œ‘Š—ȱ¡’—£‘Ž—ȱžŠ—•ħžǰȱŠ—ȱ ‘Š—‘Š’ȱœ‘Ž‘ž’ȱ”Ž¡žŽ¢žŠ—ȱ“’—“’ȱ¢Š—“’žœž˜ȱ“’—“’œ‘’ȱ¢Š—“’žœ‘’ȱŗşŞŝǰȱŗŞǼǯȱ ŽŠ— ‘’•Žǰȱ‘ŽȱꛜȱŽ—Ž›Š’˜—ȱ˜ȱœ˜—Žȱ–’••œȱžœ’—ȱœŽŠ–ȱ™˜ Ž›ȱ’—ȱ‘ŽȱŽ’jing area of the early 1890s could already produce 200 piculs, or roughly 440 ‹ŠœȱǻśŖȱ™˜ž—œȱ™Ž›ȱ‹ŠǼǰȱ™Ž›ȱŠ¢ǯŜȱ—ȱŗŞşŜǰȱ‘ŽȱꛜȱŽ—Ž›Š’˜—ȱ˜ȱ˜›Ž’—Ȭ owned “modern mills” in Shanghai could produce two times more (800 ‹ŠœǼȱ™Ž›ȱŠ¢ȱǻ™ǯȱśŗŞǼǯȱ‘Žȱ‘’—ŽœŽȱžȱŽ—ȱ•˜ž›ȱ’••ȱ ŠœȱŽŸŽ—ȱ–˜›Žȱ™˜ Ž›ž•ȱ‘Š—ȱ’œȱŒ˜ž—Ž›™Š›ǰȱ ’‘ȱŠȱ™›˜žŒ’˜—ȱŒŠ™ŠŒ’¢ȱ‘›ŽŽȱ’–ŽœȱǻŘǰśŖŖȱ‹Šœȱ ŽŽȱž—ȱžŠ—ȱǻŗşśŝǰȱ™Š›ȱŘǰȱ™™ǯȱşŞŝȮşŞŞǼǯȱ‘Žȱœ˜ž›ŒŽœȱœŠ¢ȱ‘ŽœŽȱ–’••œȱ Ž›ŽȱŒŠ™Š‹•Žȱ˜ȱ ™›˜žŒ’—ȱŘŖŖȱ™’Œž•œȱŠȱŠ¢ǯȱŽ˜›ŽȱŗşŘŚǰȱśŖȱ™˜ž—œȱ ŠœȱŽšžŠ•ȱ˜ȱŗȱ‹Šǰȱ ‘’•Žȱŗȱ™’Œž•ȱ ŠœȱŽšžŠ•ȱ ˜ȱŗŖŖȱŒŠĴ’Žœǰȱ˜›ȱŗŗŖȱ™˜ž—œǯȱ‘Ž›Ž˜›ŽǰȱŘŖŖȱ™’Œž•œȱ ŠœȱŽšžŠ•ȱ˜ȱŘŘǰŖŖŖȱ™˜ž—œǰȱ˜›ȱŚŚŖȱ‹Šœǯȱ Ў›ȱŗşŘŚǰȱ‘ŽȱœŠ—Š›ȱ˜›ȱŽŠŒ‘ȱ‹Šȱ˜ȱ̘ž›ȱ Šœȱ›ŽžŒŽȱ˜ȱŚşȱ™˜ž—œǯȱ˜›ȱ‘ŽȱŒ˜—ŸŽ›œ’˜—ȱ ›˜–ȱ™’Œž•ȱ˜ȱŒŠĴ¢ȱŠ—ȱ™˜ž—ǰȱœŽŽȱŽ›”’—œȱǻŗşŜşǰȱȃ‹‹›ŽŸ’Š’˜—œȱŠ—ȱšž’ŸŠ•Ž—œȄǼDzȱ˜›ȱ‘Žȱ  Ž’‘ȱ˜ȱŠȱ‹Šȱ˜ȱ̘ž›ȱ‹Ž˜›ŽȱŗşŘŚǰȱœŽŽȱ‘˜—ž˜ȱ”Ž¡žŽ¢žŠ—ȱ“’—“’ȱ¢Š—“’žœž˜ǰȱ‘˜—¢Š—ȱ ˜—œ‘Š—ȱ¡’—£‘Ž—ȱžŠ—•ħžǰȱŠ—ȱ’‹Ž—£‘ž¢’ȱ“’—“’ȱŠ’£Š˜ȱ¢Š—“’žœ‘’ȱǻŗşŜŜǰȱśřǼǯ ŜȲȱ

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Kai-yiu Chan

™Ž›ȱŠ¢Ǽȱ‘Šȱ˜ȱ‘Žȱ›’’œ‘ȱ–’••ȱǻ™ǯȱŗşŚǼǯȱ‘Ž—ȱȃ ˜›”œ‘˜™œȄȱŠ—ȱȃ–˜Ž›—ȱ –’••œǰȄȱ ’‘ȱ‘Ž’›ȱ’쎛Ž—ȱ•ŽŸŽ•œȱ˜ȱŽŒ‘—˜•˜¢ǰȱŠ›ŽȱŒ˜–™Š›Žǰȱ‘Žȱ•ŠĴŽ›ȱ‘Šȱ ŠȱŠ’•¢ȱ™›˜žŒ’˜—ȱŒŠ™ŠŒ’¢ȱœ˜–Žȱ꟎ȱ‘ž—›Žȱ’–Žœȱ‘Šȱ˜ȱ‘Žȱ ˜›”œ‘˜™œǯ In rice milling, a non-steam-powered polisher (nianfangǼȱ ’—ȱ ‘Š—‘Š’ȱ Œ˜ž•ȱ™›˜žŒŽȱşȱ™’Œž•œȱ™Ž›ȱŠ¢ȱ’—ȱ‘ŽȱꛜȱŽŒŠŽȱ˜ȱ‘Žȱ Ž—’Ž‘ȱŒŽ—ž›¢ȱ ǻçŠȱç‹ž—”Š’ȱŗşŖŞ‹ǰȱŘŝŚǼǯȱ—ȱŒ˜—›ŠœǰȱŠȱ–ŽŒ‘Š—’£Žȱ›’ŒŽȱ–’••ȱ’—ȱ‘ŽȱœŠ–Žȱ city in the early 1930s could produce 4 piculs per hour (Yao Qingsan and —ȱ žŽ–’—ȱ ŗşřśǰȱ ŚǼǯȱ —ȱ ‘Žȱ –’ȬŗşřŖœǰȱ ’Š—œžȱ ›˜Ÿ’—ŒŽȱ ›Ž™˜›Žȱ Šȱ ˜Š•ȱ ˜ȱ ŝŚŜȱ ›’ŒŽȬ–’••’—ȱ  ˜›”œ‘˜™œȱ  ’‘ȱ ŘǰŚŞşǰŝşŖȱ ™’Œž•œȱ ˜ȱ Š——žŠ•ȱ ™›˜žŒ’˜—ȱ capacity. In other words, each workshop could produce about 3,337 piculs Šȱ¢ŽŠ›ǯȱŽŠ— ‘’•Žǰȱ˜ȱ‘ŽȱęĞ¢Ȭ—’—Žȱ–ŽŒ‘Š—’£Žȱ›’ŒŽȱ–’••œȱ›ŽŒ˜›Žȱ’—ȱ‘Žȱ same province, forty-eight listed their production capacity as 3,243,000 piculs of aggregate production capacity a year. On average, each mill could ™›˜žŒŽȱŠ‹˜žȱŜŝǰśŜŘȱ™’Œž•œȱŠȱ¢ŽŠ›ȱǻ‘’¢Ž‹žȱ‘˜—ž˜ȱ“’—“’ȱ—’Š—“’Š—ȱ‹’Š—£žŠ—ȱ Ž’¢žŠ—‘ž’ȱŗşřśǰȱşȮŗŘǰȱŘśȮŘŜǼǯȱ¢ȱŒ˜–™Š›’—ȱ‘Žȱ›’ŒŽȱ ˜›”œ‘˜™œȱ Š—ȱ‘Žȱ›’ŒŽȱ–’••œǰȱ Žȱꗍȱ‘Šȱ‘ŽȱœŽŒ˜—ȱ™›˜žŒŽȱ Ž—¢ȱ’–Žœȱ–˜›Žǯ Žȱ ŒŠ—ȱ Š•œ˜ȱ ˜‹œŽ›ŸŽȱ ‘˜ ȱ ŽŒ‘—˜•˜’ŒŠ•ȱ Œ‘Š—Žȱ ’—ĚžŽ—ŒŽȱ ‘Žȱ ›Ž•Š’ŸŽȱ ™›’ŒŽȱ˜ȱ›’ŒŽȱŠ—ȱ̘ž›ǯȱŠ›’’–Žȱžœ˜–œȱœŠ’œ’Œœȱœ‘˜ ȱ‘Šȱ›˜–ȱŗŞŞŘȱ˜ȱ ŗşřŗǰȱ‘Žȱ™›’ŒŽȱ˜ȱ’–™˜›Žȱ›’ŒŽȱ›Ž ȱ›Š™’•¢ȱŠœȱŒ˜–™Š›Žȱ ’‘ȱ‘Šȱ˜ȱ̘ž›ǯȱ ‘Žȱꛜȱ›˜œŽȱŠ‹˜žȱŚǯşȱ’–Žœȱ˜ŸŽ›ȱęĞ¢ȱ¢ŽŠ›œǰȱ‹žȱ‘ŽȱœŽŒ˜—ȱ˜—•¢ȱŗǯŜşȱ’–Žœȱ ǻ‘Š—ȱŠ—ȱŠ—ȱŘŖŖřDZŗşŗǼǯȱ—ȱ˜–Žœ’Œȱ™›’ŒŽœǰȱ‘Žȱ•’–’Žȱ’—˜›–Š’˜—ȱ Žȱ have shows that in Tianjin, Shanghai, and Guangzhou, the price of rice rose –˜›Žȱ›Š™’•¢ȱ‘Š—ȱ‘Šȱ˜ȱ̘ž›ȱž›’—ȱ‘Žȱ™Ž›’˜ȱŗşŗŘȮŗşřŜȱǻ‘Š—ȱŘŖŖŘǼǯȱ Flour was probably processed more economically than rice. ž›ȱ ’—žœ›¢ȱ Œ˜–™Š›’œ˜—ȱ ‹¢ȱ ŒŠ™ŠŒ’¢ȱ œžŽœœȱ ‘Šȱ ̘ž›ȱ –’••’—ȱ ŠŒ‘’ŽŸŽȱŠȱŠœŽ›ȱ›˜ ‘ȱ›ŠŽȱ‘Š—ȱ’ȱ›’ŒŽǰȱ‹¢ȱœ’–™•¢ȱ–’••’—ȱŠœŽ›ǯȱ ˜ ever, production capacity only represents a potential. Organizational fac˜›œǰȱ œžŒ‘ȱ Šœȱ œ™ŽŒ’Š•’£Š’˜—ȱ Š—ȱ ‘Žȱ ŽŒ˜—˜–’Œœȱ ˜ȱ œŒŠ•Žǰȱ Š•œ˜ȱ ’—ĚžŽ—ŒŽȱ Œ‘Š—Žœȱ’—ȱ™ŠĴŽ›—œȱ˜ȱ™›˜žŒ’˜—ǯ Business Organization: Proliferation versus Integration ‘Žȱ‹žœ’—Žœœȱꛖœȱ’—ȱ‘Žȱ›’ŒŽȱŠ—ȱ̘ž›ȱ›ŠŽȱ’—ȱ‘Žȱ˜ Ž›ȱŠ—£’ȱ›Ž’˜—ȱž›’—ȱ‘Žȱ™Ž›’˜ȱž—Ž›ȱ›ŽŸ’Ž ȱŽŸ˜•ŸŽȱŸŽ›¢ȱ’쎛Ž—•¢ǯȱ˜‘ȱ›ŠŽœȱ‘Šȱœ’–’•Š›ȱ chains of market agents and participants (brokers, grain shops, warehouses, Š—ȱ–’••œǼǰȱ‹žȱ‘Ž¢ȱŽŸŽ—žŠ••¢ȱŽŸŽ•˜™Žȱ ˜ȱ’쎛Ž—ȱ‹žœ’—Žœœȱœ›žŒž›Žœǯ The rice trade in Shanghai underwent proliferation in the marketplace without substantial institutional change for vertical integration. According to several invaluable Japanese surveys of the early twentieth century, the rice trade was conducted by multiple layers of market agents, including grain dealers from source markets (maimi keren 䊷㉇ᅶҎǼǰȱ“ž—”ȱ˜›ȱ˜‘Ž›ȱ boat owners (chuanhu 㠍᠊ , independent grain merchants (shuike ∈ᅶǼǰȱ Shanghai wholesale rice dealers (mihao ㉇㰳 or mihang ㉇㸠Ǽǰȱ ‘Š—‘Š’ȱ

The Rice and Wheat Flour Market Economies

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wholesale grain dealers (zalianghang 䲰㊻㸠 or lianghang ㊻㸠ǼǰȱŠ—ȱ•˜ŒŠ•ȱ rice shops (midian ㉇ᑫ or famihang ⱐ㉇㸠ǼǰȱŠœȱ Ž••ȱŠœȱ›ŽŽ¡™˜›’—ȱŽŠ•ers (baozihang ࣙᄤ㸠ǼDzȱœŽŽȱꐞ›ŽȱŚǯŘǯȱ‘ŽœŽȱŠŽ—œȱ Ž™Ž—Žȱ˜—ȱ ‘˜•ŽœŠ•ŽȱŽŠ•Ž›œȱŠ—ȱ›’ŒŽȱœ‘˜™œǰȱ ’‘ȱ‘Žȱ ‘˜•ŽœŠ•ŽȱŽŠ•Ž›œȱ‘ŠŸ’—ȱŠ—ȱ˜ĜŒ’Š•ȱ ŒŽ›’ęŒŠŽȱ˜›ȱ‹›˜”Ž›ŠŽȱǻyatie ⠭ᏪǼȱ’—ȱ‘Ž’›ȱ™›˜žŒȱ•’—Žǯȱ—ȱ˜‘Ž›ȱ ˜›œǰȱ they were licensed merchants in a particular city, bringing buyers, sellers, Š—ȱ›ŽŠ’•Ž›œȱ˜Ž‘Ž›ȱǻŽ’œ‘’ȱŠŠœ‘’ȱŗşŖŞǰȱŗǯŗřŖȮŗŜřǰȱśǯŗśȮŘŜǰȱřŚȮřşDzȱçŠȱ ç‹ž—”Š’ȱŗşŖŞŠǰȱŘřşȮŘśŗǼǯȱ—ȱ‘ŽȱŽŠ›•¢ȱ Ž—’Ž‘ȱŒŽ—ž›¢ǰȱřřȱ˜ȱ‘ŽœŽȱ ‘˜•Žsale dealers conducted trade within Shanghai’s walled city, with another 32 in Nanshi फᏖǰȱŝŘȱ’—ȱ‘Žȱ›’’œ‘ȱŽĴ•Ž–Ž—ǰȱŗŖřȱ’—ȱ‘Žȱ–Ž›’ŒŠ—ȱŽĴ•Ž–Ž—ǰȱ 28 in the French Concession, and 30 others in the suburbs, bringing the total —ž–‹Ž›ȱ˜ȱŘşŞȱǻŽ’œ‘’ȱŠŠœ‘’ȱŗşŖŞǰȱśǯřŝȮřşǼǯ Figure 4.2. The Shanghai Rice Market, ca. the 1900s ’ŒŽȱœŽ••’—ȱ ’ŒŽȱ™›˜Œž›Ž–Ž—ȱ ’ŒŽȬ–’••’—ȱœŽ›Ÿ’ŒŽȱ —›žœ’—ȱ˜‘Ž›œȱ˜›ȱ›’ŒŽȱœŽ••’—ȱ ȱ ˜ž›ŒŽȱŠ›”ŽDZȱ –Š’–’ȱ”Ž›Ž—

ȱ ȱ ȱ ȱ

œ‘ž’”Ž

Œ‘žŠ—‘ž

ȱ ȱ ‘Š—‘Š’ȱ Š›”ŽDZȱ ȱ

 ‘˜•ŽœŠ•Žȱ ŽŠ•Ž›œȱǻ–’‘Š˜ǰȱ –’‘Š—ǰȱ £Š•’Š—‘Š—ǰȱ •’Š—‘Š—Ǽȱ

›’ŒŽȱ–’••œȱ ǻ—’Š—Š—ǰȱ —’Š—–’Œ‘Š—Ǽȱ

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›ŽŽ¡™˜›’—ȱ ŽŠ•Ž›œȱ ǻ‹Š˜£’‘Š—Ǽȱ

•˜ŒŠ•ȱ›ŽŠ’•Ž›œȱ ǻ–’’Š—ǰȱ Š–’‘Š—Ǽȱ

Sources: Ž’œ‘’ȱŠŠœ‘’ȱǻŗşŖŞǰȱśǯŗśȮŘŜǰȱřŚȮřşǰȱŗDZŗřŖȮŗŜřǼDzȱçŠȱç‹ž—”Š’ȱǻŗşŖŞŠǰȱ ŘřşȮŘśŗǼǯ

ŞŜ

Kai-yiu Chan

Within these chains of marketing agents, mechanized rice mills (nianfang or nianmichangǼȱ Ž›Žȱ–’••’—ȱ›’ŒŽȱ–˜œ•¢ȱ˜—ȱ‹Ž‘Š•ȱ˜ȱŠȱ›’ŒŽȱ–Ž›Œ‘Š—ǰȱ a dealer, or a rice or grain shop. In so doing, the mill charged its client a fee. To clients overdue in collecting the grain, the mill would also charge a œ˜›ŠŽȱŽŽȱǻçŠȱç‹ž—”Š’ȱŗşŖŞ‹ǰȱŘŜŝȮřŖŘǼǯ The mill seldom acquired paddy for its own milling, probably because ˜ȱ ‘Žȱ ŸŠ›’Žȱ  Š¢œȱ ‹¢ȱ  ‘’Œ‘ȱ ‘Žȱ ™›˜žŒŽȱ  Šœȱ ꛜȱ ˜›Ž›Žǯȱ ŒŒ˜›’—ȱ to the observations of some Japanese scholars, rice in Shanghai could be ‹˜ž‘ȱ’—ȱ˜ž›ȱ Š¢œDZȱǻŗǼȱ‘Žȱ–’••Ȃœȱ›Ž™›ŽœŽ—Š’ŸŽȱ‹ž¢’—ȱ’›ŽŒ•¢ȱ›˜–ȱ‘Žȱ œ˜ž›ŒŽȱ–Š›”ŽœǰȱǻŘǼȱ‘Žȱ ‘˜•ŽœŠ•ŽȱŽŠ•Ž›œȱ›˜–ȱ‘Žȱœ˜ž›ŒŽȱ–Š›”ŽœȱŒ‘Š›Ž›’—ȱ‘Ž’›ȱ˜ —ȱ“ž—”ǻœǼȱ˜ȱŒŠ››¢ȱ›’ŒŽȱ˜ȱ‘ŽȱŒ’¢ǰȱǻřǼȱ‘Žȱ ‘˜•ŽœŠ•ŽȱŽŠ•Ž›œȱ of the source markets entrusting a Shanghai grain merchant to look for a ‹ž¢Ž›ȱ ˜›ȱ ŽŠ•Ž›ǰȱ Š—ȱ ǻŚǼȱ ‘Š—‘Š’ȱ  ‘˜•ŽœŠ•Žȱ ŽŠ•Ž›œȱ ‹ž¢’—ȱ ›˜–ȱ ’—Žpendent grain merchants when they struck a good bargain. Among these –Ž‘˜œǰȱ‘Žȱꛜȱ ŠœȱœŽ•˜–ȱžœŽȱ‹ŽŒŠžœŽȱ˜ȱ‘Žȱ‘’‘ȱ›’œ”ȱ˜ȱ˜‹Š’—’—ȱ ™˜˜›ȬšžŠ•’¢ȱ›’ŒŽȱǻŽ’œ‘’ȱŠŠœ‘’ȱŗşŖŞǰȱŗǯŗřśȮřŜǰȱśǯřśȮřŜDzȱçŠȱç‹ž—”Š’ȱ ŗşŖŞ‹ǰȱŘŜŝȮřŖŘǼǯȱ—ȱ˜‘Ž›ȱ ˜›œǰȱ‘ŽȱŠŽ—œȱ’—ȱ‘Žȱœ˜ž›ŒŽȱ–Š›”Žœȱ‘Šȱ˜ȱ Š”Žȱ‘Žȱ’—’’Š’ŸŽȱ˜ȱŽ—Ž›ȱ‘Žȱꗊ•ȱ–Š›”Žȱ˜›ȱ Š’ȱŠ—ȱœŽŽȱ‘Žȱœ’žŠ’˜—ȱ ‘ŠȱŽ¡’œŽȱ’—ȱ‘Žȱꗊ•ȱ–Š›”Žǯȱ‘Žȱœ˜›ŠŽȱŠ—ȱž›Š‹’•’¢ȱ˜ȱ‘ŽȱŒ•ŽŠ—Žȱ rice certainly posed a problem for any participant of this market chain. Despite milling at a fast rate, a mechanized rice mill would have to assume tremendous risks to break out of such an unfavorable market condition. In the next twenty years or so, the Shanghai rice market continued to grow. Its transacted volume for domestic rice imports and exports expanded ›˜–ȱŗǰşŝŞǰŜŖŚȱ™’Œž•œȱ’—ȱ‘Žȱ™Ž›’˜ȱŗşŗŘȮŗşŗŜȱ˜ȱřǰŖŚŞǰśŚśȱ™’Œž•œȱ’—ȱ‘Žȱ™Ž›’˜ȱŗşŘŝȮŗşřŗǰȱŠ—ȱŽŸŽ—ȱ“ž–™Žȱ˜ȱŞǰŝŖŞǰśşŗȱ™’Œž•œȱ˜›ȱ‘ŽȱŽ™›Žœœ’˜—ȱ¢ŽŠ›œȱ from 1932 to 1934.7 The number of wholesale rice dealers decreased to only ŗŗŝȱꛖœȱ’—ȱ‘ŽȱŽŠ›•¢ȱŗşřŖœȱǻ‘Š—‘Š’ȱœ‘Š—¢ŽȱŒ‘ž¡žȱ¢’—‘Š—ȱ’Š˜Œ‘Š‹žȱ ŗşřŗǰȱŝŜȮŝŞǼǰȱ’–™•¢’—ȱ‘Šȱ‘Ž›Žȱ ŠœȱŠȱ™›˜ŒŽœœȱ˜ȱ‹žœ’—ŽœœȱŒ˜—ŒŽ—›Š’˜—ǯ

˜ ŽŸŽ›ǰȱœžŒ‘ȱ›˜ ‘ȱŠ—ȱŒ˜—ŒŽ—›Š’˜—ȱ’ȱ—˜ȱŒ‘Š—Žȱ‘Žȱ‹Šœ’Œȱœ›žŒture of the rice trade, although new participants appeared in the market all the time. According to some 1930s surveys, the Shanghai rice market consisted of not only all the agents mentioned previously but also a new market agent group called “distributors” (jingxiaoshang ㍧䢋ଚ or jingshou ㍧ଂ; Š˜ȱ’—œŠ—ȱŠ—ȱ—ȱ žŽ–’—ȱŗşřśǰȱŘDzȱ ˜—œ‘Š—ȱ‹Š—¢žŽ”Š—ȱŗşřŖ‹ǰȱŗŗȮŗŘDzȱ ‘Š—‘Š’ȱœ‘Š—¢ŽȱŒ‘ž¡žȱ¢’—‘Š—ȱ’Š˜Œ‘Š‹žȱŗşřŗǰȱŘśȮŘŜǰȱŞŚȮŞśǼǯȱ‘ŽœŽȱ’œ›’‹ž˜›œȱ‘Šȱ˜›’’—Š••¢ȱ‹ŽŽ—ȱ˜Ȭ‹Ž ŽŽ—œȱ’—ȱ‘Žȱ–Š›”Žȱ‹žȱŽ–Ž›ŽǰȱŠĞŽ›ȱ ‘Žȱ ꛜȱ –˜Ž›—ȱ ›’ŒŽȱ –’••ȱ  Šœȱ ŽœŠ‹•’œ‘Žȱ ’—ȱ ‘Žȱ Œ’¢ȱ ’—ȱ ŗşŖŖǰȱ ˜›ȱ ™›˜Œž›ing more unpolished rice from the source markets to that mill (Gongshang ŝȲȱ ‘Žȱꐞ›Žœȱ˜›ȱ꟎Ȭ¢ŽŠ›ȱ’—Ž›ŸŠ•œȱŠ›ŽȱŠœȱ˜••˜ œDZȱŗǰşŝŞǰŜŖŚȱ™’Œž•œȱ›˜–ȱŗşŗŘȱ˜ȱŗşŗŜDzȱŘǰřŝŖǰřŖŜȱ ™’Œž•œȱ›˜–ȱŗşŗŝȱ˜ȱŗşŘŗDzȱŘǰśŚŞǰŚŚŜȱ™’Œž•œȱ›˜–ȱŗşŘŘȱ˜ȱŗşŘŜDzȱŠ—ȱřǰŖŚŞǰśŚśȱ™’Œž•œȱ›˜–ȱŗşŘŝȱ˜ȱ ŗşřŗǯȱ˜›ȱ‘Žȱ‘›ŽŽȱ¢ŽŠ›œȱ˜ȱ‘’—ŠȂœȱŽ™›Žœœ’˜—ȱ›˜–ȱŗşřŘȱ˜ȱŗşřŚǰȱ‘Žȱꐞ›Žȱ’œȱŞǰŝŖŞǰśşŗȱ™’Œž•œǯȱ ••ȱŠŠȱŠ›ŽȱŠ”Ž—ȱ›˜–ȱ‘Žȱ—œ™ŽŒ˜›ŠŽȱ Ž—Ž›Š•ȱ˜ȱ‘Žȱ‘’—ŽœŽȱŠ›’’–Žȱžœ˜–œȱǻŗşŗśȮŗşřśǼǯ

The Rice and Wheat Flour Market Economies

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‹Š—¢žŽ”Š—ȱ ŗşřŖ‹ǰȱ ŗŖȮŗŗǼǯȱ —ȱ ‘Žȱ ŗşŗŖœǰȱ ‘Žȱ ’œ›’‹ž˜›œȱ ŽœŠ‹•’œ‘Žȱ ‘Ž’›ȱ ›ŠŽȱŠœœ˜Œ’Š’˜—ȱ’—ȱ‘Š—‘Š’ȱǻŠ˜ȱ’—œŠ—ȱŠ—ȱ—ȱ žŽ–’—ȱŗşřśǰȱŘǼǯ These distributors dealt with junk owners, cooperated with wholesale merchants in the source markets, and had relationships with Shanghai wholesale rice dealers and rice mills. They also transacted with the rice mills of other provinces and sold rice on their behalf. More important•¢ǰȱ ‘ŽœŽȱ ’œ›’‹ž˜›œȱ Ž–Ž›Žȱ Šœȱ ꗊ—Œ’Ž›œǰȱ Œ›Ž’˜›œǰȱ Š—ȱ ž—Ž› ›’Ž›œȱ ˜›ȱ ‘ŽœŽȱ –Š›”Žȱ ™Š›’Œ’™Š—œȱ ǻœŽŽȱ ęǯȱ ŚǯřǼǯȱ ¢ȱ ‘Žȱ ŽŠ›•¢ȱ ŗşřŖœǰȱ ‘Ž›Žȱ were twenty-seven in all who handled polished rice from other counties brought in by junks, while eight handled unpolished rice from other prov’—ŒŽœȱǻŠ˜ȱ’—œŠ—ȱŠ—ȱ—ȱ žŽ–’—ȱŗşřśǰȱŘDzȱ‘Š—‘Š’ȱœ‘Š—¢ŽȱŒ‘ž¡žȱ¢’—‘Š—ȱ’Š˜Œ‘Š‹žȱŗşřŗǰȱŘśȮŘŜǰȱŞŚȮŞśDzȱ ˜—œ‘Š—ȱ‹Š—¢žŽ”Š—ȱŗşřŖ‹ǰȱŗŗȮŗŘǼǯȱ These new distributors represented the further proliferation of trade net ˜›”œȱŠ—ȱ’쎛Ž—ȱœ™ŽŒ’Š•’£Š’˜—œȱ‹¢ȱ–Š›”ŽȱŠŽ—œǯ Figure 4.3. The Shanghai Rice Market, ca. the 1930s ’ŒŽȱœŽ••’—ȱ ’ŒŽȱ™›˜Œž›Ž–Ž—ȱ ’ŒŽȬ–’••’—ȱœŽ›Ÿ’ŒŽȱ —›žœ’—ȱ˜‘Ž›œȱ˜›ȱ›’ŒŽȱœŽ••’—ȱ ȱ ˜ž›ŒŽȱŠ›”ŽDZȱ

›’ŒŽȱ–’••œȱ

–Š’–’ȱ”Ž›Ž—

ȱ ȱ œ‘ž’”Ž

Œ‘žŠ—‘ž

ȱ ȱ ’œ›’‹ž˜›œȱǻ“’—¡’Š˜œ‘Š—ǰȱ“’—œ‘˜žǼ

ȱ ȱ ȱ ‘Š—‘Š’ȱ Š›”ŽDZȱ

 ‘˜•ŽœŠ•Žȱ ŽŠ•Ž›œȱǻ–’‘Š˜ǰȱ –’‘Š—ǰȱ £Š•’Š—‘Š—ǰȱ •’Š—‘Š—Ǽȱ

›’ŒŽȱ–’••œȱ ǻ—’Š—Š—ǰȱ —’Š—–’Œ‘Š—Ǽȱ

ȱ ȱ ȱ ȱ

›ŽŽ¡™˜›’—ȱ ŽŠ•Ž›œȱ ǻ‹Š˜£’‘Š—Ǽȱ

•˜ŒŠ•ȱ›ŽŠ’•Ž›œȱ ǻ–’’Š—ǰȱ Š–’‘Š—Ǽȱ

Sources: ‘Š—‘Š’ȱœ‘Š—¢ŽȱŒ‘ž¡žȱ¢’—‘Š—ȱ’Š˜Œ‘Š‹žȱǻŗşřŗǰȱŝŜȮŝŞǼDzȱ ˜—œ‘Š—ȱ ‹Š—¢žŽ”Š—ȱǻŗşřŖ‹ǰȱŗŖȮŗŗǼDzȱŠ—ȱŠ˜ȱ’—œŠ—ȱŠ—ȱ—ȱ žŽ–’—ȱǻŗşřśǰȱŗȮśřǼǯ

88

Kai-yiu Chan

In this new chain of rice procurement, Shanghai rice mills encountered new problems. Although the number of mills, as mentioned previously, inŒ›ŽŠœŽȱ‘›˜ž‘˜žȱ‘Žȱꛜȱ‘›ŽŽȱŽŒŠŽœȱ˜ȱ‘Žȱ Ž—’Ž‘ȱŒŽ—ž›¢ǰȱ‹¢ȱ‘Žȱ 1930s most did not procure their own unpolished rice but were still milling rice on behalf of others. Moreover, other market agents, such as wholeœŠ•ŽȱŽŠ•Ž›œȱŠ—ȱ›’ŒŽȱœ‘˜™œǰȱŠ•œ˜ȱ–’••Žȱ›’ŒŽǯȱ’••’—ȱ’œŽ•ȱ‹ŽŒŠ–Žȱ’ĜŒž•ȱ as an independent enterprise. Most rice was processed in markets up-country, particularly in Wuxi and Changzhou ᐌᎲ. The rice mills in Shanghai could only handle rice from other provinces, most of which was unpolished ǻŠ˜ȱ ’—œŠ—ȱ Š—ȱ—ȱ žŽ–’—ȱ ŗşřśǰȱ řDzȱ ‘Š—‘Š’ȱ œ‘Š—¢Žȱ Œ‘ž¡žȱ ¢’—‘Š—ȱ ’Š˜Œ‘Š‹žȱŗşřŗǰȱŘśǰȱřŗȮřŚǰȱŞřȮŞŚǼǯȱ—ȱ˜‘Ž›ȱ ˜›œǰȱ‹¢ȱ‘ŽȱŽ—ȱ˜ȱ˜ž›ȱ™Ž›’˜ǰȱ these mechanized rice mills, though higher in number, still did not integrate the distribution of rice under their command. Figure 4.4. The Shanghai Wheat and Flour Market, ca. the 1900s ‘ŽŠȱœŽ••’—ȱ ‘ŽŠȱ™›˜Œž›Ž–Ž—ȱ •˜ž›Ȭ–’••’—ȱœŽ›Ÿ’ŒŽȱ —›žœ’—ȱ˜‘Ž›œȱ˜›ȱ ‘ŽŠȱœŽ••’—ȱ •˜ž›ȱœŽ••’—ȱ ȱ ˜ž›ŒŽȱŠ›”ŽDZȱ ȱ ȱ

Š›–Ž›œ

£Š•’Š—‘Š—ȱ

ȱ Œ‘žŠ—‘ž

ȱ ȱ ‘Š—‘Š’ȱ Š›”ŽDZȱ ȱ

 ‘˜•ŽœŠ•ŽȱŽŠ•Ž›œȱ ǻ£Š•’Š—‘Š—ǰȱ•’Š—‘Š—Ǽȱȱ

 •˜ž›ȱ–’••œȱ

Š—ȱ‹›˜”Ž›œȱ

ȱ ȱ ȱ

Source: çŠȱç‹ž—”Š’ȱǻŗşŖŞŠǰȱŘŞşȮŘşřǼǯ

•˜ŒŠ•ȱ›ŽŠ’•Ž›œȱŠ—ȱ‹›˜”Ž›œ

The Rice and Wheat Flour Market Economies

89

—ȱŒ˜—›Šœǰȱ‘Žȱ ‘ŽŠȱ̘ž›ȱ›ŠŽȱŽ¡™Ž›’Ž—ŒŽȱœ›žŒž›Š•ȱŒ‘Š—Žȱ˜ Š›ȱ ŸŽ›’ŒŠ•ȱ ’—Ž›Š’˜—ȱ ž›’—ȱ ‘Žȱ ™Ž›’˜ȱ ž—Ž›ȱ ›ŽŸ’Ž ǯȱ Š™Š—ŽœŽȱ œž›ŸŽ¢œȱ ˜ȱ ‘Žȱ‹Ž’——’—ȱ˜ȱ‘Žȱ Ž—’Ž‘ȱŒŽ—ž›¢ȱ›ŽŸŽŠ•ȱ‘Šȱ̘ž›ȱ–’••œǰȱ•’”Žȱ›’ŒŽȱ–’••œǰȱ œŽ•˜–ȱ ™›˜Œž›Žȱ ›Š ȱ –ŠŽ›’Š•œȱ ‹¢ȱ ‘Ž–œŽ•ŸŽœȱ ‹žȱ ›’Žȱ ˜ȱ ˜‹Š’—ȱ  ‘ŽŠȱ ‘›˜ž‘ȱ –Š›”Žȱ ŠŽ—œȱ Š—ȱ ž›‹Š—ȱ ›Š’—ȱ ŽŠ•Ž›œȱ ǻzalianghangǼǰȱ  ‘˜ȱ Š™™›˜ŠŒ‘Žȱ‘Žȱ›Š’—ȱŽŠ•Ž›œȱ˜ȱ‘Žȱœ˜ž›ŒŽȱ–Š›”ŽœȱǻçŠȱç‹ž—”Š’ȱŗşŖŞŠǰȱŘŞşDzȱ œŽŽȱęǯȱŚǯŚǼǯ ž›Œ‘Šœ’—ȱ ‘ŽŠȱ’—ȱ‘’œȱ Š¢ȱ‘Šȱ‹Žž—ȱŒ‘Š—’—ȱ‹¢ȱ‘Žȱ’–Žȱ‘Žȱ Š™Š—ŽœŽȱœž›ŸŽ¢œȱ Ž›Žȱž—Ž›Š”Ž—ǰȱ‹žȱ‘’œȱ™›˜‹Š‹•¢ȱŽœŒŠ™Žȱ‘Žȱ›ŽœŽŠ›Œ‘Ž›œȂȱ Ž¢Žœǯȱ ‘Žȱ Œ‘Š—Žȱ ˜›’’—ŠŽȱ  ’‘ȱ ̘ž›ȱ –’••ȱ ˜ —Ž›œȱ ’—ȱ ‘Žȱ ˜ Ž›ȱ Š—£’ȱ ›Ž’˜—ȱ ‘˜ȱž—Ž›˜˜”ȱ–˜ŸŽœȱ˜ȱ’—Ž›ŠŽȱ™›˜žŒ’˜—ȱ ’‘ȱ™ž›Œ‘Šœ’—ȱŠ—ȱ ’œ›’‹ž’˜—ǯȱ˜›ȱŽ¡Š–™•Žǰȱ’—ȱŗşŖřǰȱ‘Žȱ˜ ȱ’—ȱ•˜ž›ȱ’••ȱǻŠ˜¡’—ȱ–’Š—Ž—Œ‘Š—ȱ 㣖ᮄ咉㉝ᒴǼȱ ˜ȱ ž¡’ȱ œŽȱ ž™ȱ Šȱ  ‘ŽŠȬ™ž›Œ‘Šœ’—ȱ ˜ĜŒŽȱ ǻbanmaizhuang 䕺呹㥞 or maizhuang 呹㥞Ǽȱ’—ȱ ’Š—¢Š—ȱྰคȱ˜ȱ™›˜Œž›Žȱ ‘ŽŠȱ›˜–ȱ ‘Šȱ•˜ŒŠ•ŽǯȱšžŠ••¢ȱ’–™˜›Š—ǰȱ‘ŽœŽȱ̘ž›ȱ–’••œȱŽœŠ‹•’œ‘Žȱ ‘˜•ŽœŠ•’—ȱ˜ęŒŽœȱǻpifachu ᡍⱐ㰩Ǽǰȱ‹žȱ–žŒ‘ȱ•ŠŽ›ȱ‘Š—ȱ‘Ž’›ȱ ‘ŽŠȬ™ž›Œ‘Šœ’—ȱ˜ĜŒŽœǯȱ ˜ ȱ’—ȱ•˜ž›ȱ’••ȱꛜȱœŽȱž™ȱœžŒ‘ȱŠ—ȱ˜ĜŒŽȱ’—ȱž£‘˜žȱ’—ȱŗşŗŗȱǻŠ˜¡’—ȱ ž¡’—ȱ‘Ž—¡’—ȱ£˜—˜—œ’ȱŗşŘşǰȱȃȱ›’Žȱ’œȱ˜ȱ›Š—Œ‘ȱĜŒŽœȄDzȱœŽŽȱęǯȱŚǯśǼǯ ‘ŽœŽȱ  ‘ŽŠȬ™ž›Œ‘Šœ’—ȱ ˜ĜŒŽœȱ ŒŠž‘ȱ ‘Žȱ ŠĴŽ—’˜—ȱ ˜ȱ Š™Š—ŽœŽȱ ›ŽœŽŠ›Œ‘Ž›œȱ ’—ȱ ‘Žȱ –’ȬŗşŗŖœǰȱ  ‘˜ȱ ›Ž™˜›Žȱ ‘Ž’›ȱ Ž¡’œŽ—ŒŽȱ Š›˜ž—ȱ ŗşŗŖȱ ˜›ȱ ŗşŗŗȱ ǻŠœž‘Š›Šȱ ŗşŗşǰȱ ŞŖŞȮŞŗŖǼǯȱ —ȱ ‘Žȱ ˜••˜ ’—ȱ  ˜ȱ ŽŒŠŽœǰȱ ˜ ȱ ’—ȱ •˜ž›ȱ’••ȱ’—ȱž¡’ȱŠ—ȱ’œȱŠœœ˜Œ’ŠŽȱ–’••œǰȱ’—Œ•ž’—ȱ˜‘Ž›ȱ˜ ȱ’—ȱ–’••œȱ Šœȱ  Ž••ȱ Šœȱ ‘Žȱ ˜‘ȱ ’—ȱ ̘ž›ȱ –’••œȱ ǻž¡’—ȱ –’Š—Ž—Œ‘Š—ȱ ⽣ᮄ咉㉝ᒴǼȱ ’—ȱ ‘Š—‘Š’ǰȱ Š—”˜žǰȱŠ—ȱ ’—Š—ǰȱ Ž›ŽȱŠ••ȱ˜›Š—’£ŽȱŠœȱŒ˜–™Š—’Žœȱž—Ž›ȱ‘Žȱ œŠ–Žȱ–Š“˜›ȱ˜ —Ž›œȱǻ‘Žȱ‹›˜‘Ž›œȱ˜—ȱ˜—“’—ȱᾂᅫᭀȱŠ—ȱ˜—ȱŽœ‘Ž—ȱ ᾂᖋ⫳ǼȱŠ—ȱŒ˜—’—žŽȱ˜ȱœŽȱž™ȱ—Ž ȱ˜ĜŒŽœǯ ¢ȱ‘Žȱ•ŠŽȱŗşŘŖœȱŠ—ȱŽŠ›•¢ȱŗşřŖœǰȱ‘ŽœŽȱ–’••œȱ™˜œœŽœœŽȱ˜ž›ŽŽ—ȱ ‘ŽŠȬ ™ž›Œ‘Šœ’—ȱ ˜ĜŒŽœȱ Š—ȱ  Ž—¢Ȭœ’¡ȱ –Š›”Ž’—ȱ ˜ĜŒŽœȱ ’—ȱ ‘’›ŽŽ—ȱ ™›˜Ÿ’—ŒŽœȱ Š—ȱ ˜—ȱ ˜—ǯȱ ‘ŽœŽȱ  ‘ŽŠȬ™ž›Œ‘Šœ’—ȱ ˜ĜŒŽœȱ Š—ȱ ̘ž›Ȭ ‘˜•ŽœŠ•’—ȱ ˜ĜŒŽœȱŠ•œ˜ȱ ˜›”Žȱ˜Ž‘Ž›ȱ ’‘ȱ‘Žȱ–Š—¢ȱ–Š›”Ž’—ȱ˜ĜŒŽœȱ˜ȱ‘ŽȱœŠ–Žȱ ˜ —Ž›œȂȱŒ˜Ĵ˜—Ȭ–’••’—ȱŽ—Ž›™›’œŽǰȱ‘Žȱž—ȱ’—ȱŒ˜Ĵ˜—ȱ–’••œȱǻ‘Ž—¡’—ȱŠ—£‘’Œ‘Š—ȱ ⬇ᮄ㋵㐨ᒴǼȱ ’—ȱ ™ž›Œ‘Šœ’—ȱ –ŠŽ›’Š•œȱ Š—ȱ –Š›”Ž’—ȱ ™›˜žŒœȱ ǻ‘Š—ȱŗşşŘǰȱŘśȮŘŜǼǯ ‘Žȱ›Š™’ȱ’—Œ›ŽŠœŽȱ’—ȱ ‘ŽŠȬ™ž›Œ‘Šœ’—ȱŠ—ȱ̘ž›Ȭ–Š›”Ž’—ȱ˜ĜŒŽœȱ Šœȱ Šȱ›Žœž•ȱ˜ȱ‘ŽȱŠ›Žœœ’ŸŽȱ™˜•’Œ¢ȱ˜ȱ‘ŽȱŽ•Ž›ȱ‹›˜‘Ž›ȱ˜ȱ‘Žȱ˜—œǯȱ—Ž›ȱ ‘’œȱŒ˜––Š—ǰȱ‘Ž’›ȱ–’••œȱ—˜ȱ˜—•¢ȱŠ˜™ŽȱŽŒ‘—˜•˜’ŒŠ•ȱ’——˜ŸŠ’˜—œȱŠ—ȱ Ž•ŽŒ›’ꮍȱ‘Ž’›ȱ–’••Ž›œȱ‹žȱŠ•œ˜ȱ‹ž’•ȱ—Ž ȱŠŒ˜›’Žœǰȱ˜˜”ȱ˜ŸŽ›ȱ˜•Ž›ȱ˜—Žœǰȱ Š—ȱ •ŽŠœŽȱ Ž¡’œ’—ȱ ̘ž›ȱ –’••œǯ8ȱ ¢ȱ ŗşŘŖǰȱ ‘Žȱ  ˜ȱ ‹›˜‘Ž›œǰȱ ˜Ž‘Ž›ȱ  ’‘ȱ ˜‘Ž›ȱœ‘Š›Ž‘˜•Ž›œǰȱ“˜’—•¢ȱ˜ —Žȱ Ž•ŸŽȱ̘ž›ȱ–’••œȱ’—ȱ˜ž›ȱŒ’’Žœǰȱ–˜œ•¢ȱ ’—ȱ‘Š—‘Š’ȱǻ‘Š—ȱŗşşŘǰȱŘŖǼǯȱ‘ŽœŽȱ–’••œȂȱ™›˜žŒ’˜—ȱŒŠ™ŠŒ’¢ȱŠ—ȱ˜ž™žȱ ‘Šȱ›˜ —ȱ›˜–ȱşŖǰŖŖŖȱ‹ŠœȱŠȱ¢ŽŠ›ȱ’—ȱŗşŖřȱ˜ȱŗşǰşśŖǰŖŖŖȱ‹ŠœȱŠȱ¢ŽŠ›ȱ’—ȱŗşŘŖȱ ŞȲȱ ˜›ȱŠȱ‹›’Žȱ›ŽŸ’Ž ȱ˜ȱ‘ŽȱŽ¡™Š—œ’˜—ȱ™›˜ŒŽœœȱ˜ȱ‹’ȱŒ˜–™Š—’ŽœȱœžŒ‘ȱŠœȱ‘Žȱ˜—ȱ‹›˜‘Ž›œȂǰȱ œŽŽȱžȱŽ’¢˜—ȱŠ—ȱ žŠ—ȱ Š—–’—ȱǻŗşŞśǰȱŗśȮŘŖǼǯ

90

Kai-yiu Chan

ǻ‘Š—ȱŗşşŘǰȱŘŗǼȱŠ—ȱ•Žȱ˜ȱŽœŠ‹•’œ‘’—ȱ–˜›Žȱ ‘ŽŠȬ™ž›Œ‘Šœ’—ȱŠ—ȱ̘ž›Ȭ  ‘˜•ŽœŠ•’—ȱ˜ĜŒŽœǯ ’ž›ŽȱŚǯśǯȱ‘Žȱ‘Š—‘Š’ȱ‘ŽŠȱŠ—ȱ•˜ž›ȱŠ›”ŽǰȱŒŠǯȱ‘ŽȱŗşřŖœ ‘ŽŠȱœŽ••’—ȱ ‘ŽŠȱ™›˜Œž›Ž–Ž—ȱ —Ž›—Š•ȱ•’—”œȱ˜ȱ•˜ž›ȱ–’••œȱ —›žœ’—ȱ˜‘Ž›œȱ˜›ȱ ‘ŽŠȱœŽ••’—ȱ •˜ž›ȱœŽ••’—ȱ ȱ Š›–Ž›œ

˜ž›ŒŽȱŠ›”ŽDZȱ ȱ

 ‘ŽŠȬ™ž›Œ‘Šœ’—ȱ ‹ž›ŽŠžœȱ

£Š•’Š—‘Š—ȱ

ȱ ȱ Œ‘žŠ—‘ž

ȱ ȱ ‘Š—‘Š’ȱ Š›”ŽDZȱ ȱ

 ‘˜•ŽœŠ•ŽȱŽŠ•Ž›œȱ ǻ£Š•’Š—‘Š—ǰȱ•’Š—‘Š—Ǽȱȱ

•˜ž›ȱ–’••œȱ

Š—ȱ‹›˜”Ž›œȱ

ȱ ȱ ȱ

˜›Ž’—ȱ ›Š’—ȱ’›–œȱ Ž¡Œ‘Š—Žœ

•˜ŒŠ•ȱ›ŽŠ’•Ž›œȱŠ—ȱ‹›˜”Ž›œ

–Š›”Ž’—ȱ ˜’ŒŽœȱ

Sources:ȱçŠȱç‹ž—”Š’ȱǻŗşŖŞŠǰȱŘŞşȮŘşřǼDzȱŠ˜¡’—ȱž¡’—ȱ‘Ž—¡’—ȱ£˜—˜—œ’ȱǻŗşŘşǼDzȱ Šœž‘Š›Šȱ’œŠ˜ȱǻŗşŗşǰȱŗǯŘDZŞŖŞȮŞŗŖǼDzȱ‘Š—‘Š’ȱœ‘Š—¢ŽȱŒ‘ž¡žȱ¢Š—‘Š—ȱ’Š˜Œ‘Š‹žȱ ǻŗşřŘǰȱŚŝȮśŜǰȱŜŘȮŝŖǰȱŝŝȮŝŞǼDzȱŠ—ȱ‘Ž‘ž’ȱ“’—“’ȱ’Š˜Œ‘Šœž˜ȱǻŗşřś‹ǰȱŗȮŘǰȱŝȮŞǼǯ

˜›ȱ‘Žȱ˜—ȱ‹›˜‘Ž›œǰȱ–Š›”ŽȱŒ˜–™Ž’’˜—ȱ ŠœȱŠ—ȱ’–™˜›Š—ȱŠŒ˜›ȱ’—ȱ ‘Ž’›ȱœ›ŠŽ’Žœȱ˜›ȱŽ¡™Š—’—ǯȱ˜–™Ž’’˜—ȱŒŠ–Žȱ›˜–ȱ–Š—¢ȱœ˜ž›ŒŽœǯȱ—ȱ the late 1900s and early 1910s, as Rong Desheng said in his memoir, their ꛜȱ̘ž›ȱ–’••ȱŠ• Š¢œȱŠŒŽȱŒ˜–™Ž’’˜—ȱ›˜–ȱ˜›Ž’—ȱ̘ž›ȱ–’••œȱŠ—ȱ˜–Žœ’Œȱ ›’ŸŠ•œǰȱ Š—ȱ ’ȱ œžěŽ›Žȱ ›˜–ȱ ™˜˜›ȬšžŠ•’¢ȱ  ‘ŽŠȱ ™ž›Œ‘ŠœŽœȱ ǻ˜—ȱ Žœ‘Ž—ȱŗşŚřǰȱřŖȮřŚǼǯȱ—ȱ˜••˜ ’—ȱ¢ŽŠ›œǰȱ‘’—ŽœŽȬ˜ —Žȱ–’••œȱŠŒ›˜œœȱ‘Žȱ country continued to increase, as did their production capacity (see table ŚǯřǼǯȱ˜–™Ž’’˜—ȱŽœŒŠ•ŠŽǯȱ˜ȱœž›Ÿ’ŸŽǰȱ‘Žȱ˜—ȱ‹›˜‘Ž›œȱ‘Šȱ˜ȱ‹Žȱ–˜›Žȱ

The Rice and Wheat Flour Market Economies

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competitive by continuing investment in production equipment, manage–Ž—ǰȱ Š—ȱ –Š›”Ž’—ȱ ”—˜ Ȭ‘˜ ǰȱ •Š›Ž•¢ȱ ˜••˜ ’—ȱ ‘Žȱ ™ŠĴŽ›—ȱ ˜ȱ Ž—›Žpreneurial reaction to market adversities as suggested by North (2005, 59). Žœ’Žœȱ’—›˜žŒ’—ȱ—Ž ȱ˜ĜŒŽœȱ˜›ȱ‹ž¢’—ȱ ‘ŽŠǰȱ‘ŽȱŽŠ›•¢ȱ Ž—’Ž‘Ȭ ŒŽ—ž›¢ȱ̘ž›ȱ–’••œȱœ’••ȱ‹˜ž‘ȱ›Š ȱ–ŠŽ›’Š•œȱŠ—ȱœ˜•ȱ™›˜žŒœȱ‘›˜ž‘ȱ existing market agents: dealers, local brokers, and even the commodity Ž¡Œ‘Š—Žǯȱ˜–Ž’–Žœȱ̘ž›ȱ–’••ȱ™Ž›œ˜——Ž•ȱ˜ȱ‘Ž•™ȱŠ—ȱŠŸ’ŒŽȱ›˜–ȱ‘ŽœŽȱ market agents when handling wheat transactions in various areas. At othŽ›ȱ’–Žœǰȱ‘ŽȱŽŠ•Ž›œȂȱ˜ěŽ›ȱ–’‘ȱ‹Žȱ•˜ Ž›ȱ‘Š—ȱ–Š›”Žȱ™›’ŒŽǯȱ—ȱŠ—¢ȱŒŠœŽǰȱ ‘Žȱ̘ž›ȱ–’••œȱžœŽȱ˜—ŽȱŒ‘Š——Ž•ȱ˜ȱœž™™•Ž–Ž—ȱŠ—˜‘Ž›DZȱŽ’‘Ž›ȱ‘Žȱ–Š›”Žȱ or the managerial hierarchy (Shanghai shangye chuxu yinhang diaochabu 1932, 47–56, 62–70, 77–78; Jincheng yinhang zongjinglichu Hankou diaocha fenbu 1938, 26–37, 90–99; Shehui jingji diaochasuo 1935b, 1–2, 7–8). ‘Žȱ‘Š—‘Š’ȱ̘ž›ȱ–’••œȱŽ—“˜¢Žȱ˜—ŽȱŠ’’˜—Š•ȱŠŸŠ—ŠŽȱ’—ȱŠŒšž’›ing raw materials to maintain production: foreign supplies. China was importing wheat in negligible quantities before the 1910s. By 1912, the country imported less than 2,500 piculs, and Shanghai obtained only 31 ™’Œž•œȱ˜ȱ‘’œȱǻœŽŽȱęǯȱŚǯŜǼǯȱ—ȱŗşŘŗǰȱ‘Š—‘Š’ȱ‹ŽŠ—ȱ˜ȱŠŒšž’›ŽȱŠ—ȱ’—Œ›ŽŠœing amount of wheat from the international market, mainly from the United States and Canada through urban foreign mercantile houses, including Japanese ones (Shanghai shehui kexueyuan jingji yanjiusuo 1980, 1.230, 235–237). By 1922, Shanghai already outnumbered other cities in foreign wheat imports. The price competitiveness of American or Canadian wheat was one factor considered by the Chinese mill owners (Gongshang banyuekan 1931, 108). The continually available supply of North American wheat probably also stabilized production and prices at mills, particularly when the domestic supply was not ensured by domestic markets or by the mills’ managerial hierarchy. The Shanghai rice market in the 1920s and 1930s also absorbed a conœ’Ž›Š‹•ŽȱŠ–˜ž—ȱ˜ȱ›’ŒŽȱ›˜–ȱ˜›Ž’—ȱ–Š›”Žœǯȱ’”Žȱ̘ž›ǰȱ›’ŒŽȱ Šœȱ›ŠŽȱ ‘›˜ž‘ȱ˜›Ž’—ȱ–Ž›ŒŠ—’•Žȱ‘˜žœŽœǯȱ—ŒŽȱŠȱŒ˜—›ŠŒȱ˜›ȱŠȱœ™ŽŒ’ęŒȱ”’—ȱ˜ȱ rice was signed, usually half a year in advance, a foreign mercantile house contacted market agents in source markets such as Saigon, Bangkok, and Rangoon. These agents ordered the product and prepared the shipment ŠĞŽ›ȱ‘Š›ŸŽœǯȱ˜œȱ›’ŒŽȱ ŠœȱŠ•›ŽŠ¢ȱ™˜•’œ‘Žǰȱ‹ŽŒŠžœŽȱ–Š—¢ȱ›’ŒŽȱ–’••œȱ˜™erated in these rice-exporting areas.9ȱ‘Ž›Žȱ Šœȱ•’Ĵ•Žȱ›˜˜–ȱ˜›ȱ‘Š—‘Š’Ȃœȱ local mills to process foreign paddy. şȲȱ —ȱ ‘’œȱ ’œœžŽǰȱ ȱ ˜ȱ —˜ȱ ‘ŠŸŽȱ ’›ŽŒȱ ŽŸ’Ž—ŒŽǰȱ ‹žȱ —˜ȱ œ’—•Žȱ œ˜ž›ŒŽȱ ȱ ‘ŠŸŽȱ Œ˜—œž•Žȱ mentions the milling of foreign rice. One source indicates that there were about eight rice mills in Saigon, mostly owned by overseas Chinese merchants; see Gongshang banyuekan (1930a, 9). Some other information on the rice mills in Southeast Asia’s rice-exporting areas ŒŠ—ȱ‹Žȱ˜ž—ȱ’—ȱžŽ‘’›˜ȱǻŗşşŜǰȱŚŜȮśŗǰȱŞřȮŞŝǰȱŗŗŖȮŗŘŘǼDzȱ‘Ž—ȱǻŗşŜŞǰȱŚŞȮŗŗŗǼDzȱ—›Š–ȱǻŗşŝŗǰȱ 36–92); Skinner (1957, 103–109); and Robequain (1944, 275–278).

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Rice mills in the source markets across the Lower Yangzi region equally failed to initiate vertical integration. By the early 1930s, surveys of major upstream rice markets, including Wuxi, Zhenjiang, and Wuhu, found ‘Šȱ’쎛Ž—ȱ–Š›”ŽȱŠŽ—œȱ—Ž˜’ŠŽȱ–Š›”Žȱ›Š—œŠŒ’˜—œǯȱЎ—ǰȱ‘ŽœŽȱ agents had no clear specialties. A rice dealer might need to mill rice or to have its own warehouse. Sometimes, a warehouse possessed its own mill to cater to the needs of customers (Shehui jingji diaochasuo 1936, 1935a, 1935c; Sun and Yang 1936, 21–45; K. Zhu 1937, 6–45; Sun Xiaocun and ’—ȱžŒ‘ž—ȱŗşřśǰȱśŚŝȮśŜŜǼǯȱ˜›Žȱ’–™˜›Š—ǰȱž—•’”Žȱ‘Žȱ ‘ŽŠȱ̘ž›ȱ›ŠŽǰȱ where the mills were the motor force, the rice-milling industry became an auxiliary sector in the rice trade. žǰȱ‘Žȱ ‘ŽŠȱ̘ž›ȱ›ŠŽȱ’ȱ—˜ȱŽ™Ž—ȱ˜—•¢ȱ˜—ȱ‘ŽȱŠ›Žœœ’ŸŽȱœ›ŠŽ’Žœȱ˜ȱ̘ž›ȱ–’••ȱ˜ —Ž›œȱŒ˜–™Š›Žȱ ’‘ȱ‘˜œŽȱ˜ȱ›’ŒŽȱ–’••ȱ˜ —Ž›œǰȱ˜›ȱ˜—ȱ having rice mill owners buy more raw materials to feed their machines. ˜ŒŠ•ȱ Œžœ˜–œȱ ™›ŽŸŠ’•Žȱ ’—ȱ ‹˜‘ȱ –Š›”Žœȱ Š—ȱ ŠŒŒ˜ž—ȱ ˜›ȱ ‘Žȱ ’쎛Ž—ŒŽȱ between the two products. Local Custom, Specialization, and Standardization The grain market itself was related to the ways that food was consumed. —ȱŒ˜–™Š›’—ȱ›’ŒŽȱ ’‘ȱ ‘ŽŠȱ̘ž›ǰȱ Žȱꗍȱ’쎛Ž—ŒŽœȱ’—ȱ‘Žȱ Š¢ȱ™Ž˜™•Žȱ used those products. People of the Lower Yangzi region, as in other areas, consumed rice in the form of grain, whereas wheat had to be ground into ̘ž›ǯȱ —ȱ ‘Žȱ ŽŠ›•¢ȱ  Ž—’Ž‘ȱ ŒŽ—ž›¢ǰȱ ‘Žȱ œ‘Š™Žȱ Š—ȱ Œ˜•˜›ȱ ˜ȱ ‘Žȱ ›’ŒŽǰȱ ˜Ž‘Ž›ȱ ’‘ȱ’œȱŠœŽȱŠĞŽ›ȱœŽŠ–’—ǰȱ‘Ž•™Žȱ™Ž˜™•ŽȱŒ•Šœœ’¢ȱ‘Žȱ›Š’—ǯȱ‘ŽœŽȱ criteria made particular regions famous for their rice in the minds of local inhabitants and formed the basis for classifying rice in the Shanghai market and elsewhere in China (Shanghai shangye chuxu yinhang diaochabu 1931, 1–4). According to one survey in the late 1920s, the Shanghai market Š•˜—Žȱ‘ŠȱŽ’‘¢Ȭ꟎ȱ”’—œȱ˜ȱ›’ŒŽǰȱ’—Œ•ž’—ȱ ˜ȱ”’—œȱ˜ȱ’Ž—’ꊋ•Žȱ˜›eign rice, from Saigon (Gongshang banyuekan 1929, 2–3). ¢ȱ ‘Žȱ ŽŠ›•¢ȱ  Ž—’Ž‘ȱ ŒŽ—ž›¢ǰȱ œ˜–Žȱ –˜Ž›—ȱ œŒ’Ž—’ęŒȱ –Ž‘˜œȱ ‘Šȱ been adopted to classify rice by standards based on the content of protein or fat in the grain. These standards had to be compatible with the preexisting names of rice grains. Japanese surveys of the 1900s cite experimental results comparing the chemical content of the rice from Japan with that ˜ȱ›’ŒŽȱ˜ž—ȱ’—ȱ‘’—ŠȱǻçŠȱç‹ž—”Š’ȱŗşŖŞŠǰȱŘřŗȮŘřşǼǯȱ—ȱœž›ŸŽ¢œȱ˜ȱ‘Žȱ Shanghai rice market in the 1930s, Chinese researchers also introduced a œŽŒ’˜—ȱ˜ȱŽœŒ›’‹Žȱ‘ŽȱŒ‘Ž–’ŒŠ•ȱŽ•Ž–Ž—œȱ˜ȱ’쎛Ž—ȱ”’—œȱ˜ȱ›’ŒŽȱŠŸŠ’•able in the city (Shanghai shangye chuxu yinhang diaochabu 1931, 4–7). žǰȱ‘Žȱ–Š›”Žȱ Šœȱ—˜ȱŠěŽŒŽȱ‹¢ȱ‘ŽœŽȱŒ•Šœœ’ęŒŠ’˜—œǯȱ›’ŒŽœȱ Ž›Žȱœ’••ȱ quoted by the local categories of rice (Gongshang banyuekan 1929, 14–17; ŗşřŖŠǰȱśȮŞǼǯ

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Notes: ‘Žȱž—’ȱ’œȱ‘Žȱ™’Œž•ǯȱ›˜–ȱŗşřŚǰȱ‘Žȱž—’ȱ˜ȱŠŒŒ˜ž—ȱ Šœȱ‘Žȱȃšž’—Š•ȄDzȱŗȱšž’—Š•ȱƽȱŗǯŜŚŝŖśŞŞȱ™’Œž•œǯȱ••ȱꐞ›Žœȱ‘Ž›Ž’—ȱ‘ŠŸŽȱ ‹ŽŽ—ȱŒ˜—ŸŽ›Žȱ’—˜ȱ™’Œž•œǯȱ•œ˜ǰȱꐞ›Žœȱœ‘˜ —ȱŠ›Žȱ˜›ȱ‘Žȱ˜••˜ ’—ȱ¢ŽŠ›ȱ˜ȱ‘ŽȱŠ——žŠ•ȱ›Ž™˜›œǰȱ ‘’Œ‘ȱŠ›Žȱ’쎛Ž—ȱ›˜–ȱ‘Žȱ ˜›’’—Š•ȱꐞ›Žœȱ˜ȱ‘Žȱ™›ŽŸ’˜žœȱ¢ŽŠ›ǯ Source: —œ™ŽŒ˜›ŠŽȱ Ž—Ž›Š•ȱ˜ȱ‘Žȱ‘’—ŽœŽȱŠ›’’–Žȱžœ˜–œȱǻŗşŗśȮŗşřśǰȱȃ–™˜›œȄȱŠ—ȱȃ‘ŽŠȄǼǯ

ŘŚǰŖŖŖǰŖŖŖ ŘřǰŖŖŖǰŖŖŖ ŘŘǰŖŖŖǰŖŖŖ ŘŗǰŖŖŖǰŖŖŖ ŘŖǰŖŖŖǰŖŖŖ ŗşǰŖŖŖǰŖŖŖ ŗŞǰŖŖŖǰŖŖŖ ŗŝǰŖŖŖǰŖŖŖ ŗŜǰŖŖŖǰŖŖŖ ŗśǰŖŖŖǰŖŖŖ ŗŚǰŖŖŖǰŖŖŖ ŗřǰŖŖŖǰŖŖŖ ŗŘǰŖŖŖǰŖŖŖ ŗŗǰŖŖŖǰŖŖŖ ŗŖǰŖŖŖǰŖŖŖ şǰŖŖŖǰŖŖŖ ŞǰŖŖŖǰŖŖŖ ŝǰŖŖŖǰŖŖŖ ŜǰŖŖŖǰŖŖŖ śǰŖŖŖǰŖŖŖ ŚǰŖŖŖǰŖŖŖ řǰŖŖŖǰŖŖŖ ŘǰŖŖŖǰŖŖŖ ŗǰŖŖŖǰŖŖŖ Ŗ

Figure 4.6. Shanghai in China’s Foreign Wheat Market, 1912–1934

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Kai-yiu Chan

Rice market agents could divide their labor not only by sorting specialty rice by its market function, a method examined by researchers in the pre-1936 years, but also by its kind of specialty. Although the Chinese researchers of the 1930s failed to give more details, they still managed ˜ȱ™˜’—ȱ˜ȱ‘ŽȱŽ¡’œŽ—ŒŽȱ˜ȱ’쎛Ž—ȱȃŒ•’šžŽœȄȱǻbang ᐿ) handling market ™›˜žŒœǯȱ ŒŒ˜›’—ȱ ˜ȱ ›ŽœŽŠ›Œ‘Ž›œȂȱ ŽœŒ›’™’˜—œǰȱ ‘ŽœŽȱ Œ•’šžŽœȱ  ˜›”Žȱ –Š’—•¢ȱ Š•˜—ȱ ‘Žȱ ŸŠ›’˜žœȱ  ŠŽ› Š¢œȱ Š—ȱ  Ž›Žȱ Œ•Šœœ’ꮍȱ ŠŒŒ˜›’—•¢ǯȱ Therefore, rice bought for the Shanghai market came from Songjiang ᵒ∳, Zhangyan ᔉคǰȱ ˜›ȱ ˜‘Ž›ȱ Š›ŽŠœȱ ‘ŠŸ’—ȱ ‘Žȱ œŠ–Žȱ  ŠŽ› Š¢ȱ ‘›˜ž‘ȱ ‘Žȱ ˜ž‘ȱ •’šžŽȱ ǻŠ—‹Š—ȱ फᐿǼǰȱ  ‘’•Žȱ ›’ŒŽȱ ›˜–ȱ ‘Š—£‘˜žǰȱ ž“’—ȱ ℺䘆, Š—ȱœ˜ȱ˜—ȱ ˜ž•ȱ™Šœœȱ‘›˜ž‘ȱ‘Žȱ˜›‘ȱ•’šžŽȱǻŽ’‹Š—ȱ࣫ᐿ).10ȱ™ŽŒ’ęŒȱ ›’ŒŽȱ’œ›’‹ž˜›œȱ–’‘ȱŽŸŽ—ȱ‘Š—•Žȱ›’ŒŽȱ›˜–ȱ˜—•¢ȱ˜—Žȱœ™ŽŒ’ęŒȱ•˜ŒŠ•ŽȱŠ—ȱ ‘Ž›Ž˜›Žȱ‹Žȱ’ŸŽ—ȱŠȱŒ•’šžŽȱ—Š–ŽȱŠŒŒ˜›’—ȱ˜ȱ‘ŠȱŠ›ŽŠȱǻ‘Š—‘Š’ȱœ‘Š—¢Žȱ chuxu yinhang diaochabu 1931, 10). ‘ŽȱŽ¡’œŽ—ŒŽȱ˜ȱŒ•’šžŽœȱŠ—ȱ‘ŽȱŒ•Šœœ’ęŒŠ’˜—ȱ˜ȱ›’ŒŽȱ‹¢ȱ’œȱ™•ŠŒŽȱ˜ȱ˜›’’—ȱ‘ŠŸŽȱ ˜ȱ’–™•’ŒŠ’˜—œǯȱ’›œǰȱŒ‘˜’ŒŽœȱ˜›ȱ›’ŒŽȱŒ˜ž•ȱ‹Žȱ’—Œ›ŽŠœŽȱ ‘Ž—ȱŠȱ —Ž ȱ”’—ȱ˜ȱ›’ŒŽȱ Šœȱ’œŒ˜ŸŽ›Žȱ’—ȱŠȱ—Ž ȱ•˜ŒŠ•Žǯȱ‘’œȱ–ŽŠ—ǰȱ‘˜ ŽŸŽ›ǰȱ‘Šȱ ˜—•¢ȱ‘ŽȱŽ¡’œ’—ȱ›Š’—ȱ—Ž ˜›”œȱ›˜–ȱ‘Š—‘Š’ȱŒ˜ž•ȱ‹ŽȱŽ¡Ž—Žȱ˜ȱ —Ž ȱŠ›ŽŠœǰȱŠœȱŠȱ—Ž ȱ›˜ž™ȱ˜ȱ›’ŒŽȱ–Ž›Œ‘Š—œȱǻŠȱŒ•’šžŽǼȱ–’‘ȱ–˜ŸŽȱ˜ȱœ™ŽŒ’Š•’£Žȱ’—ȱ›Š’—ȱ‘Šȱ”’—ȱ˜ȱ›’ŒŽǯȱŽŒ˜—ǰȱŽ¡’œ’—ȱŒ•’šžŽœȱŒ˜ž•ȱŒ˜—’—žŽȱ ž—Œ’˜—’—ȱ’—ȱ‘Žȱ–Š›”ŽȱŠ—ȱŒ˜—’—žŽȱœ™ŽŒ’Š•’£’—ȱ’—ȱ‘Žȱ–Š›”Žǰȱ™›˜Ÿ’’—ȱœ™ŽŒ’ęŒȱ’—˜›–Š’˜—ȱ˜—ȱ‘Žȱ”’—ȱ˜ȱ›’ŒŽȱŠŒŒ˜›’—ȱ˜ȱ‘Ž’›ȱœ™ŽŒ’Š•’£Žȱ ”—˜ •ŽŽȱ˜—ȱ‘Žȱ™›˜žŒȱǻ’ǯŽǯǰȱ‹Ž’—ȱȃŽ¡™Ž›œȄȱ˜—ȱ‘Žȱ™›˜žŒǼǯȱŒŒ˜›ingly, the market remained dispersed rather than integrated, even though ‘Žȱ™›˜ŒŽœœ’—ȱ’—žœ›¢ȱ‘ŠȱŠ˜™Žȱ—Ž ȱŽŒ‘—˜•˜¢ȱ˜›ȱ–ŽŒ‘Š—’£Š’˜—ǯ —ȱŒ˜—›Šœǰȱ‘Žȱ ‘ŽŠȱ̘ž›ȱ–Š›”Žȱ’ȱ—˜ȱ‘ŠŸŽȱ‘ŽȱœŠ–Žȱ™›˜‹•Ž–ȱ›ŽŠ›’—ȱšžŠ•’¢ȱŠœȱ‘Žȱ›’ŒŽȱ–Š›”Žȱ’ǯȱ‘˜ž‘ȱ̘ž›ȱšžŠ•’¢ȱœ’••ȱŽ™Ž—Žȱ˜—ȱ‘ŽȱšžŠ•’¢ȱ˜ȱ ‘ŽŠǰȱ›ŽŠ›’—ȱ ‘’Œ‘ȱ‘Žȱ–Š›”Žȱ–’‘ȱœ’••ȱž—Œ’˜—ȱ ’‘ȱœ˜–Žȱ•˜ŒŠ•ȱŒžœ˜–œǰȱ‘Ž›Žȱ Šœȱ•’Ĵ•Žȱ›˜˜–ȱ˜›ȱ‘ŽœŽȱŒžœ˜–œȱ˜ȱ œž›Ÿ’ŸŽǰȱ‹ŽŒŠžœŽȱŠ••ȱ‘Žȱ ‘ŽŠȱ ˜ž•ȱꗊ••¢ȱ‘ŠŸŽȱ˜ȱ‹Žȱ›˜ž—ȱ’—˜ȱ̘ž›ǯȱ ‘Žȱ̘ž›ȱ–’••œȱŒ•Šœœ’ꮍȱ ‘ŽŠȱŠŒŒ˜›’—ȱ˜ȱ™›ŽœŒ›’‹ŽȱœŠ—Š›œȱœŽȱ‹¢ȱ technicians, the most important standard being the content of sand, dust, ˜›ȱ ˜‘Ž›ȱ –ŠŽ›’Š•œȱ ǻŠœž‘Š›Šȱ ’œŠ˜ȱ ŗşŗşǰȱ ŜŖŖȮŜŖŘǼǯȱ Ў›ȱ ‘Žȱ ̘ž›ȱ  Šœȱ Œ•Šœœ’ꮍǰȱ’œȱŒ‘Ž–’ŒŠ•ȱŒ˜—Ž—ȱ ˜ž•ȱ‹ŽȱŠ‹˜žȱ‘ŽȱœŠ–ŽȱŠœȱ‘Šȱ˜ȱ˜‘Ž›ȱ  ‘ŽŠȱ’—ȱ’œȱŒ•Šœœȱǻ‘Š—‘Š’ȱœ‘Š—¢ŽȱŒ‘ž¡žȱ¢’—‘Š—ȱ’Š˜Œ‘Š‹žȱŗşřŘǰȱŗřǼǯ ‘ŽœŽȱ–Š›”ŽȱœŠ—Š›œȱ˜›ȱ ‘ŽŠȱŠœȱŠȱŒ˜––˜’¢ȱ Ž›Žȱ Ž••ȱ”—˜ —ȱ˜ȱ –’••ȱ˜ —Ž›œȱ ‘˜ȱžœŽȱ‹˜‘ȱ˜–Žœ’ŒȱŠ—ȱ˜›Ž’—ȱ ‘ŽŠǯȱœȱ ‘ŽŠȱ–’••’—ȱ –ŠŒ‘’—Žœȱ  Ž›Žȱ –Š’—•¢ȱ ’–™˜›Žȱ ›˜–ȱ ˜›Ž’—ȱ Œ˜ž—›’Žœǰȱ ‘Žȱ –’••œȱ  Ž›Žȱ —˜ȱŠ‹•Žȱ˜ȱ’œ’—ž’œ‘ȱ‘Ž’›ȱšžŠ•’¢ȱ˜ȱ ‘ŽŠȱ̘ž›ȱ›˜–ȱ‘Ž’›ȱŒ˜–™Ž’˜›œȂȱ ˜›ȱŽ¡Š–™•Žǰȱ›’ŒŽȱ›˜–ȱž£‘˜žȱ ˜ž•ȱ‹Žȱ‘Š—•Žȱ‹¢ȱ‘Žȱž£‘˜žȱ•’šžŽȱǻžȱŠ—ȱ㯛ᐿ), Š—ȱ ‘Šȱ ›˜–ȱ ž¡’ȱ  ˜ž•ȱ ‹Žȱ ‘Š—•Žȱ ‹¢ȱ ‘Žȱ ž¡’ȱ •’šžŽȱ ǻ’ȱ Š— 䣿ᐿ); see Shanghai œ‘Š—¢ŽȱŒ‘ž¡žȱ¢’—‘Š—ȱ’Š˜Œ‘Š‹žȱǻŗşřŗǰȱŞŚȮŞśǼǯ ŗŖȲȱ

The Rice and Wheat Flour Market Economies

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quality. Shanghai mill owners had to think of other ways of distinguishing their product quality, such as advertisements and brand names to elicit goodwill,11ȱ ˜›ȱ Œ•Šœœ’ęŒŠ’˜—œȱ ŠŒŒ˜›’—ȱ ˜ȱ œŒ’Ž—’ęŒȱ œŠ—Š›œȱ ǻ‘Š—‘Š’ȱ shangye chuxu yinhang diaochabu 1932, 5–13). Conclusion ’ŒŽȱŠ—ȱ̘ž›ȱ–Š›”ŽœȱŽ¡™Š—ŽȱŠĞŽ›ȱ‘Žȱ’—›˜žŒ’˜—ȱ˜ȱ—Ž ȱ›Š—œ™˜›tation methods, the adoption of new technology, and the enlargement of production capacity. Standardization still depended on local customs and market specialization, however. The rice trade experienced a proliferation of market agents without much vertical integration. In contrast, the  ‘ŽŠȱ̘ž›ȱ›ŠŽǰȱž—Œ˜—œ›Š’—Žȱ‹¢ȱ•˜ŒŠ•ȱŒžœ˜–œǰȱŽ—•Š›Žȱ’œȱ™›˜žŒ’˜—ȱŒŠ™ŠŒ’¢ǰȱ ‘’Œ‘ȱ–˜’ŸŠŽȱꛖœȱ’—ȱ‘Š—‘Š’ȱ˜ȱž—Ž›Š”Žȱ’—œ’ž’˜—al changes, signifying the vertical integration of production, purchasing, and distribution. œȱ˜ȱ ‘¢ȱœ˜–Žȱ™Š›’Œ’™Š—œȱ’—ȱ‘Žȱ›’ŒŽȱ–Š›”ŽȱŠ’•Žȱ˜ȱŽœŠ‹•’œ‘ȱꛖœȱ that integrated production and distribution, the answer is as follows. To integrate meant coping with the market’s customary traditions, including taste, custom, or, in some cases, religion. By not ignoring but extending the existing customs or traditions, these customs and traditions became a new “knowledge,” one that required specialization and promoted the —ŽŽȱ˜ȱŒŠ••ȱ˜—ȱœ™ŽŒ’ęŒȱ–Š›”ŽȱŠŽ—œǯȱ‘’œȱ™›˜ŒŽœœȱŸŽ›¢ȱ•’”Ž•¢ȱ’—Œ›ŽŠœŽȱ transaction costs for those participating in the rice market. But, customs were not unchangeable. Product price and quality, popular migration, government policy, and so on also played a role in changing •˜ŒŠ•ȱŒžœ˜–œȱ›ŽŠ›’—ȱ˜˜ȱŒ˜—œž–™’˜—ȱŠ—ȱŒ•Šœœ’ęŒŠ’˜—ǯ12 Similarly, once a new packaging technology emerged, and new marketing agencies such as supermarkets and convenient stores appeared in the late twentiŽ‘ȱŒŽ—ž›¢ǰȱ‘Žȱ˜•ȱ›Š’—ȱŒ•Šœœ’ęŒŠ’˜—œȱ˜›ȱ›’ŒŽȱ Ž›ŽȱŠŠ’—ȱ›Žœ‘Š™Žǰȱ Š—ȱ›’ŒŽȱœ‘˜™œȱŠ—ȱŽŠ•Ž›œȱŠŽȱ›˜–ȱ‘Žȱ–Š›”Žǯȱȱ’œȱ’ĜŒž•ȱ˜ȱœŠ¢ȱ‘˜ ȱ –žŒ‘ȱŸŽ›’ŒŠ•ȱ’—Ž›Š’˜—ȱ˜ŒŒž››Žǯȱ‘Žȱ˜•ȱ–Š›”Ž’—ȱœ›žŒž›ŽȱŽę—’Ž•¢ȱ Œ‘Š—Žǰȱ Š•˜—ȱ  ’‘ȱ ‘Žȱ ˜•ȱ Œžœ˜–œȱ ˜ȱ —Š–Žœǰȱ Œ•Šœœ’ęŒŠ’˜—œǰȱ Š—ȱ œ™ŽŒ’Žœȱ ˜ȱ ›Š’—ǯȱ ‘Žȱ ̘ž›ȱ –’••’—ȱ ’—žœ›¢ǰȱ ‘˜ ŽŸŽ›ǰȱ ’쎛Žȱ ›ŽŠ•¢ȱ ›˜–ȱ the rice milling one and became one of the fastest growing industries in ™›Ž Š›ȱ‘’—Šȱ ‘’•Žȱ›ŠžŠ••¢ȱ›Š—œ˜›–’—ȱ‘Žȱ‘’—ŽœŽȱ’Žȱǻ‘Š—ȱŘŖŖŘǼǯȱȱ See the brand names of the Mow Sing and Foh Sing Flour Mills in Maoxin Fuxin Shenxin £˜—˜—œ’ȱǻŗşŘşǼǰȱ’—ȱ‘ŽȱœŽŒ’˜—ȱ˜—ȱ‹›Š—ȱ—Š–Žœǯ ŗŘȲȱ On this issue, consider the Taiwan rice industry. Before 1895, the island had more than ˜—Žȱ‘˜žœŠ—ȱ—Š’ŸŽȱœ™ŽŒ’Žœȱ˜ȱ›’ŒŽǯȱ›˜–ȱŗŞşśȱ˜ȱ‘ŽȱŽŠ›•¢ȱŗşŘŖœǰȱŠ’ Š—ȱ›ŠžŠ••¢ȱ›ŽžŒŽȱ ‘Žȱ —ž–‹Ž›ȱ ˜ȱ ›’ŒŽȱ œ™ŽŒ’Žœȱ ˜ȱ •Žœœȱ ‘Š—ȱ ꟎ȱ ‘ž—›Žǯȱ ‘Žȱ Œ˜•˜—’Š•ȱ ˜ŸŽ›—–Ž—ȱ œŽ—ȱ •˜ŒŠ•ȱ ˜ĜŒ’Š•œȱŠ—ȱ™˜•’ŒŽ–Ž—ȱ˜ȱ’—œ™ŽŒȱ‘Žȱ™•Š—’—ȱ™›˜ŒŽœœȱ˜ȱ‘Žȱ™Š¢ȱꎕœǰȱŠ—ǰȱŠœȱŠȱ›Žœž•ǰȱ ‘˜œŽȱœ™ŽŒ’ŽœȱŽę—ŽȱŠœȱ’—Ž›’˜›ȱ Ž›Žȱ—˜ȱŒž•’ŸŠŽȱǻ Š Š—˜ȱ‘’Ž˜ȱŗşŜşǰȱŝȮŞǼǯ ŗŗȲȱ

FIVE

The Regional Development ˜ȱŽ’ȱ˜ž—¢Ȃœȱ˜Ĵ˜—ȱŽ¡’•Ž Market Economy, 1920–1937

Ȭ ȱ

Late nineteenth-century China was transformed by railway and coastal transportation, as has been well documented. This new communication system rapidly replaced much of the preexisting river and canal transport and ended the traditional courier station communication network. The new system enabled market forces, in which foreign capital played a dominant role, to penetrate rural China on an unprecedented scale. Such a ŽŸŽ•˜™–Ž—ȱœ’—’ęŽœȱ‘ŽȱŽ—˜›–˜žœȱ’–™ŠŒȱ˜ȱ‘Žȱ–Š›”ŽȱŽŒ˜—˜–¢ȱ˜—ȱ‘Žȱ Œ˜—ꐞ›Š’˜—ȱ˜ȱ•˜ŒŠ•ȱœ˜Œ’Ž’ŽœȱŠ—ȱŽŒ˜—˜–’Œȱ‹Ž‘ŠŸ’˜›œȱ’—ȱ–˜Ž›—ȱ‘’—Šǯȱ The case of Wei ◄ County illustrates the point. Ž’ȱ˜ž—¢ȱŠ—ȱœȱ˜Ĵ˜—ȱŽ¡’•Žœ In 1898, Qingdao became a treaty port, and later, in 1904, Germans built the Qingdao-Jinan Railway (Jiaoji tielu 㝴△䨉䏃Ǽǯȱ Ž’ȱ ˜ž—¢ǰȱ ‹ŽŒŠžœŽȱ of its location in close proximity to the treaty port, became a pivotal station on the trunk line. The county rose to become a large trading center in Shandong Province and eventually grew into one of the more important commercial and transportation centers in northern China (Buck 1978, ŘŘDzȱ”’——Ž›ȱŗşŝŝŠǰȱřŚŘǼǯ1 Owing to its increasingly important position in the regional commercial network, Wei was opened to foreign trade by the ’—ȱ˜ŸŽ›—–Ž—ȱ’—ȱŗşŖŜǰȱ˜Ž‘Ž›ȱ ’‘ȱ ˜ȱ˜‘Ž›ȱŒ’’Žœȱ˜—ȱ‘Žȱ›Š’• Š¢ȱ line, Jinan △फ and Zhoucun ਼ᴥȱǻ’žȱ˜—‘˜žȱŗşŜŞǰȱŗřŚDzȱ ˜žȱŽ—£‘’ȱ ŗşŚŗǰȱŘŜDzȱŠ’ ž‹žȱŗşŖŚǰȱśŜȮśŝǼǯȱ˜—ŸŽ—’Ž—ȱ›Š—œ™˜›Š’˜—ȱŠŒ’•’ŠŽȱ‘Žȱ ŗȲȱ G. William Skinner considers the city of Wei a county-level capital that served as a ›Ž’˜—Š•ȱ–Ž›˜™˜•’œȱǻŗşŝŝŠǰȱřŚŘǼǯȱŽŽȱŠ•œ˜ȱŽȱ Š—–’—ȱǻŘŖŖśǼǯ

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import of both foreign and domestic factory goods into the rural interior as well as the export of raw materials from the countryside. Through modŽ›—ȱ›Š—œ™˜›Š’˜—ȱŠ—ȱ›Š’—ǰȱŽ’ȱ‹ŽŒŠ–ŽȱŠȱŒŽ—Ž›ȱ˜›ȱ‘ŽȱŒ˜Ĵ˜—ȱŽ¡’•Žȱ ‘Š—’Œ›ŠĞȱ’—žœ›¢ǯȱ‘ŽȱŒ’¢ȱ Šœȱ Ž••ȱœ’žŠŽǰȱŠ‹˜žȱŗŗŚȱ–’•Žœǰȱ˜›ȱ‘›ŽŽȱ to four hours by rail, from Qingdao and 131 miles from the provincial ŒŠ™’Š•ǰȱ ’—Š—ǯȱȱ ꛜǰȱ Ž’ȱ ȱ ›ŽŒŽ’ŸŽȱ ˜›Ž’—ȱ ¢Š›—ȱ ‘›˜ž‘ȱ ‘Žȱ ’—Š˜ȱ port and later was the center for machine-spun yarn manufactured in Qingdao, Tianjin, and Shanghai (Gongshang banyuekan 1934, 92; Long —ȱŗşřŜǰȱśŚŗǼǯȱȱ Šœȱ‘Žȱ’—Ěž¡ȱ˜ȱŠŒ˜›¢Ȭ™›˜žŒŽȱ¢Š›—ȱ›˜–ȱŒ’’ŽœȱœžŒ‘ȱ Šœȱ’—Š˜ȱ‘ŠȱŒŠžœŽȱŒ˜Ĵ˜—ȱ ŽŠŸ’—ȱ‘Š—’Œ›ŠĞȱ˜ȱ̘ž›’œ‘ȱ’—ȱ‘ŽȱŽŠœern part of Wei. The manufacturing of yarn in Chinese treaty ports and urban centers ›Š’ŒŠ••¢ȱŒ‘Š—Žȱ‘Žȱœ›žŒž›Žȱ˜ȱ‘ŽȱŒ˜Ĵ˜—ȱ‘Š—’Œ›ŠĞȱ’—žœ›¢ȱ’—ȱ‘’—Šǯȱ —Žȱ˜žŒ˜–Žȱ Šœȱ‘ŽȱŽ–Ž›Ž—ŒŽȱ˜ȱ—Ž ȱ‘Š—’Œ›ŠĞȱŒŽ—Ž›œȱœžŒ‘ȱŠœȱŽ’ȱ that specialized in producing the “new handloom cloth” (xinshouzhibu ᮄ᠟㐨ᏗǼǰȱ ‘Šȱ ’œǰȱ Œ•˜‘ȱ ‘Šȱ  Šœȱ ‘Š—ȱ  ˜ŸŽ—ȱ  ’‘ȱ –ŠŒ‘’—ŽȬœ™ž—ȱ ¢Š›—ǯȱ The superiority of the factory-made product was obvious, as noted by Kang Chao: ‘Žȱ™›˜žŒ’Ÿ’¢ȱ’쎛Ž—’Š•ȱ‹Ž ŽŽ—ȱ‘Žȱ™›’–’’ŸŽȱœ™’——’—ȱ˜˜•œȱ’—ȱ‘Žȱ Chinese countryside and modern spinning equipment was indeed astonishing. The simple spinning wheel would produce about half a pound of ¢Š›—ȱ™Ž›ȱŠ¢ȱǻŽ•ŽŸŽ—ȱ ˜›”’—ȱ‘˜ž›œǼǯȱȱ’‘ȱ‘Žȱ¢™Žȱ˜ȱ™˜ Ž›ȱœ™’—•Žœȱ used in the 1930’s the same amount of labor could on average produce 22 ™˜ž—œȱ˜ȱŗŜȱŒ˜ž—ȱ¢Š›—ǯȱ Ž—ŒŽȱ‘Žȱ•Š‹˜›ȱ™›˜žŒ’Ÿ’¢ȱ›Š’˜ȱ‹Ž ŽŽ—ȱ‘Žȱ two types of production was at least 44 to 1, not counting the time saved in modern mills in various stages prior to the spinning process. (Chao ŗşŝŝǰȱŗŞŖǼȱ

ŸŠ—ŒŽȱœ™’——’—ȱŽŒ‘—˜•˜¢ȱ›Ž•’ŽŸŽȱ‘Žȱ‹˜Ĵ•Ž—ŽŒ”ȱŒ›ŽŠŽȱ‹¢ȱ•Š‹˜›’˜žœȱœ™’——’—ȱ’—ȱ›Š’’˜—Š•ȱŒ˜Ĵ˜—ȱ‘Š—’Œ›ŠĞȱ™›˜žŒ’˜—ǯȱ—ȱŠŸŽ›ŠŽǰȱ it took three to four hours of hand spinning to supply enough yarn for one hour’s hand weaving. Obviously time-consuming, spinning labor was ŝśȱ˜ȱŞŖȱ™Ž›ŒŽ—ȱ˜ȱ‘Žȱ˜Š•ȱ‘Š—’Œ›ŠĞȱŽ¡’•Žȱ•Š‹˜›ȱǻ‘Š˜ȱŗşŝŝǰȱŗŝşǼǯȱ‘Žȱ •Š›Žȱ™›˜žŒ’Ÿ’¢ȱ’쎛Ž—’Š•ȱ‹Ž ŽŽ—ȱ‘Š—ȱœ™’——’—ȱŠ—ȱ–ŠŒ‘’—Žȱœ™’——’—ȱŽ¡™•Š’—œȱ‘Žȱ™›ŽŒ’™’˜žœȱŽŒ•’—Žȱ’—ȱ™›˜žŒ’˜—ȱ˜ȱ‘Žȱꛜȱ’—ȱ‘ŽȱŠŒŽȱ of competition from the second.

˜ ŽŸŽ›ǰȱ‘ŽȱŒ˜–™Š›Š’ŸŽȱŠŸŠ—ŠŽȱ˜ȱ–˜Ž›—ȱŒ˜Ĵ˜—ȱ ŽŠŸ’—ȱ˜ŸŽ›ȱ hand weaving was not as important as that between modern and tradi’˜—Š•ȱœ™’——’—ǯȱ‘ŽȱŒ˜–™Ž’’ŸŽȱ™˜ Ž›ȱ˜ȱ‘Š—’Œ›ŠĞȱ ŽŠŸ’—ȱ›ŽŠ•¢ȱ’—creased at the turn of the century though the adoption of an improved handloom called the “iron-gear loom” (tiefangzhi 䨉㋵ᴎǼǯȱ ‘’œȱ —Ž ȱ weaving instrument was said to possess all the advantages of early factory equipment, except that it was still operated by human power (Chao

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ŗşŝŝǰȱŗŞŚDzȱŠ—ȱ‘˜—™’—ȱŗşřŝ‹ǰȱŗŖŚŗȮŗŖśřǼǯȱ••ȱ˜™Ž›Š’˜—œǰȱ’—Œ•ž’—ȱ‘Žȱ stretching of warps and the rolling of cloth, were controlled by simply using foot pedals. In consequence, the iron-gear loom functioned four times –˜›ŽȱŽĜŒ’Ž—•¢ȱ‘Š—ȱ‘Žȱ›Š’’˜—Š•ȱ ˜˜Ž—ȱ•˜˜–ǯȱȱ Šœȱꛜȱ’–™˜›Žȱ ›˜–ȱ Š™Š—ȱ Š—ȱ •ŠŽ›ȱ –Š—žŠŒž›Žȱ ’—ȱ ‘’—ŽœŽȱ ›ŽŠ¢ȱ ™˜›œȱ Š—ȱ Œ˜Ĵ˜—ȱ ‘Š—’Œ›ŠĞȱ ŒŽ—Ž›œǯȱ —ȱ Ž’ǰȱ ‘Žȱ —Ž ȱ ‘Š—Ȭ ŽŠŸ’—ȱ ˜˜•ȱ  Šœȱ ’—›˜žŒŽȱ from Tianjin in the late 1900s, and, by the early 1930s, seven thousand •˜˜–œȱŠȱ¢ŽŠ›ȱ Ž›Žȱ™›˜žŒŽȱ•˜ŒŠ••¢ȱǻŠ—ȱ‘˜—™’—ȱŽȱŠ•ǯȱŗşśśǰȱŘśřǼǯ ‘Ž›ŽŠœȱ ‘Žȱ ™›˜žŒ’Ÿ’¢ȱ ’쎛Ž—’Š•ȱ ‹Ž ŽŽ—ȱ ™˜ Ž›ȱ œ™’—•Žœȱ Š—ȱ hand spinning was forty-four to one, the ratio between factory weaving ‹¢ȱ–ŽŒ‘Š—’£Žȱœ‘žĴ•ŽœȱŠ—ȱ‘Š—ȱ ŽŠŸ’—ȱ‹¢ȱ‘Žȱ’›˜—ȬŽŠ›ȱ•˜˜–ȱ Šœȱ˜—•¢ȱ Š‹˜žȱ˜ž›ȱ˜ȱ˜—Žȱ‹¢ȱ‘ŽȱŽŠ›•¢ȱ Ž—’Ž‘ȱŒŽ—ž›¢ȱǻ‘Š˜ȱŗşŝŝǰȱŗŞśǼǯȱ‘ŽœŽȱ ’쎛Ž—ȱ›Š’˜œȱ’••žœ›ŠŽȱ‘Šȱ‘ŽȱŒ˜–™Ž’’ŸŽȱŽŽȱ˜ȱ–ŠŒ‘’—Žȱ˜ŸŽ›ȱ–Š—žal instrument was stronger in spinning than in weaving. These ratios also Ž¡™•Š’—ȱ  ‘¢ȱ Œ˜Ĵ˜—ȱ ‘Š—ȱ  ŽŠŸ’—ȱ –Š—ŠŽȱ ˜ȱ œž›Ÿ’ŸŽȱ •˜—ȱ ŠĞŽ›ȱ ‘Š—ȱ spinning had been replaced by factory production. To quote Kang Chao, ‘Žȱ™›˜žŒ’Ÿ’¢ȱ’쎛Ž—’Š•ȱ‹Ž ŽŽ—ȱ–ŠŒ‘’—Žȱ ŽŠŸ’—ȱŠ—ȱ‘Š—ȱ ŽŠŸ’—ȱȃ’ȱ—˜ȱ’ŸŽȱŠȱ›ž•¢ȱœ’—’ęŒŠ—ȱ–Š›’—ȱ˜ȱŒ˜œȱŠŸŠ—ŠŽȱ˜ȱ–˜Ž›—ȱ weavers over hand weavers, if we take into consideration capital costs, administrative costs, and many other indirect costs in the modern mill” ǻŗşŝŝǰȱŗŞśǼǯ As a result, the progress in spinning technology and the invention of the iron-gear loom promoted the expansion of handloom weaving. Be ŽŽ—ȱ‘Žȱ™Ž›’˜œȱŗşŖśȮŗşŖşȱŠ—ȱŗşŘŚȮŗşŘŝǰȱ ŽŠŸ’—ȱ‹¢ȱ‘Š—•˜˜–œȱ›Ž ȱ ‹¢ȱ śŘȱ ™Ž›ŒŽ—ǯȱ ŠŽ›ǰȱ ‘Žȱ ˜ž™žȱ ‹ŽŠ—ȱ ˜ȱ œŠ—ŠŽȱ ˜›ȱ ŽŒ•’—Žǰȱ ‹žȱ ›˜–ȱ ŗşřŘȱ˜ȱŗşřŜȱ’ȱ Šœȱœ’••ȱŘŖȱ™Ž›ŒŽ—ȱ‘’‘Ž›ȱ‘Š—ȱ’œȱ•ŽŸŽ•ȱ›˜–ȱŗşŖśȱ˜ȱŗşŖşǯȱ —ȱ‘ŽȱŽŸŽȱ˜ȱ‘Žȱ’—˜Ȭ Š™Š—ŽœŽȱŠ›ǰȱ ‘’Œ‘ȱ Šœȱ˜ĜŒ’Š••¢ȱŽŒ•Š›Žȱ’—ȱŗşřŝǰȱ ‘Š—’Œ›ŠĞȱŒ•˜‘ȱ™›˜žŒ’˜—ȱ ŠœȱŜŜȱ™Ž›ŒŽ—ȱ˜ȱ‘Žȱ˜Š•ȱ˜ž™žȱ˜ȱŒ˜Ĵ˜—ȱ Œ•˜‘ȱ’—ȱ‘’—Šȱǻ ˜›’—˜žŒ‘’ȱž–’˜ȱŠ—ȱ˜–’—ŠŠȱ Š£ž˜ȱŗşŚŘǰȱśŗǼǯȱœȱ•ŠŽȱ ŠœȱŗşřŚȱŠ—ȱŗşřśǰȱ‘Žȱ‘Š—•˜˜–ȱœ’••ȱ™›˜žŒŽȱŠœȱ–žŒ‘ȱŠœȱŝřȱ™Ž›ŒŽ—ȱ˜ȱ ‘Žȱ˜Š•ȱŠ–˜ž—ȱ˜ȱŒ•˜‘ȱž›—Žȱ˜žȱ’—ȱ‘ŽȱŒ˜ž—›¢ȱǻ‘Š˜ȱŗşŝŝǰȱŘřřǰȱŘřŜǼǯȱ Actually, handloom cloth remained popular among ordinary Chinese. In the mid-1930s, handloomed products accounted for 71 percent of the toŠ•ȱŒ˜Ĵ˜—ȱŠ‹›’ŒȱœŠ•Žœȱ˜ȱ‘’—ŽœŽȱŒ˜—œž–Ž›œȱǻŠ—ȱ‘˜—™’—ȱŽȱŠ•ǯȱŗşśśǰȱ ŘşŝDzȱ’—ȱ Š—ȱŘŖŖŘǼǯȱ‘’œȱ™‘Ž—˜–Ž—˜—ȱ‘Šœȱ‹ŽŽ—ȱ’—Ž›™›ŽŽȱ‹¢ȱœ˜–Žȱ›Žsearchers as showing the high adaptability of the Chinese hand-weaving industry and the mutually complementary relationship and coexistence of Œ˜Ĵ˜—ȱŽ¡’•Žȱ‘Š—’Œ›ŠĞȱŠ—ȱŠŒ˜›¢ȱ™›˜žŒ’˜—ȱ’—ȱ‘’—Šȱǻ‘Ž—ȱ ž’¡’˜—ȱ ŗşşŖDzȱŽ—ȱŠ—œ‘Ž—ȱŗşşşǰȱŘŖŖŗǼǯ The new handloom cloth promoted socioeconomic changes. In areas where peasants were previously engaged in the combined activities of cotton growing, hand spinning, and hand weaving, they abandoned spinning œ‘˜›•¢ȱŠĞŽ›ȱ‘Žȱž›—ȱ˜ȱ‘ŽȱŒŽ—ž›¢ǯȱ ˜ ŽŸŽ›ǰȱ‘Ž¢ȱŒ˜—’—žŽȱ˜ȱŒ˜–‹’—Žȱ

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farming with weaving since they could now use factory yarn instead of spinning their own yarn. In other words, although China’s traditional integration of farming with both spinning and weaving was restructured  ’‘ȱ‘Žȱ’—Ěž¡ȱ˜ȱ˜›Ž’—ȱŠ—ȱŠŒ˜›¢ȱ¢Š›—ǰȱ‘Žȱœ–Š••ȱŠ–’•¢ȱŠ›–ȱŽŒ˜—˜–¢ȱ ™Ž›œ’œŽȱ’—ȱŠȱ–˜’ꮍȱ˜›–ȱ‹ŽŒŠžœŽȱŠ›–’—ȱŠ—ȱ ŽŠŸ’—ȱŒ˜—’—žŽȱ˜ȱ ‹ŽȱŒ˜–‹’—Žȱ’—ȱ˜—Žȱ™›˜žŒ’ŸŽȱž—’ȱŠĞŽ›ȱœ™’——’—ȱ Šœȱ›Ž•ŽŠŽȱ˜ȱž›‹Š—ȱ mills. The Wei County Weaving Zone Š—¢ȱœ–Š••ȱŒ˜––ž—’’Žœȱ‘Šȱ‘Šȱ—ŽŸŽ›ȱŽ—ŠŽȱ’—ȱŒ˜Ĵ˜—ȱŒž•’ŸŠ’˜—ȱ‹Žcame centers of handloom cloth production with the arrival of new technology. Wei is representative of these new centers. Before the introduction ˜ȱ˜›Ž’—ȱŠ—ȱŠŒ˜›¢ȱ¢Š›—ǰȱŽ’ǰȱŠȱ’œ›’Œȱ ’‘ȱ•’Ĵ•Žȱ™›˜žŒ’˜—ȱ˜ȱ›Š ȱ Œ˜Ĵ˜—ǰȱ‘Šȱ˜ȱ’–™˜›ȱŒ˜Ĵ˜—ȱ›˜–ȱ—Ž’‘‹˜›’—ȱŒ˜ž—’Žœȱ˜›ȱ‘Š—ȱœ™’——’—ǯȱ Women then wove the hand-spun yarn during the slack season with traditional wooden handlooms. With this method, only “narrow cloth” (zhaibu じᏗDzȱ•’Ž›Š••¢ǰȱŒ•˜‘ȱ ’‘ȱ—Š››˜ ȱ ’‘Ǽȱ Šœȱ™›˜žŒŽǯȱ‘ŽœŽȱ˜˜œȱ Ž›Žȱ made in rural households and were woven predominantly for home conœž–™’˜—ȱ ǻŠ—ȱ ‘˜—™’—ȱ Žȱ Š•ǯȱ ŗşśśǰȱ řŖŖǼǯȱ ȱ  Šœȱ ˜—•¢ȱ ŠĞŽ›ȱ ‘Žȱ ˜™Ž—ing of Qingdao as a treaty port and the construction of the Qingdao-Jinan Railway that Wei began to use large amounts of machine-spun yarn from Qingdao. ȱ Š••ȱ ‘Žȱ –Š“˜›ȱ Œ˜Ĵ˜—ȱ ŽŠŸ’—ȱ ŒŽ—Ž›œȱ ’—ȱ —˜›‘ȱ ‘’—Šǰȱ Ž’ȱ  Šœȱ ‘Žȱ last to fail, declining rapidly on the eve of the Japanese invasion of China. ȱꛜǰȱ‘ŽȱŒŽ—Ž›œȱ’—ȱ’—ȱᅮȱ˜ž—¢ȱ’—ȱ Ž‹Ž’ȱŠ—ȱŽ™’—ȱᖋᑇ County in Shandong lost their positions of supremacy to a new center, Baodi ᇊⷹ ˜ž—¢ȱ’—ȱ Ž‹Ž’ǯȱ›ŽŠœȱ’—ȱŠ˜’ȱ‘ŠȱŠ˜™Žȱ–ŠŒ‘’—ŽȬœ™ž—ȱ¢Š›—ȱŠ—ȱ’–proved handlooms at the turn of the century. When the quality of Baodi cloth deteriorated in the mid-1920s, Gaoyang 催䱑ȱǻ’—ȱ‘ŽȱœŠ–Žȱ™›˜Ÿ’—ŒŽǼȱ rose to take Baodi’s position, by producing high-grade cloth products.2 After several boom periods in the 1930s, products from Wei surpassed those ›˜–ȱ Š˜¢Š—ȱ ǻ‘Š˜ȱ ŗşŝŝǰȱ ŗşŗȮŗşŞDzȱ ŗşŝśǰȱ ŗŞŞȮŗŞşǼǯȱ ‘Žȱ Ÿ’Œ’œœ’žŽœȱ ˜ȱ these “new handloom cloth” centers indicate that one area prospered only at the expense of another. One explanation for this is the keen competition among them. Another is that cloth merchants responded to competitive market conditions. Ў›ȱ‘ŽȱŽŒ•’—Žȱ˜ȱ Š˜¢Š—ǰȱ‹¢ȱŗşřŖȱ‘ŽȱŽ’ȱŠ›ŽŠȱ‘ŠȱŠœœž–Žȱ‘Žȱ ™›Ž˜–’—Š—ȱ™˜œ’’˜—ȱ’—ȱŒ˜Ĵ˜—ȱŒ•˜‘ȱ™›˜žŒ’˜—ǯȱ›˜ž—ȱŗşřŗǰȱ‘ŽȱŒ•˜‘ȱ ŘȲȱȱ Linda Grove has been studying Gaoyang’s handloom cloth production for years. Based ˜—ȱ Š›Œ‘’ŸŠ•ȱ ›ŽœŽŠ›Œ‘ǰȱ œž›ŸŽ¢œǰȱ Š—ȱ ꎕ ˜›”ȱ ˜ȱ œŽŸŽ›Š•ȱ ŽŒŠŽœǰȱ ‘Ž›ȱ ›ŽŒŽ—ȱ ‹˜˜”ȱ ǻŘŖŖŜǼȱ studies in detail the long-term development of the weaving district and provides an in-depth exploration of Chinese rural industry.

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˜—Ȭ–’—ȱ’™

™›˜žŒ’˜—ȱ˜ȱ‘ŽȱŽ’ȱ ŽŠŸ’—ȱ£˜—Žȱ ŠœȱŘŜǯŜƖȱ˜ȱ‘Žȱ˜Š•ȱ˜ž™žȱ›˜–ȱ Š••ȱ  ŽŠŸ’—ȱ Š›ŽŠœȱ ’—ȱ Ž‹Ž’ǰȱ ‘Š—˜—ǰȱ Š—ȱ ‘Š—¡’ȱ ›˜Ÿ’—ŒŽœȱ ˜Ž‘Ž›ǰȱ  ‘Ž›ŽŠœȱ ‘Žȱ Š˜¢Š—ȱ Š›ŽŠȱ ˜ŒŒž™’Žȱ ŗŗǯşƖǰȱ Š˜’ȱ ŜǯśƖǰȱ Š—ȱ ’—ȱ ˜—•¢ȱ ŗǯŘƖȱǻ‘Š˜ȱŗşŝŝǰȱŘŗǼǯȱȱ¢ȱŗşřŚǰȱ‘ŽȱŽ’ȱ ŽŠŸ’—ȱ£˜—Žȱ™›˜žŒŽȱŝŗǯŜŚƖȱ˜ȱ ‘Žȱ˜Š•ȱ‹˜•œȱŠ—ȱŞśǯŚśƖȱ˜ȱ‘Žȱ˜Š•ȱŸŠ•žŽȱ˜ȱŒ•˜‘ȱ˜ž™žȱŠ–˜—ȱœ’¡¢Ȭ Ž’‘ȱ‘Š—Ȭ ŽŠŸ’—ȱŒ˜ž—’Žœȱ’—ȱ‘Š—˜—ȱǻ’—Š–’ȱŠ—œ‘ĀȱŽœžçȱ”Š‹žœ‘’”’ȱ”Š’œ‘Šǰȱ ˜”Āȱ‘’ȱ”Ž’£Š’ȱŒ‘眊“˜ȱŗşŚŘǰȱŗşǼǯ —•¢ȱ‘›ŽŽȱ˜›ȱ˜ž›ȱ‘˜ž›œȱŠ Š¢ȱ›˜–ȱ’—Š˜ȱ‹¢ȱ›Š’—ǰȱŽ’ȱ‘Šȱ‹ŽĴŽ›ȱ transportation than either Baodi or Gaoyang, the two other major handweaving areas in north China in the early twentieth century. Though Baodi and Gaoyang were not far from Tianjin, neither of them was located on a railroad line. To obtain machine-spun yarn from factories in Tianjin, Gaoyang’s merchants had to allow three or four days for either junk passage along the Daqing ໻⏙ River or transportation by cart overland (Wu ‘’ȱŗşřŞǰȱŜŝŞDzȱžȱŠ——˜—ȱŗşřŜǰȱŚřřǼǯȱ¢ȱŒ˜–™Š›’œ˜—ǰȱ›Š’•›˜Šȱ›Š—œ™˜›tation connected Wei not only with Qingdao to the east but also with Jinan to the west, meeting the Tianjin-Pukou Railway (Jin-Pu tielu ⋹⌺䨉䏃Ǽȱ there. This transportation network was a chief reason for the expanding market for Wei’s handloom fabrics. Modern transport also made easier the import of foreign cloth into Wei. The sheer size of initial cloth imports easily eliminated Wei’s traditional cloth industry, based on the production of yarn at home by female labor. Later, higher-quality imported cloth provided the inspiration for improving handloom production techniques. As early as the beginning of the Republican period, certain natives of the prosperous eastern part of Wei were intent on improving the quality of textile production. These local entrepreneurs purchased the new iron-gear looms from Tianjin and dis›’‹žŽȱ—Ž ȱŽŒ‘—’šžŽœȱ‘›˜ž‘˜žȱ‘ŽȱŒ˜ž—¢ǯȱ›˜ęœȱ Ž›Žȱ–ŠŽǰȱŠ—ȱ ’—ȱŠȱŽ ȱ¢ŽŠ›œȱ—Ž ȱ‘Š—•˜˜–ȱŒ•˜‘ȱ™›˜žŒ’˜—ȱ˜˜”ȱ˜ěȱ’—ȱŸ’••ŠŽœȱŠ•˜—ȱ the Wei ◄ River such as Mucun 〚ᴥ, Dengcun 䛻ᴥ, Shibuzi ᇎපᄤ, Fumaying 侭侀➳, Sangyuan ḥ೦, and Meicun ⳝᴥ (Gongshang banyuekan ŗşřŚǰȱşŗǼǯ ŒŒ˜›’—ȱ ˜ȱ ›Ž™˜›œǰȱ ‘Ž›Žȱ  Ž›Žȱ ꟎ȱ ‘ž—›Žȱ •˜˜–œȱ ’—ȱ ‘Žȱ ™Ž›’˜ȱ ŗşŗśȮŗşŗŜǯȱ ‘Ž’›ȱ —ž–‹Ž›ȱ ’—Œ›ŽŠœŽȱ ˜ȱ ˜ŸŽ›ȱ ęĞ¢ȱ ‘˜žœŠ—ȱ ’—ȱ ‘Žȱ ™Ž›’˜ȱ 1923–1924 when hand weaving spread from eastern Wei to the southern, northern, and western parts of the county. Local machine factories were built to manufacture the improved loom, by which a person could weave 100 chi of “wide cloth” in a 10-hour workday.3 Demand for the iron-gear looms became so great that seventy to eighty thousand sets, each costing 70 to 80 yuan, were sold during a ten-year span (Gongshang banyuekan ŗşřŚǰȱşśǼǯȱ řȲȱȱ

One chi equals 0.333 meter equals 1.094 feet.

101

Ž’ȱ˜ž—¢Ȃœȱ˜Ĵ˜—ȱŽ¡’•ŽȱŠ›”ŽȱŒ˜—˜–¢ȱ

Ž’ȂœȱŒ˜Ĵ˜—ȱ ŽŠŸ’—ȱ‘Š—’Œ›ŠĞȱŽ—Ž›Žȱ’—˜ȱŠȱ˜•Ž—ȱŠŽȱŠ›˜ž—ȱ‘Žȱ late 1920s and the early 1930s. The “Wei weaving zone” came to denote a wider weaving region with the city of Wei as its collecting center. Thus Žę—Žǰȱ ’ȱ ’—Œ•žŽȱ ‘Žȱ Œ˜ž—¢ȱ œŽŠȱ ˜ȱ Ž’ǰȱ Ÿ’••ŠŽœȱ Š—ȱ ˜ —œȱ œžŒ‘ȱ Šœȱ Ž’Œž—ȱŠ—ȱ Š—’—ȱᆦҁ, as well as parts of three neighboring counties: Changyi ᯠ䙥 (including the county seat, Liuhe ⌕⊇, Shibu ᇎප, and Yinma 仆侀Ǽǰȱ ‘˜žžŠ—ȱ ໑‫( ܝ‬Dongjiadaozhuang ᵅᆊ䘧㥞, Dingjiadianzi ϕᆊᑫᄤ, Baisunxuezi ⱑᄿ䲾ᄤ, and Zhangjiaying ᔉᆊ➳ǼǰȱŠ—ȱ‘Š—•Žȱ ᯠῖȱǻ Š–ŠȱŠœŠ˜ȱŗşřśǰȱŝşǼǯȱ’ž›Žȱśǯŗȱœ‘˜ œȱ‘ŽȱŽ¡™Š—œ’˜—ȱ˜ȱ‘ŽȱŽ’ȱ County weaving zone and the numbers of handlooms in the large weav’—ȱ˜ —œȱž›’—ȱ‘Žȱ‹˜˜–ȱ™Ž›’˜ȱ˜ȱ‘Žȱ•ŠŽȱŗşŘŖœȱŠ—ȱŽŠ›•¢ȱŗşřŖœȱǻ ˜çȱ ž—“’ȱŗşŚřŠǰȱŗŘşǼǯȱȱ›˜ž‘ȱŽœ’–ŠŽȱ’ŸŽœȱ‘Žȱ˜Š•ȱ—ž–‹Ž›ȱ˜ȱ‘Š—•˜˜–œȱ in the Wei weaving zone as around a hundred thousand in the early 1930s,  ’‘ȱŠȱ’œ›’‹ž’˜—ȱ˜ȱęĞ¢ȱ‘˜žœŠ—ȱ˜›ȱŽ’ǰȱ‘’›¢ȱ‘˜žœŠ—ȱ˜›ȱ‘Š—¢’ǰȱ and twenty thousand for Shouguang and Changle combined (Amano Mo˜—˜œž”ŽȱŗşřŜǰȱŘŗŝǼǯ ’ž›ŽȱśǯŗǯȱŠ™ȱ˜ȱ‘ŽȱŽ’ȱ˜ž—¢ȱŽŠŸ’—ȱ˜—ŽȱŠ—ȱ‘Žȱž–‹Ž›ȱ˜ȱ Š—•˜˜–œ

ŽŠŸ’—ȱ£˜—ŽȱŠ›˜ž—ȱ‘ŽȱŽŠ›•¢ȱŗşŗŖœȱ ŽŠŸ’—ȱ£˜—ŽȱŠ›˜ž—ȱŗşŘŗȱ ŽŠŸ’—ȱ£˜—Žȱž›’—ȱ‘Žȱ‹˜˜–ȱ™Ž›’˜ȱŠŽ›ȱŗşŘşȱ

ŽŽ—ȱ ˜ž—¢ȱ‹˜ž—Š›¢ȱ Š’• Š¢ȱ ˜ž—¢ȱœŽŠȱ ˜ —ȱ

102

˜—Ȭ–’—ȱ’™

As the industry proliferated throughout the area, modern spinning mills in Qingdao, Shanghai, Tianjin, and Wuxi sent machine-spun yarn ˜ȱ‘’‘ȱ‘›ŽŠȱŒ˜ž—ȱǻ–˜œ•¢ȱŚŖȱ˜ȱŚŘȱ‘›ŽŠœǼȱ˜ȱŽ’ȱŠœȱ›Š ȱ–ŠŽ›’Š•ȱ˜›ȱ ‘Š—ȱ ŽŠŸ’—ǯȱ ˜ ŽŸŽ›ǰȱ’—ȱ‘Žȱ•ŠŽȱŗşŘŖœȱŠ—ȱŽŠ›•¢ȱŗşřŖœǰȱ–˜œȱ˜ȱŽ’Ȃœȱ yarn imports were from Japanese mills in Qingdao. The amount of factory yarn consumed by the county in the four years from 1931 to 1934 was ŗŜǰŘŞŖǰȱ ŗŜǰŗŜřǰȱ ŗŝǰŞŜśǰȱ Š—ȱ ŗşǰŖşŖȱ –Ž›’Œȱ ˜—œǰȱ ›Žœ™ŽŒ’ŸŽ•¢ȱ ǻŠ—ȱ ‘˜—™’—ȱŽȱŠ•ǯȱŗşśśǰȱŘŚśǼǯȱŽŒŠžœŽȱ˜ȱ‘ŽȱŽŸŽ•˜™–Ž—ȱ˜ȱ˜›Ž’—Ȭ˜ —ŽȱŒ˜ton spinning businesses inside China, the quantity of imported yarn from abroad gradually decreased. From the early 1920s, over 80 percent of Wei’s yarn imports were produced in Qingdao’s textile mills, and the Japanese ˜ —ŽȱŠ••ȱ‹žȱ˜—Žȱǻ ˜—œ‘Š—ȱ‹Š—¢žŽ”Š—ȱŗşřŚǰȱşŘǼǯȱŽŒŠžœŽȱ˜ȱŠŸ˜›Š‹•Žȱ conditions created by the Treaty of Shimonoseki, which granted foreigners the right to build factories in China, Japanese textile consortia founded ˜—ŽȱŒ˜Ĵ˜—ȱ–’••ȱŠĞŽ›ȱŠ—˜‘Ž›ȱ’—ȱ’—Š˜ǰȱ‹Ž’——’—ȱ’—ȱŗşŗŜǯȱ¢ȱŗşřŝǰȱ—’—Žȱ of the ten textile factories in the port had Japanese owners, leaving only ˜—Žȱ ’‘ȱ‘’—ŽœŽȱ˜ —Ž›œ‘’™ȱǻŠœž£Š”’ȱĀ“’›çȱŗşŚŝǰȱŝŘŞǼǯȱȱ‘ŽȱŚśŖǰŖŖŖȱ piculs of yarn delivered during the 1930s to Wei from Qingdao, 400,000 ™’Œž•œȱ  Ž›Žȱ ™›˜žŒŽȱ ‹¢ȱ Š™Š—ŽœŽȱ –’••œȱ ǻ‘’—Šȱ –˜—Š’ȱ ”Ž—”¢Ā“˜ȱ ŗşřŝǰȱ śŗǼǯ

˜žœŽ‘˜•œȱŽ—ŠŽȱ’—ȱ‘Š—•˜˜–ȱŒ•˜‘ȱ™›˜žŒ’˜—ȱ Ž›ŽȱŒ˜––˜—ȱ’—ȱ Wei. By the mid-1920s, these amounted to about 10,000, involving roughly 90,000 male and female weavers (“Shandong Weixian zhi jingji jinkuang” ŗşŘŜǰȱŞȮşǼǯȱȱŠ••ȱ‘ŽȱŠ›ŽŠœȱ˜ȱ‘Žȱ‹›˜ŠŽ›ȱ ŽŠŸ’—ȱ£˜—ŽȱŠ›ŽȱŠ”Ž—ȱ’—˜ȱŒ˜—sideration, the total number of weavers should have numbered around ŗśŖǰŖŖŖȱ ǻ ˜›’—˜žŒ‘’ȱ ž–’˜ȱ Š—ȱ ˜–’—ŠŠȱ Š£ž˜ȱ ŗşŚŘǰȱ śřǼǯȱ —ȱ ‘Žȱ ŽŠ›•¢ȱ 1930s, the amount of cloth produced from the county of Wei reached 10,000,000 bolts a year, about one-half the total output for Shandong Prov’—ŒŽȱǻ‘’—Šȱ–˜—Š’ȱ”Ž—”¢Ā“˜ȱŗşřŝǰȱŚŗȮŚŘǼǯȱ‘Žȱ˜Š•ȱŸŠ•žŽȱ˜ȱŠ——žŠ•ȱ™›˜žŒ’˜—ȱ ŠœȱŝśǰŜŖŖǰŖŖŖȱ¢žŠ—ȱǻ ˜—œ‘Š—ȱ‹Š—¢žŽ”Š—ȱŗşřŚǰȱŗŖŖǼǯ Population growth was crucial for the development of the handloom weaving industry in Wei. Many scholars studying Chinese rural handiŒ›ŠĞœȱ’—ȱ‘ŽȱŗşřŖœǰȱœžŒ‘ȱŠœȱŠ—ȱ’Š—’—ȱᮍ乃ᓋ, Wu Zhi ਇⶹ, and Yan Zhongping ಈЁᑇǰȱ’Ž—’ꮍȱ™˜™ž•Š’˜—ȱŠœȱ˜—Žȱ˜ȱ‘Žȱ–Š’—ȱŽ•Ž–Ž—œȱ˜ȱ Wei’s success. Japanese South Manchurian Railway investigators in the ŽŠ›•¢ȱ ŗşŚŖœȱ  Ž›Žȱ Š•œ˜ȱ Š Š›Žȱ ‘Šȱ Š›ŽŠœȱ •’”Žȱ Ž’ȱ ™›˜ęŽȱ ›˜–ȱ ‘Žȱ ŠŸŠ’•Š‹’•’¢ȱ˜ȱœž›™•žœȱ•Š‹˜›ǯȱ ˜ ŽŸŽ›ǰȱ‘ŽȱœžŒŒŽœœȱ˜ȱ‘Žȱž›‹Š—ȱŒ˜Ĵ˜—ȱ ŽŠŸ’—ȱ industry was in stark contrast to the need for supplementary employment ’—ȱ‘Žȱ’–™˜ŸŽ›’œ‘Žȱ›ž›Š•ȱŠ›–’—ȱŽŒ˜—˜–¢ȱǻ˜—ȱŗşřŜǰȱŜşŚDzȱžȱ‘Ž—ȱ ŗşřŜǰȱŘŚŞDzȱŠ—ȱ‘˜—™’—ȱŗşřŝŠǰȱřŞŚDzȱ ˜çȱž—“’ȱŗşŚřŠǰȱŞŞǼǯȱŒŒ˜›’—ȱ˜ȱ ‘Ž’›ȱŗşŚŗȱ’—Ž›Ÿ’Ž ȱ ’‘ȱ ŽŠ–Š—ȱ’ȱ唞 of Dahexi ໻⊇㽓ȱ’••ŠŽǰȱ Š—Ȭ ting ᆦҁȱ˜ —ȱǻ—˜›‘ȱ˜ȱ‘ŽȱŒ’¢ȱ˜ȱŽ’ǼǰȱŠȱ‘˜žœŽ‘˜•ȱ’—ȱ‘ŠȱŸ’••ŠŽȱŒž•’ŸŠŽȱ˜—•¢ȱŜȱ˜›ȱşȱmu on the average, yet one could hardly make a living

Ž’ȱ˜ž—¢Ȃœȱ˜Ĵ˜—ȱŽ¡’•ŽȱŠ›”ŽȱŒ˜—˜–¢ȱ

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without cultivating more than 12 muȱǻŞŖȱŠŒ›ŽœǼǯȱ’ȱŠ•œ˜ȱŒ˜–™•Š’—Žȱ˜ȱ‘Žȱ interviewer about the poor irrigation in the area due to a groundwater œ‘˜›ŠŽǯȱ—•¢ȱ˜—Žȱ˜ȱ‘Žȱ‘›ŽŽȱŸ’••ŠŽȱ Ž••œȱ ˜›”Žȱǻ ˜›’—˜žŒ‘’ȱž–’˜ȱ Š—ȱ˜–’—ŠŠȱ Š£ž˜ȱŗşŚŘǰȱśŘǼǯȱ‘Žȱ™›˜‹•Ž–œȱ˜ȱ˜ŸŽ›™˜™ž•Š’˜—ȱŠ—ȱ•Š—ȱ shortage made it impossible for family farms to survive only by farming. Wei, like many areas in north China, was characterized by fragmented landholding and a high ratio of population to cultivated land. The county ŠŸŽ›ŠŽȱ ŠœȱŗŜǯŞȱmu of cultivated land per household in the 1930s (Shi¢Ž‹žȱ ž˜“’ȱ –Š˜¢ħžȱ ŗşřŚŠǰȱ ŗŜǼǰȱ ‹žȱ Šȱ ™ŽŠœŠ—ȱ Š–’•¢ȱ žœžŠ••¢ȱ ‘Šȱ ˜ȱ Œž•tivate at least 18 mu to support themselves.4 A 1934 survey had an even lower estimate of the county average of cultivated land per household, ‘Šȱ’œǰȱŗřǯŜȱmuȱ’—ȱŗşřřȱǻ ’Š˜“’ȱ’Ž•žȱžŠ—•ħžȱŒ‘Ž žŒ‘žȱŗşřŚǰȱŒ’Žȱ’—ȱ˜—ȱ

Š—¡’Š—ȱŗşşśǰȱŚśŗǼǯȱ‘Žȱž—ŽšžŠ•ȱ’œ›’‹ž’˜—ȱ˜ȱ•Š—ȱŠ•œ˜ȱ™Ž—Š•’£Žȱ‘Žȱ poor. For example, in Gaojialou 催ᆊῧ, a village in Wei surveyed in deŠ’•ȱ‹¢ȱ‘Žȱ Š™Š—ŽœŽȱ’—ŸŽœ’Š˜›œǰȱŝśȱ™Ž›ŒŽ—ȱ˜ȱ‘Žȱ‘˜žœŽ‘˜•œȱŽŠŒ‘ȱŒž•’ŸŠŽȱ˜—•¢ȱ›˜–ȱŖȱ˜ȱŗśȱmuȱ˜ȱ•Š—ȱǻ’—Š–’ȱŠ—œ‘ĀȱŽœžçȱ”Š‹žœ‘’”’ȱ ”Š’œ‘ŠȱŒ‘眊‹žȱŗşŚŘǰȱŜŝŜǼǯś Overpopulation and cultivated land scarcity made Wei an area of emigrant labor. Of necessity, these desperate people ›ŠŸŽ•ŽȱŠœȱŠ›ȱŠœȱž›˜™Žȱ˜ȱ•˜˜”ȱ˜›ȱ ˜›”ȱ‹¢ȱ‘Žȱž›—ȱ˜ȱ‘ŽȱŒŽ—ž›¢ȱǻ ˜çȱ ž—“’ȱŗşŚřŠǰȱŞŞǼǯȱ‘ŽȱŠ•Ž›—Š’ŸŽȱ˜ȱŽ–’›Š’˜—ȱ Šœǰȱ˜ȱŒ˜ž›œŽǰȱœž‹œ’’Š›¢ȱ Ž–™•˜¢–Ž—ȱ’—ȱ‘Š—’Œ›ŠĞȱŠ—ȱœŽ›Ÿ’ŒŽœǯȱ The early surveys of Wei’s weaving areas also showed that few cash crops grew in the region before the late nineteenth century. Only food crops such as wheat, sorghum, soybean, and millet were planted. Local peasants lacked cash income except when they occasionally managed ˜ȱœŽ••ȱŠȱ™Š›ȱ˜ȱ‘Ž’›ȱ ‘ŽŠȱ‘Š›ŸŽœȱǻ Š–ŠȱŠœŠ˜ȱŗşřśǰȱŞŞǼǯȱž™™•Ž–Ž—Š›¢ȱ Ž–™•˜¢–Ž—ȱ  Šœȱ ‘Žȱ —Šž›Š•ȱ œ˜•ž’˜—ȱ ˜›ȱ ‘Ž’›ȱ ꗊ—Œ’Š•ȱ —ŽŽœǯȱ Žfore weaving became the most popular subsidiary industry of Wei, sur™•žœȱ •Š‹˜›ȱ ›˜–ȱ ›ž›Š•ȱ Š–’•’Žœȱ ‘Šȱ Š•›ŽŠ¢ȱ ˜—Žȱ ˜ȱ ‘Š—’Œ›ŠĞœȱ œžŒ‘ȱ Šœȱ straw braiding, hair-net weaving, embroidery, pig-bristle preparation, Š—ȱ •ŽŠ‘Ž›ȱ ™›˜ŒŽœœ’—ȱ ǻ ˜çȱ ž—“’ȱ ŗşŚřŠǰȱ ŞşǼǯȱ ‘Ž—ȱ ŠŒ˜›¢ȱ ¢Š›—ȱ Š—ȱ iron-gear looms became more available and other conditions matured in Ž’ǰȱ‘ŽȱŒ˜ž—¢ȱ‹ŽŒŠ–ŽȱŠȱ™›˜–’—Ž—ȱŠ›ŽŠȱ˜›ȱŒ•˜‘Ȭ ŽŠŸ’—ȱ‘Š—’Œ›ŠĞœǯ Fabrics produced in the region were sold both locally and nationwide.

Ž—Š—ȱ Šœȱ‘Žȱ•Š›Žœȱ–Š›”Žȱ˜›ȱŽ’ȱŒ•˜‘ǯȱ—ȱ‘’œȱŠŒŒ˜ž—ǰȱ‘Ž›Žȱ Ž›Žȱ Š• Š¢œȱ–Ž›Œ‘Š—œȱ›˜–ȱ Ž—Š—ȱœŠ’˜—Žȱ’—ȱŽ’ȱ˜ȱŒ˜••ŽŒȱŒ•˜‘ȱ˜›ȱ‘Ž’›ȱŒ•’Ž—œǯȱŽ’ȂœȱŒ•˜‘ȱ Šœȱ›Š—œ™˜›Žȱ‹¢ȱ›Š’•ȱ˜ȱ Ž—Š—ȱŠ—ȱ—‘ž’ǰȱŠ—ȱ‹¢ȱ™˜œȱ ˜ȱ Ž‹Ž’ǰȱ ˜‘Ž›ȱ ’œ›’Œœȱ ’—ȱ ‘Š—˜—ǰȱ ‘Š—¡’ǰȱ ‘ŠŠ—¡’ǰȱ Š—œžǰȱ ’Œ‘žŠ—ǰȱ ’Š—¡’ǰȱ ž‹Ž’ǰȱ ž—Š—ǰȱ ’Š—œžǰȱ ‘Ž“’Š—ǰȱ ž“’Š—ǰȱ ž——Š—ǰȱ ž’£‘˜žǰȱ ŚȲȱ

ŝŞǼǯ śȲȱ

These numbers are based on estimates from the tobacco region in Wei (see Chen 1939, Unfortunately, data of land distribution at the county level are not available.

104

˜—Ȭ–’—ȱ’™

ž’¢žŠ—ǰȱ Š—ȱ Š—Œ‘ž›’Šȱ ǻ ˜çȱ ž—“’ȱ ŗşŚřŠǰȱ ŗŖŖȮŗŖŗǼǯȱ ŸŽ—ȱ Ž‘Žȱ ➅⊇ ›˜Ÿ’—ŒŽȱŠ‹œ˜›‹Žȱœ˜–ŽȱŽ’ȱŒ•˜‘ȱ‘›˜ž‘ȱŽħ’—ȱ‹ž¢Ž›œȱǻ–Š—˜ȱ˜˜Ȭ —˜œž”ŽȱŗşŚŘǰȱřŘǼǯȱžœŽœȱ˜›ȱŠ—’–Š•Ȭ›Š —ȱŒŠ›œȱ Ž›ŽȱžœŽȱ˜›ȱ›Š—œ™˜›’—ȱ œž™™•’Žœȱ˜ȱ—ŽŠ›‹¢ȱ’œ›’Œœȱǻ ˜—œ‘Š—ȱ‹Š—¢žŽ”Š—ȱŗşřŚǰȱŗŖřǼǯ Yarn and cloth merchants played an important role in the supply and distribution of yarn and the marketing of cloth. Merchant capital was another crucial factor for developing Wei’s hand-weaving industry. Other factors included a large population and the special advantages of eco—˜–’ŒȱŽ˜›Š™‘¢ȱŠ—ȱŠȱ–˜Ž›—ȱ›Š—œ™˜›Š’˜—ȱœ¢œŽ–ȱǻ ˜çȱž—“’ȱŗşŚřŠǰȱ ŞŞȮŞşǼǯŜ Wei had long been a hub of commerce for east Shandong even before hand weaving made a name for the county. Before the opening of Qingdao as a treaty port, Wei was the strategic transportation link between the northern and southern parts of the Shandong Peninsula. With Wei as the nucleus, an overland transport network radiated, reaching as far as

žŠ—ȱ 咗 County and Chefoo 㡱㔬 (presently Yantai ✭ৄǼȱ ˜ȱ ‘Žȱ ŽŠœǰȱ Jinan to the west, Zhucheng 䃌ජ to the south, and Yangjiaogou ἞ᆊ⑱ to the north. By using overland links to ports such as Chefoo, Wei was also ’—ȱŒ˜—ŸŽ—’Ž—ȱ›ŽŠŒ‘ȱ˜ȱ™•ŠŒŽœȱŠ•˜—ȱ‘Žȱ ž•ȱ˜ȱ˜‘Š’ȱǻ ˜›’—˜žŒ‘’ȱž–’˜ȱ Š—ȱ˜–’—ŠŠȱ Š£ž˜ȱŗşŚŘǰȱśŖȮśŗDzȱŽȱ Š—–’—ȱŗşşŘǼǯ Wei County, owing to its location on vital trade routes, developed into a distinctive market area that drew crowds on the monthly market days from neighboring counties such as Changyi, Shouguang, Changle, and Anqiu ᅝϬȱǻ ˜›’—˜žŒ‘’ȱž–’˜ȱŠ—ȱ˜–’—ŠŠȱ Š£ž˜ȱŗşŚŘǰȱśŖȮśŗǼǯȱ’‘ȱ ‘’œȱŒ˜––Ž›Œ’Š•ȱ˜ž—Š’˜—ǰȱŽ’Ȃœȱ–Š›”ŽȱœŽĴ•Ž–Ž—œȱ’—Œ›ŽŠœŽȱ˜ȱ–˜›Žȱ than seventy, the second largest number among all the counties in Shan˜—ȱ Šȱ ‘Žȱ ž›—ȱ ˜ȱ ‘Žȱ ŒŽ—ž›¢ȱ ǻ˜£–Š—ȱ ŗşŞŘǰȱ ŗřŞǼǯȱ Ž›Œ‘Š—œȱ ’—ȱ Ž’ȱ ‹Ž—ŽęŽȱ›˜–ȱ‘ŽȱŠŸ˜›Š‹•Žȱ•˜ŒŠ’˜—ȱŠ—ȱ‘ŽȱŠŒ’ŸŽȱŒ˜––Ž›ŒŽȱ˜ȱ‘ŽȱŠ›ŽŠǯȱȱ Many of them accumulated capital by engaging in other businesses such as money exchange and the sale of food grains, as well as sideline products ǻ ˜çȱž—“’ȱŗşŚřŠǰȱŞşǼǯȱ‘Ž›Žȱ’œȱ—˜ȱ˜ž‹ȱ‘ŠȱŽ’Ȃœȱ›Š’’˜—Š•ȱŠ‹ž—Š—ŒŽȱ ˜ȱ’—’Ž—˜žœȱ–Ž›Œ‘Š—ȱŒŠ™’Š•ȱŒ˜—›’‹žŽȱŠȱŒ˜––Ž›Œ’Š•ȱœŽĴ’—ȱ˜›ȱ‘Žȱ development of the handloom weaving industry in the twentieth century.

˜ ȱ’ȱ–Ž›Œ‘Š—ȱŒŠ™’Š•’œœȱ˜›Š—’£ŽȱŽ’ȱ˜ž—¢Ȃœȱ–Š›”ŽȱŽŒ˜—˜–¢ȱ˜›ȱ Œ˜Ĵ˜—ȱŽ¡’•Žȱ‘Š—’Œ›ŠĞǵ Market and Contractual Relations between Merchants and Peasant Producers ‘ŽȱŠ›”ŽȱŒ˜—˜–¢ȱ˜›ȱ˜Ĵ˜—ȱŽ¡’•Žœ Žœ’Žœȱ‘ŽȱœŠ•Žȱ˜ȱŒ•˜‘ȱŠœȱŠȱꗒœ‘Žȱ™›˜žŒǰȱ‘Žȱ™ž›Œ‘ŠœŽȱ˜ȱ¢Š›—ȱŠœȱŠȱ raw material was also an important function performed by the market ŜȲȱ ‘ŽȱœŠ–ŽȱŒ˜—’’˜—œȱŠ›Žȱ–Ž—’˜—Žȱ’—ȱ’—Š–’ȱŠ—œ‘ĀȱŽœžçȱ”Š‹žœ‘’”’ȱ”Š’œ‘Šǰȱ ˜”Āȱ ‘’ȱ”Ž’£Š’ȱŒ‘眊“˜ȱŗşŚŘǰȱśśȮśŝǯ

ŗŖś

Ž’ȱ˜ž—¢Ȃœȱ˜Ĵ˜—ȱŽ¡’•ŽȱŠ›”ŽȱŒ˜—˜–¢ȱ

œ¢œŽ–ȱ˜ȱŽ’Ȃœȱ ŽŠŸ’—ȱ‘Š—’Œ›ŠĞȱ’—žœ›¢ǯȱȱ•Š—ŒŽȱŠȱ’–™˜›ȱŠ—ȱŽ¡port statistics helps one grasp the magnitude of these transactions. During ‘Žȱ ¢ŽŠ›ȱ ŗşřŖǰȱ ˜›ȱ Ž¡Š–™•Žǰȱ şǰśŗŝȱ ˜—œȱ ˜ȱ Œ˜Ĵ˜—ȱ ¢Š›—ȱ  Ž›Žȱ ‹˜ž‘ȱ ›˜–ȱ ™˜›œǰȱ ™›’—Œ’™Š••¢ȱ ’—Š˜ǰȱ Š—ȱ śǰŜŚŘȱ ˜—œȱ ˜ȱ ‘Š—•˜˜–ȱ Œ•˜‘ȱ  Ž›Žȱ Ž¡™˜›Žȱ›˜–ȱ‘ŽȱŒ˜ž—¢ȱ˜›ȱœŠ•Žȱ‘›˜ž‘˜žȱ‘’—Šȱǻ‘’¢Ž‹žȱž˜“’ȱ–Š˜¢ħžȱ ŗşřŚ‹ǰȱ ŗŖŝǰȱ ŗŗŖǼǰȱ ’—Œ•ž’—ȱ Ž’‘ŽŽ—ȱ ™›˜Ÿ’—ŒŽœȱ Š—ȱ œ˜–Žȱ œŽŸŽ—¢Ȭ˜ž›ȱ ˜ —œȱŠœȱŠ›ȱŠ Š¢ȱŠœȱŠ—Œ‘ž›’Šȱǻ’žȱ˜—‘˜žȱŗşŜŞǰȱŗǼǯȱ˜–‹’—’—ȱŽ’ȱ and Nanliu फ⌕, two important stations in the Wei weaving zone, annual yarn imports exceeded 10,000 tons, having a total value of 10,000,000 yuan ǻ ’Š˜“’ȱ’Ž•žȱžŠ—•ħžȱŒ‘Ž žŒ‘žȱŗşřŚǰȱŗŝŠǼ. œ’Žȱ›˜–ȱ ‘˜•ŽœŠ•ŽȱŽ¡Œ‘Š—ŽȱŠ–˜—ȱ ŽŠ•‘¢ȱ¢Š›—ȱŠ—ȱŒ•˜‘ȱꛖœǰȱ Š’›œȱŠ•œ˜ȱ˜˜”ȱ™•ŠŒŽȱŠȱ›Žž•Š›ȱ™Ž›’˜œȱ˜›ȱ›Š—œŠŒ’˜—œȱ’—ȱŒ˜Ĵ˜—ȱ¢Š›—ȱŠ—ȱ Š‹›’ŒœǯȱŽŠ›ȱ‘ŽȱŒ’¢ȱ˜ȱŽ’ǰȱ‘Žȱ–Š›”Žȱ Šœȱ˜™Ž—ȱŠȱ꟎ȬŠ¢ȱ’—Ž›ŸŠ•œǰȱ ˜—ȱ‘ŽȱœŽŒ˜—ǰȱœŽŸŽ—‘ǰȱ Ž•Ğ‘ǰȱœŽŸŽ—ŽŽ—‘ǰȱ Ž—¢ȬœŽŒ˜—ǰȱŠ—ȱ Ž—¢Ȭ seventh of every month of the lunar calendar. Sellers erected street stalls and transported goods to town the day before the fair (Shiyebu guoji –Š˜¢ħžȱŗşřŚ‹ǰȱŗŘŗǼǯȱ‘’œȱ”’—ȱ˜ȱž›‹Š—ȱ–Š›”Žȱ Šœȱ”—˜ —ȱ˜ȱ‘ŠŸŽȱŠȱŗŖŖȱli ǻřŗȱ–’•ŽǼȱ›Š’žœȱ˜ȱ’—ĚžŽ—ŒŽȱǻ Š–ŠȱŠœŠ˜ȱŗşřśǰȱŞŜDzȱ–Š—˜ȱ˜˜—˜œž”Žȱ ŗşŚŖǰȱŜşŖǼǯȱœȱ˜›ȱ‘Žȱ›Š—œŠŒ’˜—œȱ’—ȱ‘ŽȱŒ˜ž—›¢œ’Žǰȱ‘Ž›Žȱ Ž›ŽȱŠ’›œȱ‘Ž•ȱ at intervals at the market towns of the weaving area. For instance, a mar”Žȱ Šœȱ˜™Ž—ȱŠȱŽ’Œž—ȱ˜—ȱ‘Žȱꛜǰȱœ’¡‘ǰȱŽ•ŽŸŽ—‘ǰȱœ’¡ŽŽ—‘ǰȱ Ž—¢Ȭꛜǰȱ Š—ȱ Ž—¢Ȭœ’¡‘ȱ˜ȱŽŸŽ›¢ȱ–˜—‘ȱ˜ȱ‘Žȱ•ž—Š›ȱŒŠ•Ž—Š›ǰȱŠ—ȱŠȱ Š—’—ȱ˜—ȱ ‘ŽȱęĞ‘ǰȱŽ—‘ǰȱęЎŽ—‘ǰȱŠ—ȱ‘’›’Ž‘ǯȱŽ’Œž—Ȃœȱ–Š›”ŽȱŠĴ›ŠŒŽȱ™Ž˜™•Žȱ ›˜–ȱŠȱ›Š’žœȱ˜ȱśŖȱliǰȱ ‘Ž›ŽŠœȱ Š—’—Ȃœȱ–Š›”Žȱ›Ž ȱ™Ž˜™•Žȱ›˜–ȱŠȱ›Šdius of 30 liȱǻ Š–ŠȱŠœŠ˜ȱŗşřśǰȱŞśDzȱ–Š—˜ȱ˜˜—˜œž”ŽȱŗşŚŖǰȱŜşŖǼǯȱ‘Ž›ȱ districts in the Wei weaving zone, such as Yinma, Shibu, and Liuhe ⌕⊇ ˜ȱ—Ž’‘‹˜›’—ȱ‘Š—¢’ȱ˜ž—¢ǰȱŠ•œ˜ȱ‘Šȱ‘Ž’›ȱ˜ —ȱœ™ŽŒ’ęŒȱ–Š›”ŽȱŠ¢œȱ Š—ȱœ™‘Ž›Žœȱ˜ȱ‹žœ’—ŽœœǰȱŠœȱ’••žœ›ŠŽȱ’—ȱŠ‹•Žȱśǯŗǯȱ Š‹•ŽȱśǯŗǯȱŠ“˜›ȱŠ›”Žȱ˜ —œȱ’—ȱ‘ŽȱŽ’ȱ˜ž—¢ȱŽŠŸ’—ȱ˜—Ž Market Towns Market Days of the Month ™‘Ž›Žȱ˜ȱ—ĚžŽ—ŒŽȱ ǻž—Š›ȱŠ•Ž—Š›Ǽ (Radius in liǼ Vicinity of the Wei County Seat

2 and 7 (i.e., 2nd, 7th, ŗ؝‘ǰȱŗŝ‘ǰȱŘؗǰȱŘŝ‘Ǽ

100

Meicun

ŗȱŠ—ȱŜ

śŖ

Š—’—

śȱŠ—ȱŗŖ

30

Yinma

4 and 9

śŖ

Shibu

śȱŠ—ȱŗŖ

śŖ

Liuhe

śȱŠ—ȱŗŖ

śŖ

Vicinity of Changyi City

2 and 7

śŖ

Sources:ȱ Š–ŠȱŠœŠ˜ȱǻŗşřśǰȱŞśǼDzȱ–Š—˜ȱ˜˜—˜œž”ŽȱǻŗşŚŖǰȱŜşŖǼDzȱŒǯȱ ž˜ȱ’žŽ—ȱ ǻŗşřśǰȱŚŘŝśǼǯ

ŗŖŜ

˜—Ȭ–’—ȱ’™

˜ŒŠ•ȱ¢Š›—ȱŠ—ȱŒ•˜‘ȱꛖœȱ Ž›Žȱ•˜ŒŠŽȱŠȱ‘ŽœŽȱ–Š›”Žȱ˜ —œǯȱ˜›ȱŽ¡Š–™•Žǰȱ‘Ž›Žȱ Ž›Žȱ Ž—¢ȱ¢Š›—ȱꛖœȱŠ—ȱ Ž•ŸŽȱŒ•˜‘ȱꛖœȱŠȱ’—–Šǰȱ ‘’•Žȱœ’¡ȱ ˜›ȱœŽŸŽ—ȱ¢Š›—ȱꛖœȱŠ—ȱ Ž—¢ȱŒ•˜‘ȱꛖœȱ Ž›Žȱ•˜ŒŠŽȱŠȱ‘’‹žǯȱ•‘˜ž‘ȱ —˜ȱ¢Š›—ȱ˜›ȱŒ•˜‘ȱœ‘˜™œȱ‘ŠȱŽœŠ‹•’œ‘Žȱ˜ĜŒŽœȱŠȱŽ’Œž—ǰȱž›‹Š—ȱ–Ž›Œ‘Š—œȱ from Wei would dispatch representatives to handle business at that town on –Š›”ŽȱŠ¢œȱǻ Š–ŠȱŠœŠ˜ȱŗşřśǰȱŞŜDzȱ–Š—˜ȱ˜˜—˜œž”ŽȱŗşŚŖǰȱŜşŖǼǯȱ›Š—œŠŒ’˜—œȱ’—ȱ‘Žȱ›ž›Š•ȱŠ›ŽŠœȱ Ž›Žȱ–˜œ•¢ȱ’—ȱŒŠœ‘ȱǻ Š–ŠȱŠœŠ˜ȱŗşřśǰȱŞŜǼǯȱ›‹Š—ȱ business was carried out either directly between the seller and the buyer or else through a middleman. It was the custom for a broker to receive a commission from the seller, generally in promissory notes from a native bank that could be cashed the same day. Credit purchases were sometimes granted to regular customers, those who usually paid back the debt in a month ˜›ȱœ˜ȱǻ‘’¢Ž‹žȱž˜“’ȱ–Š˜¢ħžȱŗşřŚ‹ǰȱŗŗřDzȱ’—Š–’ȱŠ—œ‘ĀȱŽœžçȱ”Š‹žœ‘’”’ȱ ”Š’œ‘Šǰȱ ˜”Āȱ‘’ȱ”Ž’£Š’ȱŒ‘眊“˜ȱŗşŚŘǰȱŗŗŞȮŗřŗǼǯȱȱŗşřŗȱꎕȱœž›ŸŽ¢ȱŽœ’–Šed that transactions amounting to over 700,000 yuan could be concluded in a single market day during the peak season (“Diaocha Weixian, Changle, ’žǰȱ’—£’ǰȱ‘˜žŒž—ȱ£‘ħ’ȱœ‘ž–žȱ“’ȱ“’—“’ȱ£‘žŠ—”žŠ—ȱ‹Š˜Š˜ȄȱŗşřŗǰȱŗǼǯȱ ’ž›ŽœȱśǯŘȱŠ—ȱśǯřȱ˜ž•’—Žȱ‘Žȱ–Š›”Žȱœ›žŒž›Žȱ˜ȱŽ’ȂœȱŒ˜Ĵ˜—Ȭ ŽŠŸ’—ȱ ‘Š—’Œ›ŠĞȱ’—žœ›¢ȱ‘›˜ž‘ȱ’œȱŒ˜Ĵ˜—ȱ¢Š›—ȱŠ—ȱŒ•˜‘ȱ’œ›’‹ž’˜—ȱŒ‘Š——Ž•œǯ ’ž›ŽȱśǯŘǯȱ‘ŽȱŠ›”Ž’—ȱ‘Š——Ž•œȱ˜ȱ˜Ĵ˜—ȱŠ›—ȱ’—ȱŽ’ȱ˜ž—¢ǰȱŗşŘŜȮŗşřř ȱȱȱȱ’—Š˜DZȱ

’—Š˜ȱ–’••œȱŠ—ȱŠŽ—œȱ

ȱ

ȱ

ž™˜›ȱ¢Š›—ȱ–Ž›Œ‘Š—œȱ

ȱ Ž’ȱ˜ž—¢Ȃœȱ Š›Ž‘˜žœŽœȱ’—ȱ’—Š˜ȱ ȱ ȱ ȱȱȱȱŽ’ȱ˜ž—¢DZȱ ȱ ȱ

ȱ

ȱ

Š›—ȱ ‘˜•ŽœŠ•Ž›œȱ’—ȱŽ’ȱ˜ž—¢ȱȱ

ȱ

ȱ

ȱ

ȱ

ȱ

ȱ

ȱ

›‹Š—ȱ ¢Š›—ȱ –Š›”Žȱ

ȱ

•˜‘ȱ’›–œȱ ¢Ž’—Ȧ ŽŠŸ’—ȱ ˜›”œ‘˜™œȱ ŽŠŸ’—ȱ ˜›”œ‘˜™œȱ ¢Ž‘˜žœŽœȱ

ȱȱȱȱȱŠ›—ȱ›ŽŠ’•Ž›œȱŠ—ȱ™Ž•Ž›œȱ ȱ ȱ ȱ ȱ

ž›Š•ȱ ™Ž›’˜’Œȱ –Š›”Žȱ

ȱ ȱ —Ž™Ž—Ž—ȱ ŽŠŸ’—ȱ‘˜žœŽ‘˜•œȱ Š—ȱ ˜›”›˜˜–œȱ’—ȱ‘Žȱ›ž›Š•ȱŠ›ŽŠȱ

107

Ž’ȱ˜ž—¢Ȃœȱ˜Ĵ˜—ȱŽ¡’•ŽȱŠ›”ŽȱŒ˜—˜–¢ȱ

’ž›Žȱśǯřǯȱ‘Žȱ’›Œž•Š’˜—ȱ‘Š——Ž•œȱ˜ȱ Š—•˜˜–ȱ•˜‘ȱ’—ȱŽ’ȱ˜ž—¢ǰȱŗşŘŜȮŗşřř ȱȱȱȱȱȱȱȱȱȱž™˜›œȱ ȱ ȱȱȱȱȱȱȱȱȱ

ȱȱȱȱȱȱȱȱȱȱȱ•˜‘ȱ–Ž›Œ‘Š—œȱ›˜–ȱ˜žœ’Žȱ

—ȱ˜›Ž›

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›‹Š—ȱ

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ž›Š•ȱ

Œ•˜‘ȱ

™Ž›’˜’Œȱ

ŽŠŸ’—ȱ‘˜žœŽ‘˜•œȱ

’›–œȱ

Š—ȱ ˜›”›˜˜–œȱ’—ȱ

ȱ

ȱ –Š›”Žȱȱ

ȱȱȱȱȱȱȱ•˜‘ȱ™Ž•Ž›œȱ

‘Žȱ›ž›Š•ȱŠ›ŽŠȱ

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ȱȱȱȱȱȱȱ•˜‘ȱ›ŽŠ’•Ž›œȱ

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ȱ ȱ

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Œ•˜‘ȱ

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–Š›”Žȱ

ȱ ȱ

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›‹Š—ȱ

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ž’—Ȭ˜žȱ

ȱ

¢Š›—ȦŒ•˜‘ȱ’›–œǰȱ ȱ ȱ ȱ

ȱ

ŽŠŸ’—ȱ  ˜›”œ‘˜™œȱ

¢Ž’—Ȧ ŽŠŸ’—ȱ  ˜›”œ‘˜™œǰȱ ¢Ž‘˜žœŽœȱ



As shown in the yarn distribution diagram, yarn wholesalers represented the major yarn suppliers for the weaving industry. They procured most of the raw materials from Qingdao, mainly through the warehouses of the Wei bang ᐿȱǻ—Š’ŸŽȬ™•ŠŒŽȱ›˜ž™Ǽǰȱ ‘’Œ‘ȱŠ•œ˜ȱ™›˜Ÿ’Žȱ˜˜œȱ’›ŽŒ•¢ȱ˜ȱ  ŽŠ•‘¢ȱŒ•˜‘ȱꛖœȱŠ—ȱ˜ȱ¢Ž’—Ȧ ŽŠŸ’—ȱ ˜›”œ‘˜™œȱǻ—˜Žȱ’—ȱęǯȱśǯŘǼȱ ˜—ȱŒ˜––’œœ’˜—ǯȱ–˜—ȱ‘Žȱ›˜ž‘•¢ȱęĞ¢ȱ•Š›ŽȱŠ—ȱœ–Š••ȱ¢Š›—ȱꛖœȱ’—ȱ‘Žȱ city of Wei, the twenty-four yarn wholesalers were reputed to be the best ŒŠ™’Š•’£Žǰȱ‘ŠŸ’—ȱœ˜–ŽȱŚŘŜǰŚŖŖȱ¢žŠ— as their total capital, or 17,800 yuan ™Ž›ȱ ꛖȱ ˜—ȱ ŠŸŽ›ŠŽȱ ǻ Š–Šȱ ŠœŠ˜ȱ ŗşřśǰȱ ŞŜDzȱ –Š—˜ȱ ˜˜—˜œž”Žȱ ŗşŚŖǰȱ ŜşŖDzȱ’—Š–’ȱŠ—œ‘ĀȱŽœžçȱ”Š‹žœ‘’”’ȱ”Š’œ‘Šǰȱ ˜”Āȱ‘’ȱ”Ž’£Š’ȱŒ‘眊“˜ȱ ŗşŚŘǰȱŗŗŞȮŗřŗǼǯȱ‘Ž¢ȱ—˜ȱ˜—•¢ȱ™›˜Ÿ’Žȱ˜›ȱ‘Žȱ•˜ŒŠ•ȱ¢Š›—ȱ–Š›”Žȱ‹žȱŠ•œ˜ȱ ŽŠ•ȱ’›ŽŒ•¢ȱ ’‘ȱ‘ŽȱŒ•˜‘ȱꛖœǰȱ¢Ž’—Ȭ ŽŠŸ’—ȱ ˜›”œ‘˜™œǰȱ ŽŠŸ’—ȱ workshops, dye houses, yarn peddlers, and retailers. Although transactions at the local market were carried out with cash, purchases in bulk ›˜–ȱ’—Š˜ȱŠ—ȱ ‘˜•ŽœŠ•ŽȱŽ¡Œ‘Š—Žœȱ‹Ž ŽŽ—ȱ¢Š›—ȱꛖœȱ Ž›ŽȱžœžŠ••¢ȱ –ŠŽȱ ’‘ȱ™›˜–’œœ˜›¢ȱ—˜Žœȱǻ Š–ŠȱŠœŠ˜ȱŗşřśǰȱŞŝȱŠ—ȱ—˜ŽǼǯȱȱȱȱȱȱȱ Transactions were usually conducted at the commercial hubs of an urban area, especially Dongguan ᵅ䮰 to the east of the city and Nanguan फ䮰 to the south of the city. In Dongguan, a famous yarn-distributing center, the most important yarn trade was undertaken on Dongguan Street and Xiahe ϟ⊇ȱ ›ŽŽȱ ǻŠ–Š”Š–’ȱ Š—Š˜ȱ ŗşřśǰȱ şśDzȱ ȃ‘Š—˜—ȱ Ž’¡’Š—ȱ£‘’ȱ“’—“’ȱ“’—”žŠ—ȄȱŗşŘŜǰȱŗŖDzȱ Š’ȱ‘’Ž¢˜œ‘’ȱŗşřśǰȱřřDzȱ ’Š˜“’ȱ’Ž•žȱ

108

˜—Ȭ–’—ȱ’™

žŠ—•ħžȱŒ‘Ž žŒ‘žȱŗşřŚǰȱŗŝŠǼǯȱžœ’—ŽœœȱŠȱŠ—žŠ—ȱŠ™™›˜¡’–ŠŽȱřǰŖŖŖȱ ‹Š•ŽœȱŠȱ–˜—‘ȱǻ’Š—ȱ‘Ž—¡žȱŗşřŚǰȱřŖŜŗǼǯȱœȱ–Ž—’˜—Žȱ™›ŽŸ’˜žœ•¢ǰȱŠ’›œȱ were also held near the city. During the more prosperous seasons, Wei’s ž›‹Š—ȱ–Š›”ŽȱŒ˜ž•ȱŠ‹œ˜›‹ȱŠœȱ–Š—¢ȱŠœȱęЎŽ—ȱŒŠ›œȱ˜ȱ¢Š›—ȱǻŗȱŒŠ›ȱŽšžŠ•œȱ ŝśȱ‹Š•ŽœǼȱ˜—ȱŠȱœ’—•Žȱ–Š›”ŽȱŠ¢ȱǻ Š–ŠȱŠœŠ˜ȱŗşřśǰȱŞŝȱŠ—ȱ—ǯȱŗǼǯȱœȱŠ—nual consumption amounted to about 180,000 piculs (Yamakami Kanao ŗşřśǰȱşśǼǯȱŸŽ—ȱ’—Ž™Ž—Ž—ȱ ŽŠŸŽ›œȱ›˜–ȱœž‹ž›‹Š—ȱŸ’••ŠŽœȱ Ž—ȱ˜ȱ‘Žȱ Œ’¢ȱ˜ȱ‹ž¢ȱŒ˜Ĵ˜—ȱ¢Š›—ǯȱ Urban yarn retailers also sent their salesmen to market towns such as Meicun, where there was no local yarn shop, in order to sell weaving material on rural market days. Wei’s yarn merchants provided for ‘Žȱ ŽŠŸ’—ȱŠ›ŽŠœȱ˜ȱ Š—’—ǰȱ‘Š—¢’ǰȱ‘Š—•ŽǰȱŠ—ȱ‘˜žžŠ—ǯȱœȱ˜›ȱ Yinma and Shibu, where there were local yarn shops, yarn was purchased wholesale by the shops so as to make retail sales on periodic market days ˜ȱ’—Ž™Ž—Ž—ȱ ŽŠŸŽ›œȱ›˜–ȱ—ŽŠ›‹¢ȱŸ’••ŠŽœȱǻ Š–ŠȱŠœŠ˜ȱŗşřśǰȱŞŜȱŠ—ȱ —˜ŽǼǯȱ Š›—ȱ ™Ž•Ž›œȱ œ˜•ȱ  ŽŠŸ’—ȱ –ŠŽ›’Š•ȱ ˜—ȱ ‘Žȱ œ›ŽŽȱ ˜›ȱ ›˜–ȱ ˜˜›ȱ to door and served as intermediaries between the urban market and the ›ž›Š•ȱ–Š›”Žǰȱ‹ž¢’—ȱ›˜–ȱ‘Žȱꛜȱ˜ȱ™›˜Ÿ’Žȱ‘ŽȱœŽŒ˜—ȱ ’‘ȱœž™™•’Žœǯȱ Therefore, in the periodic rural yarn market, yarn retailers and peddlers could be regarded as sellers, whereas peasant weavers were buyers. By some estimates, the amount of yarn sold at Yinma on a market day  Šœȱ˜—Žȱ˜ȱ ˜ȱŒŠ›œȱž›’—ȱ‘Žȱ˜ěȬœŽŠœ˜—œȱŠ—ȱ ˜ȱ˜ȱ‘›ŽŽȱŒŠ›œȱž›’—ȱ peak periods. The amount for Shibu and Liuhe was three carts sold in œ•ŠŒ”ȱœŽŠœ˜—œȱŠ—ȱ꟎ȱŒŠ›œȱ’—ȱ‹žœ¢ȱ’–Žœǯȱœȱ˜›ȱŽ’Œž—ǰȱœŠ•ŽœȱŠ–˜ž—Žȱ ˜ȱ ˜ȱ˜ȱ‘›ŽŽȱŒŠ›œȱ’—ȱ ’—Ž›ȱŠ—ȱ꟎ȱŒŠ›œȱ’—ȱœ™›’—ȱŠ—ȱŠ••ǯȱ—ȱ‘ŽœŽȱ ™Ž›’˜’Œȱ–Š›”ŽœǰȱŒŠœ‘ȱ Šœȱ‘Žȱ–Š“˜›ȱ–ŽŠ—œȱ˜ȱ›Š—œŠŒ’˜—ȱǻ Š–ŠȱŠœŠ˜ȱ ŗşřśǰȱŞŜǼǯȱ —ȱŠȱœ¢œŽ–ȱœ’–’•Š›ȱ˜ȱ‘Žȱ–Š›”Žȱœ›žŒž›Žȱ˜ȱŒ˜Ĵ˜—ȱ¢Š›—ǰȱ‘Žȱ’œ›’bution network of handloom cloth was organized into two markets, the ž›‹Š—ȱŒ•˜‘ȱ–Š›”ŽȱŠ—ȱ‘Žȱ›ž›Š•ȱ™Ž›’˜’Œȱ–Š›”ŽȱǻœŽŽȱęǯȱśǯřǼǯȱ—ȱ‘Žȱ›ž›Š•ȱ market, independent weavers represented the chief sellers, and cloth merchants, including retailers and peddlers, the chief buyers. Some market ˜ —œȱŠ•œ˜ȱ‘Šȱœ–Š••ȱŒ•˜‘ȱꛖœǯȱ˜›ȱŽ¡Š–™•Žǰȱ•˜ŒŠ•ȱŒ•˜‘ȱœ‘˜™œȱŠȱ’—–Šȱ and Shibu numbered twelve and twenty, respectively. At Meicun, howŽŸŽ›ǰȱ‘’œȱ”’—ȱ˜ȱꛖȱ ŠœȱœŒŠ›ŒŽǯȱœžŠ••¢ǰȱ‘Žȱ ˜ŸŽ—ȱŠ‹›’Œœȱ™›˜žŒŽȱŠȱ Yinma and Shibu were transported to Wei by local merchants, but Meicun’s cloth had to be collected on market days by the buying agents dis™ŠŒ‘Žȱ›˜–ȱŽ’ȂœȱŒ•˜‘ȱꛖœǯȱŠœ‘ȱ ŠœȱžœŽȱ’—ȱŽ’Œž—Ȃœȱ™Ž›’˜’Œȱ–Š›”Žœȱǻ Š–ŠȱŠœŠ˜ȱŗşřśǰȱŞŜȱŠ—ȱ—˜ŽǼǯȱ‘ŽȱŽ’Œž—ȱ–Š›”Žȱ ŠœȱŒ›’’ŒŠ•ȱ˜ȱ Wei’s cloth trade. The quantity disposed of at that market was one-quarter ˜ȱŽ’Ȃœȱ˜Š•ȱ˜ž™žȱǻȃŒ˜—˜–’Œȱ˜—’’˜—œȱ’—ȱŠœŽ›—ȱ‘Š—ž—ȄȱŗşŘŜǰȱ śřŞǼǯȱ ž›’—ȱ ‘Žȱ ™›ŽȬŗşřŝȱ ‹˜˜–ȱ ™Ž›’˜ȱ ˜ȱ Ž’Ȃœȱ  ŽŠŸ’—ȱ ‘Š—’Œ›ŠĞȱ ’—dustry, transactions carried out at Meicun amounted to more than 200,000

Ž’ȱ˜ž—¢Ȃœȱ˜Ĵ˜—ȱŽ¡’•ŽȱŠ›”ŽȱŒ˜—˜–¢ȱ

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‹˜•œȱǻ‘Š—ȱ’—¢žȱŗşŚŝǰȱŘřǼȱŠ—ȱŠ‹˜žȱŜŖǰŖŖŖȱ˜ȱŝŖǰŖŖŖȱ¢žŠ—ȱ™Ž›ȱ–Š›”Žȱ day (Gongshang banyuekanȱŗşřřǰȱŘśŗŖȮŘśŗŗǼǯ The cloth market in Wei’s urban area accommodated major buyers that ’—Œ•žŽȱŒ•˜‘ȱꛖœȱ™ž›Œ‘Šœ’—ȱ˜›ȱŽ¡™˜›ȱ˜›ȱ˜›ȱœŠ•Žȱ˜ȱŒ•˜‘ȱ–Ž›Œ‘Š—œȱ ›˜–ȱ˜žœ’Žȱ‘ŽȱŒ˜ž—¢ǯȱ‘Ž›Žȱ Ž›Žȱœ˜–ŽȱŘśŝȱŒ•˜‘ȱꛖœȱ’—ȱŽ’ǰȱ ’‘ȱ’—’vidual capitalization ranging from 2,000 to 20,000 yuan and a total annual turnover of 3,012,700 yuan in 1934 (Gongshang banyuekan 1934, 99; Chang Zhiying and Liu Zugan 1941, juanȱŘŚǰȱ™™ǯȱŗȮŘDzȱ’—Š–’ȱŠ—œ‘ĀȱŽœžçȱ”Š‹žœ‘’”’ȱ”Š’œ‘Šǰȱ ˜”Āȱ‘’ȱ”Ž’£Š’ȱŒ‘眊“˜ȱŗşŚŘǰȱŗŗŞǰȱŗřřȮŗřŚǼǯȱ‘˜ž‘ȱ–˜œȱ ˜ȱ‘ŽœŽȱŒ•˜‘ȱꛖœȱ Ž›ŽȱŒ˜—ŒŽ—›ŠŽȱŠȱ˜—žŠ—ǰȱŠȱŽ ȱœ‘˜™œȱŒ˜ž•ȱŠ•œ˜ȱ be found at Fangzi ഞᄤ, Baya ຽ⎃, and other towns. Cloth transactions were carried out either directly between buyers and sellers or through bro”Ž›œǯȱ Ž••Ž›œȱ ™Š’ȱ ‘Žȱ Œ˜––’œœ’˜—œǰȱ ˜ĞŽ—ȱ ’—ȱ ›Š’’˜—Š•ȱ ‹Š—”ȱ ›ŠĞœȱ ˜ȱ ‹Žȱ cashed the same day. Regular customers made purchases on credit and žœžŠ••¢ȱ œŽĴ•Žȱ ‘Žȱ ŠŒŒ˜ž—ȱ ’—ȱ Šȱ –˜—‘ȱ ǻ ˜—œ‘Š—ȱ ‹Š—¢žŽ”Š—ȱ ŗşřŚǰȱ şşDzȱ Chang Zhiying and Liu Zugan 1941, juanȱŘŚǰȱ™ǯȱřǼǯȱ ‘ŽȱžĴ’—Ȭ˜žȱ¢œŽ– Some wholesale cloth buyers also procured fabrics for the outside market ’›ŽŒ•¢ȱ›˜–ȱ‘Žȱ¢Š›—ȱŠ—ȱŒ•˜‘ȱꛖœǰȱ¢Ž’—Ȭ ŽŠŸ’—ȱ ˜›”œ‘˜™œǰȱŠ—ȱ  ŽŠŸ’—ȱ ˜›”œ‘˜™œǯȱȃžĴ’—Ȭ˜žȄȱŒ•˜‘ȱŠ—ȱ¢Š›—ȱꛖœǰȱ¢Ž’—Ȭ ŽŠŸ’—ȱ workshops, and some dye houses supplied yarn for their outworking weavers. The woven fabric was then collected for sale on the local market, sold to cloth merchants from other cities, or exported. There were cloth sellers in Wei’s urban market, joining cloth peddlers and retailers as well as workshops. Variously described as the “merchant employer system,” “advance payment system,” “weaving-on-order system,” and “weaving-on-contract œ¢œŽ–ǰȄȱ‘Žȱ™žĴ’—Ȭ˜žȱœ¢œŽ–ȱ‹ŽŒŠ–Žȱ™˜™ž•Š›ȱ˜—•¢ȱŠĞŽ›ȱ–ŠŒ‘’—ŽȬœ™ž—ȱ ¢Š›—ȱ ŠœȱŠ˜™Žȱ’—ȱ ŽŠŸ’—ȱŒŽ—Ž›œȱŠ›˜ž—ȱ‘ŽȱŗşŘŖœǯȱЎ›ȱ‘Šȱ’–Žǰȱ –Ž›Œ‘Š—ȱ ŒŠ™’Š•ȱ ’—Œ›ŽŠœŽȱ ’—ȱ ‘Žȱ ‘Š—’Œ›ŠĞȱ ’—žœ›¢ǰȱ Šœȱ –Ž›Œ‘Š—œȱ ‹Žcame factory yarn suppliers and handloom cloth buyers and developed relationships with small peasant families. It has been suggested that ™˜˜›ȱ™ŽŠœŠ—œȱ ‘˜ȱŒ˜ž•ȱ—˜ȱŠě˜›ȱ–ŠŒ‘’—ŽȬœ™ž—ȱ¢Š›—ȱ‘Šȱ˜ȱŽ—Ž›ȱ’—˜ȱ Œ˜—›ŠŒžŠ•ȱ ›Ž•Š’˜—œ‘’™œȱ  ’‘ȱ –Ž›Œ‘Š—ȱ Ž–™•˜¢Ž›œǰȱ  ‘Ž›ŽŠœȱ ‘Žȱ ‹ŽĴŽ›Ȭ ꗊ—ŒŽȱ›ž›Š•ȱ‘˜žœŽ‘˜•œȱŽ—Žȱ˜ȱ‹ž¢ȱ¢Š›—ȱŠ—ȱœŽ••ȱŒ•˜‘ȱ‘Ž–œŽ•ŸŽœǯȱ Of these, a few even set up their workrooms to produce cloth by using Š–’•¢ȱ•Š‹˜›ȱŠ—ȱ‹¢ȱ‘’›’—ȱŠ™™›Ž—’ŒŽœǯȱžȱ˜ĞŽ—ǰȱ™ŽŠœŠ—ȱ™›˜žŒŽ›œȱ Ž›Žȱ independent weavers at one moment and weavers for their merchant employers at another, depending on market conditions. Thus, when cloth ™›’ŒŽœȱ›˜œŽǰȱ ŽŠŸ’—ȱ‘˜žœŽ‘˜•œȱ›’Žȱ˜ȱȃ ŽŠŸŽȱ˜›ȱœŠ•ŽȄȱ˜›ȱŠȱ‹ŽĴŽ›ȱ›Žturn, or when yarn became cheaper, they bought the material themselves.

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Conversely, in a time of declining cloth markets, weavers naturally preferred “weaving on order” and earning solid payments. When yarn prices  Ž›Žȱœ˜Š›’—ǰȱœ˜–Žȱ ŽŠŸŽ›œȱ˜ž—ȱ‘Žȱ–ŠŽ›’Š•ȱž—Šě˜›Š‹•ŽȱŠ—ȱ‘Šȱ˜ȱ Ž™Ž—ȱ ˜—ȱ ‘Žȱ ™žĴ’—Ȭ˜žȱ ꛖœȱ ˜›ȱ œž™™•’Žœǯȱ ‘Žȱ œ¢œŽ–œȱ ˜ȱ ȃ ŽŠŸ’—ȱ for sale” and “weaving on order” coexisted in Wei, and the family was the unit of coordination and production. —Ž›ȱ‘Žȱ™žĴ’—Ȭ˜žȱœ¢œŽ–ǰȱŽ’ȂœȱŒ•˜‘ȱŠ—ȱ¢Š›—ȱꛖœȱŠ—ȱ¢Ž’—Ȭ  ŽŠŸ’—ȱ ꛖœȱ ™›˜Œž›Žȱ ¢Š›—ȱ Š—ȱ ’œ›’‹žŽȱ ’ȱ ˜ȱ ›ž›Š•ȱ  ŽŠŸŽ›œȱ ’—ȱ Ž¡change for woven fabrics that met stipulated standards. The merchant Ž–™•˜¢Ž›œȱꗒœ‘Žȱ‘ŽȱŒ•˜‘ȱ˜›ȱŽ—›žœŽȱ˜‘Ž›ȱ ˜›”œ‘˜™œȱ˜ȱ˜ȱ‘Žȱ“˜‹ǯȱ ‘Žȱ ꗒœ‘Žȱ ™›˜žŒœȱ  Ž›Žȱ ‘Ž—ȱ ™žȱ ˜—ȱ ‘Žȱ –Š›”Žǰȱ žœžŠ••¢ȱ  ’‘ȱ ‘Žȱ ›ŠŽ–Š›”ȱ˜ȱ‘Žȱ™žĴ’—Ȭ˜žȱꛖǯȱ—ȱ‘’œȱ Š¢ǰȱŠȱ ŽŠŸŽ›ȱ–’‘ȱ˜‹Š’—ȱ¢Š›—ȱ ›˜–ȱ‘Žȱ™žĴ’—Ȭ˜žȱ–Ž›Œ‘Š—ȱ˜—ȱŒ›Ž’ȱŠ—ȱ™Š¢ȱ’—Ž›Žœȱ˜ȱŠ‹˜žȱŗǯŘƖȱ ˜›ȱŠȱ™Ž›’˜ȱ˜ȱ꟎ȱ˜ȱŽ—ȱŠ¢œȱ˜›ȱ‘Žȱ˜›ȱœ‘Žȱ–’‘ȱ‹Žȱ™Š’ȱ’—ȱ”’—ǯȱ—˜‘Ž›ȱ –Ž‘˜ȱ  Šœȱ ˜ȱ ˜‹Š’—ȱ ¢Š›—ȱ ›˜–ȱ ‘Žȱ ™žĴ’—Ȭ˜žȱ ꛖœȱ ˜ȱ  ŽŠŸŽȱ ‘Žȱ Šœsigned quota of cloth and receive a certain cash amount upon turning in ‘Žȱꗒœ‘Žȱ™›˜žŒœǯ Ž—Ž›Š••¢ȱ œ™ŽŠ”’—ǰȱ Ž’Ȃœȱ ™žĴ’—Ȭ˜žȱ ꛖœȱ žœŽȱ ‘Žȱ ˜••˜ ’—ȱ œ¢œŽ–œȱǻœŽŽȱŠ—ȱħ’Š—ȱŗşřŜǰȱŗřŗDzȱ Š—ȱ˜—’—ȱŗşřřǰȱŝŞşǼǯ 1. Merchants provided factory yarn at the current market price, and  ŽŠŸŽ›œȱŠ›ŽŽȱ˜ȱŠȱ‘’‘ȱ’—Ž›Žœȱ›ŠŽȱ˜ȱŗǯŘƖȱ˜›ȱŠȱ™Ž›’˜ȱ˜ȱ꟎ȱ˜ȱŽ—ȱ Š¢œǯȱȱžŠ›Š—˜›ȱ Šœȱ˜ĞŽ—ȱ—ŽŽŽȱ˜›ȱ‘Žȱ•˜Š—ǰȱŠ—ȱ‘Žȱ ŽŠŸŽ›ȱ‘Šȱ˜ȱ œŽ••ȱ‘Žȱꗒœ‘ŽȱŒ•˜‘ȱŠœȱœ˜˜—ȱŠœȱ™˜œœ’‹•Žȱ˜ȱ™Š¢ȱ‘ŽȱŽ‹ǯȱ Řǯȱ Š›—ȱ ꛖœǰȱ Œ•˜‘ȱ ꛖœǰȱ Š—ȱ ¢Ž’—Ȭ ŽŠŸ’—ȱ  ˜›”œ‘˜™œȱ ŠŸŠ—ŒŽȱ ‘Žȱ ŠŒ˜›¢ȱ ¢Š›—ȱ ˜ȱ ‘Žȱ  ŽŠŸ’—ȱ ‘˜žœŽ‘˜•œȱ ’—ȱ ›Žž›—ȱ ˜›ȱ ‘Žȱ ꗒœ‘Žȱ product. The prices of raw material and the end product were usually œ™ŽŒ’ꮍȱŠŒŒ˜›’—ȱ˜ȱŒž››Ž—ȱ–Š›”Žȱšž˜Š’˜—œǯȱȱ‘Žȱ¢Š›—ȱ™›’ŒŽȱ̞ŒžŠŽȱ–˜›Žȱ‘Š—ȱśȱ¢žŠ—ȱŠȱ‹Š•ŽȱŠȱ‘Žȱ’–Žȱ˜ȱŒ•˜‘ȱŒ˜••ŽŒ’˜—ǰȱ‘Žȱ ˜ȱ™Š›’Žœȱ œ‘Š›Žȱ‘Žȱ’쎛Ž—ŒŽǯȱ 3. Weavers received a piecework wage of cloth set by their merchant Ž–™•˜¢Ž›œȱŠŒŒ˜›’—ȱ˜ȱ‘Žȱ™ŠĴŽ›—ǰȱœ’£Žǰȱ Ž’‘ǰȱ¢Š›—ȱŒ˜ž—ǰȱŠ—ȱ‘Žȱ—ž–bers of warp, woof, and so on. If the product fell below the mark, the ™žĴ’—Ȭ˜žȱ –Ž›Œ‘Š—ȱ ›Ž“ŽŒŽȱ ’ǰȱ ’œŒ˜ž—Žȱ ‘’œȱ ™Š¢–Ž—ȱ ˜›ȱ ’ǰȱ ˜›ȱ ŽŸŽ—ȱ canceled the weaver’s contract, depending on the shortfall in quality. ‘Žȱꛜȱ™žĴ’—Ȭ˜žȱœ¢œŽ–ȱ’—Œž››ŽȱŠ—ȱ’—Ž›Žœȱ›ŠŽȱ˜ȱŗǯŘƖȱ˜›ȱ¢Š›—ǰȱ  ‘’Œ‘ȱ Šœȱ‘’‘ȱŒ˜–™Š›Žȱ ’‘ȱ’—Ž›Žœȱ›ŠŽœȱ’—ȱ˜‘Ž›ȱŠ›ŽŠœȱǻ ˜çȱž—“’ȱ ŗşŚřŠǰȱŗŘřǼǯȱ‘ŽȱœŽŒ˜—ȱ–Ž‘˜ȱ›ŽœŽ–‹•ŽȱŠȱœŠ•Žȱœ¢œŽ–ȱ‹ŽŒŠžœŽȱ‘Žȱ™›’ŒŽœȱ˜ȱ›Š ȱ–ŠŽ›’Š•ȱŠ—ȱ‘ŽȱŽ—ȱ™›˜žŒȱ Ž›Žȱę¡Žȱ’—ȱŠŸŠ—ŒŽȱ’—ȱŠŒŒ˜›ȱ  ’‘ȱ‘Žȱ–Š›”ŽȱŒ˜—’’˜—ǯȱȱ ˜ ŽŸŽ›ǰȱ‘Žȱ‘’›ȱ–Ž‘˜ȱ ŠœȱŠȱ ŠŽȱœ¢œŽ–ȱ’—ȱ ‘’Œ‘ȱ‘Žȱ ŽŠŸŽ›œȱ‘’›Žȱ˜ž ˜›”’—ȱŠ–’•’Žœȱ˜ȱ‘Š—’Œ›ŠĞȱ ˜›”ers earning a piece-rate wage and producing for their merchant employers ’—ȱ˜ —œǯȱ‘ŽȱŠŸŽ›ŠŽȱŒŠœ‘ȱ™Š¢–Ž—œȱ Ž›Žȱ›˜–ȱŖǯŜȱ˜ȱŖǯşȱ¢žŠ— per bolt of cloth. These payments varied depending on the fabrics involved. For

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example, the lowest on the scale was 0.3 yuan per bolt (Amano Motonoœž”ŽȱŗşŚŖǰȱŜşŖǼǯ ŽŠ›•Žœœȱ ˜ȱ ‘Žȱ ’Ž—’’Žœȱ ˜ȱ ‘Žȱ ™žĴ’—Ȭ˜žȱ ꛖœȯŒ•˜‘ȱ ˜›ȱ ¢Š›—ȱ shops, dyeing-weaving workshops, or yarn-dyeing houses—production was carried out predominantly in rural weavers’ households with fam’•¢ȱ•Š‹˜›ǯȱ˜‘ȱ™žĴ’—Ȭ˜žȱꛖœȱŠœȱ Ž••ȱŠœȱ¢Š›—ȱŠ—ȱŒ•˜‘ȱ–Ž›Œ‘Š—œȱŽpended on rural weaving households. It was paradoxical that whereas the •ŠĴŽ›ȱ‘Šȱœ›’Œȱ‹ž¢’—ȱŠ—ȱœŽ••’—ȱŠ››Š—Ž–Ž—œȱ ’‘ȱ’—Ž™Ž—Ž—ȱ ŽŠŸŽ›œǰȱ‘Žȱ˜›–Ž›ǰȱ‘›˜ž‘ȱ‘Ž’›ȱŠŒŒŽœœȱ˜ȱ‘Žȱ›Š ȱ–ŠŽ›’Š•ȱŠ—ȱ‘Žȱꗒœ‘Žȱ product markets, operated as merchant employers for their weavers. Wei’s contract weavers were also cloth providers for several wellcapitalized cloth merchants from other provinces. These merchants sometimes sent buying agents to collect cloth directly from Wei’s producers who wove on orders given by agents. The cloth turned out in this way was of standard quality and sold by the dealer under a trademark of his own ǻȃŒ˜—˜–’Œȱ˜—’’˜—œȱ’—ȱŠœŽ›—ȱ‘Š—ž—ȄȱŗşŘŜǰȱśřŞȮśřşǼǯȱŽ›Œ‘Š—œȱ from the outside could also procure their fabrics from Wei through two large cloth dealers at Dongguan whose main business was to collect the woven products from the weavers on behalf of their clients in other cities. Institutions and Incentives in the Market Economy of Wei County ‘Žȱ ™žĴ’—Ȭ˜žȱ œ¢œŽ–ȱ ™Ž›˜›–Žȱ ‘Žȱ ž—Œ’˜—œȱ ˜ȱ –Š›”Ž’—ǰȱ šžŠ•’¢ȱ Œ˜—›˜•ǰȱ¢Š›—ȱ’œ›’‹ž’˜—ǰȱŠ—ȱœ˜–Ž’–Žœȱꗊ—Œ’—ǯȱ˜—Žȱ˜ȱ‘ŽœŽȱž—Œtions could be performed in the village economy. In diverse ways, the ™žĴ’—Ȭ˜žȱꛖœȱ‘Ž•™Žȱ˜ȱ–Ž›Œ‘Š—’œŽȱꗒœ‘ŽȱŒ˜Ĵ˜—ȱ™›˜žŒœȱ‹Ž¢˜—ȱ the local market. They also distributed yarn from mills in distant large cit’Žœȱ˜ȱ›ž›Š•ȱ ŽŠŸŽ›œǯȱ¢ȱ›Žœ™˜—’—ȱ˜ȱŒžœ˜–Ž›ȱŽ–Š—ǰȱ‘Žȱ™žĴ’—Ȭ˜žȱ merchants served as quality control agents and helped to standardize products to meet the needs of the wholesale market. The formal rules used in this system helped make the market economy more productive. AnothŽ›ȱŒ›žŒ’Š•ȱž—Œ’˜—ȱ˜ȱ‘Žȱ™žĴ’—Ȭ˜žȱœ¢œŽ–ȱ Šœȱꗊ—Œ’—ǯȱ¢ȱ™žĴ’—ȱ˜žȱ on credit, merchant employers provided working capital for their outside  ŽŠŸŽ›œȱ ‘˜ȱŒ˜ž•ȱ—Ž’‘Ž›ȱŠě˜›ȱ˜ȱ‹ž¢ȱ¢Š›—ȱ’—ȱ•Š›ŽȱšžŠ—’’Žœȱ—˜›ȱœ˜›Žȱ their woven products to anticipate an increase in prices. For impoverished weavers, who were likely risk averse, “weaving on ˜›Ž›ȄȱŠ—ȱŽŠ›—’—ȱę¡Žȱ ŠŽœȱ–Š¢ȱ Ž••ȱ‘ŠŸŽȱ‹ŽŽ—ȱ™›ŽŽ›Š‹•Žȱ˜ȱȃ ŽŠŸ’—ȱ˜›ȱœŠ•ŽǯȄȱ‘Ž›Žȱ Šœȱ•Žœœȱ›’œ”ȱŽ—Š’•Žȱ’—ȱ‘Žȱꛜȱœ¢œŽ–ȱ‘Š—ȱ’—ȱ‘Žȱ second, where they risked not being able to make a living during hard ’–Žœǯȱ˜ȱœž––Š›’£ŽǰȱŠ•‘˜ž‘ȱ‘Žȱ™žĴ’—Ȭ˜žȱœ¢œŽ–ȱ’ȱ—˜ȱŒ‘Š—Žȱ‘Žȱ ™›ŽŽ¡’œ’—ȱ–˜Žȱ˜ȱ™›˜žŒ’˜—ǰȱ’ȱ’ȱ‘Ž•™ȱ˜ȱ™›˜–˜ŽȱŒ˜Ĵ˜—ȱ‘Š—’Œ›ŠĞœȱ ‹¢ȱ˜›Š—’£’—ȱ™›˜žŒ’˜—ȱŠ—ȱ–Š›”Ž’—ȱ˜˜œȱ‘›˜ž‘ȱŠȱ’ěžœŽǰȱ’ŸŽ›œ’ꮍȱ—Ž ˜›”ȱ˜ȱŒ˜—›ŠŒžŠ•ȱŠ››Š—Ž–Ž—œǯȱ

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Rural weavers, having entered into a contractual relationship with their merchant employers, lost their independence. As a result, they had to rely ˜—ȱ‘Žȱ™žĴ’—Ȭ˜žȱꛖœȱ˜›ȱ¢Š›—ȱœž™™•’ŽœǰȱŒ•˜‘ȱœŠ•ŽœǰȱŠ—ȱ–Š›”Žȱ’—˜›mation. In other words, the weavers withdrew from the production of ›Š ȱ–ŠŽ›’Š•ȱŠ—ȱ‘Žȱꗒœ‘Žȱ™›˜žŒȱ–Š›”ŽœȱŠ—ȱŠĴŠŒ‘Žȱ‘Ž–œŽ•ŸŽœȱ˜ȱ merchant entrepreneurs. There were many weavers, a situation that made Œ˜–™Ž’’˜—ȱ Ž¡›Ž–Ž•¢ȱ ”ŽŽ—ȱ ˜›ȱ “˜‹œȱ  ’‘ȱ ™žĴ’—Ȭ˜žȱ ꛖœǯȱ ‘žœǰȱ ‘Žȱ bargaining power of weavers transacting with merchant employers was weak. Between them, however, their contractual trust meant that weavers depended on merchants who also counted on weavers for the woven ™›˜žŒœǯȱ‘’œȱ’—Ž›Ž™Ž—Ž—ŒŽȱœ’—’ꮍȱ›ŽŒ’™›˜Œ’¢ȱ‹Ž ŽŽ—ȱ‘Žȱ ˜ȱŠœȱ Œ•’Ž—œȱŠ—ȱ™Š›˜—œȱŠ—ȱ‘žœȱŽ–‹˜’ŽȱŠ—ȱ’Š—œ‘Ž—ȂœȱǻŗşŞŝǼȱ—˜’˜—ȱ˜ȱ the three meanings of bao (ࣙ, ֱ, ฅǼǰȱ ‘’Œ‘ȱœž––Š›’£Žȱ‘Žȱ‘›ŽŽȱ’–™˜›Š—ȱ‘ž–Š—ȱ›Ž•Š’˜—œ‘’™œȱ’—ȱ‘’—ŽœŽȱŒž•ž›Žǯȱ Ž›Žǰȱ‘ŽœŽȱ‘›ŽŽȱ–ŽŠ—’—œȱ can be extended to denote contracts based on trust, clientage-patronage, and reciprocity. Chinese business institutions functioned in Wei’s handweaving industry to give strong incentives for households to transact in myriad contractual relationships that made for a highly competitive market for yarn and handloom cloth. ‘Žȱ™žĴ’—Ȭ˜žȱꛖœȱ˜™Ž›ŠŽȱ–Š’—•¢ȱ˜—ȱŒ˜––Ž›Œ’Š•ȱ’—ŸŽœ–Ž—ȱŠ—ȱ were not involved in the production process. In reality, they coordinated production from outside, and the small producers still possessed their own means of production. The contract-weaving system did not change family production, nor did it bring about any technological or qualita’ŸŽȱ‹›ŽŠ”‘›˜ž‘œǯȱ‘Žȱœ¢œŽ–ȱ Šœȱœ’••ȱ™•ŠžŽȱ‹¢ȱ’—ŽĜŒ’Ž—Œ¢ǰȱ’››Žž•Š›ȱ work schedules, and the waste of materials in transit and product adulŽ›Š’˜—ȱǻ›ŠŸŽ›–Š—ȱŗşŝŚǰȱŜřǼǯȱ—ȱ‘’—Šǰȱ‘Žȱ™žĴ’—Ȭ˜žȱœ¢œŽ–ȱ˜›ȱŒ˜Ĵ˜—ȱ hand weaving was integrated with workshop production. Many weaving  ˜›”›˜˜–œȱ’—ȱŽ’ȱ Ž›ŽȱŠ•œ˜ȱ™žĴ’—Ȭ˜žȱꛖœǯ ˜—ŸŽ›œŽ•¢ǰȱ–Ž›Œ‘Š—œȱ ‘˜ȱ Ž›ŽȱŠŒ’ŸŽȱ’—ȱŒ’›Œž•Š’˜—ȱ™›˜ęŽȱ‘Žȱ–˜œȱ from the market without transforming their business into a modern-style manufacturing enterprise. Because of the risks involved in the cloth trade, cloth and yarn merchants, especially the powerful among them, usually saved part of their capital for other investments. For instance, among the ’—ŸŽœ˜›œȱ’—ȱ¢Š›—ȱꛖœǰȱ–Š—¢ȱ Ž›ŽȱŠ•œ˜ȱ’—Ÿ˜•ŸŽȱ’—ȱ˜‘Ž›ȱŠ›ŽŠœȱ˜ȱ›ŠŽǰȱ such as groceries or native products. Most yarn wholesalers engaged in ›Š’’˜—Š•ȱ‹Š—”’—ȱŠœȱ‘Ž’›ȱœ’Ž•’—Žȱ˜ŒŒž™Š’˜—ȱǻ ˜—ȱ’—ȱŗşřŚǰȱřŝDzȱŗşřśǰȱ ŞŝǼǯȱŠ—¢ȱ‘ŠȱŠŒŒž–ž•ŠŽȱ‘Ž’›ȱŒŠ™’Š•ȱ‘›˜ž‘ȱ›Š’’˜—Š•ȱ‹Š—”’—ȱ˜›ȱ trade in leather and still held on to these businesses as sidelines while ŽŠ•’—ȱ’—ȱ¢Š›—ȱǻ ˜çȱž—“’ȱŗşŚřŠǰȱşşǼǯȱ Besides supplying yarn, traditional banking performed another func’˜—ȱŒ›žŒ’Š•ȱ˜ȱ‘Žȱ ‘˜•ŽœŠ•Žȱ¢Š›—ȱꛖœǯȱ˜œœŽœœ’—ȱœž‹œŠ—’Š•ȱž—œȱǻ‘Žȱ ˜Š•ȱ Š–˜ž—Žȱ ˜ȱ ŚŘŜǰŖŖŖȱ ¢žŠ—ȱ ˜›ȱ –˜›Žȱ ’—ȱ ŗşřŚDzȱ œŽŽȱ ’—Š–’ȱ Š—œ‘Āȱ

Ž’ȱ˜ž—¢Ȃœȱ˜Ĵ˜—ȱŽ¡’•ŽȱŠ›”ŽȱŒ˜—˜–¢ȱ

113

Žœžçȱ”Š‹žœ‘’”’ȱ”Š’œ‘Šǰȱ ˜”Āȱ‘’ȱ”Ž’£Š’ȱŒ‘眊“˜ȱŗşŚŘǰȱŗřŗǼǰȱ‘ŽœŽȱꛖœȱ overtook other sources of traditional credit and became the main credi˜›œȱ’—ȱ‘ŽȱŒ˜ž—¢ȱ˜›ȱŒ•˜‘ȱ–Ž›Œ‘Š—œǯȱ‘˜•ŽœŠ•Ž›Ȭꗊ—Œ’Ž›œȱŠ’•˜›Žȱ‘Ž’›ȱ banking functions to the handloom cloth business, taking deposits from local cloth and yarn dealers and advancing them loans. They also cashed ›ŠĞœȱ›˜–ȱ‘Žȱ˜žœ’ŽȱŠ—ȱ’œœžŽȱ–˜—Ž¢ȱ˜›Ž›œȱ˜ȱ‹ž¢Ž›œȱ ‘˜ȱ‘Šȱ–ŠŽȱ purchases from other districts, a service that was also extended to itinerant traders. These banking houses were agents in other areas as well and Œ˜—›’‹žŽȱ˜ȱŽ’ȂœȱŽ¡™Š—’—ȱ–˜—Ž¢ȱ–Š›”ŽȱǻŠ—ȱ ž’–’—ȱŗşřŝǰȱŝŖȮŝŘDzȱ

Š–Šȱ ŠœŠ˜ȱ ŗşřśǰȱ ŞŝDzȱ ž˜ȱ ’žŽ—ȱ ŗşřśǰȱ ŚŘŝśDzȱ ‘’¢Ž‹žȱ ž˜“’ȱ –Š˜¢ħžȱ ŗşřŚ‹ǰȱ ŗŗŘȮŗŗřǰȱ ŗŗŜDzȱ ˜›’—˜žŒ‘’ȱ ž–’˜ȱ Š—ȱ ˜–’—ŠŠȱ Š£ž˜ȱ ŗşŚŘǰȱ śśDzȱ ’—Š–’ȱŠ—œ‘ĀȱŽœžçȱ”Š‹žœ‘’”’ȱ”Š’œ‘Šǰȱ ˜”Āȱ‘’ȱ”Ž’£Š’ȱŒ‘眊“˜ȱŗşŚŘǰȱ ŗřŗȮŗřŚǰȱŘŞŗǰȱŘŞřǰȱŘŞŜDzȱ ˜çȱž—“’ȱŗşŚřŠǰȱŗŘŚǼǯȱ ›˜–’—Ž—ȱ¢Š›—ȱ ‘˜•ŽœŠ•Ž›œȱŠ—ȱꗊ—Œ’Ž›œǰȱ ’‘ȱ‘ŽȱœŽŒž›’¢ȱ˜ȱ‘Ž’›ȱ abundant funds and control of yarn, were able to exercise power over other cloth merchants and over the entire cloth production business in the weaving area. The powerful position of these yarn wholesalers went unchallenged in Wei’s commercial circles until the early 1930s. At that time, the Japanese yarn-selling agents became the main yarn suppliers of the area. Starting in 1931, the wholesale yarn sector was dominated by an agent of the Japanese textile enterprises called Ruixiang ⨲⼹. The Japanese took over the function of the Chinese merchants, linking the fac˜›¢ȱ™›˜žŒ’˜—ȱ˜ȱ¢Š›—ȱŠ—ȱ‘Žȱ‘Š—’Œ›ŠĞȱ™›˜žŒ’˜—ȱ˜ȱŒ•˜‘ǯȱž’¡’Š—ȱ received yarn directly from the Japanese mills in Qingdao for distribution ˜ȱŽ’Ȃœȱ ŽŠŸ’—ȱ‘˜žœŽ‘˜•œǯȱŽŒŠžœŽȱ‘’œȱ Š™Š—ŽœŽȱœŠ•Žœȱ˜ĜŒŽȱ–Š—ŠŽȱ to bypass all intermediaries and even evade Chinese taxes, it could af˜›ȱ˜ȱ˜ěŽ›ȱŒ‘ŽŠ™Ž›ȱ¢Š›—ȱ˜ȱ ŽŠŸŽ›œȱǻ‘’¢Ž‹žȱž˜“’ȱ–Š˜¢ħžȱŗşřŚ‹ǰȱŗŖŘǰȱ ŗŗśǰȱŗŗŞDzȱŠ—ȱ ž’–’—ȱŗşřŝǰȱşŘǼǯȱœȱŠȱ›Žœž•ǰȱ•˜ŒŠ•ȱ¢Š›—ȱ ‘˜•ŽœŠ•Ž›œȱ‘Šȱ˜ȱ limit their wholesaling business and make banking their main enterprise ǻŠ—ȱ ž’–’—ȱŗşřŝDzȱ’Š—ȱ‘Ž—¡žȱŗşřŚǼǯȱ‘Žȱ Š™Š—ŽœŽȱ’–™ŠŒȱ˜—ȱ‘Žȱ¢Š›—ȱ market apparently represents political interference into the market to create a more favorable condition for Japanese business interests. A survey conducted by Japanese in the early 1940s indicated that these ¢Š›—ȱꛖœȱŽ¡Ž–™•’ꮍȱœ˜–Žȱ˜ȱ‘Žȱ’—‘Ž›Ž—ȱœ›žŒž›Š•ȱ•’–’Š’˜—œȱ˜ȱ‘’nese merchant capital. This survey indicated that, as a whole, the composition of personally owned and borrowed capital showed “the usurious Š—ȱ œ™ŽŒž•Š’ŸŽȱ —Šž›Žȱ ˜ȱ ‘Žȱ Ž—Ž›™›’œŽȄȱ ǻ’—Š–’ȱ Š—œ‘Āȱ Žœžçȱ ”Š‹žœ‘’”’ȱ”Š’œ‘Šǰȱ ˜”žȱ‘’ȱ”Ž’£Š’ȱŒ‘眊“˜ȱŗşŚŘǰȱřřŞȮřŚŖDzȱ ˜çȱž—“’ȱŗşŚř‹ǰȱ ŚŘȮŚřǼǯȱ˜ȱŽ•Š‹˜›ŠŽǰȱ‘Žȱ Š™Š—ŽœŽȱœž›ŸŽ¢ȱœ‘˜ Žȱ‘Šȱ’ȱ‘Žȱ˜Š•ȱŒŠ™’Š•ȱ ˜ȱ ‘Žȱ œž›ŸŽ¢Žȱ ¢Š›—ȱ ꛖœȱ  Šœȱ ’Ÿ’Žȱ ’—˜ȱ  ˜ȱ ™Š›œǰȱ ˜—Žȱ ˜ȱ ™Ž›œ˜—Š•ȱ capital and the other of borrowed capital, the percentages of the two parts  ˜ž•ȱ‹ŽȱŘşǯŗƖȱ˜›ȱ‘ŽȱꛜȱŠ—ȱŝŖǯşƖȱ˜›ȱ‘ŽȱœŽŒ˜—ȱǻ’—Š–’ȱŠ—œ‘Āȱ Žœžçȱ ”Š‹žœ‘’”’ȱ ”Š’œ‘Šǰȱ ˜”Āȱ ‘’ȱ ”Ž’£Š’ȱ Œ‘眊“˜ȱ ŗşŚŘǰȱ řřŚȮřřŜDzȱ ˜çȱ

114

˜—Ȭ–’—ȱ’™

ž—“’ȱŗşŚř‹ǰȱřşǼǯȱ˜››˜ ŽȱŒŠ™’Š•ȱŒ˜—œ’œŽȱ˜ȱꗊ—Œ’Š•ȱŒ›Ž’ȱǻ’ǯŽǯǰȱ•˜Š—œȱ from modern banks, traditional banking houses, pawnshops, individual –˜—Ž¢ȱ •Ž—Ž›œǰȱ ŽŒǯǼǰȱ •˜Š—œȱ ˜ȱ Œ˜––Ž›Œ’Š•ȱ Œ›Ž’ȱ ǻ’—Œ•ž’—ȱ •˜Š—œȱ ›˜–ȱ ˜‘Ž›ȱꛖœȱ˜ȱ‘ŽȱœŠ–Žȱ›ŠŽDzȱŒ›Ž’ȱ™ž›Œ‘ŠœŽœȱ›˜–ȱœŽ••Ž›œDzȱŠŸŠ—ŒŽȱ™Š¢ments from buyers; support from owners, branches, and joint enterprises; ž—™Š’ȱ’Ÿ’Ž—œDzȱŽŒǯǼǰȱŠ—ȱŽ™˜œ’œȱ›˜–ȱŒžœ˜–Ž›œǰȱ™Š›—Ž›œǰȱŠ—ȱ˜‘Ž›ȱ ꛖœȱǻ’—Š–’ȱŠ—œ‘ĀȱŽœžçȱ”Š‹žœ‘’”’ȱ”Š’œ‘Šǰȱ ˜”Āȱ‘’ȱ”Ž’£Š’ȱŒ‘眊“˜ȱ ŗşŚŘǰȱřŚŖȮřŚřDzȱ ˜çȱž—“’ȱŗşŚř‹ǰȱŚřȮŚŚǼǯȱ–˜—ȱ‘Žȱ‘›ŽŽȱ–Š’—ȱœ˜ž›ŒŽœȱ˜ȱ borrowed capital, deposits occupied the highest percentage, amounting ˜ȱ śŚǯřƖȱ ˜ȱ ‘Žȱ ˜Š•ǯȱ Ž™˜œ’œȱ ›˜–ȱ Œžœ˜–Ž›œȱ œžŒ‘ȱ Šœȱ ˜‘Ž›ȱ ¢Š›—ȱ ꛖœȱ and yarn and cloth peddlers, and deposits from prominent wealthy peasŠ—œǰȱ•Š—•˜›œǰȱ˜ĜŒ’Š•œǰȱŠ—ȱ‘Žȱ’•Žȱ›’Œ‘ǰȱŒ˜—œ’žŽȱ‘Žȱ™›’—Œ’™Š•ȱ™Š›ȱ ˜ȱ‘’œȱž—ǯȱ ˜ ŽŸŽ›ǰȱŽ™˜œ’œȱ Ž›Žȱ—˜ȱœ˜•’Œ’Žȱ›˜–ȱ‘Žȱœ˜Œ’Ž¢Ȃœȱ›Š—”ȱ Š—ȱꕎǯȱ˜ȱŽ™˜œ’ȱ–˜—Ž¢ȱ’—ȱ˜—Žȱ˜ȱ‘Žȱꛖœǰȱ˜—ŽȱŽ’‘Ž›ȱ‘Šȱ˜ȱ‹Žȱ‘Žȱ relative or friend of the investor or else had to apply through a guarantor.

Ž›Žǰȱ™Ž›œ˜—Š•ȱŒ›Ž’ȱ›Ž•Š’˜—œȱŒ‘Š›ŠŒŽ›’£Žȱ‘Žȱꗊ—Œ’Š•ȱœ¢œŽ–ȱǻ’—Š–’ȱ Š—œ‘ĀȱŽœžçȱ”Š‹žœ‘’”’ȱ”Š’œ‘Šǰȱ ˜”Āȱ‘’ȱ”Ž’£Š’ȱŒ‘眊“˜ȱŗşŚŘǰȱřŚŘȮřŚřǼǯȱ The large percentage of borrowed capital in the total capital assets of ‘Žȱ¢Š›—ȱꛖœȱœžŽœȱ‘Šȱ‘ŽȱŽ—Ž›™›’œŽȱ ŠœȱœŽȱž™ȱ˜—ȱŠȱ˜ž—Š’˜—ȱ˜ȱ Œ›Ž’ǰȱ‹žȱŠȱŒ˜—œ’Ž›Š‹•ŽȱŠ–˜ž—ȱ˜ȱ™›˜ęȱ‘Šȱ˜ȱ‹Žȱ™Š’ȱ˜žȱŠœȱ’—Ž›Žœȱ ˜ȱŸŠ›’˜žœȱŒ›Ž’˜›œǯȱœȱ˜ȱ™›˜ęǰȱ–˜œȱ˜ȱ’ȱ Šœȱ’Ÿ’ŽȱŠ–˜—ȱœ‘Š›Ž‘˜•ers: 70 percent was distributed to the owner and 30 percent to the manŠŽ›ǯȱ Ž’—ŸŽœ–Ž—ȱ  Šœȱ ˜ĞŽ—ȱ ’—ŠŽšžŠŽȱ ˜ȱ œžœŠ’—ȱ Œ˜—’—ž’—ȱ ›˜ ‘ȱ ǻ’—Š–’ȱŠ—œ‘ĀȱŽœžçȱ”Š‹žœ‘’”’ȱ”Š’œ‘Šǰȱ ˜”Āȱ‘’ȱ”Ž’£Š’ȱŒ‘眊“˜ȱŗşŚŘǰȱ řŝŝȮřŝşDzȱ ˜çȱž—“’ȱŗşŚř‹ǰȱŝŞȮŝşǼǯȱ‘Ž›Ž˜›Žǰȱ‘ŽȱŽ—Ž›™›’œŽȱ—˜ȱ˜—•¢ȱ™Š’ȱ •Š›ŽȱŠ–˜ž—œȱ˜ȱ’—Ž›Žœȱ˜—ȱ’œȱ‹˜››˜ ŽȱŒŠ™’Š•ȱ‹žȱŠ’—Žȱ•’Ĵ•Žȱ˜ȱŠžment its own capital assets. On the composition of total assets, the Japanese survey showed that ‘Žȱ‘’—ŽœŽȱ¢Š›—ȱꛖœȱ˜™Ž›ŠŽȱ ’‘ȱŠȱŸŽ›¢ȱ•˜ ȱ›Š’˜ȱ˜ȱę¡ŽȱŠœœŽœȱ˜ȱŒ’›culating assets. On average, circulating assets occupied 94 percent of the ˜Š•ǰȱ•ŽŠŸ’—ȱ˜—•¢ȱŜȱ™Ž›ŒŽ—ȱ˜ȱę¡ŽȱŠœœŽœȱǻ’—Š–’ȱŠ—œ‘ĀȱŽœžçȱ”Š‹žœ‘’”’ȱ”Š’œ‘Šǰȱ ˜”Āȱ‘’ȱ”Ž’£Š’ȱŒ‘眊“˜ȱŗşŚŘǰȱřŚśȮřŚŜDzȱ ˜çȱž—“’ȱŗşŚř‹ǰȱ ŚŝȮŚŞǼǯȱ›ŽŽȱ˜ȱ‘Žȱ‹ž›Ž—ȱ˜ȱ•Š›Žȱę¡ŽȱŠœœŽœǰȱ‘Žȱ¢Š›—ȱꛖœȱŒ˜ž•ȱ–Š”Žȱ Šȱšž’Œ”ȱž›—˜ŸŽ›ǰȱ›Ž™˜›Ž•¢ȱ˜—ȱŠ—ȱŠŸŽ›ŠŽȱ˜ȱ꟎ȱ’–ŽœȱŠȱ¢ŽŠ›ȱǻ’—Š–’ȱ Š—œ‘ĀȱŽœžçȱ”Š‹žœ‘’”’ȱ”Š’œ‘Šǰȱ ˜”Āȱ‘’ȱ”Ž’£Š’ȱŒ‘眊“˜ȱŗşŚŘǰȱřŜřDzȱ ˜çȱ ž—“’ȱŗşŚřǰȱŜśǼǯȱȱ–’—’–Š•ȱę¡ŽȱŠœœŽœȱ’–™•’Žȱ‘’‘ȱ̎¡’‹’•’¢ȱ˜›ȱ‘Žȱ¢Š›—ȱ –Ž›Œ‘Š—œǰȱ ‘Žȱ ̎¡’‹’•’¢ȱ Š•œ˜ȱ –ŽŠ—ȱ ’—œŠ‹’•’¢ȱ ˜›ȱ ‘Žȱ Ž—Ž›™›’œŽǯȱ ˜œȱ ꛖœȱ ”Ž™ȱ ‘Ž’›ȱ ’—ŸŽœ–Ž—œȱ ’—ȱ Žšž’™–Ž—ȱ ˜ȱ Šȱ –’—’–ž–ȱ œ˜ȱ ‘Šȱ ‘Ž¢ȱ could easily retreat to another business when the yarn market contracted. Under these conditions, few yarn shops had long-term plans or consistent policies. Yarn dealing had long been a risky enterprise and was highly sensitive to market conditions, especially when yarn merchants had to depend on Japanese mills for supplies. To avoid total bankruptcy in times of

Ž’ȱ˜ž—¢Ȃœȱ˜Ĵ˜—ȱŽ¡’•ŽȱŠ›”ŽȱŒ˜—˜–¢ȱ

ŗŗś

crisis, most yarn dealers also engaged in various sideline businesses such as trade in cloth, grain, and paper. The Japanese accounts of the Chinese yarn business suggest on the one hand the vulnerability and limitation of the sector and on the other hand the rationality of risk aversion among these Chinese merchants in response to the unstable market environment. —ȱœ‘˜›ǰȱ‘Žȱ›Š’’˜—Š•ȱŒ›Ž’ȱœ¢œŽ–ǰȱ—˜›–œȱ˜ȱꗊ—ŒŽǰȱŠ—ȱ™Ž›œ˜—Š•ȱ and informal exchange relations continued to function. These established institutions coexisted with emerging organizations such as the contractual system that characterized the new handloom cloth business. Chinese yarn wholesalers, dependent on Japanese mills for factory yarn supplies,  Ž›ŽȱŒ˜–™•ŠŒŽ—ȱŠ‹˜žȱ‘Ž’›ȱ›˜•Žȱ’—ȱ‘Žȱꗊ—Œ’Š•ȱŠ—ȱ–Š›”Žȱœ¢œŽ–œȱŠœȱ Œ›Ž’ȱŠ››Š—Ž›œȱŠ—ȱ›Š ȱ–ŠŽ›’Š•ȱœž™™•’Ž›œǯȱžȱ¢Š›—ȱ›ŽŠ’•Ž›œǰȱŒ•˜‘ȱꛖœǰȱ Š—ȱ¢Ž’—Ȭ ŽŠŸ’—ȱ ˜›”œ‘˜™œȱ›Ž•’Žȱ˜—ȱ‘Žȱ ‘˜•ŽœŠ•Žȱꛖœȱ˜›ȱŒ›Ž’ȱ and yarn supplies. They entered into contractual relationships with rural weaving households and functioned to advance yarn to weavers, to control the products’ quality, and to extend the cloth market. Nevertheless, ‘Ž¢ȱ ‘Šȱ •’Ĵ•Žȱ ’—ŒŽ—’ŸŽȱ ˜ȱ ŸŽ—ž›Žȱ ‹Ž¢˜—ȱ ‘Žȱ ™žĴ’—Ȭ˜žȱ œ¢œŽ–ȱ ‘Šȱ ‘Šȱ‹›˜ž‘ȱ•’Ĵ•ŽȱŒ‘Š—Žȱ˜ȱ‘Žȱ™›ŽŽ¡’œ’—ȱ–˜Žȱ˜ȱ™›˜žŒ’˜—ǯȱŽŒŠžœŽȱ ˜ȱ™žĴ’—Ȭ˜žȂœȱ™˜œ’’˜—ȱ‹Ž ŽŽ—ȱ‘Žȱ Ž••ȬŒŠ™’Š•’£Žȱ Š™Š—ŽœŽȱ–’••œȱŠ—ȱ Œ˜œȬŽĜŒ’Ž—ȱ™ŽŠœŠ—ȱŠ–’•¢ȱ™›˜žŒ’˜—ȱž—’œǰȱ’ȱœŽŽ–Žȱ˜ȱ‹Žȱ‘Žȱ‘’‘Žœȱ form of business that merchant capitalists could achieve. This was already Š—ȱ’——˜ŸŠ’ŸŽȱŠŒŒ˜–™•’œ‘–Ž—ǯȱ—ȱŠȱœŽ—œŽǰȱ‘Žȱ™žĴ’—Ȭ˜žȱœ¢œŽ–ǰȱ ‘’Œ‘ȱ Š•œ˜ȱ ™•Š¢Žȱ Š—ȱ ’–™˜›Š—ȱ ›˜•Žȱ ’—ȱ ‘Žȱ Š™Š—ŽœŽȱ Œ˜Ĵ˜—ȱ Ž¡’•Žȱ ’—žœ›¢ǰ7  Šœǰȱ’—ȱ˜ž•Šœœȱǯȱ˜›‘Ȃœȱ ˜›œȱǻŗşŞŗǰȱŗşşśǰȱŘŖŖśǼǰȱŠȱ—˜ŸŽ•ȱ’—œ’ž’˜—ȱ that equipped Chinese society with an incentive structure for adapting to changing economic circumstances at the critical juncture of the early twentieth century. In Wei’s case, the system does seem to have enabled ‘’—ŽœŽȱ–Ž›Œ‘Š—ȱŒŠ™’Š•ȱ˜ȱ˜™’–’£Žȱ’œȱ™›˜ęŽŽ›’—ȱ̎¡’‹’•’¢ȱž—Ž›ȱ‘Žȱ traditional mode of production. —ȱ‘ŽȱŠ›ŽŠȱ˜ȱ™›˜žŒ’˜—ǰȱ‘Žȱ’ěžœŽȱ™ŽĴ¢ȱ™›˜žŒŽ›œȂȱŽŒ˜—˜–¢ȱ™›Žvailed. Weaving households produced the bulk of the cloth on the market. Most of these direct producers remained as part-time peasant weavers œŒŠĴŽ›ŽȱŠŒ›˜œœȱ›ž›Š•ȱŠ›ŽŠœǯȱ‘Ž¢ȱ‘Šȱ˜˜ȱ•’Ĵ•ŽȱŒŠ™’Š•ȱŠ—ȱ˜˜ȱ•’Ĵ•Žȱ’–Žȱ ˜ȱ ™›˜žŒŽȱ Œ•˜‘ǯȱ ‘Ž¢ȱ Œ˜ž•ȱ —˜ȱ Šě˜›ȱ ˜ȱ ‹ž¢ȱ ¢Š›—ȱ ’—ȱ •Š›Žȱ šžŠ—’’Žœǯȱ To compound the problem, they were not able to sell their woven fabric beyond the local market unless through merchants in one way or another. Nor did they have enough capital to stockpile their products in times of Ž™›Žœœ’˜—ȱ˜›ȱ‹ŽĴŽ›ȱ™›’ŒŽœȱ•ŠŽ›ǯȱ—ȱŠ—ȱŠĴŽ–™ȱ˜ȱœ˜•ŸŽȱ‘Žȱ–Ž›Œ‘Š—’œing problems of the family production system, the merchants did play an important role not only in distributing the new material but also in buying ŝȲȱ I am indebted to James Kung and Tomoko Shiroyama for this connection. See, for example, Abe Takeshi 1989; Nishikawa Shunsaku and Abe Takeshi 1990, 193–198.

ŗŗŜ

˜—Ȭ–’—ȱ’™

‘Žȱꗒœ‘Žȱ™›˜žŒȱǻ‘Š˜ȱŗşŝśǰȱŗşŖȮŗşŗǼǯȱȱ•ŽŠ›•¢ǰȱ‹˜‘ȱ‘Žȱ™›˜žŒ’˜—ȱ Š—ȱ–Š›”Žȱœ¢œŽ–œǰȱŽœ™ŽŒ’Š••¢ȱ‘Žȱ™žĴ’—Ȭ˜žȱ–ŽŒ‘Š—’œ–ǰȱ˜ȱ‘Žȱ‘Š—’Œ›ŠĞȱ’—žœ›¢ȱŒ˜—Œ›ŽŽ•¢ȱ–Š—’ŽœŽȱ‘Žȱ’—Ž›Ž™Ž—Ž—ȱ›Ž•Š’˜—œ‘’™ȱ‹Žtween merchant capital and the small peasant economy. The proliferation of handloom cloth production did increase wealth Š—ȱŽ¡™Š—ȱ ‘˜•ŽœŠ•’—ǰȱŒŠ››¢’—ǰȱꗊ—Œ’—ǰȱŠ—ȱ™žĴ’—Ȭ˜žȱ‹žœ’—ŽœœŽœǯȱ

Š—Ȭ ŽŠŸ’—ȱ™›˜žŒ’˜—ȱ™›˜–˜Žȱ•˜ŒŠ•ȱŒ˜––Ž›ŒŽǰȱ–Š›”Žȱœ’£Žǰȱ–˜—ŽŠ›¢ȱŽ¡Œ‘Š—Žœǰȱ‘Žȱ™žĴ’—Ȭ˜žȱœ¢œŽ–ǰȱŠ—ȱ–Ž›Œ‘Š—ȱŒŠ™’Š•ȱŠŒ’Ÿ’’Žœǯȱ The new enterprises also provided small peasant-weavers with income, always in cash, thus helping them to survive. This was no small achievement.8 Actually, the symbiotic interrelationship between merchant capital, Chinese as well as foreign, and the small peasant economy in Wei County constituted a complex, productive market economy of considerable adaptability. Conclusion Wei County experienced a large economic transformation in the 1920s and ŽŠ›•¢ȱŗşřŖœǯȱžȱŠĞŽ›ȱŗşřŜǰȱ Š›ȱ™›ŽŸŽ—Žȱž›‘Ž›ȱ’——˜ŸŠ’˜—œȱ›˜–ȱŠ”’—ȱ place. During the rise of the Wei County native cloth industry, local entrepreneurs did not have the technical and organizational capabilities to inte›ŠŽȱ‘Žȱ’—žœ›¢ȱŠ—ȱ›ŽŠ•¢ȱ›ŽžŒŽȱŠŒ˜›ȱŒ˜œœȱǻŽȱ Š—–’—ȱŘŖŖŘǼǯȱ—stead, they behaved as competing players in a highly competitive market that was only partly integrated. The most resourceful players invested in ‘Žȱꗊ—Œ’Š•ȱ–Š›”ŽȱŠ—ȱ˜ȱŠȱ•ŽœœŽ›ȱŽ¡Ž—ȱ’—ȱ˜‘Ž›ȱ–Š›”Žœǯȱ˜ȱ–Ž›Œ‘Š—ȱ ŒŠ™’Š•’œœȱ Ž›ŽȱŠ‹•Žȱ˜ȱ’—Ž›ŠŽȱŠ••ȱœŠŽœȱ˜ȱ‘Š—’Œ›ŠĞȱŒ•˜‘ȱ™›˜žŒ’˜—ǰȱ but many integrated some processing stages, showing that transformation costs could be slightly reduced per unit of output through factor productivity and modest economies of scale. Wei’s commercialization in the twentieth century took place because commerce and manufacturing coexisted in a low-cost labor market. This arrangement enabled modest economies of scale and improved factor productivity. This production system, however, did not greatly change ˜ŸŽ›ȱ ’–Žǯȱ ŽŒŠŽœȱ ŠĞŽ›ȱ ‘Š—•˜˜–ȱ Œ•˜‘ȱ  ŽŠŸ’—ȱ  Šœȱ ’—›˜žŒŽȱ ’—˜ȱ the county, there were still peasant-weavers living at home and working at this occupation. But where merchants integrated and coordinated more input exchanges for the production of native cloth and the repair and replacement of ‘Š—•˜˜–œȱ ‘›˜ž‘ȱ ™žĴ’—Ȭ˜žȱ –Ž‘˜œǰȱ ‘Ž¢ȱ  Ž›Žȱ Š‹•Žȱ ˜ȱ •˜ Ž›ȱ ‘Ž’›ȱ transaction and transformation costs per unit of marketed output. As a ›Žœž•ǰȱ Ž’ȱ –Ž›Œ‘Š—œȱ ž›—Žȱ ˜žȱ ‘’‘ȬšžŠ•’¢ȱ ‘Š—’Œ›ŠĞȱ Œ•˜‘ȱ Šȱ ™›’ŒŽœȱ ‘Šȱ™Ž˜™•ŽȱŠ••ȱ˜ŸŽ›ȱ‘’—ŠǰȱŠ—ȱŽŸŽ—ȱŠ‹›˜ŠǰȱŒ˜ž•ȱŠě˜›ǯȱ‘žœǰȱ‘ŽȱŽ’ȱ ŞȲȱ

ŽŽȱ‘Žȱ›ŽŽŸŠ•žŠ’˜—ȱ‹¢ȱŽ—ȱŠ—œ‘Ž—ȱǻŘŖŖŘǰȱŘŗŞȮŘŚŞDzȱœŽŽȱŠ•œ˜ȱŘŖŖŝǰȱŒ‘Š™ǯȱŜǼǯ

Ž’ȱ˜ž—¢Ȃœȱ˜Ĵ˜—ȱŽ¡’•ŽȱŠ›”ŽȱŒ˜—˜–¢ȱ

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—Š’ŸŽȱ Œ˜Ĵ˜—ȱ Ž¡’•Žȱ ’—žœ›¢ȱ ̘ž›’œ‘Žǰȱ ŽœŠ‹•’œ‘’—ȱ ‘Žȱ ™•ŠŒŽȱ Šœȱ Šȱ —Š’˜—Š•ȱŒŽ—Ž›ȱ˜›ȱ™›˜žŒ’—ȱŠ—ȱ–Š›”Ž’—ȱ—Š’ŸŽȱŒ˜Ĵ˜—ȱŒ•˜‘ȱ‘ŠȱŒ˜–™ŽŽȱ’—ȱ™›’ŒŽȱŠ—ȱšžŠ•’¢ȱ ’‘ȱ‘ŽȱŒ˜Ĵ˜—ȱŒ•˜‘ȱ˜ȱ‘’—ŠȂœȱ–˜Ž›—ȱŽ¡’•Žȱ manufacturing sector.

SIX

Chinese Farmer Rationality and the Agrarian Economy of the Lower Yangzi in the 1930s

ȱ Ȭ ȱ  ǰȱȱȬȱǰȱȱ  ȱ

A prominent theme in the economic history of contemporary China revolves around the contentious issue of why China did not experience a qualitative breakthrough or “transformative growth” during at least the  ˜ȱ ŒŽ—ž›’Žœȱ ‹Ž˜›Žȱ ‘Žȱ ˜––ž—’œȱ ŽŸ˜•ž’˜—ȱ ˜ȱ ŗşŚşȱ ǻ žŠ—ȱ ŗşŞśǰȱ ŗşşŖDzȱ˜–Ž›Š—£ȱŘŖŖŖDzȱ˜—ȱŗşşŝǼǯȱ One theory has it that China’s inability to experience rapid economic growth was because of irrational social constraints on women in the for–Š•ȱ•Š‹˜›ȱ–Š›”Žȱǻ žŠ—ȱŗşşŖǼǯȱ˜ȱ˜—•¢ȱ‘Šȱœ˜Œ’Š•ȱ—˜›–œȱ™Ž›™ŽžŠŽȱ high wages for men and blocked the formation of capitalist “managerial farms,”1 the low opportunity costs for women and their struggle for subsistence combined to push them into household production for cash Œ›˜™œǯȱ ˜Ĵ˜—ȱ  Šœȱ ›˜ —ȱ ’—ȱ ‘Žȱ —˜›‘ȱ Š—ȱ œŽ›’Œž•ž›Žȱ  Šœȱ ™›ŠŒ’ŒŽȱ ’—ȱ ‘Žȱœ˜ž‘ȯ‹˜‘ȱŒ˜Ĵ˜—ȱŠ—ȱœ’•”ȱ Ž›ŽȱŽ–Š—Žȱ‹¢ȱ‘Žȱ ˜›•ȱŽŒ˜—˜–¢ǯȱ Whereas income-augmenting activities may have raised total household income, the greater labor intensity they entailed allegedly brought diminishing returns to the marginal product of women’s labor. Total output growth only kept pace with population growth, a process described ‹¢ȱŠȱ‘’œ˜›’Š—ȱŠœȱȃ›˜ ‘ȱ ’‘˜žȱŽŸŽ•˜™–Ž—Ȅȱ˜›ȱȃ’—Ÿ˜•ž’˜—Ȅȱǻ žŠ—ȱ ŗşşŖǼǰȱ ‘’Œ‘ȱ’œȱŠŠ’—œȱ‘Žȱ›Š’˜—Š•’¢ȱ˜ȱ‘Žȱ–Š›”Žǯ ŒŒ˜›’—ȱ ˜ȱ žŠ—ȱ ǻŗşŞśǼǰȱ ‘Žȱ ȃ–Š—ŠŽ›’Š•ȱ Š›–Ȅȱ ›ŽœŽ–‹•Žœȱ ŒŠ™’Š•’œ’Œȱ ›Ž•Š’˜—œȱ ˜ȱ production in that its owner hired wage laborers and paid them the marginal product. This enabled them to avoid the allegedly sharply diminishing marginal returns that many small peasant farms—which relied on their own family members for labor—typically encountered, to the extent that they applied “excessive” labor to their small plots. ŗȲȱ

Chinese Farmer Rationality

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Another view, the “modernization policies” approach, does not agree that rural institutions and socioeconomic class relations were barriers to economic development. Citing the development experiences of Taiwan and the Liaodong Peninsula of mainland China in the early-to-mid twentieth century as evidence, this school of thought argues the importance of ŽěŽŒ’ŸŽȱœŠŽȱ™˜•’Œ’Žœȱ’—ȱ›Š—œ˜›–’—ȱ›Š’’˜—Š•ȱŠ›’Œž•ž›Žȱǻ¢Ž›œȱŠ—ȱ ‘’—ȱŗşŜŚDzȱ¢Ž›œȱŠ—ȱ•’ŽȱŗşŝŘǼǯȱ™™•¢’—ȱ—Ž ȱŽŒ‘—˜•˜’ŒŠ•ȱ’—™žœȱ˜ȱ increase yields and specializing in production for the market could have raised land and labor productivity and increased income, if two policy conditions were met. First, the land survey, and, with its completion, the land tax reform, could clarify ownership and provide added security to property rights in land, thereby facilitating land market transactions. Sec˜—ǰȱ ‘Žȱ œŠŽȱ ™žȱ ’—ȱ ™•ŠŒŽȱ Š—ȱ ŽěŽŒ’ŸŽȱ ™ŠŒ”ŠŽȱ ’—Œ•ž’—ȱ ›ŽœŽŠ›Œ‘ȱ Š—ȱ development in agriculture—essentially a seed-fertilizer revolution—and established agricultural experimental stations to disseminate new farming ŽŒ‘—˜•˜¢ǰȱ™›˜–˜’—ǰȱŠœȱ’ȱŽħ’ȱ Š™Š—ǰȱŠȱȃ ›ŽŽ—ȱŽŸ˜•ž’˜—ǯȄȱ‘ŽœŽȱ public goods were essential for modernizing Chinese farming.2 China’s failure to transform its small family farms must be understood by the Republican government’s failure to adopt appropriate policies as in Taiwan and on the Liaodong Peninsula under the Japanese colonial regime. There is then a third—essentially “Smithian”—“commercialization” approach, one that sees “commercialization,” or specialization and exchange with increasing returns to scale and the development of markets, as central to agricultural modernization. According to this view, agricultural transformation depends not so much on raising farm yields as on, through the development of markets, using specialization and exchange ˜ȱ Šž–Ž—ȱ Š›–ȱ ’—Œ˜–Žœȱ ǻ’—Œ•ž’—ȱ ’—Œ˜–Žȱ ›˜–ȱ ŒŠœ‘ȱ Œ›˜™œǼȱ ’›ŽŒ•¢ȱ  ’‘ȱ‘Žȱ™›˜Ÿ’œ’˜—ȱ˜ȱ˜ěȬŠ›–ȱ’—Œ˜–ŽȱŠ—ȱ’—’›ŽŒ•¢ȱ ’‘ȱ›’œ’—ȱ›Žž›—œȱ to scale as primary economic decision-making units become more specialized in response to commercialization. The highly competitive nature of both factor and product markets in China in the early twentieth century, ŠŒŒ˜›’—ȱ˜ȱ¢Ž›œȱǻŗşŝŖǼǰȱ™›˜Ÿ’ŽœȱŽŸ’Ž—ŒŽȱ˜ȱ“žœȱ‘˜ ȱŠȱ–˜Ž›ŠŽȱ›’œŽȱ in farm household income before the Japanese invasion can be interpreted as a result of this increased specialization, though far from being a breakthrough in the economy. In short, there are three approaches to looking into the Chinese agricultural economy in the early twentieth century: involution and underdevelopment theory, institutions and policies theory, and commercialization ‘Ž˜›¢ǯȱ‘Žȱꛜȱ ˜ȱŠ›ŽȱŒ˜–™Ž’—ȱ‘Ž˜›’ŽœȱŠŒŒ˜ž—’—ȱ˜›ȱ‘Žȱ‹Š››’Ž›œȱ˜ȱ ŘȲȱ The Green Revolution is a shorthand referral to the large increase in mainly grain (rice Š—ȱ ‘ŽŠǼȱ™›˜žŒ’Ÿ’¢ȱ’—ȱ‘ŽȱŗşŜŖœȱ‹ŽŒŠžœŽȱ˜ȱ‘ŽȱŠŸŠ’•Š‹’•’¢ȱ˜ȱ‘’‘Ȭ¢’Ž•ȱŸŠ›’Ž¢ȱœŽŽœȱ and of chemical fertilizers in a context of improved irrigation and mechanization (Farmer ŗşŞŜDzȱŠŽȱŗşŝŚǼǯ

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Kung, Lee, and Bai

breakthrough, whereas the last one explores the improvement without a ‹›ŽŠ”‘›˜ž‘ȱ˜ȱœ‘˜ ȱ‘Šȱ’ȱ Šœȱ—˜ȱŠȱ–ŠĴŽ›ȱ˜ȱŠȱ•ŠŒ”ȱ˜ȱ›Š’˜—Š•’¢ȱ’—ȱ‘Žȱ market or the people who made choices but rather a lack of institutions and policies. Although the involution theory has inspired a large body of literature on China’s economic development, and it is imperative to compute the marginal product of labor of each economically active household mem‹Ž›ȱ’—ȱ˜›Ž›ȱ˜ȱ’›ŽŒ•¢ȱŽœȱ‘Žȱ‘¢™˜‘Žœ’œǰȱ‘Ž›Žȱ‘Šœȱ‹ŽŽ—ȱ•’Ĵ•ŽȱœžŒŒŽœœȱ’—ȱ this undertaking due to the paucity of good-quality data. Moreover, the other two approaches previously mentioned also generate an interest in the economic behaviors of farm households. The institutions and policy theory requires data on whether farm households allocated their land and •Š‹˜›ȱŒ˜—œ’œŽ—•¢ȱ ’‘ȱ™ŠĴŽ›—œȱ‘ŠȱŒ˜ž•ȱ‹Žȱ™˜œž•ŠŽȱ‹¢ȱŽŒ˜—˜–’Œȱ›Š’˜—Š•’¢ȱ ǻ’Ĵ›’Œ‘ȱ Š—ȱ ¢Ž›œȱ ŗşŝŗǼǰ3 whereas the commercialization approach tries to document the active and competitive operations of factor and product markets before the late 1930s as indirect proof that, because farm households had alternative outlets for their surplus labor, the kind of ȃ’››Š’˜—Š•Ȅȱ‹Ž‘ŠŸ’˜›ȱŠ••žŽȱ˜ȱ‹¢ȱ žŠ—ȱŒ˜ž•ȱ—˜ȱ™˜œœ’‹•¢ȱ‘ŠŸŽȱŽ¡’œŽȱ ǻ›Š—ȱŗşŞŝDzȱ¢Ž›œȱŗşŝŖǼǯ ‘Žȱ™›ŽœŽ—ȱœž¢ȱ‘Šœȱœ¢œŽ–Š’ŒŠ••¢ȱžœŽǰȱ˜›ȱ‘Žȱꛜȱ’–ŽǰȱŠȱž—’šžŽȱ farm survey conducted in the late 1920s in the Lower Yangzi. With this set of data, we can address several important related issues similar to those of the third approach outlined here, using a method broadly consistent  ’‘ȱ ‘Žȱ Ž—ŽŠŸ˜›ȱ ˜ȱ ’Ĵ›’Œ‘ȱ Š—ȱ ¢Ž›œȱ ǻŗşŝŗǼǯȱ ’›œǰȱ  Žȱ Žœ’—ŠŽȱ ‘Žȱ economic context in which farm households operated so as to understand the employment and income opportunities actually available to those households. Second, we explore two questions: Did economic exchange— either transacted through the market or organized within the family (such ŠœȱŽ–Š•Žȱ•Š‹˜›ȱ’—ȱœŽ›’Œž•ž›ŽǼȯŽ—Š‹•ŽȱŠ›–ȱ‘˜žœŽ‘˜•œȱ˜ȱŠ••˜ŒŠŽȱ•Š—ǰȱ •Š‹˜›ǰȱŠ—ȱŒŠ™’Š•ȱǻ’—Œ•ž’—ȱ‘ž–Š—ȱŒŠ™’Š•ǼȱŠŒŒ˜›’—ȱ˜ȱŒ˜–™Š›Š’ŸŽȱŠŸŠ—ŠŽǵȱ —ǰȱ  ‘Šȱ  Ž›Žȱ ‘Žȱ  Ž•Š›Žȱ ŽěŽŒœȱ ›˜–ȱ ‘˜žœŽ‘˜•ȱ ŽŒ’œ’˜—œȱ regarding the resources allocated to both income and basic consumption? Although our empirical results should not be taken as an outright rejection of the involution thesis (which we do not think we have formally ™›˜™˜œŽǼǰȱ‘Ž¢ȱ˜ȱœžŽœǰȱŠ—ȱ‘’œȱ’œȱŒ˜—œ’œŽ—ȱ ’‘ȱ‘ŽȱŠ—Š•¢œ’œȱ˜ȱ’›’Œ‘ȱŠ—ȱ¢Ž›œȱǻŗşŝŗǼǰȱ‘ŠȱŠ›–ȱ‘˜žœŽ‘˜•œȱ’—ȱ‘ŽȱŒ˜––Ž›Œ’Š•’£ŽȱŠ›ŽŠœȱ of China were increasing welfare in a way consistent with economic ra’˜—Š•’¢ǯȱ ™ŽŒ’ęŒŠ••¢ǰȱ œ™ŽŒ’Š•’£Š’˜—ȱ Š—ȱ Ž¡Œ‘Š—Žȱ Ž¡™Š—Žȱ  ’‘’—ȱ ‘’œȱ œ’—ȱ Šȱ Š›–ȱ œž›ŸŽ¢ȱ Œ˜—žŒŽȱ ’—ȱ ꟎ȱ Ÿ’••ŠŽœȱ ’—ȱ Š—Œ‘ž›’Šǰȱ ’Ĵ›’Œ‘ȱ Š—ȱ ¢Ž›œȱ ǻŗşŝŗǼȱŒ˜–™Š›ŽȱŠŒžŠ•ȱ‘˜žœŽ‘˜•ȱ’—Œ˜–Žȱ ’‘ȱ ‘Šȱ ˜ž•ȱ‘ŠŸŽȱ‹ŽŽ—ȱ˜‹Š’—Žȱ‘Šȱ‘ŽœŽȱ ‘˜žœŽ‘˜•œȱ‹Ž‘ŠŸŽȱ’—ȱŠȱ–Š¡’–’£’—ȱ Š¢ǰȱ‹žȱ‘Ž¢ȱŠ’•Žȱ˜ȱꗍȱŠ—¢ȱœ’—’ęŒŠ—ȱ’쎛Ž—ŒŽȱ between the two. This leads them to conclude that farm households had been allocating their ›Žœ˜ž›ŒŽȱŽ—˜ –Ž—œȱŽĜŒ’Ž—•¢ǯ řȲȱ

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regional economy, with factor and product markets behaving competitively, and family farms, as the primary economic organizations, adjusting to “changing relative prices” by reallocating household resources. One –Š¢ȱŽŸŽ—ȱŠĴ›’‹žŽȱ‘Žȱœ‘Š›™ȱ’—Œ›ŽŠœŽȱ’—ȱ™Ž›ȱŒŠ™’Šȱ’—Œ˜–Žȱ˜ȱ‘Žȱœž›ŸŽ¢Žȱ ‘˜žœŽ‘˜•œȯ‹¢ȱŠ•–˜œȱśŖȱ™Ž›ŒŽ—ȱ›˜–ȱŗşŘşȱ˜ȱŗşřŜȱǻ‹Ž˜›Žȱ’ȱŽŒ•’—Žȱ‹¢ȱ ŗŖȱ™Ž›ŒŽ—ȱ›˜–ȱ’œȱ™ŽŠ”ȱŠȱ‘ŽȱŽ—ȱ˜ȱ‘ŽȱŒ’Ÿ’•ȱ Š›ȱ’—ȱŗşŚŞǼȯ˜ȱ‘’œȱ‹›˜Šȱ economic rationality and to the market development that we see in the ›Ž’˜—ȱǻ ž—ǰȱŽŽǰȱŠ—ȱŠ’ȱŘŖŖśǼǯȱ•‘˜ž‘ȱ‘Žȱœž›ŸŽ¢ȱŠŠȱ‘Šȱ ŽȱžœŽȱ˜›ȱ Š—Š•¢œ’œȱ’œȱŒ˜—ę—Žȱ˜ȱ˜—•¢ȱ˜—ŽȱŒ˜ž—¢ȱ˜›ȱ›Ž’˜—ȱǻŠ—ȱŠ•œ˜ȱ˜ȱ˜—Žȱ ’‘ȱŽ ǰȱ ’ȱŠ—¢ǰȱ–Š—ŠŽ›’Š•ȱŠ›–œȯ‘Žȱ™›’—Œ’™Š•ȱŽ–™•˜¢Ž›œȱ˜ȱŠ›–ȱ•Š‹˜›Ǽǰȱ‘Žȱ’œtinctly higher economic development there implies that chances for farm households to “involute” there would be less—at least when compared with the north of China. It is from this vantage point that Wuxi provides a good case for testing the involution hypothesis. Š›”ŽȱŽŸŽ•˜™–Ž—ȱŠ—ȱ›Š’˜—Š•ȱŽŒ˜—˜–’Œȱ‹Ž‘ŠŸ’˜›ȱŠěŽŒȱ—˜ȱ“žœȱ™Ž›ȱ capita income; they also have equity implications. Although the ownership distribution of land and probably other assets might have been very unequal in this highly commercialized region of China, operated holdings  Ž›Žȱ œ’—’ęŒŠ—•¢ȱ •Žœœȱ ž—ŽšžŠ•ȱ ‘Š—ȱ  Šœȱ •Š—ȱ ˜ —Ž›œ‘’™ǯ4 This implies that the intrinsically unequal distribution of land was moderated because of the active operations of the land rental market. Moreover, with alternative income sources, except those provided by land, total income inequality would be distinctly lower than land inequality. Though we paint a generally positive picture of the Jiangnan economy in early twentieth-century China, it is important to bear in mind that rational economic behavior at the microeconomic level is not enough to modernize traditional agriculture. Because technological and organizational innovations entail “public goods,” they can be supplied only by government actions—an insight inspiringly demonstrated by the modernization breakthrough approach. Why the Republican government of China failed to bring about this innovation is an important research topic, but it is beyond the scope of this chapter. —ȱ‘Žȱ—Ž¡ȱœŽŒ’˜—ǰȱ Žȱ‹›’ŽĚ¢ȱŽœŒ›’‹Žȱ‘ŽȱŠŠȱžœŽȱ˜›ȱ˜ž›ȱŠ—Š•¢œ’œǯȱ A descriptive analysis of the land rental and pawning market follows. The labor market, which includes not only the farm labor market, but more ’–™˜›Š—•¢ȱ ‘Žȱ ˜ěȬŠ›–ȱ ˜—Žœȯ‘Žȱ –’›Š—ȱ •Š‹˜›ȱ –Š›”Žȱ Š—ȱ ‘Žȱ Š–ily production of sericulture—is the subject of the next section. We then analyze the factors determining the choices of farm households in allocating family resources among the various economic activities listed in the “Operated holdings” refer to the total acreage a household cultivated, which could be larger than the amount of land it owned in the event this household rented more land for cultivation, or smaller if a household let others farm part of it in exchange for a rental payment. ŚȲȱ

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œž›ŸŽ¢ǯȱ’—Š••¢ǰȱ Žȱ•˜˜”ȱŠȱ‘ŽȱŽěŽŒȱ˜ȱŽŒ˜—˜–’Œȱ™Š›’Œ’™Š’˜—ȱ˜—ȱ’—Œ˜–Žȱ and basic staple consumption or, in short, economic welfare and then close with a short summary and conclusion. The Data Our data are based on a two-part farm survey of nine representative vil•ŠŽœȱǻ’—ȱŽ›–œȱ˜ȱŽŒ˜—˜–’ŒȱŽŸŽ•˜™–Ž—ȱŠ—ȱœŠ—Š›ȱ˜ȱ•’Ÿ’—Ǽȱ’—ȱž¡’ȱ ˜ž—¢ȱ ǻęǯȱ ŜǯŗǼǯȱ ‘’œȱ œž›ŸŽ¢ȱ  Šœȱ Œ˜—žŒŽȱ ꛜȱ ‹¢ȱŒŠŽ–’Šȱ ’—’ŒŠȂœȱ ˜Œ’Š•ȱŒ’Ž—ŒŽȱŽœŽŠ›Œ‘ȱ—œ’žŽȱǻǼȱ˜›ȱ‘Žȱ¢ŽŠ›ȱŗşŘşȱǻȱŗşřŖǼǯȱ‘Žȱ second part was conducted by the Chinese Academy of Social Science’s ˜Œ’Š•ȱ Œ’Ž—ŒŽȱ ŽœŽŠ›Œ‘ȱ —œ’žŽȱ ǻŠ•œ˜ȱ Ǽȱ ’—ȱ ŗşśŞǰȱ ›ŠŒ’—ȱ ‹ŠŒ”ȱ ˜ȱ ‘Žȱ ŗşřŖœȱŠ—ȱŗşŚŖœȱǻȱŗşśŞǼǯȱ—ŸŽœ’Š˜›œȱ˜›ȱ‘ŽȱŗşśŞȱœž›ŸŽ¢ȱ Ž—ȱ‹ŠŒ”ȱ to eleven originally surveyed villages with basically the same questionnaire and asked the respondents to provide them with answers for the ¢ŽŠ›œȱ ŗşřŜȱ Š—ȱ ŗşŚŞǯȱ —ŒŽȱ ŠŠ’—ǰȱ ‘Ž¢ȱ œž›ŸŽ¢Žȱ ‘Žȱ Ž—’›Žȱ Ÿ’••ŠŽœȱ Š—ȱ enumerated around eight hundred households. The two parts together Œ˜ŸŽ›ȱ ‘›ŽŽȱ ’–Žȱ ™˜’—œȯŗşŘşǰȱ ŗşřŜǰȱ Š—ȱ ŗşŚŞǯȱ ȱ ’œ’—Œ’ŸŽȱ ŽŠž›Žȱ ˜ȱ this survey is that all 1,207 households in these villages were studied. Although others have made use of this survey information, they did not ana•¢£Žȱ‘ŽȱŠŠȱŠœȱ Žȱ˜ȱ‘Ž›ŽȱǻŽ••ȱŗşşşDzȱ‘Š—ȱ‘˜—–’—ȱŘŖŖŘǼǯś There are three distinct advantages in using this survey information. First, we can construct a panel data set by merging the information of various years and thus can track changes in a village’s economic structure and in peasant welfare over two decades. Second, the survey was conducted in a prosperous county in China’s most advanced region—the ˜ Ž›ȱŠ—£’ȯŠȱ‘Žȱ’–ŽǰȱŠ—ȱ’ȱ’œȱžœŽž•ȱ˜›ȱŽœ’—ȱ‘ŽȱŽěŽŒȱ˜ȱŒ˜–mercialization on peasant economic behavior. Third, although the SSRI survey did not cover a geographical area as wide or diverse, or sample as many households, as the surveys conducted by John Lossing Buck and his Chinese associates at Nanking University,Ŝȱ’ȱ’ȱ—˜ȱœžěŽ›ȱ›˜–ȱž—ŽŸŽ—ȱ sampling7 or underenumeration of small farms.8 ˜›ȱ’—œŠ—ŒŽǰȱŠ•‘˜ž‘ȱŽ••ȱǻŗşşşǼȱ›Š—˜–•¢ȱŒ‘˜˜œŽœȱŽ—ȱ‘˜žœŽ‘˜•œȱ›˜–ȱŽŠŒ‘ȱ˜ȱ‘Žȱ Ž•ŽŸŽ—ȱ’—ȱ‘ŽȱŗşŘşȱœž›ŸŽ¢ȱ˜›ȱ‘Ž›ȱŠ—Š•¢œ’œǰȱ‘Š—ȱǻŘŖŖŘǼȱžœŽœȱ‘ŽȱŠŠȱ˜—ȱ˜—•¢ȱ˜ž›ȱ˜ȱ‘Ž–ǯ ŜȲȱ žŒ”ȱŒ˜—žŒŽȱ‘’œȱꛜȱœž›ŸŽ¢ȱ›˜–ȱŗşŘŘȱ˜ȱŗşŘŚȱ˜—ȱŘǰŞşşȱŠ›–ȱ‘˜žœŽ‘˜•œȱ’—ȱœŽŸŽ—ȱ ‘’—ŽœŽȱ™›˜Ÿ’—ŒŽœǰȱ‘Žȱ›Žœž•œȱ˜ȱ ‘’Œ‘ȱŠ›Žȱœž––Š›’£Žȱ’—ȱ‘’—ŽœŽȱŠ›–ȱŒ˜—˜–¢ȱǻŗşřŖǼǯȱ

’œȱœŽŒ˜—ȱœž›ŸŽ¢ǰȱŒ˜—žŒŽȱ›˜–ȱŗşŘşȱ˜ȱŗşřřǰȱŒ˜ŸŽ›ŽȱŗŜǰŝŞŜȱŠ›–ȱ‘˜žœŽ‘˜•œȱ’—ȱ Ž—¢Ȭ two provinces and was published in 1937. ŝȲȱ ˜›ȱ Ž¡Š–™•Žǰȱ ’—ȱ žŒ”Ȃœȱ ꛜȱ œž›ŸŽ¢ȱ ˜ȱ şȱ Ÿ’••ŠŽœǰȱ ˜—•¢ȱ Řȱ ‘˜žœŽ‘˜•œȱ ’—ȱ Šȱ Ÿ’••ŠŽȱ  Ž›Žȱ surveyed, at one extreme, whereas 102 households in a village were interviewed, at the other extreme. In his second survey, only 1 household was interviewed in 21 of the 101 villages, whereas in each of the 2 other villages 100 households were surveyed. There is no sampling issue for the SSRI data, since the surveys covered the entire selected villages. ŞȲȱ This may explain why farm size per capita was as large as 7.4 mu in the 1930s in Buck’s œž›ŸŽ¢ǰȱ  ‘’Œ‘ȱ ’œȱ –˜›Žȱ ‘Š—ȱ ˜ž‹•Žȱ ‘Žȱ Š–˜ž—ȱ ǻŠȱ •’Ĵ•Žȱ ˜ŸŽ›ȱ řȱ muǼȱ ˜ž—ȱ ’—ȱ Šȱ œž›ŸŽ¢ȱ ˜ȱ śȲȱ

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ȱ

The SSRI survey was designed to categorize variables by the follow’—DZȱŽ–˜›Š™‘’ŒȱŒ‘Š›ŠŒŽ›’œ’ŒœȱǻŠŽǰȱŽ—Ž›ǰȱ‘˜žœŽ‘˜•ȱœ’£ŽǼǰȱœ˜Œ’˜ŽŒ˜—˜–’ŒȱŒ‘Š›ŠŒŽ›’œ’ŒœȱǻŽžŒŠ’˜—ǰȱ˜ŒŒž™Š’˜—ǰȱŒ›Ž’ȱŒ˜—’’˜—œǼǰȱ›Žœ˜ž›ŒŽȱ Ž—˜ –Ž—œȱ ǻ•Š—ǰȱ •Š‹˜›ȱ ˜›ŒŽǰȱ Š›’Œž•ž›Š•ȱ Š—ȱ —˜—Š›–ȱ ŠœœŽœǼǰȱ ŠŒ˜›ȱ –Š›”Žȱ ›Š—œŠŒ’˜—œȱ ǻ•Š—ȱ ›Ž—Š•ȱ Š—ȱ •Š‹˜›Ǽǰȱ ™›˜žŒ’˜—ȱ ǻœ˜ —ȱ ŠŒ›ŽŠŽȱ Š—ȱ Œ›˜™™’—ȱ ™ŠĴŽ›—œǼǰȱ ˜ž™žǰȱ ’—Œ˜–Žǰȱ Š—ȱ Œ˜—œž–™’˜—ǯȱ Žȱ Ž¡Š–’—Žȱ the factor markets as they were described in the surveyed villages. Land Markets in Wuxi Size Distribution and Land Rental The land rental market must be examined in the context of how much arable land was available in the Jiangnan region and where arable land was ’œ›’‹žŽǯȱ ’œ˜›’Š—œȱ ‘ŠŸŽȱ —˜Žȱ ‘Šȱ ŠŸŽ›ŠŽȱ Š›–ȱ œ’£Žȱ ’—ȱ ‘’œȱ ›Ž’˜—ȱ by the turn of the twentieth century was exceedingly small—about a mu ŗǯŞȱ–’••’˜—ȱ‘˜žœŽ‘˜•œȱŒ˜—žŒŽȱ‹¢ȱ‘ŽȱŠ’˜—Š•’œȱ˜ŸŽ›—–Ž—ȱ’—ȱ‘ŽȱŗşřŖœȱǻœŽŽȱ žŠ—ȱ ŗşşŖǼǯȱ˜›ȱ žŠ—ǰȱ‘Žȱž—Ž›Ž—ž–Ž›Š’˜—ȱ™›˜‹•Ž–ȱ’œȱ–˜›ŽȱœŽŸŽ›Žǰȱ’ŸŽ—ȱ‘Šȱ’—Ÿ˜•ž’˜—Š›¢ȱ behavior occurred only on the small peasant farms.

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™Ž›ȱ ™Ž›œ˜—ȱ ǻŠ˜ȱ ’—œž’ȱ ŗşşŜDzȱ žŠ—ȱ ŗşşŖǼǯ9 Moreover, the farms were ž—ŽŸŽ—•¢ȱ’œ›’‹žŽǯȱ˜‘ȱ˜ȱ‘ŽœŽȱȃœ¢•’£ŽȱŠŒœȄȱŠ›ŽȱŒ˜—ę›–Žȱ‹¢ȱ‘Žȱ SSRI survey, which found that average per capita arable land in this highly commercialized area was 1.2 muȱ ’—ȱ ‹˜‘ȱ ŗşŘşȱ Š—ȱ ŗşřŝǯȱ ™ŽŒ’ęŒŠ••¢ǰȱ ž™ȱ ˜ȱŜŖȱ™Ž›ŒŽ—ȱ˜ȱ ‘˜žœŽ‘˜•œȱ‘ŠȱŠȱ™Ž›ȱŒŠ™’ŠȱŠŸŽ›ŠŽȱ˜ȱ•Žœœȱ‘Š—ȱŗȱmu, whereas about 19 percent owned from 1 to 2 muȱ’—ȱ‹˜‘ȱŗşŘşȱŠ—ȱŗşřŜǯȱ˜ȱ ‹ŽĴŽ›ȱ ž—Ž›œŠ—ȱ •Š—˜ —Ž›œ‘’™ȱ Œ˜—ŒŽ—›Š’˜—ǰȱ  Žȱ Œ˜–™žŽȱ ‘Žȱ ’—’ȱ Œ˜ŽĜŒ’Ž—œȱ˜›ȱ•Š—ȱ’œ›’‹ž’˜—ǯȱȱŖǯŜȱ’—ȱ‹˜‘ȱŗşŘşȱŠ—ȱŗşřŜǰȱ’ȱ’œȱ‘’‘ȱ enough to lend credence to the conventional view that landownership distribution was very unequal. ‘ŽȱŒ˜–‹’—ŽȱŽěŽŒœȱ˜ȱœ–Š••ȱŠ›–ȱœ’£ŽȱŠ—ȱž—ŽšžŠ•ȱ•Š—ȱ’œ›’‹ž’˜—ȱ meant that as much as half of the cultivated land—42 percent according ˜ȱŠȱŠ’˜—Š•’œȱ˜ŸŽ›—–Ž—ȱœž›ŸŽ¢ȱŠ—ȱŜŜȱ™Ž›ŒŽ—ȱŠŒŒ˜›’—ȱ˜ȱ Š™Š—ŽœŽȱ researchers—was rentedȱǻŠ˜ȱ’—œž’ȱŗşşŜDzȱ žŠ—ȱŗşşŖǼǯȱ‘Žȱȱꗍing lies somewhere in between but is closer to that of the former survey; ˜ŸŽ›ȱ‘Š•ǰȱŜŘǯŜƖȱ’—ȱŗşŘşǰȱ˜ȱ‘Žȱ•Š—ȱŒž•’ŸŠŽȱ‹¢ȱž¡’ȱ‘˜žœŽ‘˜•œȱ Šœȱ ˜ž—ȱ˜ȱ‹Žȱ›Ž—ŽȱǻŠ‹•ŽȱŜǯŗǼǯȱȱ‘Žȱ—ž–‹Ž›ȱ˜ȱ‘˜žœŽ‘˜•œȱŽ—ŠŽȱ’—ȱ •Š—ȱ ›Ž—Š•ȱ ›Š—œŠŒ’˜—œǰȱ Šȱ œŠŽ›’—ȱ ŝŞǯŜƖȱ ’—ȱ ŗşŘşȱ ™Š›’Œ’™ŠŽȱ ’—ȱ ‘Žȱ rental market as buyers, compared with a mere 11 to 13 percent of ownersuppliers in this market. The vast discrepancy between the two sides of the market—whether measured by the quantity of land rented or by the number of households participating—is consistent with an earlier view that many landlords were absentees. Although land rental transactions had declined slightly, substantial proportions of households continued to adjust their operated holdings through the rental market in the ensuing ŽŒŠŽœȯŝŝǯŝƖȱ’—ȱŗşřŜȱŠ—ȱŝŖǯŗƖȱ’—ȱŗşŚŞǯ Although some may regard a highly active land rental market in Wuxi ŠœȱŠȱœ’—ȱ‘Šȱ•Š—ȬŽęŒ’Ž—ȱ‘˜žœŽ‘˜•œȱ Ž›Žȱ‹Ž’—ȱŽ¡™•˜’Žȱ‹¢ȱ‘˜œŽȱ ’‘ȱ surplus land, it could also mean that households with surplus laborers could avoid overworking their land through land renting. The Gini coefꌒŽ—ȱŒŠ•Œž•ŠŽȱ˜—ȱ‘Žȱ‹Šœ’œȱ˜ȱȃ˜™Ž›ŠŽȄȱ•Š—‘˜•’—œȯ ‘’Œ‘ȱ’—Œ•žŽȱ rented land—is only 0.4, which is substantially smaller than that based ˜—ȱ ˜ —Ž›œ‘’™ȱ ǻŖǯŜǼǯȱ ‘’œȱ œžŽœœȱ ‘Šȱ ‘Žȱ •Š—ȱ ›Ž—Š•ȱ –Š›”Žȱ ’ȱ ‘ŠŸŽȱ Š—ȱŽšžŠ•’£’—ȱŽěŽŒȱ˜—ȱ˜™Ž›ŠŽȱ•Š—ȱ’—ŽšžŠ•’¢ǰȱ ‘’Œ‘ȱŠ•œ˜ȱ’–™•’Žœȱ‘Šȱ ŠŒ˜›ȱŽ—˜ –Ž—œȯ’—ȱ™Š›’Œž•Š›ȱ•Š—ȱŠ—ȱ•Š‹˜›ȯ Ž›Žȱ‹ŽĴŽ›ȱ–ŠŒ‘Žȱ ŠŒ›˜œœȱ ‘˜žœŽ‘˜•œȱ  ’‘ȱ ’쎛’—ȱ •Š—ȱ Ž—˜ –Ž—œǯ10 This opportunity ˜›ȱ•Š—ȬŽęŒ’Ž—ȱ‘˜žœŽ‘˜•œȱ˜ȱ›Ž—ȱ•Š—ȱ’œȱŽœ™ŽŒ’Š••¢ȱŒ›žŒ’Š•ȱ ‘Ž›Žȱœž›plus farm workers have few outside wage-earning opportunities, since One muȱŽšžŠ•œȱŖǯŖŜŜŝȱ‘ŽŒŠ›Žǯ ‘’œȱ ’œȱ Œ˜—œ’œŽ—ȱ  ’‘ȱ ‘Žȱ ꗍ’—ȱ ˜ȱ ›Š—ȱ Š—ȱ Š—œȱ ǻŗşşŘǼǯȱ œ’—ȱ ‘Žȱ œž›ŸŽ¢ȱ Œ˜—žŒŽȱ ‹¢ȱ ‘Žȱ Š’˜—Š•ȱ Š—ȱ ˜––’œœ’˜—ȱ ǻ˜ȱ ‘Žȱ Ž™ž‹•’ŒŠ—ȱ ˜ŸŽ›—–Ž—Ǽȱ ’—ȱ œ’¡ŽŽ—ȱ ‘’—ŽœŽȱ ™›˜Ÿ’—ŒŽœǰȱ ‘ŽœŽȱ Šž‘˜›œȱ œ’–’•Š›•¢ȱ ꗍȱ ‘Šȱ ȃ‘Žȱ ’œ›’‹ž’˜—ȱ ˜ȱ ˜™Ž›Š’˜—Š•ȱ ‘˜•’—œdzǽ ŠœǾȱ–˜›ŽȱŽšžŠ•ȱ‘Š—ȱ‘Žȱ’œ›’‹ž’˜—ȱ˜ȱ•Š—ȱ˜ —Ž›œ‘’™ȄȱǻŗŞşȮŗşŖǼǯ şȲȱ

ŗŖȲȱ

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that opportunity allows them to expand farm operations and more fully use family surplus labor, thereby preventing the marginal product of their ˜ŸŽ›Š••ȱ‘˜žœŽ‘˜•ȱ•Š‹˜›ȱ›˜–ȱœžěŽ›’—ȱ‘ŽȱŠ••ŽŽȱ’–’—’œ‘’—ȱ›Žž›—œȯ an important “symptom” of involution. Table 6.1. Land Rental and Pawning Markets in Wuxi County 1929

1936

1948

Percentage of households participating in (a) the land rental market in*

78.6

77.7

70.1

out

13.2

11.8

13.9

1.2

0.8

2.3

out

17.1

13.2

3.5

in

62.6

61.2

38.9

out

15.2

15.1

15.5

(b) the pawning market in Percentage of (a) land rented

(b) land pawned in

0.20

0.24

0.60

11.22

7.75

1.42

5.53

4.51

5.63

in

3.46

2.76

2.19

out

0.84

0.68

0.87

in

0.01

0.01

0.03

out

0.62

0.35

0.08

out Amount of land owned (in mu) (a) rented

(b) pawned

Source: SSRI (1929, 1958). * “Rent in” refers to the demand for rental land, whereas “rent out” refers to the supply of rental land.

Land Pawning Compared with the land rental market, the market for pawning was smaller. For example, though nearly half the land cultivated in Wuxi in 1929 was rented, only 11% was pawned out in the same year (table 6.1). Similarly, compared with 78.6% of households having reported to have

ŗŘŜ

Kung, Lee, and Bai

›Ž—Žȱ’—ȱ•Š—ǰȱ˜—•¢ȱŗŝǯŗƖȱ˜ȱ‘˜žœŽ‘˜•œȱ‘Šȱ™Š —Žȱ˜žȱ•Š—ǯ11 Unlike the land rental market, where most participated on the demand side of the market, land pawning was more active on the supply side. Once again, the ’œŒ›Ž™Š—Œ¢ȱ‹Ž ŽŽ—ȱŽ–Š—ȱŠ—ȱœž™™•¢ȱ›ŽĚŽŒœȱ‹˜‘ȱ‘Žȱ’—Ÿ˜•ŸŽ–Ž—ȱ˜ȱ an “absentee landlord” class and the fact that pawning was an important means of informal credit to which capital-constrained farm households ˜ĞŽ—ȱ›Žœ˜›Žȱ˜›ȱ•˜Š—œǰȱ ’‘ȱ‘Ž’›ȱ•Š—ȱ™•ŽŽȱŠœȱŒ˜••ŠŽ›Š•ǯȱ‘Ž—ȱ•Š—ȱ was pawned to a fellow villager, the party who pawned out the land could lose its cultivation right to the family advancing the loan to it, whereas an absentee landlord would allow a debtor household to continue to farm the •Š—ȱ˜—ȱ ‘’Œ‘ȱ‘ŽȱŒ˜••ŠŽ›Š•ȱ‘Šȱ‹ŽŽ—ȱ™•ŽŽȱǻŠ—ȱŘŖŖřǼǯȱ—ȱŠ—¢ȱŒŠœŽǰȱ the possibility that pawning could eventually lead to an outright land sale ’쎛Ž—’ŠŽœȱ’ȱ›˜–ȱ™ž›Žȱ›Ž—’—ǯȱ To the extent that pawning represented an important source of credit ˜›ȱŒŠ™’Š•ȬŒ˜—œ›Š’—ŽȱŠ–’•’Žœǰȱ’œȱ™˜™ž•Š›’¢ȱ Šœȱ˜ĞŽ—ȱ’Žȱ˜ȱ‘Žȱ›Š™’ȱ expansion of sericulture in those land pockets where soil characteristics were especially well suited for mulberry tree cultivation. The availability of credit was important, since it helped families who wanted to develop a sideline in sericulture but were unable to purchase mulberry leaves for ŽŽ’—ȱ œ’•” ˜›–œȱ ǻ’ȱ ‘Ž¢ȱ ’ȱ —˜ȱ ›˜ ȱ ‘’œȱ Œ›˜™ȱ ‘Ž–œŽ•ŸŽœǼȱ Š—ȱ ™Ž›haps also helped them purchase charcoal for maintaining warmer room temperature during the winter. This cash availability is crucial in a context  ‘Ž›ŽȱŠȱ˜›–Š•ȱŒ›Ž’ȱ–Š›”Žȱ’œȱ•Š›Ž•¢ȱŠ‹œŽ—ǰȱŠ›žŽœȱŠ—ȱǻŗşşŜǼǰȱ ‘˜ȱŽœŒ›’‹Žœȱ‘ŽȱŽŸŽ•˜™–Ž—ȱ˜ȱœŽ›’Œž•ž›ŽȱŠ—ȱ›Ž•ŠŽȱ‘Š—’Œ›ŠĞœȱ™›˜žŒ’˜—ȱ in the Lower Yangzi as dependent mainly on loans that pledged land as collateral—a practice very popular during the seventeenth and eighteenth centuries. Labor Markets in Wuxi Farm Labor Economic historians view the farm labor market in the Lower Yangzi as highly inactive, in sharp contrast to the land rental market in Wuxi. The agricultural year-labor market is considered exceedingly thin because most ŗŗȲȱ Both the incidence and magnitude of pawning out land had, however, waned over time. ˜–™Š›Žȱ  ’‘ȱ ŗşŘşǰȱ ˜—•¢ȱ Šȱ •’Ĵ•Žȱ ˜ŸŽ›ȱ ŗřȱ ™Ž›ŒŽ—ȱ ˜ȱ ‘Žȱ ‘˜žœŽ‘˜•œȱ ™Š›’Œ’™ŠŽȱ ’—ȱ ‘’œȱ –Š›”ŽȱŠœȱœž™™•’Ž›œȱ’—ȱŗşřŜǰȱŠȱŽŒ›ŽŠœŽȱ˜ȱ–˜›Žȱ‘Š—ȱŘśȱ™Ž›ŒŽ—ǰȱŠ—ȱ‹¢ȱŗşŚŞȱ‘Žȱ’—Œ’Ž—ŒŽȱ  Šœȱ ž›‘Ž›ȱ ›ŽžŒŽȱ ˜ȱ Šȱ —Ž•’’‹•Žȱ řǯśƖǯȱ ‘Žȱ ŽŒ•’—Žȱ ’—ȱ ™Š —’—ȱ ŠŒ’Ÿ’¢ȱ ›˜–ȱ ‘Žȱ ŗşřŖœȱ ˜— Š›ȱ–Š¢ȱ‹ŽȱŠĴ›’‹žŽȱ˜ȱ‘Žȱ Š—’—ȱ’—Ž›Žœȱ˜ȱŠ‹œŽ—ŽŽȱ•Š—•˜›œȱ’—ȱŠŒŒž–ž•Š’—ȱ•Š—ȱ ŠȱŠȱ’–Žȱ ‘Ž—ȱ‘ŽȱŽŸŽ•˜™–Ž—ȱ˜ȱ‘Žȱ˜ěȬŠ›–ȱŽŒ˜—˜–¢ȱ’—ȱ‘Žȱ›Ž’˜—ȱ™›˜Ÿ’ŽȱŠ•Ž›—Š’ŸŽǰȱ Š›žŠ‹•¢ȱ‹ŽĴŽ›ǰȱ›Žž›—ȱ˜›ȱ‘Ž’›ȱŒŠ™’Š•ȱ‘Š—ȱ‘ŠȱŠŒŒ›žŽȱ›˜–ȱ•Š—ȱŠŒšž’œ’’˜—ȱǻŠ˜ȱ’—œž’ȱ ŗşşŜǼǯȱ —Žȱ –’‘ȱ Šȱ ‘Šȱ ‘Žȱ ’œ›ž™’˜—œȱ ŒŠžœŽȱ ’—ȱ ‘Žȱ Ÿ’••ŠŽȱ ŽŒ˜—˜–¢ȱ ŠĞŽ›ȱ ŗşřŝȱ ‹¢ȱ decade-long warfare was probably another factor that discouraged absentee landlords from further accumulating land.

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farms were small and fragmented, as managerial farms simply did not Ž¡’œȱ’—ȱ‘’œȱ›Ž’˜—ȱǻ žŠ—ȱŗşşŖǼǯ12 The Mantetsu data that Cao Xingsui ǻŗşşŜǼȱŽ¡Š–’—Žœȱ•ŽŠœȱ‘’–ȱ˜ȱ‘Žȱ˜‹œŽ›ŸŠ’˜—ȱ‘Šȱ–˜œȱŠ›–ȱŠ–’•’Žœǰȱ’—cluding those with land exceeding 20 mu, relied mainly on their own family labor power. Only exceptionally large farms—those with more than 10 mu per capita—were found to have hired any year laborers. The bulk of farm labor hiring thus took the form of casual or day labor during peak agricultural seasons. But, the number of days hired was just as limited; according to the Mantetsu survey of eleven villages, the average number of days hired out per worker was only seventeen for the entire year for this kind of labor, obviously too few to be relied on as a major income source. ‘Žȱȱœž›ŸŽ¢ȱ˜ŽœȱŒ˜—ę›–ȱ‘Žȱ•˜ ȱ’—Œ’Ž—ŒŽȱ’—ȱ‘Žȱ–Š›”Žȱ˜ȱ•˜—Ȭ Ž›–ȱŠ›’Œž•ž›Š•ȱ•Š‹˜›Ž›œȱǻŠ‹•ŽȱŜǯŘǼǯȱ˜›ȱŽ¡Š–™•ŽǰȱŽŸŽ—ȱž›’—ȱ‘Žȱœž›veyed year in which the demand for agricultural year-labor market was Šȱ’œȱ™ŽŠ”ȱǻŗşŘşǼǰȱ˜—•¢ȱŝǯŚƖȱ˜ȱ‘˜žœŽ‘˜•œȱ‘’›Žȱ’—ȱ‘’œȱ”’—ȱ˜ȱ•Š‹˜›ǯȱ˜›ȱ those that did, the number of laborers hired was small—less than 0.12 person per household in all surveyed years. This market was even thinner ˜—ȱ ‘Žȱ œž™™•¢’—ȱ Ž—DZȱ ˜›ȱ ’—œŠ—ŒŽǰȱ ’—ȱ ŗşŘşǰȱ ˜—•¢ȱ ŘǯşƖȱ ǻŠȱ –Ž›Žȱ ˜ž›ŽŽ—ȱ ‘˜žœŽ‘˜•œǼȱ‘’›Žȱ˜žǰȱŠ–˜—ȱ ‘˜–ȱŽŠŒ‘ȱœž™™•’Žȱ›˜ž‘•¢ȱ˜—Žȱ•Š‹˜›Ž›ȱ on average.13 This imbalance between the two sides of the long-term farm •Š‹˜›ȱ –Š›”Žǰȱ  ’‘ȱ ‘˜œŽȱ ˜—ȱ ‘Žȱ ‘’›’—ȱ œ’Žȱ œ’—’ęŒŠ—•¢ȱ ˜ž—ž–‹Ž›’—ȱ the supplying households, has two important implications.14ȱ ‘Žȱ ꛜȱ is that the local labor market was providing employment opportunities for peasants from outside the villages—from villages that might be even ™˜˜›Ž›ȱǻ‘Ž—ȱ’ȱŗşřśǰȱřŗǼǯȱŽŒ˜—ǰȱŽ ȱ‘˜žœŽ‘˜•œȱ›˜–ȱ‘ŽȱœŠ–ŽȱŸ’••ŠŽȱ participated in this labor market, indicating that alternative employment ˜™™˜›ž—’’ŽœȱŽ¡’œŽȱ ’‘ȱ™›Žœž–Š‹•¢ȱ‹ŽĴŽ›ȱ›Žž›—œȯ˜™™˜›ž—’’Žœȱ‘Šȱ lay outside the farm sector. In sharp contrast, the day-labor market was far more active. In 1929, the –˜œȱŠŒ’ŸŽȱ¢ŽŠ›ǰȱ—ŽŠ›•¢ȱ‘Š•ȱ˜ȱ‘Žȱœž›ŸŽ¢Žȱ‘˜žœŽ‘˜•œǰȱŚŝǯŜƖǰȱ‘’›ŽȱŠ¢ȱ laborers. Depending on how we count the number of days for which this kind of labor was hired, the unconditional mean is about nineteen days,  ‘’Œ‘ȱ’œȱœ›’”’—•¢ȱœ’–’•Š›ȱ˜ȱ‘ŽȱŠ—Žœžȱꗍ’—ǯȱžȱ’ȱ ŽȱŒ˜ž—ȱ˜—•¢ȱ those households that hired short-term farm laborers, the mean number of days hired soars to a substantial forty-one, which was more than double ŗŘȲȱ Managerial farms probably existed for two centuries from the late Ming to the late Qing in the Lower Yangzi but disappeared toward the early twentieth century for many reasons, among which prohibitive supervision cost, high wage cost, and higher relative returns to ’—žœ›’Š•ȱŠ—ȱŒ˜––Ž›Œ’Š•ȱ™›˜ęœȱ Ž›Žȱ™›’–Š›¢ȱǻŠ˜ȱ’—œž’ȱŗşşŜDzȱ žŠ—ȱŗşşŖǼǯ ŗřȲȱ ȱ‘ŽȱŚŞśȱ‘˜žœŽ‘˜•œȱœž›ŸŽ¢Žȱ’—ȱŗşŘşǰȱ˜ž›ŽŽ—ȱǻŘǯşƖǼȱ‘Šȱ‘’›Žȱ˜žȱŠœȱ¢ŽŠ›ȱ•Š‹˜›ǰȱ  ‘’Œ‘ȱŠ–˜ž—Žȱ˜ȱ›˜ž‘•¢ȱŖǯŖřȱ™Ž›œ˜—ȱ™Ž›ȱ‘˜žœŽ‘˜•ȱǻŗŚȱ’Ÿ’Žȱ‹¢ȱŚŞśǼǯȱ ŗŚȲȱ ‘ŽȱŠ™ȱ‹Ž ŽŽ—ȱ‘Žȱ—ž–‹Ž›ȱ˜ȱ¢ŽŠ›ȱ•Š‹˜›Ž›œȱ‘’›Žȱ’—ȱŠ—ȱ‘’›Žȱ˜žȱ›ŽĚŽŒœȱ‘Žȱ˜‹Ÿ’˜žœȱ fact that those who hired in had larger farms.

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the magnitude of that found by the Japanese researchers. Similar to what we found with the year labor market, proportionately more households ‘’›Žȱ’—ȱǻŚŞȱ™Ž›ŒŽ—Ǽȱ‘Š—ȱ‘’›Žȱ˜žȱǻŘřȱ™Ž›ŒŽ—ǼǰȱœžŽœ’—ȱ‘Šȱ‘Žȱœž›veyed villages provided this kind of employment opportunity to villagers ›˜–ȱ˜žœ’ŽȱǻŠ‹•ŽȱŜǯŘǼǯȱ Š‹•ŽȱŜǯŘǯȱŠ›–ȱŠ‹˜›ȱŠ›”Žœȱ’—ȱž¡’ȱ˜ž—¢ 1929

ŗşřŜ

1948

Percentage of households participating in day labor market year labor market

hired in

ŚŝǯŜ

37.7

38.8

hired out

23.1

ŘśǯŘ

28.2

hired in

7.4

3.7

4.4

hired out

2.9

2.9

1.7

Average number of persons hired in the year labor market: hired in

0.12

ŖǯŖŜ

ŖǯŖŜ

hired out

0.03

0.04

0.02

Average number of persons hired in the day labor market: hired in

19.4

ŗŜǯř

ŗŚǯŜ

hired out

11.2

11.3

12.3

Source:ȱȱǻŗşŘşǰȱŗşśŞǼǯȱ

ěȬŠ›–ȱŠ‹˜›ǰȱŽ›’Œž•ž›ŽǰȱŠ—ȱ’›Š’˜— ‘Žȱ ꗍ’—ȱ ‘Šȱ Š›–ȱ •Š‹˜›ȱ  Šœȱ Œ˜—ę—Žȱ ˜ȱ •Š›Ž•¢ȱ œŽŠœ˜—Š•ȱ •Š‹˜›ȱ ž›ing peak agricultural periods is consistent with the observation concerning the dearth of managerial farms in the Lower Yangzi. Moreover, the fact that more than 80 percent of surveyed households were engaged in seriŒž•ž›Žȱ’—ȱŗşŘşȱ’œȱŠ•œ˜ȱœŽŽ–’—•¢ȱŒ˜—œ’œŽ—ȱ ’‘ȱ žŠ—Ȃœȱ’—Ÿ˜•ž’˜—ȱŠ›ž–Ž—ȱǻŠ‹•ŽȱŜǯřǼǯȱ’—ŒŽȱ’ȱ Šœȱ–Š’—•¢ȱ ˜–Ž—ȱ ‘˜ȱŽ—ŠŽȱ’—ȱœŽ›’Œž•ž›Žǰȱ the overall lack of demand for year farm labor and the undersized farms in Wuxi together suggest that even male workers would have been severely underemployed if alternative income opportunities were seriously lacking. A typical trait of small peasant farms is their reliance on a combina’˜—ȱ ˜ȱ ŽŒ˜—˜–’Œȱ ŠŒ’Ÿ’’Žœȱ ‹˜‘ȱ ˜›ȱ ›’œ”ȱ ’ŸŽ›œ’ęŒŠ’˜—ȱ Š—ȱ ˜›ȱ ’—Œ˜–Žȱ maximization. Chinese farmers in the Republican period—in the Lower Yangzi at least—were no exception. To increase income subject to availŠ‹•Žȱ ‘˜žœŽ‘˜•ȱ ›Žœ˜ž›ŒŽœȱ ǻ•Š—ǰȱ •Š‹˜›ǰȱ Š—ȱ ŒŠ™’Š•Ǽǰȱ Šȱ ˜˜ȱ ™›˜™˜›’˜—ȱ of the surveyed villages allocated their members among a variety of

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income-generating activities, besides farming their undersized farms and engaging in the household sideline of sericulture. Whereas long-term farm labor work may not have been easy to come by, there were abundant Ž–™•˜¢–Ž—ȱ˜™™˜›ž—’’Žœȱ’—ȱ‘Žȱ˜ěȬŠ›–ȱœŽŒ˜›ǯȱŠ‹•ŽȱŜǯřȱœ‘˜ œǰȱ˜›ȱŽ¡ample, that roughly half the households had a nonfarm job in the local ŽŒ˜—˜–¢ǯȱŠŽȱ’쎛Ž—•¢ǰȱŠ‹˜žȱ˜—Žȱ’—ȱ ˜ȱ‘˜žœŽ‘˜•œȱ‘ŠȱŠȱ–Ž–‹Ž›ȱ engaged in this kind of work, suggesting just how widely available such  ˜›”ȱ ˜™™˜›ž—’’Žœȱ ‘Šȱ Š•›ŽŠ¢ȱ ‹ŽŒ˜–Žȱ Š›˜ž—ȱ ‘Žȱ •ŠŽȱ ŗşŘŖœǯȱ ˜ ŽŸer, though there were plenty of employment opportunities, only a few households had their own family businesses or had members possessing the knowledge and skills needed to become school teachers or medical ™›ŠŒ’’˜—Ž›œȱǻž‹‹Žȱȃ™›˜Žœœ’˜—Š•œȄǼǯȱ˜›Ž˜ŸŽ›ǰȱ’ȱ ŽȱŒ˜—œ’Ž›ȱ‘ŠȱŠœȱ much as 28 percent of households had reported at least one family member working outside the village as a migrant worker, a substantial proportion of the farm households in Wuxi in the 1930s had a wide array of income opportunities besides rice or wheat cultivation and sericulture. This Ž¡Š–™•Žȱ’œȱŒ˜—ę›–Žȱ‹¢ȱ‘ŽȱŽŒ•’—Žȱ’—ȱ‘˜žœŽ‘˜•ȱœŽ›’Œž•ž›Žȯ™›˜‹Š‹•¢ȱ in response to a secular decline in the prices of silk and cocoon—and rise in emigration.ŗś Taken together, the evidence of farmers reallocating their family resources in accord with relative price changes suggests that they were behaving in a way consistent with economic rationality. The concomitant participation of Wuxi villagers in both local and nonŠ›–ȱ  ˜›”ȱ ŒŠ—ȱ ‹Žȱ ŠĴ›’‹žŽȱ ˜ȱ Šȱ •Š›Žȱ Ž¡Ž—ȱ ˜ȱ ‘Žȱ ›’œŽȱ ˜ȱ ‘Š—‘Š’ȱ Šœȱ China’s largest metropolis and to the emergence of Wuxi as another growing city in the Lower Yangzi region, second only to Shanghai (Cao Xingœž’ȱŗşşŜDzȱŠž›ŽȱŗşŞşDzȱ Š˜ȱ ’—¢žŽȱŠ—ȱŠ—ȱžŽ¡’ȱŗşŞŝDzȱ‘Š—ȱ‘˜—–’—ȱ ŘŖŖŘǼǯȱ‘Š—‘Š’Ȃœȱ›’œŽȱŠœȱ‘’—ŠȂœȱ–˜œȱ‘›’Ÿ’—ȱŒ’¢ȱ’—ȱ‘ŽȱŗşřŖœȱŠ—ȱ‘Žȱ ™•Ž‘˜›Šȱ˜ȱ“˜‹œȱ‘Šȱ’ȱŽ—Ž›ŠŽȱŠĴ›ŠŒŽȱŠ—ȱ’––Ž—œŽȱŠ–˜ž—ȱ˜ȱ™Ž˜™•Žȱ from within Jiangsu Province seeking work opportunities.ŗŜ Many from the southern part of the province (Sunan 㯛फǼǰȱ˜›ȱŽ¡Š–™•Žǰȱ˜˜”ȱ“˜‹œȱ’—ȱ ŗśȲȱ The heyday of sericulture appears to have been around the 1910s. For example, in 1913, nearly all farm households in Wuxi engaged in sericulture, with some allocating 30 percent of their arable land to the cultivation of mulberry trees, whose leaves provided ŽŽȱ ˜›ȱ œ’•” ˜›–œȱ ǻžȱ ˜“ž—ȱ ŗşşśDzȱ ‘Š—ȱ ‘˜—–’—ȱ ŘŖŖŘǰȱ Œ‘Š™ǯȱ ŘǼǯȱ —ȱ ŗşŘşǰȱ ‘Žȱ Œ˜ž—¢ȱ œ’••ȱ ‘Šȱ ŘşǯŞƖȱ ˜ȱ ’œȱ Š›Š‹•Žȱ •Š—ȱ Œ˜ŸŽ›Žȱ  ’‘ȱ –ž•‹Ž››¢ȱ ›ŽŽœȱ ǻ’žȱ žŠ’‹˜ǰȱ ‘Š—ȱ ’¢’ǰȱ Š—ȱ ‘žȱ žŽ“’—ȱ ŗşŞŞǰȱ řřǼǯȱЎ›ȱ ‘Šǰȱ ‘Žȱ ‘Š—œ˜–Žȱ ™›˜ęœȱ ‹›˜ž‘ȱ Š‹˜žȱ ‹¢ȱ œŽ›’Œž•ž›Žȱ peaked and began to decline on a secular basis, and by the early 1930s net income from sericulture allegedly fell to levels similar to those of rice-wheat farming. Further, as cocoon ™›’ŒŽœȱŒ˜—’—žŽȱ˜ȱŽŒ•’—Žȱ’—ȱ‘ŽȱŗşřŖœȱŠ—ȱŗşŚŖœȱǻœŠŸŽȱ˜›ȱŠȱŽ ȱ˜˜ȱ¢ŽŠ›œǼǰȱž¡’ȱ™ŽŠœŠ—œȱ began, in earnest, converting the mulberry land into rice paddy and reduced their labor and Ž›’•’£Ž›ȱ’—™žœȱŠŒŒ˜›’—•¢ȱǻ’žȱ žŠ’‹˜ǰȱ‘Š—ȱ’¢’ǰȱŠ—ȱ‘žȱžŽ“’—ȱŗşŞŞǰȱřśȮřŜDzȱ‘Š—ȱ ‘˜—–’—ȱŘŖŖŘǰȱŒ‘Š™ǯȱŘǼǯ ŗŜȲȱ Because of in-migration, the population of Shanghai grew from less than half a million to over three million in the century between roughly the 1840s and 1940s.

130

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factories or worked as sales clerks in department stores or as servers at hotels, whereas their northern counterparts found employment in dockyards or worked as rickshaw pullers and housekeepers (Zhang Zhongmin 2002, Œ‘Š™ǯȱśǼǯ17ȱ‘Ž›œȱ ‘˜ȱ̘Œ”Žȱ˜ȱ‘’œȱ‹˜˜–’—ȱŒ’¢ȱ Ž›ŽȱœŽ•ȬŽ–™•˜¢ŽȱŠœȱ tailors, cobblers, peddlers, and the like. Š‹•Žȱ Ŝǯřǯȱ ‘Žȱ ›žŒž›Žȱ ˜ȱ ž¡’Ȃœȱ ˜—Š›–ȱ Œ˜—˜–¢ȱ ǻ’—Œ•ž’—ȱ ˜žœŽ‘˜•ȱ ›˜žŒ’˜—Ǽ 1929

ŗşřŜ

1948

Percentage of farm households with members engaged in ȱȱȱȱ•˜ŒŠ•ȱ ŠŽȱŽ–™•˜¢–Ž—ȱǻ—˜—Š›–Ǽ

śŗǯř

48.2

32.0

teaching and medical professions

ŗǯŜ

ŗǯŜ

Ŗǯś

family business

0.2

ŖǯŜ

0.7

ȱȱȱȱ™ŽĴ¢ȱ›ŠŽ

11.1

11.3

8.9

sericulture

81.0

ŝŘǯŜ

ŜŖǯş

Average number of family members engaged in local wage employment

ŖǯśŞ

ŖǯśŚ

ŖǯřŜ

teaching and medical professions

0.02

0.02

0.01

family business

0.00

0.01

0.01

0.12

0.12

0.09

N/A

N/A

N/A

ȱȱȱȱ™ŽĴ¢ȱ›ŠŽ sericulture Source:ȱȱǻŗşŘşǰȱŗşśŞǼǯ

A similar process was at work in Wuxi. Although wages in Wuxi were not as high as those in Shanghai, its development in the 1920s from a market town into a medium-sized city with modern textile, food-processing, Š—ȱ œ’•”Ȭ›ŽŽ•’—ȱ ’—žœ›’Žœȱ ‘Šȱ Šȱ œ’–’•Š›ȱ ŽěŽŒȱ ˜—ȱ ˜ěȬŠ›–ȱ Ž–™•˜¢–Ž—ȱ ǻžȱ˜“ž—ȱŗşşśǼǯȱ—ȱŠ’’˜—ǰȱ‘’œȱž›‹Š—’£Š’˜—ȱ’—ȱ‘ŽȱŠ—£’ȱ›Ž’˜—ȱŽ—erated many self-employment opportunities for carpenters, cooks, tailors, Š—ȱ‹Š›‹Ž›œȱǻŠ—Žœžȱœž›ŸŽ¢ǰȱŒ’Žȱ’—ȱŠ˜ȱ’—œž’ȱŗşşŜǼǯȱ ’žȱ žŠ’‹˜ǰȱ‘Š—ȱ’¢’ǰȱŠ—ȱ‘žȱžŽ“’—ȱǻŗşŞŞǰȱřŘǼǰȱ˜›ȱŽ¡Š–™•Žǰȱ•Š–Ž—ȱ‘Žȱ’—Š‹’•’¢ȱ of Wuxi people to compete with their counterparts from the north (Subei 㯛࣫Ǽȱ’—ȱ›’Œ”œ‘Š ȱ pulling. ŗŝȲȱ

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131

In summary, both the land and labor markets in the Wuxi economy appear to have operated actively in the 1920s and 1930s, before the Japanese military invasion and the resulting economic disruptions. Whereas land and other endowments were unequally distributed across farm households, the active operations of land and nonfarm labor in particular ‘Ž•™Žȱ Š›–ȱ ‘˜žœŽ‘˜•œȱ ˜ȱ Š••˜ŒŠŽȱ ›Žœ˜ž›ŒŽœȱ ŽĜŒ’Ž—•¢ȱ Œ˜—œ’œŽ—ȱ  ’‘ȱ their endowment characteristics, thereby reducing the incentive to behave as they would under involution. Why Did Households Participate in Land and Labor Markets? ˜ȱ ŽŒ˜—˜–’Œȱ ž—’œȱ Š›Žȱ œ˜ȱ œŽ•ȬœžĜŒ’Ž—ȱ ‘Šȱ ‘Ž¢ȱ ŒŠ——˜ȱ Ž—‘Š—ŒŽȱ ‘Ž’›ȱ  Ž•Š›Žȱ‘›˜ž‘ȱ›ŠŽǯȱ˜›ȱŽ¡Š–™•Žǰȱ—˜ȱ–ŠĴŽ›ȱ‘˜ ȱ ŽŠ•‘¢ȱŠȱŠ›–ȱ‘˜žœŽhold, it gains by hiring workers if it does not have enough family laborers ˜ȱŒž•’ŸŠŽȱŠ••ȱ’œȱ•Š—ǯȱ—ȱ‘ŽȱœŠ–Žȱ Š¢ǰȱ—˜ȱ–ŠĴŽ›ȱ‘˜ ȱ•’Ĵ•Žȱ•Š—ȱŠȱŠ›–ȱ ‘˜žœŽ‘˜•ȱ‘Šœǰȱ–Ž–‹Ž›œȱŒŠ—ȱœ’••ȱ‹Ž—Žęȱ‹¢ȱœŽŽ”’—ȱ ˜›”ȱ˜—ȱ˜‘Ž›ȱ™Ž˜™•ŽȂœȱŠ›–œǯȱ‘Žȱ ˜ȱ‘˜žœŽ‘˜•œȯŒ‘Š›ŠŒŽ›’£Žȱ‹¢ȱ’쎛’—ȱŽ—˜ –Ž—œȱ ˜ȱ•Š—ȱŠ—ȱ•Š‹˜›ȯŒŠ—ȱ™›Žœž–Š‹•¢ȱ‹Ž—Žęȱ›˜–ȱ™Š›’Œ’™Š’—ȱ’—ȱ‘Žȱ–Š›ket for labor exchange. In principle, a household, like any economic unit, ŠŒŽœȱŠȱ–Ž—žȱ˜ȱŒ‘˜’ŒŽœȱ˜›ȱ˜‹Š’—’—ȱ’—Œ˜–Žǯȱȱ•Š—ȬŽęŒ’Ž—ȱ‘˜žœŽ‘˜•ǰȱ for example, may rent in land to meet the consumption requirements of its “surplus” members or it may hire out in the labor market; either choice helps to increase income. This economic principle does not fundamentally change even in a complex economy including jobs other than farm work, Ž¡ŒŽ™ȱ ‘Šȱ –˜›Žȱ Œ‘˜’ŒŽœȱ Š›Žȱ ŠŸŠ’•Š‹•Žǯȱ —œŽŠȱ ˜ȱ Œ‘˜˜œ’—ȱ ‹Ž ŽŽ—ȱ ǻŗǼȱ  ˜›”’—ȱ–˜›Žȱ•Š—ȱ‹¢ȱ›Ž—’—ȱŠ—ȱǻŘǼȱ ˜›”’—ȱ˜—ȱ˜‘Ž›ȱ™Ž˜™•ŽȂœȱŠ›–œǰȱ one can choose to work outside of farming. ¢ȱ ‘Žȱ •ŠŽȱ ŗşŘŖœǰȱ ‘Žȱ ž¡’ȱ Š—ȱ ‘Š—‘Š’ȱ ŽŒ˜—˜–’Žœȱ ˜ěŽ›Žȱ Šȱ ŸŠœȱ menu of employment choices to Lower Yangzi villagers. As mentioned in the previous section, many nonfarm occupations were already available; in fact, they were even more readily available than long-term farm employment. The issue that we will take up here concerns the bases of farm households’ economic decision making, that is, what determined ‘Žȱ Œ‘˜’ŒŽœȱ ǻŠ—ȱ Œ˜—œ›Š’—œǼȱ ˜ȱ ŽŒ˜—˜–’Œȱ ™Š›’Œ’™Š’˜—ȯ‘Žȱ Ž™Ž—Ž—ȱ variable of this analytical exercise. According to conventional economic reasoning, a farm household will premise its choices by both its land and •Š‹˜›ȱŽ—˜ –Ž—œȯ‘Žȱ•ŠĴŽ›ȱ’—Œ•ž’—ȱ•Š‹˜›ȱšžŠ•’¢ǯȱž›‘Ž›–˜›Žǰȱ˜ȱ’œ’—ž’œ‘ȱ‘ŽȱŽěŽŒȱ˜ȱ’쎛Ž—ȱŒŠŽ˜›’Žœȱ˜ȱ•Š‹˜›ǰȱ Žȱ’œŠ›ŽŠŽȱ•Š‹˜›ȱ endowments by genderȱǻ–Š•ŽȱŠ—ȱŽ–Š•Žȱ™›’–Š›¢ȱ•Š‹˜›ǼȱŠ—ȱage (“young” for dependents below a certain working age and “old” for those who have ›ŽŠŒ‘Žȱ‘ŽȱŠŽȱ˜ȱ›Ž’›Ž–Ž—Ǽǯ18 ŗŞȲȱ We treat those family members not in the working population as “dependents” largely because chances are greater that they are consumers rather than breadwinners in a family.

132

Kung, Lee, and Bai

Economic returns are determined not only by the quantity of labor but also by the “quality,” which economists usually measure by educational ŠĴŠ’—–Ž—ǯȱ•‘˜ž‘ȱ‘Žȱȱœž›ŸŽ¢ȱ’ȱ—˜ȱ–ŽŠœž›Žȱ‘ŽȱŽžŒŠ’˜—Š•ȱŠtainment of individual household members, there is enough information to compute an average household education index for measuring varia’˜—œȱ’—ȱ‘Žȱ•ŽŸŽ•ȱ˜ȱŽžŒŠ’˜—ȱŠĴŠ’—Žȱ‹¢ȱŠ›–ȱ‘˜žœŽ‘˜•ȱ–Ž–‹Ž›œȱ’—ȱŽ—eral, and it can be used to estimate economic returns to education (Kung, ŽŽǰȱŠ—ȱŠ’ȱŘŖŖśǼǯȱ’—Š••¢ǰȱ Žȱ’—Œ•žŽȱ’—ȱ˜ž›ȱ•’œȱ˜ȱŽ¡™•Š—Š˜›¢ȱŸŠ›’Š‹•Žœȱ ‘Žȱ ™˜œœ’‹•Žȱ ŽěŽŒȱ ˜ȱ Š›–ȱ ŒŠ™’Š•ǰȱ žœ’—ȱ ˜¡Ž—ȱ Šœȱ ™›˜¡¢ǰȱ  ‘’•Žȱ Š•œ˜ȱ Œ˜—›˜••’—ȱ˜›ȱ‘ŽȱŽěŽŒȱ˜ȱ–Š›”ŽȱŽŸŽ•˜™–Ž—ȱŠ—ȱŽ˜›Š™‘’Œȱ•˜ŒŠ’˜—ȱ˜—ȱ household economic decisions. The results of this multivariate regression Ž¡Ž›Œ’œŽȱŠ›Žȱœž––Š›’£Žȱ’—ȱŠ‹•ŽȱŜǯŚȱǻ˜›ȱ•Š—ȱŠ—ȱŠ›–ȱ•Š‹˜›ȱ–Š›”ŽœǼȱŠ—ȱ Š‹•ŽȱŜǯśȱǻ˜›ȱ—˜—Š›–ȱ•Š‹˜›ȱ–Š›”ŽœȱŠ—ȱ‘˜žœŽ‘˜•ȱ™›˜žŒ’˜—Ǽǯ An important conclusion from this analytical exercise is that both household demographics and capital endowment (now referred to as ȃ‘ž–Š—ȱ ŒŠ™’Š•Ȅȱ ˜›ȱ ŽžŒŠ’˜—Ǽȱ  Ž›Žȱ ŽŽ›–’—Š—œȱ ˜ȱ ‘˜žœŽ‘˜•œȂȱ ŽŒ˜nomic decisions in Wuxi in the 1930s. Of the four demographic variables, the quantity of male labor played an important role in household deciœ’˜—œǯȱ˜›ȱ’—œŠ—ŒŽǰȱ—˜ȱ˜—•¢ȱ’ȱ’ȱŠěŽŒȱ•Š—ȱ›Ž—Š•ȱŽŒ’œ’˜—œȱ’—ȱ‘Žȱ™›Ždicted positive direction, that is, the more male laborers in a household, the higher that household’s proclivity to rent in land, but it was also a predictor of pawning activity—an economic activity in which female la‹˜›ȱ‘Šȱ—˜ȱœ’—’ęŒŠ—ȱœŠ’œ’ŒŠ•ȱŽěŽŒǯȱ‘Žȱꗍ’—ȱ‘Šȱ–Š•Žȱ•Š‹˜›ȱ’œȱŠȱœ’—’ęŒŠ—ȱ™›Ž’Œ˜›ȱ˜ȱ‘Žȱ™Š —’—ȱŽŒ’œ’˜—ȱœžŽœœȱ‘Šȱ‘˜žœŽ‘˜•œȱ–ŠŽȱ this decision in order to engage the “surplus” male labor in agricultural ™›˜žŒ’˜—ȯŠȱꗍ’—ȱ‘Šȱ•Ž—œȱœž™™˜›ȱ˜ȱŠ—ȱŽŠ›•’Ž›ȱŒ˜—“ŽŒž›Žȱ‘Šȱ˜—Žȱ of the two purposes of pawning lay in the expansion of farm operations ǻ˜›ȱ‘˜œŽȱ ‘˜ȱ™Š —ȱ’—ȱ•Š—Ǽǯȱ•œ˜ȱŽ¡™ŽŒŽȱ’œȱ‘Žȱꗍ’—ȱ‘Šȱ‘˜žœŽ‘˜•œȱ with greater male labor power were less likely to hire in day laborers to help with time-critical farm tasks during the busy peak agricultural seasons; instead, these households were more likely to hire out to work on other people’s farms.19 Finally, the quantity of male labor also determined nearly all nonfarm labor market participation in the same positive direction, except in the medical and education professions. This is a reasonable result considering that both medicine and teaching are occupations that require above-average human capital. œȱ’œȱ˜ĞŽ—ȱ‘ŽȱŒŠœŽȱ’—ȱŠȱ™ŽŠœŠ—ȱŽŒ˜—˜–¢ǰȱ‘˜ ŽŸŽ›ǰȱ‘ŽœŽȱȃŽ™Ž—Ž—Ȅȱ–Ž–‹Ž›œȱ–Š¢ȱŠ•œ˜ȱ contribute to household income by way of choices households make on how best to use them. ŗşȲȱ ‘ŽȱŒ˜—ŸŽ›œŽȱꗍ’—ȱ‘Šȱ‘˜žœŽ‘˜•œȱ ’‘ȱ™›˜™˜›’˜—ŠŽ•¢ȱ–˜›ŽȱŽ–Š•Žȱ•Š‹˜›ȱ™˜ Ž›ȱ tend to hire in labor gives further support to the idea that labor hiring decisions are predicated mainly by households’ varying labor endowments, particularly those of healthy male laborers.

-1.141 ǻŖǯşŘǼ

ŗǯŜŗŚ

ǻŗǯŚŚǼ

1,287

1,287

ǻŘǯşŜǼ

ǻŚǯŘřǼ

ǻřǯřŚǼ

śǯŝŜŝȘȘȘ

-3.213***

ŘǯŖŞŜȘȘȘ

ǻŘǯŜřǼ

ǻŖǯŝŞǼ

ŚǯşŘŜȘȘȘ

-0.194

ǻŘǯśŗǼ

ǻŜǯşśǼ

ŖǯśřŝȘȘ

-2.383***

ǻŜǯřŗǼ

out

ŗǯŜŗŜȘȘȘ

in

Rental in

1,287

ǻŘǯŗŚǼ

7.184**

ǻŖǯşŖǼ

ŘǯřŜŚ

ǻŗǯşŝǼ

3.310**

ǻŖǯŖŜǼ

ŖǯŖŘś

ǻŘǯřřǼ

1,287

ǻŖǯŖŝǼ

0.230

ǻŗǯŗŜǼ

2.080

ǻŘǯŗřǼ

2.192**

ǻŗǯŖŖǼ

0.338

ǻŖǯşŚǼ

0.333

out

1,287

ǻŗǯŜŜǼ

ŘǯśŖŗȘ

ǻŖǯŗŖǼ

-0.094

ǻŘǯśŜǼ

ŗǯŘŜřȘȘ

ǻřǯŚřǼ

ŖǯśŜŞȘȘȘ

ǻśǯřŜǼ

1,287

ǻŗǯŖşǼ

-1.844

ǻŗǯŗŜǼ

-1.313

ǻŖǯśŗǼ

0.277

ǻŘǯřśǼ

-0.443**

ǻŚǯŜŝǼ

0.942***

out

1,287

ǻŗǯŗşǼ

3.839

ǻŖǯŝśǼ

ŗǯśśŚ

ǻŗǯŝŖǼ

ŘǯřŚśȘ

ǻŖǯśŘǼ

ŖǯŗŜş

ǻŖǯŝŖǼ

ŖǯŘŜŗ

in

1,287

ǻŗǯŗŚǼ

-4.374

ǻŗǯŘŜǼ

-3.289

ǻŘǯŖşǼ

-2.387**

ǻŖǯŘşǼ

ŖǯŖşś

ǻŖǯśŞǼ

0.177

out

Year labor

Farm labor market Day labor

0.974***

in

Participation Pawning ǻŒ›Ž’ȱ–Š›”ŽǼ

0.917**

Land market

Notes: Absolute value of zȱœŠ’œ’Œœȱ’—ȱ™Š›Ž—‘ŽœŽœǯȱ—ȱ‘ŽȱŽœ’–Š’˜—œǰȱ Žȱ‘ŠŸŽȱŒ˜—›˜••Žȱ˜›ȱ‘ŽȱŽěŽŒȱ˜ȱŠ›–ȱœ’£Žǰȱ’–Žȱ›Ž—ǰȱ—ž–‹Ž›ȱ˜ȱ˜¡Ž—ǰȱ distance to the nearest township, and percentage of rice transacted in the market. Șȱ’—’ęŒŠ—ȱŠȱŗŖƖDzȱȘȘȱœ’—’ęŒŠ—ȱŠȱśƖDzȱȘȘȘȱœ’—’ęŒŠ—ȱŠȱŗƖǯ # Number of household members age fourteen or younger, divided by household size. ## Number of household members age fourteen or older who do not belong to the labor force, divided by household size.

Number of observations

average household education

Household endowments

##

old dependency ratio

young dependency ratio#

female laborer

male laborer

Household demographics

Dependent variable

Š‹•ŽȱŜǯŚǯȱŠŒ˜›œȱ쎌’—ȱ‘Žȱ ˜žœŽ‘˜•ȱ‘˜’ŒŽȱ˜ȱŠ—ȱŠ—ȱŠ›–ȱŠ‹˜›ȱŠ›”ŽȱŠ›’Œ’™Š’˜—

Chinese Farmer Rationality 133

1,287

1,287

ǻŗǯŞŜǼ

ǻŗǯřşǼ

ǻŗǯśřǼ 39.890*

ȬřŖǯřśŚ

1.373

ǻŖǯřřǼ

ǻŗǯŘŖǼ

ǻřǯŞřǼ

ȬŖǯśŗś

ŞǯŖşŜ

ǻŗǯŜŜǼ

ŗǯşśŝȘȘȘ

řǯśŞŚȘ

ǻŚǯřŘǼ

ǻŖǯşŞǼ

ǻŚǯŞŚǼ

0.730***

-0.972

Professional

0.842***

Local wage

1,287

ǻŖǯŗŞǼ

ŖǯŝŞś

ǻŖǯşŝǼ

2.904

ǻŗǯśŞǼ

4.208

ǻŗǯŖŝǼ

ŖǯśŚŗ

ǻŘǯřŜǼ

ŗǯŗŜŗȘȘ

Family business

Nonfarm labor market

1,287

ǻŖǯŘŗǼ

-0.848

ǻŗǯśŜǼ

řǯśŜŜ

ǻŗǯŘŜǼ

ŗǯśŖŗ

ǻŗǯşŖǼ

ŖǯśŝŜȘ

ǻŘǯřŞǼ

0.727**

ŽĴ¢ȱ›ŠŽ

Participation

1,287

ǻŚǯśśǼ

śǯŘŗŚȘȘȘ

ǻŗǯŚŜǼ

-0.808

ǻŗŘǯŗřǼ

ŝǯŜŚŜȘȘȘ

ǻŗǯşşǼ

ŖǯŘśřȘȘ

ǻŚǯŗŘǼ

ŖǯśŗŘȘȘȘ

Migration

1,287

ǻŖǯŜŜǼ

0.891

ǻŘǯşŝǼ

2.483***

ǻśǯŝŝǼ

2.878***

ǻŜǯşşǼ

ŗǯŘşśȘȘȘ

ǻŚǯŚřǼ

0.771***

Sericulture

˜žœŽ‘˜•ȱœ’Ž•’—Ž

Notes:ȱ‹œ˜•žŽȱŸŠ•žŽȱ˜ȱ£ȱœŠ’œ’Œœȱ’—ȱ™Š›Ž—‘ŽœŽœǯȱ—ȱ‘ŽȱŽœ’–Š’˜—œǰȱ Žȱ‘ŠŸŽȱŒ˜—›˜••Žȱ˜›ȱ‘ŽȱŽěŽŒȱ˜ȱŠ›–ȱœ’£Žǰȱ’–Žȱ›Ž—ǰȱ—ž–‹Ž›ȱ˜ȱ˜¡Ž—ǰȱ distance to the nearest township, and percentage of rice transacted in the market. Șȱ’—’ęŒŠ—ȱŠȱŗŖƖDzȱȘȘȱœ’—’ęŒŠ—ȱŠȱśƖDzȱȘȘȘȱœ’—’ęŒŠ—ȱŠȱŗƖǯ # Number of household members age fourteen or younger, divided by household size. ## Number of household members age fourteen or older but who do not belong to the labor force, divided by household size.

Number of observations

average household education

Household endowments

##

old dependency ratio

young dependency ratio#

female laborer

male laborer

Household demographics

Dependent variable

Š‹•ŽȱŜǯśǯȱŠŒ˜›œȱ쎌’—ȱ‘Žȱ ˜žœŽ‘˜•ȱ‘˜’ŒŽȱ˜ȱ˜—Š›–ȱŒ˜—˜–’ŒȱŒ’Ÿ’’Žœ

134 Kung, Lee, and Bai

Chinese Farmer Rationality

ŗřś

Female labor, though not to the same extent as its male counterpart, also explained a household’s economic decisions for sericulture and local wage employment, as well as, unexpectedly, migration. The positive correlation between female labor and household participation in both local wage employment and migrant nonfarm work provides strong evidence in support of women’s economic participation beyond that of familial production of sericulture. In particular, women’s involvement in migration ’—ȱŗşřŖœȱž¡’ȱ˜ěŽ›œȱ›Žœ‘ȱŽŸ’Ž—ŒŽȱ‘Šȱ—ŽŽœȱ˜ȱ‹ŽȱŠ”Ž—ȱœŽ›’˜žœ•¢ȱœ’—ŒŽȱ ‘’œȱ”’—ȱ˜ȱ–’›Š—ȱ•Š‹˜›ȱŽ–™•˜¢–Ž—ȱ™Š’ȱ–žŒ‘ȱ‹ŽĴŽ›ȱ‘Š—ȱ–˜œȱ˜‘Ž›ȱ ”’—œȱ ˜ȱ  ˜›”ȱ •’œŽȱ ’—ȱ ‘Žȱ ȱ œž›ŸŽ¢ȱ ǻ ž—ǰȱ ŽŽǰȱ Š—ȱ Š’ȱ ŘŖŖśǼǯȱ ž›ȱ ꗍ’—ȱŠ•œ˜ȱœžŽœœȱ‘Šȱ ‘Ž›ŽŠœȱ–Ž—ȱ–Š¢ȱ‘ŠŸŽȱ‘ŠȱŠ—ȱŠŸŠ—ŠŽȱ˜ŸŽ›ȱ  ˜–Ž—ȱ ’—ȱ ›ž——’—ȱ Š–’•¢ȱ ‹žœ’—ŽœœŽœǰȱ  ˜–Ž—ȱ  Ž›Žȱ ‹ŽĴŽ›ȱ ›Ž™›ŽœŽ—Žȱ among the human capital–intensive professions. We should stress, however, that both these sectors were very small—only one household in the ˜›–Ž›ȱŠ—ȱŽ’‘ȱ’—ȱ‘Žȱ•ŠĴŽ›Dzȱ‘žœǰȱŠŸŠ—ŠŽœȱ›˜–ȱŽ—Ž›ȱ’쎛Ž—ŒŽœȱ should not be overblown. Although the economic behaviors regarding Ž–Š•Žȱ•Š‹˜›ȱ’쎛Žȱ›˜–ȱ‘˜œŽȱ˜ȱ–Š•Žȱ•Š‹˜›ǰȱœ‘˜ ’—ȱŠȱ™ŠĴŽ›—ȱ˜ȱŽ—dered labor choices, this is due to the socially constructed economic op™˜›ž—’’Žœȱ˜™Ž—Žȱ˜ȱ‘Žȱ’쎛Ž—ȱœŽ¡Žœǯȱ˜‘ȱœŽ¡Žœǰȱ‘žœǰȱ Ž›Žȱ›ŽŠŒ’—ȱ ˜ȱ‘ŽœŽȱ˜™™˜›ž—’’ŽœǰȱŠ•‹Ž’ȱ’쎛Ž—’ŠŽǰȱ’—ȱ‘ŽȱœŠ–Žȱ–Š——Ž›ȱ˜ȱ›Š’˜nality, together making it possible for measurable increases in household income, even though falling short of creating an economic breakthrough. What is rather unexpected is the role played by “young dependents.” An important reason that some households rented in land and hired in labor was that they had more young family members to feed than other households. Moreover, these families also seemed to be active in the pawn’—ȱ–Š›”ŽǰȱŠȱꗍ’—ȱ’ĜŒž•ȱ˜ȱŽ¡™•Š’—ǯȱ˜›Žȱ›ŽœŽŠ›Œ‘ȱ˜—ȱ•Š—ȱ™Š —’—ȱ is clearly needed to enhance our understanding of this economic activity in rural China before the Communist Revolution suppressed markets and abolished private land ownership. Fourth, as with the amount of available labor, the amount of land that Šȱ‘˜žœŽ‘˜•ȱ˜ —ŽȱŠ•œ˜ȱŠěŽŒŽȱ•Š—ȱ›Ž—Š•ȱŽŒ’œ’˜—œǰȱŠ›–ȱ•Š‹˜›ȱ‘’›’—ǰȱ and many nonfarm economic decisions. As expected, land and labor are positively correlated—families with more land tended to hire in more farm labor but were less likely to rent in land. More interesting are the ꗍ’—œȱ‘ŠȱŠ–’•’Žœȱ ’‘ȱ–˜›Žȱ•Š—ȱŠ›Žȱ™˜œ’’ŸŽ•¢ȱŒ˜››Ž•ŠŽȱ ’‘ȱ›ž—ning a business and are also more likely to engage in sericulture—the latŽ›ȱŠȱꗍ’—ȱ‘ŠȱŒ˜—›Š’Œœȱ‘Žȱ—˜’˜—ȱ‘Šȱ˜—•¢ȱœ–Š••ȱ™ŽŠœŠ—ȱŠ›–œȱ Ž›Žȱ ™žœ‘Žȱ’—˜ȱ‘’œȱž—™›˜ęŠ‹•ŽȱŽŒ˜—˜–’ŒȱŠŒ’Ÿ’¢ȱ‹ŽŒŠžœŽȱ˜ȱ‘Žȱ’œŒ›’–’—Štory practices that women in the formal labor market faced. Instead, the lack of land appears to have pushed families into local wage employment Š—ȱ™ŽĴ¢ȱ›ŠŽǰȱ‹˜‘ȱ˜ȱ ‘’Œ‘ȱ’ȱ—˜ȱ™Š¢ȱŠŸ˜›Š‹•¢ȱ’—ȱŒ˜–™Š›’œ˜—ȱ ’‘ȱ

ŗřŜ

Kung, Lee, and Bai

migrant work especially but also with sericulture.20 A most interesting ꗍ’—ȱŒ˜—ŒŽ›—œȱ‘Žȱ›Ž•Š’˜—œ‘’™ȱ‹Ž ŽŽ—ȱ•Š—˜ —Ž›œ‘’™ȱŠ—ȱ™Š —’—ǯȱ Though families with surplus land to farm were more likely to rent out part of their land in return for rental income, they were most unlikely to ™Š —ȱ˜žȱ‘Ž’›ȱ•Š—ȯŠȱꗍ’—ȱ‘Šȱ›Ž’—˜›ŒŽœȱ‘ŽȱŸ’Ž ȱ‘Šȱ™Š —’—ȱ’œȱ an important way of obtaining informal credit but that it may also have •˜—Ž›ȬŽ›–ȱŠŸŽ›œŽȱŽěŽŒœǯȱ ’Ğ‘ǰȱ‘Žȱœ’—’ęŒŠ—ȱŠ—ȱ—ŽŠ’ŸŽȱ›Ž•Š’˜—œ‘’™ȱ˜ž—ȱ‹Ž ŽŽ—ȱŽžŒŠtion and renting in land suggests that returns to farming were most likely lower than those associated with at least some nonfarm activities, particularly migration and professional occupations—the two activities that cor›Ž•ŠŽȱ™˜œ’’ŸŽ•¢ȱǻŠ—ȱœ’—’ęŒŠ—•¢Ǽȱ ’‘ȱ‘ŽȱŽžŒŠ’˜—ȱŸŠ›’Š‹•Žǯȱœȱ–Ž—tioned earlier, per capita income of households with members engaged in migrant activities was much higher than for those engaged in most other ŠŒ’Ÿ’’ŽœǰȱŠȱꗍ’—ȱ‘Šȱ’œȱŒ˜—œ’œŽ—ȱ ’‘ȱ‘Žȱ›Ž•ŠŽȱꗍ’—ȱ‘Šȱ–’›Š’˜—ȱ›Žšž’›Žȱ‘’‘Ž›ȱŽžŒŠ’˜—Š•ȱŠĴŠ’—–Ž—ȱǻ ž—ǰȱŽŽǰȱŠ—ȱŠ’ȱŘŖŖśǼǯ ’—Š••¢ǰȱŠ›–ȱŒŠ™’Š•ȱ˜›ǰȱœ™ŽŒ’ęŒŠ••¢ǰȱ›ŠĞȱŠ—’–Š•œǰȱ’œȱ˜ž—ȱ˜ȱŒ˜››Ž•ŠŽȱ positively both with participation in land rental markets and concomitantly with the hiring of long-term farm labor, but negatively with local  ŠŽȱŽ–™•˜¢–Ž—ȱŠ—ȱ™ŽĴ¢ȱ›ŠŽǯȱ‘’œȱ™ŠĴŽ›—ȱ˜ȱꗍ’—œȱž—Ž›•’Žœȱ‘Žȱ economic process of households’ “selecting” between farm and nonfarm work in the resource allocation process. Only households with the intention to specialize in farming would invest in farm capital by acquiring –˜›Žȱ›ŠĞȱ›Žœ˜ž›ŒŽœǰȱ ‘Ž›ŽŠœȱ‘˜œŽȱŒ‘˜˜œ’—ȱ˜ȱ ˜›”ȱ˜ěȱ‘ŽȱŠ›–ȱ’ȱ‘Žȱ opposite. Our analysis lends strong empirical support to the hypothesis that farm households in Wuxi did allocate their resources—especially labor resources—in a way consistent with economic rationality. Whether that produced the best results is the question we will address next. 쎌œȱ˜ȱŒ˜—˜–’ŒȱŠ›’Œ’™Š’˜—ȱ˜—ȱ—Œ˜–ŽȱŠ—ȱ˜—œž–™’˜— It is one thing to suggest that farm households in Wuxi were allocat’—ȱ›Žœ˜ž›ŒŽœȱ’—ȱŠȱ Š¢ȱ‘Šȱ›ŽĚŽŒŽȱ‘ŽȱŒ˜–™Š›Š’ŸŽȱŠŸŠ—ŠŽȱ˜ȱ‘Ž’›ȱ endowment characteristics, and quite another thing to ascertain the welŠ›Žȱ ŽěŽŒœȱ ˜ȱ ‘Ž’›ȱ Š••˜ŒŠ’˜—ȱ ŽŒ’œ’˜—œǯȱЎ›ȱ Š••ǰȱ ’ȱ ’œȱ Š›žŠ‹•¢ȱ ‘Žȱ Žfect of resource allocation on income and consumption that is of greater direct relevance for economies at the lower levels of economic develop–Ž—ǯȱ ‘Šȱ  Žȱ  Š—ȱ ˜ȱ ꗍȱ ˜žȱ ’œȱ  ‘Ž‘Ž›ȱ ’—Œ˜–Žȱ Š—ȱ Œ˜—œž–™’˜—ȱ ŘŖȲȱ The per capita income of families with members engaged in sericulture and migration  Ž›Žǰȱ ›Žœ™ŽŒ’ŸŽ•¢ǰȱ ŗǰŖŘŝȱ Š—ȱ ŗǰśŝŖȱ ŒŠĴ’Žœȱ ˜ȱ ‘žœ”Žȱ ›’ŒŽǰȱ  ‘Ž›ŽŠœȱ ‘˜œŽȱ ˜ȱ •˜ŒŠ•ȱ  ŠŽȱ Ž–™•˜¢–Ž—ȱ Š—ȱ ™ŽĴ¢ȱ ›ŠŽȱ  Ž›Žȱ –Ž›Ž•¢ȱ şŞŜȱ Š—ȱ ŝśŜȱ ŒŠĴ’Žœǰȱ ›Žœ™ŽŒ’ŸŽ•¢ǯȱ ‘Žȱ –ŽŠ—ȱ ™Ž›ȱ ŒŠ™’Šȱ’—Œ˜–Žȱ ŠœȱŗǰŖŖŖȱŒŠĴ’Žœǯȱ—ŽȱŒŠĴ¢ȱŽšžŠ•œȱśŖŖȱ›Š–œǯ

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per capita can be explained by household economic choices. To ensure that income comparisons are consistent over time, we have converted all income denominated in money into husked rice (caomi ㊭㉇ǼȱŽšž’ŸŠ•Ž—œȱ ǻ‹¢ȱ  Ž’‘ǰȱ ’—ȱ ‘’—ŽœŽȱ ŒŠĴ’ŽœǼǰȱ žœ’—ȱ Œ˜–™Š›Š‹•Žȱ ™›’ŒŽȱ ’—’ŒŽœȱ ˜›ȱ ‘Žȱ survey years in question.21 Data on household consumption, although available, is more restricted, since the surveys list only the consumption ˜ȱœŠ™•Žœȱǻ›’ŒŽȱŠ—ȱ ‘ŽŠǼȱ ’‘ȱŠ•–˜œȱ—˜ȱ’—˜›–Š’˜—ȱ˜—ȱ‘ŽȱŒ˜—œž–™tion of meat and dairy products such as eggs—an omission that most likely will bias downward the consumption of the richer households. This limitation aside, the pertinent data still allow us to measure and compare the caloric intake of households as associated with their choice of economic participation. Caloric comparisons are made by convert’—ȱ›’ŒŽȱŠ—ȱ ‘ŽŠȱŒ˜—œž–™’˜—ȱꐞ›Žœȱ’—˜ȱŠȱŒ˜––˜—ȱž—’ȱ˜ȱŽ—Ž›¢ȱ equivalence on a per capita basis.22 Besides correlating economic participation with income and consump’˜—ȱ œŠ—Š›œǰȱ  Žȱ ‘ŠŸŽȱ Š•œ˜ȱ Œ˜—›˜••Žȱ ˜›ȱ ‘Žȱ ™˜œœ’‹•Žȱ ŽěŽŒœȱ ˜ȱ ‘˜œŽȱ ŸŠ›’Š‹•Žœȱ‘Šȱ–Š¢ȱŠěŽŒȱ‘ŽȱŽœ’–ŠŽȱ˜žŒ˜–Žœȱ›˜–ȱ’ŸŽ›œŽȱŽŒ˜—˜–’Œȱ ŠŒ˜›œǯȱ‘ŽœŽȱŠŒ˜›œȱ’—Œ•žŽȱŠ›–ȱŒŠ™’Š•ȱǻŽǯǯǰȱ ŠŽ›ȱ™ž–™œǼǰȱŒŠ™’Š•ȱŠœsets used in household sideline production (e.g., silkworm feeding trays,  ŽŠŸ’—ȱ –ŠŒ‘’—ŽœǼǰȱ ‘Žȱ œ’£Žȱ ˜ȱ ˜™Ž›ŠŽȱ Š›–ȱ ‘˜•’—œǰȱ Š—ǰȱ —˜ȱ •ŽŠœǰȱ ¢ŽŠ›ȱŸŠ›’Š‹•Žœȱǻ’ǯŽǯǰȱŗşřŜȱŠ—ȱŗşŚŞǼȱŠœȱ™›˜¡¢ȱ˜›ȱ‘ŽȱŽěŽŒȱ˜ȱ‘Žȱ’–Žȱ›Ž—ǯȱ ž›ȱ›Žœž•œȱŠ›Žȱœž––Š›’£Žȱ’—ȱŠ‹•ŽȱŜǯŜǯ ‘Žȱ –˜œȱ ’–™˜›Š—ȱ ꗍ’—ȱ ’œȱ ‘Šǰȱ Œ˜–™Š›Žȱ  ’‘ȱ ›’ŒŽȬ ‘ŽŠȱ Œž•’ŸŠ’˜—ȱ ǻ‘Žȱ ‹Ž—Œ‘–Š›”ȱ žœŽȱ ˜›ȱ ‘’œȱ Œ˜–™Š›’œ˜—Ǽǰȱ Šȱ œ’—’ęŒŠ—ȱ —ž–‹Ž›ȱ of income sources—rental, local wage employment, family business, mi›Š’˜—ǰȱ Š—ǰȱ —˜ȱ ‘Žȱ •ŽŠœǰȱ œŽ›’Œž•ž›ŽȯŠ••ȱ ‘ŠŸŽȱ Šȱ ™˜œ’’ŸŽȱ ŽěŽŒȱ ˜—ȱ ™Ž›ȱ ŒŠ™’Šȱ’—Œ˜–Žǯȱ‘Žȱ™˜œ’’ŸŽȱ’—Œ˜–ŽȱŽěŽŒȱ›Žœž•’—ȱ›˜–ȱ‘˜žœŽ‘˜•œȱ›Ž—’—ȱ˜žȱœž›™•žœȱ•Š—ȱŠ—ȱ›ž——’—ȱŠȱ‹žœ’—ŽœœȱǻŠȱ™›˜¡¢ȱ˜ȱœž›™•žœȱŒŠ™’Š•Ǽȱ is obvious and needs no further elaboration. The same analysis applies also to the few families with members working as professionals. What is •Žœœȱ˜‹Ÿ’˜žœǰȱ™Ž›‘Š™œǰȱ’œȱ‘Žȱœ›˜—ȱ™˜œ’’ŸŽȱŽěŽŒȱ˜ȱ•˜ŒŠ•ȱ ŠŽȱŽ–™•˜¢ment, migrant work, and sericulture on per capita income. Although we are unable to measure with precision the marginal product of labor in these economic activities, there is now solid empirical evidence to suggest that households with members engaged in these labor-intensive activities enjoyed higher per capita incomes than families that did not or could not take advantage of these employment opportunities. A detailed explanation of how we perform this exercise can be found in Kung, Lee, and Š’ȱǻŘŖŖśǼǯ ŘŘȲȱ The conversion rates are based on those provided by the Nutrient Data Laboratory of ‘Žȱ—’ŽȱŠŽœȱŽ™Š›–Ž—ȱ˜ȱ›’Œž•ž›Žǯȱ˜›ȱ›’ŒŽǰȱ‘Žȱ›ŠŽȱ’œȱřŜŖȱ”ŒŠ•ȱ™Ž›ȱŗŖŖȱ›Š–œǰȱŠ—ȱ for wheat 340 kcal. ŘŗȲȱ

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Š‹•Žȱ ŜǯŜǯȱ ‘Žȱ 쎌œȱ ˜ȱ Š›”Žȱ ǻŠ—ȱ ˜—Š›–Ǽȱ Š›’Œ’™Š’˜—ȱ ˜—ȱ —Œ˜–Žȱ Š—ȱ Consumption Dependent variable

Log per capita income

Log per capita energy consumed

-0.102***

0.020

Land and credit markets renting

in out

pawning

in out

ǻŘǯşśǼ

ǻŗǯŗŜǼ

0.288***

0.009

ǻŜǯřŜǼ

ǻŖǯŚřǼ

ȬŖǯŖŖŜ

ŖǯŖŜś

ǻŖǯŖŜǼ

ǻŗǯřşǼ

-0.128***

-0.002

ǻŘǯŞśǼ

ǻŖǯŗŗǼ

0.017

-0.017

ǻŖǯśśǼ

ǻŗǯŗŘǼ

0.042

0.003

ǻŗǯŘŞǼ

ǻŖǯŗşǼ

0.024

0.049

ǻŖǯřŘǼ

ǻŗǯřśǼ

0.070

0.199***

ǻŖǯŞŞǼ

ǻŚǯşŚǼ

ŖǯŗŜśȘȘȘ

-0.000

ǻśǯśŜǼ

ǻŖǯŖŖǼ

ŖǯŗŜŘ

0.049

ǻŗǯŘŝǼ

ǻŖǯŝşǼ

ŖǯŚśśȘȘ

ŖǯŗśŝȘ

ǻŘǯřŝǼ

ǻŗǯŜŞǼ

ŖǯŖŜŞ

0.090***

ǻŗǯřŜǼ

ǻřǯŜřǼ

0.213***

ŖǯŖśŜȘȘȘ

Farm labor markets day labor

in out

year labor

in out

ěȬŠ›–ȱ•Š‹˜›ȱ–Š›”Žœ wage employment professionals family business ™ŽĴ¢ȱ›ŠŽ Migrant work

ǻŝǯŝŖǼ

ǻŚǯŗŝǼ

Sericulture

ŖǯŗśŘȘȘȘ

ŖǯŖŜŗȘȘȘ

ǻŚǯŜşǼ

ǻřǯŞŜǼ

Number of observations

ŗśŜś

ŗśŜŘ

Notes: Absolute value of z statistics in parentheses. In the estimations, we have Œ˜—›˜••Žȱ˜›ȱ‘ŽȱŽěŽŒȱ˜ȱ‘˜žœŽ‘˜•ȱœ’£Žǰȱ‘˜žœŽ‘˜•ȱœ’Ž•’—ŽȱŽŒ‘—˜•˜¢ȱ ǻšžŠ—’¢ȱ˜ȱœ’•” ˜›–ȱŽŽ’—ȱ›Š¢œȱŠ—ȱ ŽŠŸ’—ȱ–ŠŒ‘’—ŽœǼǰȱŠ›–ȱŽŒ‘—˜•˜¢ȱ ǻ ŠŽ›ȱ™ž–™œǼǰȱŠ›–ȱœ’£ŽǰȱŠ—ȱ’–Žȱ›Ž—ǯ Șȱ’—’ęŒŠ—ȱŠȱŗŖƖDzȱȘȘȱœ’—’ęŒŠ—ȱŠȱśƖDzȱȘȘȘȱœ’—’ęŒŠ—ȱŠȱŗƖǯȱ

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Š —’—ȱ ǻ˜žǼȱ ›Ž™›ŽœŽ—œȱ Š—ȱ ’–™˜›Š—ȱ Ž¡ŒŽ™’˜—ȱ ˜ȱ ‘ŽœŽȱ ꗍ’—œǯȱ Whereas the negative relationship between pawning and income may ap™ŽŠ›ȱ Š—˜–Š•˜žœȱ Šȱ ꛜȱ œ’‘ǰȱ ’ǰȱ ˜˜ǰȱ ŒŠ—ȱ ‹Žȱ ŠŒŒ˜ž—Žȱ ˜›ȱ ‹¢ȱ ŽŒ˜—˜–’Œȱ reasoning. To the extent that pawning out land represented a desperate ŠĴŽ–™ȱ‹¢ȱ‘˜žœŽ‘˜•œȱ˜ȱŽȱ–žŒ‘Ȭ—ŽŽŽȱŒ›Ž’ǰȱŠ—ȱ ‘Ž—ȱ›Ž™Š¢–Ž—ȱ Ž›–œȱ Ž›Žȱœ›žŒž›Žȱ‹¢ȱžœž›’˜žœȱ’—Ž›Žœǰȱ™Š —’—ȱŠŸŽ›œŽ•¢ȱ’—ĚžŽ—ŒŽȱ the debtor’s options. Alternatively, pawning might have resulted in some households cultivating smaller farms in which land was pawned to their Ž••˜ ȱŸ’••ŠŽ›œȱǻ ‘˜ȱŠŒšž’›Žȱ‘ŽȱŒž•’ŸŠ’˜—ȱ›’‘ȱŠœȱŠȱ›Žœž•Ǽǯȱ—ȱŽ’‘Ž›ȱ case, the negative relationship between income and pawning appears to •Ž—ȱœž™™˜›ȱ˜ȱ‘ŽȱŸ’Ž ȱ‘Šȱ™Š —’—ȱ Šœȱ‘ŽȱꛜȱœŽ™ȱ˜ Š›ȱȃ’œ›Žœœȱ •Š—ȱœŠ•ŽœȄȱǻ žŠ—ȱŗşşŖǼǯ œȱ˜ȱ‘ŽȱŽěŽŒȱ˜ȱŽŒ˜—˜–’Œȱ™Š›’Œ’™Š’˜—ȱ˜—ȱŒ˜—œž–™’˜—ǰȱ’ȱ’œȱ—˜ȱŠ• Š¢œȱ‘ŽȱŒŠœŽȱ˜›ȱŠŒ’Ÿ’’Žœȱ‘ŠŸ’—ȱŠȱœ’—’ęŒŠ—ȱŽěŽŒȱ˜—ȱ’—Œ˜–ŽȱŠœȱ Ž••ȱŠœȱ on consumption; only migration and sericulture—and, to a much lesser Ž¡Ž—ǰȱŠȱŠ–’•¢ȱ‹žœ’—Žœœȯ‘ŠŸŽȱŠȱœ’—’ęŒŠ—ȱŽěŽŒȱ˜—ȱ‹˜‘ǯȱ—ȱ™Š›’Œž•Š›ǰȱ  Žȱ  Š—ȱ ˜ȱ œ›Žœœȱ ‘Žȱ œ’—ž•Š›•¢ȱ ’–™˜›Š—ȱ  Ž•Š›Žȱ ŽěŽŒȱ ˜ȱ œŽ›’Œž•ž›Žǰȱ ‹ŽŒŠžœŽȱ˜ȱ’œȱ—ŽŠ’ŸŽȱ›˜•ŽȱŠœȱŽœŒ›’‹Žȱ’—ȱ‘Žȱ•’Ž›Šž›ŽȱǻŽ••ȱŗşşşDzȱ žŠ—ȱ ŗşşŖǼǯȱŠœŽȱ˜—ȱ‘Žȱœ™ŽŒ’ęŒȱŒ›’Ž›’˜—ȱ˜ȱŽŸŠ•žŠ’—ȱ‘Žȱ’–™˜›Š—ŒŽȱ˜ȱŠ—ȱ economic activity for income and consumption, we conclude that migra’˜—ȱ Š—ȱ œŽ›’Œž•ž›Žȱ ˜ěŽ›Žȱ ‹ŽĴŽ›ȱ ŽŒ˜—˜–’Œȱ  Ž•Š›Žȱ ŠŒ’Ÿ’’Žœȱ ˜›ȱ ž¡’ȱ villagers than for households relying on either rental or local wage inŒ˜–Žǰȱœ’—ŒŽȱ‘ŽœŽȱ•ŠĴŽ›ȱ ˜ȱŠŒ’Ÿ’’Žœȱ‘ŠŸŽȱ—˜ȱœ’—’ęŒŠ—ȱŽěŽŒȱ˜—ȱœŠ™•Žȱ consumption. Finally, there are those activities that, although conferring no distinct economic advantage to their participants in income, nonetheless help raise the consumption standards of poorer households. For example, where the per capita income of households with members engaged ’—ȱ™ŽĴ¢ȱ›ŠŽȱ ŠœȱŸŽ›¢ȱ•˜ ȯŘśȱ™Ž›ŒŽ—ȱ‹Ž•˜ ȱ‘Žȱ–ŽŠ—ȱǻ ž—ǰȱŽŽǰȱŠ—ȱ Š’ȱŘŖŖśǼȯ‘ŽȱŒŠ•˜›’Œȱ’—Š”Žȱ˜›ȱ‘ŽœŽȱ™Ž˜™•Žȱ ŠœȱŠȱ•ŽŠœȱ’–™›˜Ÿ’—ǯȱ Conclusion The macro issue of why China’s economy, in particular its agricultural sector, did not achieve a breakthrough in the past few centuries continues ˜ȱ ŠĴ›ŠŒȱ œŒ‘˜•Š›•¢ȱ ŠĴŽ—’˜—ǰȱ Š—ȱ Š—¢ȱ Œ˜—œŽ—œžœȱ Š–˜—ȱ ‘’œ˜›’Š—œȱ ’œȱ Šœȱ ›Ž–˜ŽȱŠœȱŽŸŽ›ǯȱ ˜ ŽŸŽ›ǰȱ ‘Ž—ȱŽ¡Š–’—ŽȱŒ•˜œŽ•¢ǰȱŠȱ‘Žȱ–’Œ›˜ȱ•ŽŸŽ•ǰȱ‘Žȱ performance of a local economy can be seen as rather prosperous with observable rational behaviors in the labor market. We made use of panel data that cover an important period of almost twenty years in a local econ˜–¢ȱ ‘Ž›Žȱ‘ŽȱŽěŽŒȱ˜ȱŒ˜––Ž›Œ’Š•’£Š’˜—ȱ Šœȱ™›˜—˜ž—ŒŽȯ‘Žȱ ’Š—nan economy of the Lower Yangzi. We found that farm households were allocating their resources in a way consistent with economic rationality and, equally important, that factor markets were active and operated

140

Kung, Lee, and Bai

Œ˜–™Ž’’ŸŽ•¢ǯȱ Ž›Žǰȱ Žȱ ’••ȱ™˜œȱ ˜ȱ™›’—Œ’™Š•ȱ˜‹œŽ›ŸŠ’˜—œȱŒ˜—ŒŽ›—’—ȱ farm household economic behavior and markets. First, this local economy had not just an active land rental market, but Š—ȱŠŒ’ŸŽȱ•Š‹˜›ȱ–Š›”Žȱ’—ȱŠȱŸŠ›’Ž¢ȱ˜ȱ˜ěȬŠ›–ȱŒ˜—Ž¡œǰȱ’—Œ•ž’—ȱ–’›Š—ȱ Ž–™•˜¢–Ž—ǯȱ‘ŽȱŽ¡’œŽ—ŒŽȱ˜ȱ–Š—¢ȱ˜ěȬŠ›–ȱ’—Œ˜–Žȱ˜™™˜›ž—’’Žœȱ‘Ž•™Žȱ ‘˜žœŽ‘˜•œȱ ’‘ȱœž›™•žœȱ•Š‹˜›ȱ˜ȱ‹ŽĴŽ›ȱžœŽȱ‘Ž’›ȱ•Š‹˜›ȱŠ—ǰȱ‹¢ȱ˜’—ȱœ˜ǰȱ to increase household income. Our survey evidence, reported elsewhere, œ‘˜ œȱ‘Šȱ™Ž›ȱŒŠ™’Šȱ—Žȱ’—Œ˜–Žȱ’—Œ›ŽŠœŽȱ›˜–ȱ‘Žȱ•ŠŽȱŗşŘŖœȱ˜ȱŗşřŜȱ‹¢ȱ Šœȱ–žŒ‘ȱŠœȱśŖȱ™Ž›ŒŽ—ǰȱ‹Ž˜›Žȱ’ȱŽŒ•’—Žȱ‹¢ȱ›˜ž‘•¢ȱŗŖȱ™Ž›ŒŽ—ȱ›˜–ȱ’œȱ high point because of military and political disturbances. Although our ꗍ’—œȱœ‘˜ž•ȱ‹Žȱ›ŽŠŽȱ ’‘ȱŒŠž’˜—ǰȱ ŽȱœŽŽȱŠȱŒ˜——ŽŒ’˜—ȱ‹Ž ŽŽ—ȱ‘Žȱ expansion of specialization and exchange and per capita income growth. ‘’œȱ ꗍ’—ȱ ’œȱ ’–™˜›Š—ȱ ‹ŽŒŠžœŽȱ ‘Žȱ ’Š——Š—ȱ ŽŒ˜—˜–¢ȱ  Šœȱ œ’••ȱ ™›˜œpering despite the unequal distribution of land ownership. The rapid ex™Š—œ’˜—ȱ˜ȱ‘Žȱ˜ěȬŠ›–ȱœŽŒ˜›ȱ’—ȱ‘’œȱ›Ž’˜—ȱ™•Š¢ŽȱŠȱŸŽ›¢ȱŒ›žŒ’Š•ȱ›˜•Žȱ’—ȱ contributing to this income growth process. Second, a household’s choice of economic participation appears to be conditioned by the comparative advantage of such endowments as land, •Š‹˜›ǰȱŠ—ȱŒŠ™’Š•ǯȱ˜›ȱ’—œŠ—ŒŽǰȱ‘ŽȱšžŠ—’¢ȱ˜ȱ–Š•Žȱ•Š‹˜›ȱœ’—’ęŒŠ—•¢ȱŽtermines a household’s decisions about land rental, pawning, and a range of nonfarm work opportunities (except for those that require distinctly ›ŽŠŽ›ȱ ‘ž–Š—ȱ ŒŠ™’Š•Ǽǯȱ ’”Ž ’œŽǰȱ Ž–Š•Žȱ •Š‹˜›ȱ —˜ȱ ˜—•¢ȱ ™›Ž’ŒŠ‹•¢ȱ Ž¡plains a family’s decision to participate in sericulture but also local wage Ž–™•˜¢–Ž—ȱŠ—ȱ–’›Š—ȱ˜ěȬŠ›–ȱ ˜›”ǯȱ˜–Ž—ȂœȱŽ—ŠŽ–Ž—ȱ’—ȱ–’›Š’˜—ȱœ‘˜ œȱ‘Šȱ–Š—¢ȱ Ž›Žȱ—˜ȱŒ˜—ę—Žȱ˜—•¢ȱ˜ȱ‘˜žœŽ‘˜•ȱŽŒ˜—˜–’Œȱ™›˜duction but engaged in highly paid work as did their male counterparts. Just like labor, land is a good predictor of household allocation decisions. The positive association it had with family business and sericulture suggests that a broad spectrum of society, including the rich, participated in sericulture. Conversely, the negative association between land, on the ˜—Žȱ‘Š—ǰȱŠ—ȱ•˜ŒŠ•ȱ ŠŽȱŽ–™•˜¢–Ž—ȱŠ—ȱ™ŽĴ¢ȱ›ŠŽǰȱ˜—ȱ‘Žȱ˜‘Ž›ǰȱœžŽœœȱ‘Šȱ•Š—ȬŽęŒ’Ž—ȱ‘˜žœŽ‘˜•œȱŽ—ŠŽȱ’—ȱ•˜ Ž›Ȭ™Š’ȱŠŒ’Ÿ’’Žœǯȱ œȱ ˜›ȱ ‘Žȱ  Ž•Š›Žȱ ŽěŽŒœȱ ˜ȱ ŽŒ˜—˜–’Œȱ ™Š›’Œ’™Š’˜—ǰȱ –˜œȱ ŽŒ˜—˜–’Œȱ activities, including local wage employment and sericulture, were found ˜ȱ ‘ŠŸŽȱ œ’—’ęŒŠ—•¢ȱ Ž—‘Š—ŒŽȱ ‘˜žœŽ‘˜•ȱ ’—Œ˜–Žǯȱ ‘Žȱ ˜—•¢ȱ Ž¡ŒŽ™’˜—ȱ ’œȱ ™Š —’—Dzȱ ‘Žȱ —ŽŠ’ŸŽȱ ŽěŽŒȱ ˜ȱ ‘’œȱ ŠŒ’Ÿ’¢ȱ ˜—ȱ ’—Œ˜–Žȱ œžŽœœȱ ‘Šȱ households entering into the pawning relationship might have been forced to do so by adverse circumstances, a possibility consistent with the Œ˜—ŸŽ—’˜—Š•ȱŸ’Ž ȱ‘Šȱ™Š —’—ȱ›Ž™›ŽœŽ—œȱ‘ŽȱꛜȱœŽ™ȱ˜ Š›ȱȃ’œ›Žœœȱ •Š—ȱœŠ•ŽœǰȄȱ‹žȱ–˜›ŽȱŽ–™’›’ŒŠ•ȱ›ŽœŽŠ›Œ‘ȱ’œȱ—ŽŽŽȱ˜ȱŒ˜—ę›–ȱ‘’œȱŒ•Š’–ǯȱ ‘Ž—ǰȱ‘Ž›Žȱ’œȱ‘Žȱ’–™˜›Š—ȱ›˜•Žȱ™•Š¢Žȱ‹¢ȱ™ŽĴ¢ȱ›ŠŽȯ—˜ȱŠȱ™˜™ž•Š›ȱ ‘˜žœŽ‘˜•ȱŒ‘˜’ŒŽȱ’ȱ˜‘Ž›ȱŠ•Ž›—Š’ŸŽœȱŽ¡’œŽǯȱ‘Ž›ŽŠœȱ™ŽĴ¢ȱ›ŠŽȱ‘Šȱ—˜ȱ œ’—’ęŒŠ—ȱŽěŽŒȱ˜—ȱ’—Œ˜–Žǰȱ’ȱ‘ŠȱŠȱ™˜œ’’ŸŽȱŽěŽŒȱ˜—ȱŒ˜—œž–™’˜—ǯȱ‘’œȱ

Chinese Farmer Rationality

141

œžŽœœȱ‘Šȱ‘˜žœŽ‘˜•œȱŒ˜ž•ȱ‹ŽŒ˜–Žȱ‹ŽĴŽ›ȱ˜ěȱ‹¢ȱ™Š›’Œ’™Š’—ȱ’—ȱ‘’œȱ •˜ Ȭ’—Œ˜–ŽȱŠŒ’Ÿ’¢ǯȱ•œ˜ȱ’–™˜›Š—ȱ’œȱ‘Žȱꗍ’—ȱ‘Šȱ˜—•¢ȱ ˜ȱŠŒ’Ÿ’’Žœȱ ‘ŠȱŠȱ™˜œ’’ŸŽȱŽěŽŒȱ˜—ȱ‹˜‘ȱ’—Œ˜–ŽȱŠ—ȱŒ˜—œž–™’˜—ǰȱ—Š–Ž•¢ǰȱœŽ›’Œž•ž›Žȱ and migration. There is solid empirical evidence to refute the alleged irrationality of household participation in sericulture. Meanwhile, labor mi›Š’˜—ȱ˜ěŽ›œȱ›Žœ‘ȱŽŸ’Ž—ŒŽȱ˜›ȱŠȱȃŸŽ—ȄȱŠ‹œ˜›‹’—ȱœž›™•žœȱ›ž›Š•ȱ•Š‹˜›Ž›œȱ in Jiangnan. This absorption of labor was even greater in the Lower Yangzi ›Ž’˜—ȱ ‘Ž›Žȱ–Š›”Žœȱ̘ž›’œ‘Žǯȱ The issue of economic underdevelopment for most parts of the past ŒŽ—ž›¢ȱ‘Ž›Ž˜›Žȱ›Žšž’›Žœȱ‘ŽȱšžŠ•’ęŒŠ’˜—ȱ‘ŠȱŽŸŽ—ȱ ’‘˜žȱŠȱŠŸ˜›Š‹•Žȱ institutional and policy environment, China’s market and economic behavior could perform very well, just short of a fundamental transformation or breakthrough. More importantly, this performance can still be accounted for in terms of rationality.

˜›”Ž›œȱ˜ȱ‘Žȱ ˜—ȱ ˜—ȱ˜Ĵ˜—ȱ’••ǯȱŗşŗŚǯȱǻ˜ž›Žœ¢ȱ˜ȱ‘Žȱ’œœ’˜—œȱ 1›Š—¸›ŽœȱŽȱŠ›’œǯǼ

‘Žȱ ˜—ȱ ˜—ȱ˜Ĵ˜—ȱ’••ǰȱœ’žŠŽȱ‹Ž ŽŽ—ȱ‘ŽȱŠŒŽȱ˜ž›œŽȱŠ—ȱ‘Žȱ ˜•˜ȱ ›˜ž—ȱŠȱŠžœŽ Š¢ȱŠ¢ǰȱ ˜—ȱ ˜—ȱœ•Š—ǯȱ—ȱŗşŗŚǰȱ‘Žȱ’œŽ›œȱ˜ȱ St. Paul de Chartres bought the premises and converted it into St. Paul’s ˜—ŸŽ—ǯȱŗşŗŚǯȱǻ˜ž›Žœ¢ȱ˜ȱ‘Žȱ’œœ’˜—œȱ1›Š—¸›ŽœȱŽȱŠ›’œǯǼ

˜ŒŠŽȱ ’—ȱ ˜”ž•Š–ǰȱ ˜—ȱ ˜—ȱ œ•Š—ǰȱ Š£Š›Ž‘ȱ ›’—’—ȱ ˜žœŽȱ of the Missions Etrangères was previously called Douglas Castle and ˜ —Žȱ‹¢ȱ ǯȱǯȱŠ™›Š’”ǯȱ‘Žȱ™›’—’—ȱ‘˜žœŽȱ˜™Ž›ŠŽȱž—’•ȱŗşśřǯȱŗŞşŜǯ ǻ˜ž›Žœ¢ȱ˜ȱ‘Žȱ’œœ’˜—œȱ1›Š—¸›ŽœȱŽȱŠ›’œǯǼ

PART TWO Dynamics in Institutional Change

SEVEN

Traditional Land Rights in

˜—ȱ ˜—ȂœȱŽ ȱŽ››’˜›’Žœ KENTARO MATSUBARA

One problematic aspect of assessing the development of a productive market economy in late nineteenth- to early twentieth-century China is ‘Žȱ œ’—’ęŒŠ—ŒŽȱ ˜ȱ ›Š’’˜—Š•ȱ •Š—ȱ ›’‘œȱ Š—ȱ •Š—ȱ ›Š—œŠŒ’˜—œǯȱ Š›•¢ȱ œŒ‘˜•Š›œ‘’™ȱ ’—ȱ ‘’œȱ ꎕȱ Ž¡™•˜›Žȱ ‘Žȱ ›Ž•Š’˜—œȱ ‹Ž ŽŽ—ȱ ‘ŽœŽȱ •Š—‘˜•ing practices and the economy in general and established that one could —˜ȱ•’—”ȱ™Š›’Œž•Š›ȱ™ŠĴŽ›—œȱ˜ȱ•Š—‘˜•’—ȯŽę—Žȱ’—ȱŽ›–œȱ˜ȱȃ˜ —Ž›Ȭ cultivators,” “part-owners,” or “tenants”—to the degree of commercial’£Š’˜—ȱ ˜›ȱ ˜ȱ  ŽŠ•‘ȱ ’œ›’‹ž’˜—ȱ ™ŠĴŽ›—œȱ ’—ȱ ‘Žȱ ŽŒ˜—˜–¢ȱ ǻŠ œ”’ȱ ŗşŝŘDzȱ Šž›ŽȱŗşŞşǼǯȱ Moreover, as various kinds of land-related rights have been analyzed through land deeds, it has become apparent that this variety hinged on the diverse arrangements among local social groups, and such groups were not limited to the signatories of a particular deed. Many rights established in a deed could be explained only by referring to the involvement of  ’Ž›ȱœ˜Œ’Š•ȱ›˜ž™œǰȱ˜ĞŽ—ȱž—–Ž—’˜—Žȱ’—ȱ‘ŽȱŽŽǯȱ˜›ȱŽ¡Š–™•Žǰȱ›’‘œȱ to zhaojia ᡒ‫ۍ‬ǰȱ‘Šȱ’œǰȱŠ’’˜—Š•ȱ™Š¢–Ž—ȱŠĞŽ›ȱŠȱœŠ•ŽǰȱŠ™™ŽŠ›ȱ˜ȱ‘ŠŸŽȱ’—volved the role—within the local community encompassing both vendor and purchaser—of the previous owner, that is, the vendor, in somehow guaranteeing the land rights of the current owner, that is, the purchaser ǻ ’œ‘’–˜˜ȱ’˜ȱŗşşŝ‹Ǽǯȱ‘ŽȱŸŠ›’˜žœȱ›’‘œȱ›Ž•ŠŽȱ˜ȱœŽĴ•Ž–Ž—ȱ’—ȱŠȱ™Š›ticular area were closely connected to the formation of local groups based ˜—ȱ‘ŽȱŽ¡Ž—ŽȱŠ–’•¢ǰȱ‘Šȱ’œǰȱ‘Žȱ•’—ŽŠŽȱǻŠž›ŽȱŗşŞŜǼǯȱ—ȱŽ¡Š–’—’—ȱ‘˜ ȱ land rights were related to the workings of the market and the economy, it is useful to begin by outlining some basic features of how these social groupings of lineages worked, both in holding property and in forming local communities. It was in the context of these social processes that land transactions were agreed on, performed, and secured.

148

Kentaro Matsubara

The primary unit of private property holding in Qing China was the household. While much of this property was held under individual names, the individual name was that of the paterfamilias, and the property was held in the form of “collective residence, common property,” tongju gongcai ৠሙ݅䉵, by the household group. This group consisted of the paterŠ–’•’Šœǰȱ‘’œȱ’›ŽŒȱ–Š•ŽȱŽœŒŽ—Š—œǰȱ‘Žȱ ’ŸŽœȱǻŠ—ȱŒ˜—Œž‹’—ŽœǼȱ˜ȱ‘ŽœŽȱ –Ž—ǰȱŠ—ȱŠ—¢ȱž—–Š››’ŽȱŠž‘Ž›œȱ˜ȱ‘ŽœŽȱ–Ž–‹Ž›œȱǻ‘’Šȱ‘ž£˜ȱŗşŜŝǰȱ śŖȮśŞǼǯȱ—Ž›ȱ‘’œȱœ¢œŽ–ǰȱŠ••ȱ’—Œ˜–Žȱ˜ȱ‘Žȱ–Ž–‹Ž›œȱ Ž—ȱ’—˜ȱ˜—ŽȱŒ˜–mon account, and all expenditure by the members came from the same common account. Property that could be independently held by individual members of the household appears to have been severely limited, ™Š›’Œž•Š›•¢ȱ˜›ȱ•Š—ȱǻ‘’Šȱ‘ž£˜ȱŗşŜŝǰȱśŖŝȮśśŖǼǯȱ This form of property holding, according to Shiga Shuzo, was one consequence of the ideal of zong ᅫ, which involves the notion that property ž•’–ŠŽ•¢ȱ‹Ž•˜—œȱ—˜ȱ˜ȱ‘Žȱ’—’Ÿ’žŠ•ȱǻ˜›ȱ‘˜žœŽ‘˜•ȱ›˜ž™Ǽȱ‹žȱ˜ȱ‘Žȱ continuity of the male line. Shiga, however, stops short of exploring a much more direct expression of this idea than household property: the institution of ancestral property. Ancestral property is held in the name either of a particular ancestor (zu ⼪, Cantonese tsoǼȱ˜›ȱ˜ȱŠ—ȱǻŠ—ŒŽœ›Š•Ǽȱ‘Š••ȱ (tang ූ, Cant. tongǼǰȱœŽ™Š›ŠŽ•¢ȱ›˜–ȱ‘Žȱ‘˜žœŽ‘˜•ȱǻ›ŽŽ–Š—ȱŗşŜŜǰȱśŗȮ śŘǼǯȱ Ž›Žǰȱ‘Žȱ‘˜•’—ȱ ˜ž•ȱ˜Œžœȱ˜—ȱœ™ŽŒ’ęŒȱŠ—ŒŽœ˜›œǰȱŠ—ȱ‘ŽȱŽ—Ž›Š•ȱ rule was that all direct male descendants of these focal ancestors could ‹Ž—Žęȱ›˜–ȱ‘Žȱ™›˜™Ž›¢ǯȱŠ—¢ȱœžŒ‘ȱŽ—’’ŽœȱŒ˜ž•ȱ‹ŽȱŽœŠ‹•’œ‘Žȱ’—ȱ˜—Žȱ lineage group, some encompassing an entire localized lineage (if the focal Š—ŒŽœ˜›ȱ Šœȱ‘Žȱ˜ž—’—ȱŠ—ŒŽœ˜›ǼǰȱŠ—ȱ˜‘Ž›œȱ’—Œ•ž’—ȱ“žœȱ˜—Žȱ™Š›ticular branch or extended household within such a group (if the holding ˜ŒžœŽȱ˜—ȱŠȱ–˜›Žȱ›ŽŒŽ—ȱŠ—ŒŽœ˜›Ǽǯȱȱ ŠœȱœŠ—Š›ȱ™›ŠŒ’ŒŽȱ˜›ȱŠȱ–Š—ŠŽ›ȱ ˜ȱ‹ŽȱŠ™™˜’—Žȱ˜ȱŠ–’—’œŽ›ȱ‘ŽȱŠěŠ’›œȱ˜ȱŠȱ™Š›’Œž•Š› zu or tang. Unlike the household, which would dissolve upon division, these organizations were considered permanent, and whereas managers might change, the organizations would persist as the same entities throughout the genera’˜—œȱǻŠœž‹Š›ŠȱŘŖŖŚǼǯȱ Ancestral property holding is known to have had particular implications for lineage integration and local social structuring. It could provide material backing to lineage groups and could work either as a unifying or Šȱ’Ÿ’œ’ŸŽȱ˜˜•ȱ˜›ȱ•˜ŒŠ•’£Žȱ•’—ŽŠŽœȱǻ›ŽŽ–Š—ȱŗşŜŜDzȱŠž›ŽȱŗşŞŜDzȱ‹›Ž¢ȱ Š—ȱŠœ˜—ȱŗşşŗǼǯȱ‘Žȱ–Š’—ȱ™˜’—ȱ‘Ž›Žǰȱ‘˜ ŽŸŽ›ǰȱ’œȱ‘Šȱœ’—ŒŽȱŽœŒŽ—ȱŠ—ȱ lineage were not the only principles according to which local communities could be formed, ancestral property was not the sole form of property holding that transcended the households. Territorial ties, arranged primarily through organizations focusing on popular religion, were also im™˜›Š—ȱ’—ȱ™ŠĴŽ›—œȱ˜ȱœ˜Œ’Š•ȱŒ˜‘Žœ’˜—ǯȱŽ››’˜›’Š•ȱ˜›ȱ›Ž•’’˜žœȱ˜›Š—’£Š’˜—œȱ could also hold property and be parties to land transactions (Duara 1988;

Traditional Land Rights

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Šž›Žȱ Š—ȱ ’žȱ ŗşşśǼǯȱ ˜›Ž˜ŸŽ›ǰȱ ‘Žȱ ’—Œ˜›™˜›Š’˜—ȱ ˜ȱ ™›˜™Ž›¢Ȭ‘˜•’—ȱ bodies could take place in various contexts, including market manage–Ž—ǰȱ ŠŽ›ȱŒ˜—›˜•ǰȱ˜›ȱŒ‘Š›’¢ȱǻ ŠœŽȱŘŖŖŖǼǯȱ An individual could simultaneously participate in a number of these overlapping groups, and economic exchange between these parties took place in the context of the multilayered relations established with each ˜‘Ž›ǯȱ ‘Žȱ ›Ž•Š’˜—œȱ ’—Ÿ˜•ŸŽȱ œŽĴ•Ž–Ž—ǰȱ Ž››’˜›’Š•ȱ Œ˜–™Ž’’˜—ȱ ˜ŸŽ›ȱ ›Žsources, intermarriage, interlineage alliances, ritual cohesion, long-term loans, and so on. While most land deeds signed by the parties betrayed only a small part of such diverse relations, the economy, of which land ›Š—œŠŒ’˜—œȱ Ž›ŽȱŠȱ™Š›ǰȱ Šœȱꛖ•¢ȱŽ–‹ŽŽȱ’—ȱ‘ŽœŽȱœ˜Œ’Š•ȱ›Ž•Š’˜—œǯȱ —ĚžŽ—ŒŽȱ‹¢ȱ‘ŽȱŒ˜—œ’Ž›Š’˜—œȱ˜ȱœžŒ‘ȱ›Ž•Š’˜—œǰȱ‘ŽœŽȱ™Š›’Žœȱ ˜ž•ȱ—˜ȱ easily have made economic decisions simply in accord with market forces. Under such conditions, assessing the extent to which a market might have operated in relation to land is a problem needing careful treatment, Š—ȱ‘Žȱ™›ŽœŽ—ȱŒ‘Š™Ž›ȱŠĴŽ–™œȱ“žœȱ‘’œǯȱŽ›Š’—ȱ•Š—Ȭ›Ž•ŠŽȱ›’‘œǰȱœžŒ‘ȱ as those of primary purchase or those concerning the use of common land,  Ž›ŽȱŠŒŒ˜›ŽȱŽ¡™•’Œ’•¢ȱ˜ȱ–Ž–‹Ž›œȱ˜ȱ™Š›’Œž•Š›ȱ›˜ž™œȱŽę—Žȱ‘›˜ž‘ȱ descent and territory. Such rights, clearly limiting the social scope within which transactions involving a certain plot of land could take place, were pervasive: the most common format for a deed of sale included a clause ŠŒ”—˜ •Ž’—ȱ‘Žȱ™›’–Š›¢ȱ™ž›Œ‘ŠœŽȱ›’‘œǰȱŠ—ȱ—˜’˜—œȱ›Ž•ŠŽȱ˜ȱœŽĴ•Žment would be decisive in what could or could not be done with a particu•Š›ȱ™•˜ȱ˜ȱ•Š—ǯȱ‘Žȱœ˜Œ’Š•ȯŠ—ȱŽŒ˜—˜–’Œȯœ’—’ęŒŠ—ŒŽȱ˜ȱ•Š—ȱ›Š—œŠŒtions in this environment appears to be understandable only in the context of the dynamics involving the relevant social groupings.

’œ˜›’ŒŠ•ȱ–ŠŽ›’Š•ȱ›˜–ȱ‘ŽȱŽ ȱŽ››’˜›’Žœȱ˜ȱ ˜—ȱ ˜—ȱ™›˜Ÿ’Žœȱ the opportunity to place land transactions in the context of these social dynamics. The exceptional richness of documentation allows land deeds to be checked against genealogies, account books, and fengshui 乼∈ documents, as well as detailed, plot-by-plot colonial land records.1 Moreover, the amount of anthropological research that has gone into this small area is extremely useful, as the resulting reconstructions of social landscapes provide new insights and background material in understanding the social processes surrounding land transactions. Later in this chapter, I will –Š”ŽȱžœŽȱ˜ȱ–ŠŽ›’Š•ȱ™›ŽœŽ—Žȱ˜ȱ‘Žȱ ˜—ȱ ˜—ȱŒ˜ž›œȱ’—ȱŠȱ•ŽŠ•ȱŒŠœŽȱ Š‹˜žȱ›Š’’˜—Š•ȱ•Š—ȱ›’‘œȱǻ‘ŽȱŒŠœŽȱ Šœȱ’œ™žŽȱž›’—ȱ‘ŽȱŗşşŖœǼǰȱ’—ȱ ŗȲȱ Land deeds that have survived in great numbers throughout China constitute the primary source material in trying to understand traditional Chinese land transactions and their social ‹ŠŒ”›˜ž—œǯȱ ˜ ŽŸŽ›ǰȱ Žœ™’Žȱ ǻ˜›ȱ ™Ž›‘Š™œȱ ŽŸŽ—ȱ ‹ŽŒŠžœŽȱ ˜Ǽȱ ‘Žȱ ŽŽœȂȱ ’–™˜›Š—ŒŽȱ Šœȱ documents to prove land rights either in court or in other social contexts, they cannot be thought of as full and accurate records of the actual transactions and holding arrangements, any more than a political treatise can be depended on as a descriptive representation of the status quo.

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Kentaro Matsubara

Š—ȱŠĴŽ–™ȱ˜ȱ›Ž•ŠŽȱœ™ŽŒ’ęŒȱ˜›–œȱ˜ȱ•Š—ȱ›Š—œŠŒ’˜—ȱ˜ȱ‘Žȱœ˜Œ’Š•ȱ‹ŠŒ”ground involving lineages and religious organizations in the early twentieth century.2

˜ ŽŸŽ›ǰȱ‹Ž˜›Žȱ‹Ž’——’—ȱŠ—ȱŠ—Š•¢œ’œȱ˜ȱ‘’œȱŒŠœŽǰȱȱ ’••ȱœŠ›ȱ‹¢ȱ•˜˜”ing into the forms and categories of land transactions that were not only žœŽȱ’—ȱ‘Žȱ ˜—ȱ ˜—ȱŒŠœŽȱ‹žȱ Ž›Žȱ˜‹œŽ›ŸŽȱ‘›˜ž‘˜žȱ’—ȱ‘’—Šǯȱ Some Basic Forms of Land Transaction Sale, Mortgage, and Tenancy One basic tenet about the relation between land rights and the functioning of a productive market economy for land is the following: institutions that allow for “weak” land rights, and a lack of clear delineation between different rights competing over one plot of land, are more likely to impede a productive land market. In traditional Chinese society, there was a strong Ž—Ž—Œ¢ȱ˜›ȱ’쎛Ž—ȱ™›˜™Ž›¢ȱ›’‘œǰȱŠ•’Ž—Š‹•ŽȱŠ—ȱ’—Š•’Ž—Š‹•Žǰȱ˜ȱŒ˜Ž¡’œȱ ˜›ȱ˜—Žȱ™•˜ȱ˜ȱ•Š—ǰȱ˜ĞŽ—ȱ ’‘˜žȱŒ•ŽŠ›ȬŒžȱŽ•’—ŽŠ’˜—œǯȱ‘’œȱ Šœȱ˜—ŽȱŠœpect of customary land law in Taiwan that was thought to present serious impediments to economic development and was explicitly tackled in the course of integrating customary law with the colonial legal system under the Japanese.3ȱ ˜ ŽŸŽ›ǰȱ‘Ž›Žȱ‘ŠŸŽȱ‹ŽŽ—ȱœž’ŽœȱœžŽœ’—ȱ‘Žȱž—Œ’˜—ing of a land market over a wide region in China. For example, it has been Š›žŽȱ ‘Šȱ ’—ȱ ‘Žȱ ’Š——Š—ȱ Š›ŽŠǰȱ ‘Ž›Žȱ  Ž›Žȱ ̞ŒžŠ’˜—œȱ ’—ȱ •Š—ȱ ™›’ŒŽœȱ that largely followed the prices of grain, and institutions allowing for a wide range of potential buyers to be sought for the sale of land can also be ˜ž—ȱǻ ’œ‘’–˜˜ȱ’˜ȱŗşşŝŠǰȱŒ‘Š™ǯȱŚDzȱŠœž‹Š›ŠȱŘŖŖŖ‹Ǽǯ To the extent that there was an “ownership” of land in Qing China, it resided with the party referred to as yezhu ὁЏǻ˜ —Ž›ǼȱŠ—ȱœžŒ‘ȱ˜ —Ž›ship was transferred by either of two forms of sale (mai 䊷Ǽǯȱ—Žȱ Šœȱ‘Žȱ “live” sale, huomai ⌏䊷, and the other was the “absolute” sale, juemai ㍊䊷. ‘Žȱ•’ŸŽȱœŠ•Žȱ’œȱŠȱ›ŽŽŽ–Š‹•ŽȱœŠ•Žǰȱ’—ȱ ‘’Œ‘ȱŠĞŽ›ȱŠȱœŽȱ—ž–‹Ž›ȱ˜ȱ¢ŽŠ›œǰȱ the vendor can buy the land back at the original price. Thus, the vendor receives a payment upon transferring the title of yezhu to the purchaser, Š—ȱ ŠĞŽ›ȱ œ˜–Žȱ ¢ŽŠ›œȱ ‘Žȱ ŸŽ—˜›ȱ ŒŠ—ȱ ™Š¢ȱ ‘Žȱ œŠ–Žȱ Š–˜ž—ȱ ‹ŠŒ”ȱ ˜ȱ ‘Žȱ original purchaser and resume as yezhu. From the purchaser’s viewpoint, ȱ Šȱ –˜›Žȱ ‘Ž˜›Ž’ŒŠ•ȱ •ŽŸŽ•ǰȱ ‘’œȱ Œ‘Š™Ž›ȱ  ’••ȱ œ‘˜ ȱ ‘˜ ȱ •Š—ȱ ›Š—œŠŒ’˜—œȱ ŒŠ—ȱ ˜ĞŽ—ȱ ‹Žȱ ‹ŽĴŽ›ȱ ž—Ž›œ˜˜ȱ Šœȱ ™Š›ȱ ˜ȱ Šȱ –ž•’•Š¢Ž›Žȱ ™›˜ŒŽœœȱ ˜ȱ •˜ŒŠ•ȱ œ˜Œ’Š•ȱ œ›žŒž›’—ȱ ›Š‘Ž›ȱ than as a straightforward commercial transaction. I will try to avoid simply juxtaposing an “embedded” economy and a market economy, characterizing traditional Chinese land ›Š—œŠŒ’˜—œȱ ’—ȱ Ž›–œȱ ˜ȱ ‘Šȱ ’Œ‘˜˜–¢ȱ ǻŒ˜–™Š›Žȱ ˜•Š—¢’ȱ ŗşśŝǼǯȱ —œŽŠǰȱ ȱ  ’••ȱ •˜˜”ȱ ’—˜ȱ the institutional framework of the land transactions that allowed aspects both hostile and auspicious to a market economy to exist at the same time. řȲȱ ˜›ȱŠȱœž––Š›¢ȱ˜ȱ‘’œȱŠĴŽ–™ȱ‹¢ȱ ›’Ž›œȱ’—Ÿ˜•ŸŽȱ’—ȱ‘ŽȱŒ˜–™’•Š’˜—ȱ˜ȱ‘ŽȱTaiwan shiho, œŽŽȱ’œ‘’ȱ ’ŽŠ”’ȱǻŘŖŖŚǼǯ ŘȲȱ

Traditional Land Rights

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‘Žȱ›Š—œŠŒ’˜—ȱ‘Šœȱ‘ŽȱœŠ–ŽȱŽěŽŒȱŠœȱ‘’œȱ’—ŸŽœ’—ȱ‘Žȱ–˜—Ž¢ȱ’—ȱ‘Žȱ’•Žȱ of yezhu, then receiving, for the duration of the sale, the proceeds from the •Š—ȱ ‘Žȱ ‘Šœȱ ™ž›Œ‘ŠœŽǰȱ Š—ȱ ꗊ••¢ȱ ›ŽŽŽ–’—ȱ ‘Žȱ ˜›’’—Š•ȱ ’—ŸŽœ–Ž—ǯ4 Another way to put it is that the transaction works in the same way as a loan from the purchaser to the vendor, with the land as security and the proceeds paid to the purchaser in lieu of an interest. By contrast, the absolute sale brings about the transfer of the title of yezhu without any provision for the vendor to buy it back and involves the payment of a larger amount of money by the purchaser than for a live sale. The deed of an absolute sale, for example, would include such words Šœȱȃ‘’œȱ˜—ŽȱœŠ•Žȱ‘Šœȱ‘ŽȱŽěŽŒȱ˜ȱ˜—Žȱ‘ž—›ŽȱŽ›–’—Š’˜—œǯȱ˜›ŽŸŽ›ǰȱ‘Ž›Žȱ shall be no troublemaking or regrets, no additional payment, no redemption, or any other misconduct.”ś The absolute sale is closer to the “sale” in modern legal parlance, transferring ownership, giving the purchaser a right of free disposal of the property, where the vendor, once he has sold the object in question, ceases to be an interested party. The term mai used on its own could imply a live rather than an absolute œŠ•Žǯȱ —ȱ ‘’œȱ Œ˜—Ž¡ǰȱ ‘Žȱ ’쎛Ž—ŒŽȱ ‹Ž ŽŽ—ȱ ‘Žȱ —˜’˜—ȱ ˜ȱ maiȱ ǻœŠ•ŽǼȱ Š—ȱ dian ‫݌‬, usually translated as “mortgage,” becomes far from clear-cut. In a transaction of dian, the original owner, the yezhu, becomes the mortgagor Š—ȱ›Š—œŽ›œȱ‘Žȱ›’‘œȱ˜ȱ™›˜ęȱ›˜–ȱ‘Žȱ™›˜™Ž›¢ȱ’—ȱšžŽœ’˜—ȱ˜ȱŠȱ–˜›gagee, dianzhu ‫݌‬Џ, who has in turn made a certain payment to the mortŠ˜›ǯȱ‘Žȱ–˜›ŠŽȱ’œȱ˜›ȱŠȱę¡Žȱ—ž–‹Ž›ȱ˜ȱ¢ŽŠ›œǰȱŠ—ȱŠĞŽ›ȱ‘Šȱ’–Žȱ‘Žȱ –˜›Š˜›ȱ ›Žœž–Žœȱ ‘Žȱ ™›˜™Ž›¢ȱ ŠĞŽ›ȱ ™Š¢’—ȱ ‘Žȱ ˜›’’—Š•ȱ Š–˜ž—ȱ ‹ŠŒ”ȱ ˜ȱ‘Žȱ–˜›ŠŽŽǯȱ‘Žȱ–˜›ŠŽŽȱŒ˜ž•ȱ™›˜ęȱ›˜–ȱ‘Žȱ•Š—ȱ˜›ȱ‘Žȱž›Štion, which works in the same way as receiving interest on the original funds transferred to the mortgagor at the beginning of the transaction. In both the dian and the huomaiǰȱ‘Žȱ˜ —Ž›ȱ˜ȱ™›˜™Ž›¢ȱ’œȱŽěŽŒ’ŸŽ•¢ȱ›ŽŒŽ’Ÿing a loan that he must repay over a set number of years, and his property is the security. In both cases, failure to pay back the amount of money could lead to the deed being redrawn into one of absolute sale (Matsubara ŘŖŖŖŠǼǯȱ‘Žȱ™›˜ęȱŽ—Ž›ŠŽȱ›˜–ȱ‘Žȱ™›˜™Ž›¢ȱ˜ŸŽ›ȱ‘Šȱ™Ž›’˜ǰȱ’—ȱ‹˜‘ȱ cases, constitutes the gain for the purchaser-mortgagee, who advanced the funds at the beginning.Ŝ ŚȲȱ The gender referred to in this sentence and similar ones throughout the chapter is male but in much rarer occasions it could be female. Women could, in limited circumstances, be ™Š›’Žœȱ˜ȱŠȱ•Š—ȱ›Š—œŠŒ’˜—ǯȱ ˜ ŽŸŽ›ǰȱ‘Ž¢ȱŒŽ›Š’—•¢ȱ’ȱ—˜ȱŽ—“˜¢ȱ‘ŽȱœŠ–Žȱ›’‘œȱŠœȱ–Ž—ǰȱ Š—ȱŽŸŽ—ȱ ‘Ž—ȱ‘Ž¢ȱ‘Ž•ȱ•Š—ǰȱ’ȱ Šœȱ˜ĞŽ—ȱ™Ž›ŒŽ’ŸŽȱ˜ȱ‹ŽȱŠȱœ’žŠ’˜—ȱ˜ȱ•˜˜”’—ȱŠĞŽ›ȱ‘Žȱ property while a son was young or until an “appropriate” male in the family could take over. śȲȱ ˜ȱ Š—ȱ’••ŠŽȱŗŞŜŖǯȱȱŠ–ȱ›ŠŽž•ȱ˜ȱŠ›’Œ”ȱ ŠœŽȱ˜›ȱ™˜’—’—ȱ–Žȱ˜ȱ‘’œȱŽŽǯȱ‘Žȱ texts quoted here are my direct translations of the original wordings, remaining as faithful to the Chinese language structure as possible. ŜȲȱ —ŽŽǰȱŽ›ŠŠȱ ’›˜Š”’ȱǻŗşŞşǼȱœŽŽœȱdian and huomai as two ways of referring to the same transaction, the use of the terms depending on the geographical area where the transaction

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Kentaro Matsubara

Šȱ‘Žȱ•Š—ȱŠ¡Š’˜—ȱœ¢œŽ–ȱž—Œ’˜—Žȱ˜ȱ”ŽŽ™ȱ›ŠŒ”ȱ˜ȱ ‘˜ȱ˜ —Žȱ ŽŠŒ‘ȱ›ŠŒȱ˜ȱ•Š—ǰȱ‘Žȱ’쎛Ž—ŒŽȱ‹Ž ŽŽ—ȱhuomai and dian might have beŒ˜–Žȱœ’—’ęŒŠ—ǯȱ ˜ ŽŸŽ›ǰȱ‘ŽȱŠ••˜ŒŠ’˜—ȱ˜ȱ‘Žȱ•Š—ȱŠ¡ȱž—Ž›ȱ‘Žȱ’—ȱ did not operate in such a way as to take each land transaction into account. As a result, the land tax owed by a particular person or household did not correspond to the actual property that this party held; thus, whether a ™Š›’Œž•Š›ȱ™•˜ȱ˜ȱ•Š—ȱ Šœȱ‘Ž•ȱ‹¢ȱ–˜›ŠŽȱ˜›ȱ•’ŸŽȱœŠ•Žȱ Šœȱ—˜ȱ›ŽĚŽŒŽȱ ’—ȱ‘Žȱ•Š—ȱŠ¡ȱ‹ž›Ž—ȱǻŠœž‹Š›ŠȱŘŖŖŚǰȱŒ‘Š™ǯȱŗǼǯȱ The categories of mai, huomai, juemai, and dian can be found in land deeds throughout Qing China, and the deeds appear to be standardized ǻ ’œ‘’–˜˜ȱ ’˜ȱ ŗşşřǰȱ ŝşřǼǯȱ —¢ȱ ’œŒžœœ’˜—ȱ ˜ȱ •Š—ȱ ›Š—œŠŒ’˜—œȱ ’—ȱ ‘Žȱ ’—ȱ‘Šœȱ˜ȱŠŒŒ˜ž—ȱ˜›ȱ‘ŽȱžœŽœȱ˜ȱ‘ŽœŽȱœ™ŽŒ’ęŒȱŒŠŽ˜›’Žœǯȱ There were also tenancy agreements between those parties holding certain land rights, either as yezhu or dianzhu, and parties wishing to pay a rent and use the land. Such categories as pidian ᡍԗ and zhaodian ᢯ԗ would be used for these tenancy transactions. Although tenants might struggle for certain rights, the basic categories implied that the tenant’s ›’‘œȱ’ȱ—˜ȱŠěŽŒȱ‘Žȱ™˜œ’’˜—ȱ˜ȱŽ’‘Ž›ȱ‘Žȱyezhu or the dianzhu. Limitations to Selling and Mortgaging Land Whereas the same categories were widely used for land transactions throughout Qing China, actual land deeds reveal that these transactions were not conducted in an open environment where property rights could ‹Žȱ›Š—œŽ››Žȱ˜ȱ‘Žȱ™Š›¢ȱ‘Šȱ˜ěŽ›Žȱ‘Žȱ‘’‘Žœȱ™›’ŒŽǯȱȱ¢™’ŒŠ•ȱŽŽȱ  ˜ž•ȱŒ˜—Š’—ȱœžŒ‘ȱ™‘›ŠœŽœȱŠœȱ‘Žȱ˜••˜ ’—DZȱȃǻ‘ŽȱŸŽ—˜›Ǽȱꛜȱ’—Ÿ’Žȱ the elder brothers, uncles, cousins, and so forth (as prospective purchasŽ›œǼǰȱ‹žȱŽŠŒ‘ȱ’ȱ—˜ȱ‘ŠŸŽȱŽ—˜ž‘ȱ–˜—Ž¢ȱ˜ȱŠ”Žȱ˜ŸŽ›ȱ‘Žȱ•Š—ǯȱЎ›ȱ‘Šǰȱ ‘Ž¢ȱ Ž›ŽȱŠ‹•Žȱ˜ȱŠœ”ȱ ž˜ȱ’žȱ˜ȱ‹Žȱ–’•Ž–Š—ǰȱŠ—ȱ˜ěŽ›Žȱ‘Žȱ•Š—ȱ˜ȱ ’ȱŠ—ȱ ’Žȱ˜—ȱǽ’ȱŠ—“’ŽȱŠ—ȱ’—ȱŠ—Š›’—Ǿǰȱ ‘˜ȱ ˜ž•ȱŠȱ’ȱ˜ȱ‘Ž’›ȱ œŠŒ›’ęŒ’Š•ȱ™›˜™Ž›¢ȱŠ—ȱŽ¡Ž›Œ’œŽȱŒ˜—›˜•ȱ˜ŸŽ›ȱ’DZȱ‘Ž¢ȱŒ˜—œŽ—Žȱ˜ȱ‹ž¢ȱ‘Žȱ ™›˜™Ž›¢Ȅȱ ǻ˜ȱ Š—ȱ ’••ŠŽȱ ŗŞŜŖǼǯȱ ‘Žȱ —Šž›Š•ȱ ’–™•’ŒŠ’˜—ȱ ’œȱ ‘Šȱ ›Ž•Štives had priority over other parties to purchase property, and this right could be exercised in such a way as to impede the sale of land outside the family. Moreover, these rights could also be held by neighbors and previous owners, working as an encumbering factor when selling land (Niida ˜‹˜›žȱŗşşŗǰȱřśşǼǯȱ One might not accept the macro explanation that these rights of priority, traceable to the mid-eighth century, were premodern rights that gradually eroded over a period of more than a thousand years through the growth of individual freedom to dispose of one’s property (Niida Noboru 1991, řŚřȮřŚŚǼǯȱ’‘Ž›ȱ Š¢ǰȱœžŒ‘ȱŠ—ȱŽ¡™•Š—Š’˜—ȱ˜Žœȱ—˜ȱœžĜŒŽȱŽ’‘Ž›ȱ˜ȱ–Š”Žȱ took place.

Traditional Land Rights

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sense of the institution or to understand the rationale of each economic deŒ’œ’˜—ȱ˜ȱŒ˜–™•¢ȱ ’‘ȱǻ˜›ȱ’—˜›ŽǼȱ‘’œȱ™›ŠŒ’ŒŽǯȱ˜›ȱœžŒ‘ȱŠ—ȱž—Ž›œŠ—’—ǰȱ the social circumstances under which family members or neighbors might have tried to exercise these rights will need to be reconstructed. Another slightly less well-known limitation can be perceived in an˜‘Ž›ȱ™‘›ŠœŽǰȱ˜ž—ȱ’—ȱŠȱŽŽȱ˜ȱŠ‹œ˜•žŽȱœŠ•Žȱ›˜–ȱŗŞřŜǯȱ‘’œȱŽŽǰȱŠĞŽ›ȱ œŽĴ’—ȱ˜žȱ‘ŽȱŒ˜—’’˜—œȱ˜ȱ‘ŽȱœŠ•ŽǰȱœŠŽœȱ‘Šȱȃ‘Ž›Žȱ’œȱ—˜ȱœ’žŠ’˜—ȱ˜ȱ zhunzhe ⑪ᡬ,” that is, the land transaction is not being conducted in lieu of the payment of a bad debt owed by the vendor.7 This phrase is set in the context of listing the factors that might impede the sale and of guarantee’—ȱ‘Šȱ‘ŽœŽȱŠŒ˜›œȱ˜ȱ—˜ȱŽ¡’œDZȱ‘Ž›ŽȱŠ›ŽȱŒ•ŠžœŽœȱ˜ȱ‘ŽȱŽěŽŒȱ‘Šȱ‘Žȱ relatives have not been kept in the dark and that the property is not common property belonging to a wider descent group. The notion that zhunzhe was a practice to be avoided appears to be at odds with many records of long-term land transactions, in which land is taken as security for a loan, taking the form of dian or redeemable sale. In these cases, the dianzhu or purchaser gradually assumes greater control ˜ŸŽ›ȱ‘Žȱ™›˜™Ž›¢ǰȱŒž•–’—Š’—ȱ’—ȱŠ—ȱŠ‹œ˜•žŽȱœŠ•ŽȱǻŠœž‹Š›ŠȱŘŖŖŖŠǼǯȱ‘’œȱ tension is tightly connected to the problematic nature of another category widely observed in Qing land transactions, the zhaojia. Zhaojia is a practice in which the vendor can demand a supplemenŠ›¢ȱ™Š¢–Ž—ȱ˜—ȱ˜™ȱ˜ȱ‘Žȱ˜›’’—Š•ȱ•Š—ȱ™›’ŒŽȱŠĞŽ›ȱŒ˜–™•Ž’—ȱ‘ŽȱœŠ•Žǯȱ This practice would make sense where the sale was a live one. As long as the land was worth the total amount paid, and as long as this sum could ‹Žȱ›Ž™Š’ȱǻ’—ȱ™ž›Œ‘Šœ’—ȱ‹ŠŒ”ȱ‘Žȱ•Š—ȱŠȱ‘ŽȱŽ—ȱ˜ȱ‘ŽȱŽ›–Ǽǰȱ‘Žȱ™ž›Œ‘ŠœŽ›ȱŒ˜ž•ȱŽěŽŒ’ŸŽ•¢ȱ•˜Š—ȱŠ’’˜—Š•ȱ–˜—Ž¢ȱ˜ȱ‘ŽȱŸŽ—˜›ȱ’—ȱ‘’œȱ˜›–ǰȱ although the “interest rate” (that is, the rent yielded from the property set ŠŠ’—œȱ‘Žȱ˜Š•ȱŠ–˜ž—ȱ™Š’ȱ˜ȱ‘ŽȱŸŽ—˜›Ǽȱ–’‘ȱ˜ȱ˜ —Dzȱ‘’œȱ¢™Žȱ˜ȱ zhaojiaȱ ˜ž•ǰȱŠœȱ’—’ŒŠŽȱ™›ŽŸ’˜žœ•¢ǰȱ˜ĞŽ—ȱ•ŽŠȱ˜ȱŠ—ȱŠ‹œ˜•žŽȱœŠ•Žǯȱ Kishimoto Mio observed that in many such cases the total amount paid at the point of the absolute sale showed a certain consistency in that it Ž—Žȱ˜ȱ•Š›Ž•¢ȱ›ŽĚŽŒȱ‘ŽȱŠŸŽ›ŠŽȱ•Š—ȱ™›’ŒŽȱŠȱ‘Žȱ’–Žǯȱ ˜ ŽŸŽ›ǰȱœ‘Žȱ Š•œ˜ȱ—˜Žȱ‘Šȱ‘ŽȱŸŽ—˜›ȱ˜ĞŽ—ȱŒ˜—’—žŽȱ˜ȱŠœ”ȱ‘Žȱ™ž›Œ‘ŠœŽ›ȱ˜›ȱŠȱœž™™•Ž–Ž—Š›¢ȱ™Š¢–Ž—ȱŽŸŽ—ȱŠĞŽ›ȱŠ—ȱŠ‹œ˜•žŽȱœŠ•Žȱ ŠœȱŒ˜–™•ŽŽǯȱ ’œ‘’–˜˜ȱ ǻŗşşŝ‹ǼȱŠĴŽ–™Žȱ˜ȱŽ¡™•Š’—ȱ‘’œȱ‹¢ȱ›ŽŽ››’—ȱ˜ȱœ˜Œ’Š•ȱŠŒ˜›œǰȱœžŒ‘ȱŠœȱ‘Žȱ purchaser’s need to have his land rights continuously guaranteed by the former owner in the wider local community. Such an explanation, while at odds with the typical wording of a deed of absolute sale, implies there was a constraint whereby the vendor of land might retain certain claims ˜ȱ•Š—ȱŽŸŽ—ȱŠĞŽ›ȱ’œȱœŠ•Žǯȱ›˜–ȱ‘ŽȱŸ’Ž ™˜’—ȱ˜ȱ‘Žȱ–Š›”Žǰȱ‘’œȱ•’–’Žȱ ŝȲȱ Deed held at the Institute of Oriental Culture, University of Tokyo, cited in Kishimoto Mio 1993, 772.

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Kentaro Matsubara

the purchaser’s options in trying to sell the property to yet another party, since his rights over the land depended on the original vendor. Underregistration, both of taxable land and of transactions, made it necessary ˜›ȱ‘Žȱ˜ŸŽ›—–Ž—ȱ˜ȱ›Ž•¢ȱ˜—ȱŽŸ’Ž—ŒŽȱ™›˜žŒŽȱ‹¢ȱ—˜—˜ĜŒ’Š•ȱ™Š›’Žœȱ’—ȱ ˜›Ž›ȱ ˜ȱ ŠœŒŽ›Š’—ȱ ǻŠ—ȱ žŠ›Š—ŽŽǼȱ •Š—ȱ ›’‘œǯȱ ˜›Ž˜ŸŽ›ǰȱ Šȱ –Š’œ›ŠŽȂœȱ ›ž•’—ǰȱ˜ȱ‹ŽȱŽěŽŒ’ŸŽǰȱ‘Šȱ˜ȱŠ’—ȱ‘ŽȱŒ˜–™•’Š—ŒŽȱ˜ȱ‹˜‘ȱ™Š›’Žœȱǻ‘’Šȱ ‘ž£˜ȱŗşŞŚǰȱŘśŘȮŘśśǼǯȱ—ȱ˜‘Ž›ȱ ˜›œǰȱ‘Žȱ™’Œž›Žȱ‘ŠȱŽ–Ž›Žœȱ‘Ž›Žȱ’œȱ‘Šȱ if a party intended to secure its land rights, these rights had to be secured and guaranteed primarily in a nongovernmental context, involving the immediate parties to the transaction giving the land rights, as well as the local communities surrounding these parties. Land Transactions and Social Structuring in the New Territories of Hong Kong One Field, Two Owners The customary practice of yitian liangzhu ϔ⬄ϵЏǰȱȃ˜—Žȱꎕǰȱ ˜ȱ˜ —ers,” is well known to Chinese historians. Usually, this practice meant dividing the land rights into “surface” (tianmian ⬄䴶ǼȱŠ—ȱȃœž‹œ˜’•Ȅȱǻtiangen ⬄ḍǼǯȱ—ȱ™›’—Œ’™•Žǰȱ‘Žȱœž‹œ˜’•ȱ˜ —Ž›ȱŒ˜••ŽŒŽȱŠȱ›Ž—ȱŠ—ȱ™Š’ȱ‘ŽȱŠ¡ȱ˜—ȱ the land, while the surface owner, who could not be removed by the subsoil owner, managed the land. The surface owner was free to dispose of his right without the subsoil owner’s consent. This right, combined with the subsoil owner’s inability to remove him, made the surface right a kind of ownership rather than a mere tenant’s right. This form of landholding has interested scholars for several reasons. For historians interested in the ȃ–˜Žȱ˜ȱ™›˜žŒ’˜—ȄȱŠœȱ›ŽĚŽŒŽȱ’—ȱ‘Žȱ•Š—‘˜•’—ȱŠ››Š—Ž–Ž—œǰȱŠ—ȱ for those concerned with whether “modern ownership rights” developed in traditional China, yitian liangzhu showed that one could not envisage either a simple landlord-tenant relationship or a modern ownership that implied unrestricted control over land by a landlord. One aspect of this œŒ‘˜•Š›œ‘’™ȱ ’œȱ ‘Šȱ ‘ŽœŽȱ ‘’œ˜›’Š—œȱ ǻŠ•˜—ȱ  ’‘ȱ ˜‘Ž›œǼȱ ‘ŠŸŽȱ Ž—Ž›Š••¢ȱ tended to understand yitian liangzhu as an arrangement between an individual surface owner and an individual subsoil owner, without bringing ’—ȱ˜‘Ž›ȱ™Š›’Žœȱ˜›ȱ•˜ŒŠ•ȱŒ˜––ž—’’Žœȱǻ’’Šȱ˜‹˜›žȱŗşşŗǰȱŗŜŚȮŘŗśDzȱŽ›ŠŠȱ

’›˜Š”’ȱŗşŞřǼǯȱ Another context in which scholars have been interested in yitian liangzhu is that of property rights and social formations in the New Territories ˜ȱ ˜—ȱ ˜—ǯȱ’Ÿ’’—ȱ•Š—ȱ›’‘œȱ’—˜ȱœž›ŠŒŽȱŠ—ȱœž‹œ˜’•ȱ Šœȱ ’Ž•¢ȱ ˜‹œŽ›ŸŽȱ’—ȱ‘ŽȱŠ›ŽŠǰȱŠ—ȱŒ˜•˜—’Š•ȱ˜ĜŒ’Š•œȱŠȱ‘Žȱ˜žœŽȱ˜ȱ›’’œ‘ȱ›ž•Žȱ›Žported that the arrangement was at the core of local problems about land‘˜•’—ȱǻŽ™˜›ȱŗşŖŖǰȱŗȮŚŗDzȱ˜–Žȱ˜ŽœȱŗşŖŗǼǯȱ‘ŽȱŒ˜•˜—’Š•ȱ˜ŸŽ›—–Ž—ȱ established the Land Court to deal with these problems. Surface-subsoil

Traditional Land Rights

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˜ —Ž›œ‘’™ȱ  Šœȱ ŽěŽŒ’ŸŽ•¢ȱ Žœ›˜¢Žȱ Šœȱ Šȱ ›Žœž•Dzȱ ‘˜ ŽŸŽ›ǰȱ ›ŽŒ˜›œȱ Œ›Žated through the activities of the Land Court provide historical material of unique quality. Using both these records and data from intensive an‘›˜™˜•˜’ŒŠ•ȱꎕ ˜›”ǰȱ›ŽœŽŠ›Œ‘Ž›œȱ‘ŠŸŽȱ˜ž—ȱ–žŒ‘ȱ˜—ȱyitian liangzhu in the New Territories. Their work takes into account not just individual signatories to land deeds but relationships between lineages and villages, as well as forms of tax payment and rent collection (Watson 1977; Faure ŗşŞŜDzȱŠ•–Ž›ȱŗşŞŝǼǯȱ ’Œ‘ŠŽ•ȱŠ•–Ž›ȱ‘Šœȱ˜ž•’—Žȱ꟎ȱœ˜Œ’Š•ȱ™›˜ŒŽœœŽœȱ ‘Ž›Ž‹¢ȱyitian liangzuȱŒ˜ž•ȱŒ˜–ŽȱŠ‹˜žDZȱǻŗǼȱ‘Žȱ’–™Ž›’Š•ȱ›Š—ȱ˜ȱ•Š›Žȱ›ŠŒœȱ˜ȱž—Œž•’ŸŠŽȱ •Š—ǰȱ  ’‘ȱ ‘Žȱ ›Š—ŽŽœȱ ›ŽŒ›ž’’—ȱ  ˜›”Ž›œȱ ǻŽŸŽ—žŠ•ȱ œž›ŠŒŽȱ ‘˜•Ž›œǼȱ ˜ȱ ’—‘Š‹’ȱŠ—ȱŒž•’ŸŠŽȱ‘Žȱ•Š—DzȱǻŘǼȱ‘ŽȱŠ››’ŸŠ•ȱ˜ȱ’––’›Š—œǰȱŠŒ’—ȱ˜—ȱ‘Ž’›ȱ ˜ —ȱ’—’’Š’ŸŽǰȱ˜ȱœŽĴ•ŽȱŠ—ȱ˜™Ž—ȱŠ—ȱŠ›ŽŠȱ˜ȱ ŠœŽ•Š—ȱŠ—ȱŒ˜–Žȱ˜ȱŽ›–œȱ  ’‘ȱ‘ŽȱŽ—›Ž—Œ‘Žȱ•’—ŽŠŽœȱǻ ‘˜ȱ‹ŽŒ˜–Žȱœž‹œ˜’•ȱ‘˜•Ž›œǼDzȱǻřǼȱ‘Žȱ–Ž–bers of powerful lineages discovering tax evasion on land (over which the ™˜ Ž›ž•ȱ•’—ŽŠŽȱ’—ȱšžŽœ’˜—ȱ‘Šœȱ—˜ȱŒ•Š’–ǼȱŠ—ȱ‘Ž—ȱ˜›Œ’—ȱ‘ŽȱŒž•™›’œȱ˜ȱ ’ŸŽȱž™ȱ›’‘œȱ˜ȱ‘Žȱœž‹œ˜’•DzȱǻŚǼȱ’••ŽŠ•ȱŠ¡ȬŠ›–’—ȱŠ›ŽŽ–Ž—œǰȱ”—˜ —ȱŠœȱ baolan ࣙᬀDzȱŠ—ȱǻśǼȱŠȱŸŠ›’Ž¢ȱ˜ȱŒ˜—›ŠŒžŠ•ȱ™›ŠŒ’ŒŽœȯ‘ŽœŽȱ’—Œ•žŽȱž—›Žistered sales where the vendor continued to pay tax, the “perpetual lease” that functioned either as a hidden sale or a genuine lease, and sales where ‘ŽȱŸŽ—˜›ȱ ˜ž•ȱ›Ž–Š’—ȱ˜—ȱ‘Žȱ•Š—ȱŠœȱŠȱŽ—Š—ȱǻŠ•–Ž›ȱŗşŞŝǰȱŗřȮřŘǼǯȱ The relationship between this form of divided ownership and the categories of land transaction used widely in Qing China—described earlier ’—ȱ‘’œȱŒ‘Š™Ž›ȯ’œȱ›Š‘Ž›ȱŒ˜–™•Ž¡ǯȱ‘ŽȱęĞ‘ȱ™›˜ŒŽœœȱŽœŒ›’‹Žȱ‹¢ȱŠ•–Ž›ȱ clearly indicates a variety of transactions that could lead to this arrange–Ž—ǯȱ˜›Ž˜ŸŽ›ǰȱ’—ȱ‘Žȱꛜȱ˜ž›ȱ™›˜ŒŽœœŽœȱŠœȱ Ž••ǰȱ’ȱ‘ŽȱŠ›ŽŽ–Ž—ȱ‹Ž ŽŽ—ȱ‘Žȱœž‹œ˜’•ȱŠ—ȱœž›ŠŒŽȱ˜ —Ž›œȱ Šœȱ ›’ĴŽ—ȱ˜ —ǰȱ’ȱ’œȱ›ŽŠœ˜—Š‹•Žȱ to assume that some category of land transaction—be it mortgage, sale, or Ž—Š—Œ¢ȯ ˜ž•ȱ‘ŠŸŽȱ‹ŽŽ—ȱžœŽǯȱ ˜ ŽŸŽ›ǰȱŸŽ›¢ȱ•’Ĵ•Žȱ–ŠŽ›’Š•ȱ›Ž–Š’—œȱ˜—ȱ how these agreements between surface and subsoil owners were formu•ŠŽǯȱ–˜—ȱ ‘Žȱ œž›Ÿ’Ÿ’—ȱ ŽŽœȱ ›Š—’—ȱ ǻ ‘Šȱ Š™™ŽŠ›ȱ ˜ȱ ‹ŽǼȱ œž›ŠŒŽȱ rights, it is possible to see two types, according to the categories used for the transaction. ‘Žȱꛜȱ¢™ŽȱŽ¡™•’Œ’•¢ȱžœŽœȱŠȱȃ™Ž›–Š—Ž—ȄȱŽ—Š—Œ¢ǯȱ‘Ž›Žȱ’œȱŠȱ Ž••Ȭ known deed issued by the Sheung Shui Lius to the Chung lineage of Tai Om Shan in 1733.8 In this deed, a Chung Yuk-hing is described as tenant dianren ԗҎ, accepting the tenancy rights that enable the opening and cul’ŸŠ’˜—ȱ˜ȱꎕœǯȱ‘ŽȱŽŽȱœ™ŽŒ’ęŽœȱ‘Šȱ’—ȱ›Žž›—ȱ˜›ȱŠȱ˜ —ȱ™Š¢–Ž—ȱ ˜ȱ ŗȱ ŠŽ•ǰȱ Śȱ –ŠŒŽǰȱ Š—ȱ Śȱ ŒŠ—Š›ŽŽ—ȱ Š—ȱ ˜›ȱ ‘Žȱ Š——žŠ•ȱ ›Ž—ȱ ˜ȱ śŖŖȱ ŒŠœ‘ȱ ǻ‘ŠȱŒ˜ž•ȱ—˜ȱ‹Žȱ›Š’œŽǼǰȱ‘ŽȱŽœŒŽ—Š—œȱ˜ȱ‘ž—ȱž”Ȭ‘’—ȱ ˜ž•ȱ‹Žȱ allowed to reclaim, cultivate, and control this land forever and the Lius ŞȲȱ

˜™¢ȱ‘Ž•ȱ‹¢ȱ ǯȱǯȱ Š¢Žœǰȱ’ŸŽ—ȱ˜ȱ‘’–ȱ‹¢ȱ’žȱž—Ȭœ‘Š–ǯ

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Kentaro Matsubara

would not cause trouble or “regret” this transaction at a later date (Faure ŗşŞŜǰȱřŜȮŚŖǼǯȱ‘Ž›ŽŠœȱ‘Žȱ™Ž›™ŽžŠ•ȱ—Šž›Žȱ˜ȱ‘’œȱ•ŽŠœŽȱ’œȱŒ•ŽŠ›ǰȱ‘Ž›Žȱ Ž›Žȱ limits to what the Chungs were allowed to do: toward the end of the deed, there is a clause providing that the Chungs could not “privately transfer ‘Žȱ Ž—Š—Œ¢ȱ ˜ȱ ‘˜œŽȱ  ‘˜ȱ •’ŸŽȱ Š›ȱ Š Š¢ǯȄȱ ŠŸ’ȱ Šž›Žȱ ǻŗşŞŜǰȱ řşȮŚŖǼȱ ‘Šœȱ argued that this clause prevented the Chungs from transferring rights to such parties as other “great surnames” (the magnate lineages, including the Lius themselves, competing for hegemony in what became the New Ž››’˜›’ŽœǼȱ‘Šȱ–’‘ȱŒ‘Š••Ž—Žȱ‘ŽȱŠž‘˜›’¢ȱ˜ȱ‘Žȱ’žœǯȱ‘Žȱ’žœȱž—Ž›took to deal with such problems that might arise between the Chungs and ˜‘Ž›ȱ•˜ŒŠ•ȱ’—‘Š‹’Š—œȱŠ—ȱ Ž›ŽȱŒ•ŽŠ›•¢ȱ•˜˜”’—ȱ˜ȱŽ¡Ž›ȱ‘Ž’›ȱ’—ĚžŽ—ŒŽȱ’—ȱ the area. In this example, it appears that local politics imposed legal limits ǻ˜ȱ‘ŽȱŽ¡Ž—ȱ‘Šȱ‘ŽȱŽŽȱŒ˜ž•ȱ‹ŽȱœŠ’ȱ˜ȱ‹Žȱ•ŽŠ••¢ȱ‹’—’—Ǽȱ˜—ȱ‘Žȱ•Š—ȱ rights of the “surface owners.” Such limits were much more evident in the second type of formulation for granting surface rights, as can be found in a deed from the village of Pui O on Lantau Island.9 The Lei lineage of Pik Sha Chan issued a tenancy deed to a Cheung Man-shing, also described as dianren, and the wording of the deed does not suggest an arrangement of surface ownership at all. ‘ŽȱŽ›–ȱ˜ȱ‘ŽȱŽ—Š—Œ¢ȱ’œȱę¡ŽȱŠȱŽ—ȱ¢ŽŠ›œȱǻŠȱ‘ŽȱŽ—ȱ˜ȱ ‘’Œ‘ȱŠȱ—Ž ȱ •ŽŠœŽȱŒ˜ž•ȱ‹Žȱ’œœžŽǼǰȱŠ—ȱ‘ŽȱŽ—Š—ȱ’œȱ˜›‹’Ž—ȱ˜ȱ˜™Ž—ȱ—Ž ȱ•Š—ȱ˜›ȱ to allow relatives or friends to live in the village. The reason this deed can be said to have granted surface rights is that in reality, the Cheung •’—ŽŠŽȱœŽĴ•Žȱ’—ȱ‘ŽȱŸ’••ŠŽȱ™Ž›–Š—Ž—•¢ǰȱŠ—ȱ‘Žȱ•ŽŠœŽȱŒ˜—’—žŽȱ˜ȱ‹Žȱ renewed for generations throughout the eighteenth and nineteenth centuries. Moreover, the Lei lineage did not succeed in preventing the Cheungs from reclaiming new land and eventually challenging its authority by ap™ŽŠ•’—ȱ ˜ȱ ˜ĜŒ’Š•œȱ ǻŠž›Žǰȱ ž”ǰȱ Š—ȱ ȱ ŗşŞŜǰȱ ŚřǼǯȱ Ž›Žǰȱ ‘Žȱ ™›ŠŒ’ŒŽȱ ˜ȱ yitian liangzhu was created by local interlineage politics, overriding the ǻ•ŽŠ•Ǽȱ•’–’Š’˜—œȱœ™ŽŒ’ꮍȱ’—ȱ‘ŽȱŽŽǯ Both in name, and in the substantive arrangement of land rights, the practice of yitian liangzhu appears to have been basically the same in the Ž ȱ Ž››’˜›’Žœȱ Šœȱ Ž•œŽ ‘Ž›Žȱ ’—ȱ ˜ž‘ȱ ‘’—Šǯȱ ˜ ŽŸŽ›ǰȱ  ‘Šȱ  Žȱ ŒŠ—ȱ observe in the New Territories is the interaction between the formal ar›Š—Ž–Ž—œȱœ™ŽŒ’ꮍȱ’—ȱŽŽœȱŠ—ȱ‘ŽȱŠŒžŠ•ȱ¢—Š–’Œœȱ˜ȱ•˜ŒŠ•ȱ™˜•’’Œœǯȱ Ž›ŠŠȱ ’›˜Š”’ȱǻŗşŞřǼǰȱ ˜›”’—ȱ ’‘’—ȱ‘ŽȱŒ˜—ŒŽ™žŠ•ȱ›Š–Ž ˜›”ȱ˜ȱ•Š—ȱ transactions associated with yitian liangzhu, has argued that analogous to “live” and “absolute” sales, there were “live” and “absolute” tenancies, the surface-subsoil form of ownership resulting from this absolute tenancy. Whether this formulation is a valid reconstruction of the conceptual framework in the cases cited by Terada, the New Territories cases show şȲȱ

˜™¢ȱ’—ȱ™˜œœŽœœ’˜—ȱ˜ȱ ǯȱǯȱ Š¢Žœǯ

Traditional Land Rights

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that the relation between the social arrangement of yitian liangzhu and the ˜›–Š•ȱŒŠŽ˜›’Žœȱ“žœ’¢’—ȱ’ȱ Šœȱ—˜ȱŒ•ŽŠ›ȱŒžǯȱ’쎛Ž—ȱŒŠŽ˜›’ŽœȱŒ˜ž•ȱ be used in transactions underpinning the same arrangement, while difŽ›Ž—ȱ œ˜Œ’Š•ȱ Š››Š—Ž–Ž—œȱ Œ˜ž•ȱ ‹Žȱ ž—Ž› ›’ĴŽ—ȱ ‹¢ȱ ‘Žȱ œŠ–Žȱ ŽŽȱ ˜ȱ Ž—Š—Œ¢ǯȱ‘Žȱ ›’ĴŽ—ȱŽŽȱ Šœȱ—Ž’‘Ž›ȱŠ—ȱŠŒŒž›ŠŽȱ›ŽĚŽŒ’˜—ȱ˜ȱ‘Žȱœ˜Œ’Š•ȱ arrangements nor a document dictating the exact conditions of a particular transaction. The Social Environment of Land Transactions in the New Territories That deeds did not cover all categories and conditions or social arrange–Ž—œȱ˜Žœȱ—˜ȱ–ŽŠ—ȱ‘Šȱ‘Žȱ ›’ĴŽ—ȱŽŽȱ Šœȱ’—œ’—’ęŒŠ—ȱ˜›ȱ‘Šȱ‘Ž›Žȱ was no internal coherence in the use of land-transaction categories in the New Territories. What it does mean is that the categories of land transac’˜—ȱ Š—ȱ ‘Žȱ  ›’ĴŽ—ȱ ŽŽȱ ‘Šȱ –˜›Žȱ Œ˜–™•Ž¡ȱ ›˜•Žœȱ ˜ȱ ™•Š¢ȱ ’—ȱ ‘Žȱ •˜ŒŠ•ȱ social dynamics. These dynamics included such processes as competition among subsoil-holding great surnames, later immigrants trying to establish themselves and challenge the political supremacy of the great surnames, and the material base of each party being secured through land ›Š—œŠŒ’˜—œȱǻŠž›ŽȱŗşŞŜǼǯȱ A provision of “permanence” in a deed of tenancy would encourage ‘ŽȱŽ—Š—Ȯœž›ŠŒŽȱ‘˜•Ž›ȱ˜ȱ’—ŸŽœȱ’—ȱ‘Žȱ•Š—ǰȱ˜ĞŽ—ȱŠœȬ¢Žȱ—˜ȱ›ŽŒ•Š’–Žȱ by the landlord–subsoil holder. The deed then would facilitate the process ˜ȱœŽĴ•Ž–Ž—ȱ˜›ȱ‘ŽȱŽ—Š—ǯȱŽŒž›’—ȱŽ—Š—œȱ˜›ȱœžŒ‘ȱ•Š—ȱ Šœȱ—ŽŒŽœœŠ›¢ȱ ˜›ȱ‘Žȱœž‹œ˜’•ȱ‘˜•Ž›ȱǻ‘Ž—ŒŽȱ‘Žȱ ’Žœ™›ŽŠȱžœŽȱ˜ȱ‘ŽœŽȱ™›ŠŒ’ŒŽœǼǰȱ‹žȱ the establishment of an independent group on the land involved political risk. Such a provision as that found in the Tai Om Shan deed, that land rights could not be transferred to “those who live far away,” could be used to alleviate the risk of outside parties eroding the subsoil holder’s material base. Conversely, such a deed as the Lantau one would present obstacles ’—ȱ‘Žȱ™›˜ŒŽœœȱ˜ȱ‘Žȱ‘Žž—œȱœŽĴ•Ž–Ž—ǯȱ—ȱ‘ŽœŽȱŒŠœŽœǰȱŽŽœȱ Ž›ŽȱžœŽȱ with the hope of checking, or preventing, social changes, at the cost of reducing the incentive for their tenants to reclaim and enhance the land in šžŽœ’˜—ǯȱ’‘Ž›ȱ Š¢ǰȱ‘Žȱ™›˜Ÿ’œ’˜—œȱ˜ȱ‘Žȱ ›’ĴŽ—ȱŽŽȱ ˜ž•ȱ—˜ȱ—ŽŒŽœsarily be kept, and the enforcement of contracts was not a strong point of the Qing judicial system. Such circumstances, where the categories used in land transactions appear to have been intricately connected to local politics, had implications for the market as well. In a previous analysis of village account books in the New Territories, I showed that land transactions in the village social context were part of long-term relationships involving loans, intermar›’ŠŽǰȱŠ—ȱŽ››’˜›¢ȱǻŠœž‹Š›ŠȱŘŖŖŚǰȱŒ‘Š™ǯȱŚǰȱŠ™™ǯȱŜǼǯȱ—ȱ˜‘Ž›ȱ ˜›œǰȱ•Š—ȱ transactions tended to occur within a limited group where the long-term

ŗśŞ

Kentaro Matsubara

›Ž•Š’˜—œȱ Ž›ŽȱŽœŠ‹•’œ‘Žǯȱ˜›Ž˜ŸŽ›ǰȱŠž›ŽȂœȱœž’Žœȱ˜—ȱœŽĴ•Ž–Ž—ȱ›’‘œȱ suggest that even if one purchased land in the New Territories, unless ‘Žȱ™ž›Œ‘ŠœŽ›ȱ‘Šȱ‘Žȱ›’‘œȱ˜ȱœŽĴ•Ž–Ž—ǰȱ‘’œȱžœŽȱ˜ȱ‘Žȱ•Š—ȱ ˜ž•ȱ‹Žȱ seriously limited. Although he could receive rent income, he would not be able to live on the land with the full rights of an inhabitant of the area. Such factors as these would quickly limit the parties to which land would actually be sold. Consider the following well-documented case from the New Terri˜›’Žœǰȱ ˜—ȱ ‘Žȱ ›Ž•Š’˜—œȱ Š–˜—ȱ •Š—ȱ ›Š—œŠŒ’˜—œǰȱ  ›’ĴŽ—ȱ ŽŽœǰȱ Š—ȱ ‘Žȱ œ‘’Ğ’—ȱ‹Š•Š—ŒŽœȱ˜ȱŽ››’˜›’Š•ȱ™˜ Ž›ǯ The Ancestral Property of the Tuen Mun Tos The Lineage and the To Ka-yi tso The case of To Kan Chi and Others v. Pui Man Yau and Others revolved around the To 䱊ȱ•’—ŽŠŽȱ˜ȱžŽ—ȱž—ȱŠ—ȱ’œȱŒ•Š’–œȱ˜ŸŽ›ȱ‘Žȱ‹Ž—ŽęŒ’Š•ȱ ownership of a Daoist temple and Buddhist monastery. One interest of this case lay in the traditional forms of land transaction that were used by the Tos and how these transactions might substantiate claims to ownership in the present (To Kan Chi and Others v. Pui Man Yau and OthersȱŗşşŘǼǯ ‘Žȱ˜ȱ•’—ŽŠŽȱ‘ŠȱœŽĴ•Žȱ’—ȱžŽ—ȱž—ȱ›˜–ȱŠȱ•ŽŠœȱ‘Žȱ’—ȱ¢—Šœ¢ǯȱ A third-generation member of this lineage was To Ka-yi 䱊௝‫۔‬, who is œŠ’ȱ˜ȱ‘ŠŸŽȱ’Žȱ’—ȱŗŚśŚǯȱ˜ȱ ŠȬ¢’ȱ‘Šȱ˜ž›ȱœ˜—œǰȱŠ—ȱ‘›ŽŽȱ˜ȱ‘’œȱœ˜—œȱ‹Žcame the founders of the three branches into which the lineage is divided to this day.10 Thus, all male members of the lineage were considered direct descendants of Ka-yi and could claim rights to the property held by the ancestral estate (called tsoǰȱ‘ŽȱœŠ–ŽȱŠœȱȃŠ—ŒŽœ˜›ȄǼȱŽœŠ‹•’œ‘Žȱ’—ȱ ŠȬ¢’Ȃœȱ name. This property included the Daoist temple that became a focus of the legal dispute in the 1990s.11 The Daoist temple had an abbot named Pui Man-yau, who had been appointed by his predecessor to succeed him when he died, which happened in 1989. The line of abbots could be traced back to one Chan Chunting, who had acquired certain property rights from the To lineage in 1914. One major issue in the dispute was the exact nature of the property rights that had been transferred in the transaction of 1914: whether the Tos had performed an outright sale allowing Chan Chun-ting to be the absolute owner or whether the To Ka-yi tso owned the temple. ŗŖȲȱ The fourth branch is recorded to have moved away from Tuen Mun, with a descendant living in Dapuxu Nankeng ໻㥚๳फഥȱ Šœȱ ˜ȱ ŗŞŞŖȱ ǻŒŒ˜ž—ȱ ˜˜”ȱ ŗŞŞŖǰȱ ŚǼǯȱ ‘Žȱ ™ŠŽȱ numbering here of the account book is the same as that used in court. ŗŗȲȱ The complex including the temple also had a Buddhist monastery, which had been ŽœŠ‹•’œ‘Žȱ ‹ŽŒŠžœŽȱ ˜ȱ ‘Žȱ ꛜȱ Š‹‹˜Ȃœȱ Œ˜—ŸŽ›œ’˜—ȱ ˜ȱ ž‘’œ–ǰȱ ‹žȱ ‘Žȱ Š˜’œȱ Ž–™•Žȱ continued to function; here, for the sake of clarity, I will concentrate on this temple.

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The grant issued in 1914, signed by members of the To lineage, was not one of absolute sale, and the court duly acknowledged this point. One aspect of the case is that the abbot’s control over the property, although based on this transaction, took on a life of its own and eventually evolved to the point where he would claim absolute ownership. However, questions were raised about what property rights the To lineage held before the grant of 1914. An important document here was an account book dated 1880, in  ‘’Œ‘ȱ‘Žȱ–Š—ŠŽ–Ž—ȱ˜ȱŠ—ŒŽœ›Š•ȱ™›˜™Ž›¢ȱǻŒŠ••ŽȱȃœŠŒ›’ęŒ’Š•ȱ™›˜™Ž›¢ǰȄȱ changchan ௫⫶) held by the To Ka-yi tso was recorded. This account book was titled An Account Book to Record the Fair Apportionment of the Shared Š—ŠŽ–Ž—ȱ ˜ȱ ›Š’—ȱ Š¡ȱ ‹•’Š’˜—œȱ Š—ȱ ŠŒ›’ęŒ’Š•ȱ Š—ȱ Š–˜—ȱ ‘Žȱ ‘›ŽŽȱ Fongs of the To Ng Lau Tong.12ȱȃ˜ȱȱŠžȱ˜—Ȅȱ’œȱŠȱtong name for the Kayi tso (Account Book 1880, 4). Property of the tsoȱ’œȱŒ•Šœœ’ꮍȱž—Ž›ȱ ˜ȱœŽ™Š›ŠŽȱ‘ŽŠ’—œǯȱ—Ž›ȱ‘Žȱ ꛜȱ‘ŽŠ’—ǰȱȃ‘Žȱ›˜™Ž›¢ȱ Ž•ȱ‹¢ȱ ŠȬ¢’ȱTsoȱœȱ’œŽȱŽ•˜ ȄȱǻŒŒ˜ž—ȱ Book 1880, 18), there is a list of place-names, with the due rent and the tenants. If there is more than one tenant for a piece of property, the distribution of rent among these tenants is also entered. Tenants include both To lineage members and outside parties, and in some cases particulars of ™Š¢–Ž—ȱŠ›Žȱœ™ŽŒ’ꮍȱǻŒŒ˜ž—ȱ˜˜”ȱŗŞŞŖǰȱŗŞȮŘřǼǯȱ‘ŽȱŽ—Š—œȱ˜ȱ‘ŽœŽȱ properties are referred to as dianren, and the property rights appear to be of a straightforward landlord-tenant relationship. The second heading, under which the Daoist temple in question falls, is more complex. It reads “The Annual Tax Grain and Silver To Be [Collected and] Paid for the Farmland and Orchards that the Ka-yi Tsoȱ ŽĞȱ and That Are Mortgaged or Perpetually Sold to Other People Is Recorded Ž•˜ ȄȱǻŒŒ˜ž—ȱ˜˜”ȱŗŞŞŖǰȱŘŚǼǯŗř For the phrase “mortgaged or perpetuŠ••¢ȱœ˜•ǰȄȱdianduan ‫݌‬ᮋ, the court referred to a translation “assigned by –˜›ŠŽȱ˜›ȱ™Ž›™Žž’¢ȄȱǻTo Kan Chi and Others v. Pui Man Yau and Others ŗşşŘǰȱ ŜŝȮŜŞǼǯȱ ‘’œȱ  ˜ž•ȱ ‘ŠŸŽȱ ‹ŽŽ—ȱ Šȱ ›Ž–Š›”Š‹•Žȱ žœŽȱ ˜ȱ ‘Žȱ ŒŠŽ˜›’Žœȱ dian and duan (duan being the equivalent of jue), especially given the diŒ‘˜˜–¢ȱœŠŽȱ’—ȱ˜ž›ȱꛜȱœŽŒ’˜—ǰȱ‹Ž ŽŽ—ȱhuo and dian on the one hand and jue or duan on the other. However, since each item of property listed ž—Ž›ȱ‘’œȱ‘ŽŠ’—ȱ’—ȱ‘ŽȱŠŒŒ˜ž—ȱ‹˜˜”ȱ’œȱœ™ŽŒ’ꮍȱŠœȱŽ’‘Ž›ȱdianshou ‫݌‬ফ (taken by mortgage—by the mortgagee) or duan (perpetually sold—to the Tao Wuliutang junpai sanfang fen liangwu changchan dengji bu 䱊Ѩ᷇ූഛ⌒ϝ᠓ߚ㊂ ࢭ௫⫶ⱏ㿬㈓ǰȱ ›ŽŽ››Žȱ ˜ȱ ’—ȱ ‘’œȱ Œ‘Š™Ž›ȱ Šœȱ ȃŒŒ˜ž—ȱ ˜˜”ȱ ŗŞŞŖǯȄȱ ‘Žȱ Œ˜ž›ȱ ŠŸ˜›Žȱ ‘’œȱ ›Š—œ•Š’˜—ȱ˜ȱ‘Žȱ’•Žǰȱœž‹–’ĴŽȱ‹¢ȱŽ¡™Ž›ȱ ’—Žœœȱ—‘˜—¢ȱ’Œ”œȱǻ˜ȱ Š—ȱ‘’ȱŠ—ȱ‘Ž›œȱ v. Pui Man Yau and Others 1992, 67). The preserved copy of this account book was made in 1884. ŗřȲȱ The original Chinese heading reads ௝‫⼪۔‬᠔䙎ϟ‫݌‬ᮁߎ㟛Ҏ⬄೦↢ᑈ䁆ঢ㋡㊂㉇䡔ⱏ 㿬ᮐᕠ. ŗŘȲȱ

ŗŜŖ

Kentaro Matsubara

™ž›Œ‘ŠœŽ›ǼǰȱŠ—ȱ—ŽŸŽ›ȱ‹˜‘ȱŠȱ‘ŽȱœŠ–Žȱ’–Žǰȱ‘Žȱ›Š—œ•Š’˜—ȱ˜ěŽ›Žȱ‘Ž›Žȱ makes more sense. An example of property referred to as mortgaged property is as follows: “Land of the place-name Wai Fan, mortgaged to Leung Gin-luk of ž—ȱž—ȱ Š••ŽȱŸ’••ŠŽDZȱ‘Žȱ›Ž—ȱ’œȱśȱshi 9 duǰȱŠ—ȱŽŠŒ‘ȱ¢ŽŠ›ȱśşŖȱŒŠœ‘ȱ’œȱ owed for rice and silver. Now Lau A-gau has paid 390 cash, and Tsa-sing’s œ˜—ǰȱ’—ȱ‘Žȱ¢ŽŠ›ȱ˜ȱŽ—œ‘Ž—ȱǽŗŞŝŘǾǰȱ™Š’ȱŘŖŖȱŒŠœ‘ǯȱ›˜‘Ž›œȱŠžȱȬœ’—ȱŠ—ȱ ŠžȱȬŠ”ȱ˜ȱž—ȱž—ȱ Š••ŽȱŸ’••ŠŽȱǻ—˜ Ǽȱ˜ ŽȱŚŞŖȱŒŠœ‘ȄȱǻŒŒ˜ž—ȱ˜˜”ȱ ŗŞŞŖǰȱřŖǼǯȱ—ȱ‘’œȱ›Š—œŠŒ’˜—ǰȱ‘Žȱ˜ȱ ŠȬ¢’ȱtso mortgaged the land to Leung ’—Ȭ•ž”ǯȱ‘Žȱ›Ž—ȱ¢’Ž•ȱ˜ȱ‘Žȱ•Š—ȱ Šœȱśȱshi 9 douǯȱȱ’œȱ—˜ȱœ™ŽŒ’ꮍȱ‘˜ ȱ much was due for the initial mortgage or how much was actually paid. ‘žœǰȱ ‘Žȱ Ž¡ŠŒȱ —Šž›Žȱ ˜ȱ ‘Žȱ ™Š¢–Ž—ȱ ˜ȱ śşŖȱ ŒŠœ‘ȱ ’œȱ ž—Œ•ŽŠ›ǯȱ ˜ ŽŸŽ›ǰȱ parties of the Lau surname, from the same walled village as Leung Ginluk, are mentioned as those actually making the payment, and the yield, on the part of the tsoǰȱ’œȱœ™ŽŒ’ꮍǯȱ For an example of property described as “perpetually transferred land” (a translation of the term duantian ᮋ⬄ǼǰȱŠ—ȱŽ—›¢ȱ›ŽŠœȱŠœȱ˜••˜ œDZȱ œ’—ȱ Š—ȱ ž—ȱ ǽŠ˜’œȱ Ž–™•ŽǾȱ Šȱ œ’—ȱ œ‘Š—ȱ ŽŸŽ›¢ȱ ¢ŽŠ›ȱ ›Žœ™˜—œ’‹•Žȱ for perpetually transferred land rice silver of 7 qian 2 fen. To be divided equally by the three branches, each branch taking the silver of 2 qian 4 fenǯȱǽȱ‘Ž—ȱŠ™™ŽŠ›œȱ‘ŠȱŠȱ•ŠŽ›ȱ—˜Žȱ ŠœȱŠŽȱŠœȱ˜••˜ œǯǾȱȱ‘’œȱ›’ŒŽȱ silver, 700 cash should be given to supplement the senior branch. The rest œ‘˜ž•ȱ‹ŽȱŠ”Ž—ȱŽšžŠ••¢ȱ‹¢ȱ‘Žȱ‘›ŽŽȱ‹›Š—Œ‘ŽœǯȱǻŒŒ˜ž—ȱ˜˜”ȱŗŞŞŖǰȱřŗǼ

This is a curious provision, since land perpetually transferred is yielding an annual income to the To Ka-yi tso. One possible inference is that the tax for the land was still owed by the To Ka-yi tso, and the purchasers —ŽŽŽȱ˜ȱ™Š¢ȱ‘ŽȱŸŽ—˜›œȱ˜›ȱ‘’œǯȱȱ’œȱ’ĜŒž•ȱ˜ȱ”—˜ ȱ ‘Ž‘Ž›ȱ–Ž–bers of the To Ka-yi tso actually were paying the taxes for this particular property perpetually transferred, though we do have the records of the tsoȂœȱŠ¡ȱ‹ž›Ž—ȱ›˜–ȱ‘ŽȱœŠ–ŽȱŠŒŒ˜ž—ȱ‹˜˜”ȱǻŒŒ˜ž—ȱ˜˜”ȱŗŞŞŖǰȱřȮŗŝǼǯȱ An entry in these records gives the name under which the tax burden is registered, the jia ⬆ȱǻ‘Žȱ‹Šœ’Œȱ•˜ŒŠ•ȱŽ››’˜›’Š•ȱž—’ȱ˜›ȱŠ¡Š’˜—ȱ›Ž’œ›¢Ǽ under which that registration is made, and the amount owed: there is no information about which part of the tso’s property each item of land tax is paid for.14ȱ ˜ ŽŸŽ›ǰȱ’ȱ’œȱŒ•ŽŠ›ȱ‘Šȱ‘›˜ž‘ȱœ˜–Žȱ–ŽŠ—œǰȱž—Ž›ȱœ˜–Žȱ A similar arrangement can be seen in the land tax payment in neighboring Xiangshan ˜ž—¢ȱ˜ȱŠȱœ’–’•Š›ȱ™Ž›’˜ȱǻ›˜ž‘•¢ȱ Ž—¢ȱ¢ŽŠ›œȱŽŠ›•’Ž›Ǽǯȱ‘Žȱ—Š–Žœȱž—Ž›ȱ ‘’Œ‘ȱŠ¡ȱ‹ž›Ž—œȱ were registered in the Xiangshan case bore no resemblance to the actual living taxpayers. For the Tos as well, it is not clear whether names such as 䱊ϔ㟝ȱǻ˜ǽœǾȱŠ••ȱ˜Ž‘Ž›Ǽǰȱ䱊টᄿ(To ›’Ž—ǽœǾȱŠ—ȱ›Š—œ˜—ǽœǾǼǰȱ˜›ȱ䱊᭛টǻ˜ȱ•’Ž›Š›¢ȱ›’Ž—ǽœǾǼȱŒ˜››Žœ™˜—Žȱ˜ȱŠŒžŠ•ȱ™Ž˜™•Žǯȱ Tax was also registered under the name of the ancestor Ka-yi who had been dead for three ‘ž—›Žȱ¢ŽŠ›œǯȱȱ’쎛Ž—ŒŽȱ’œȱ‘Šȱ ‘’•Žȱ’—ȱ‘Žȱ’Š—œ‘Š—ȱŒŠœŽȱ‘ŽȱŠ¡ȱ‹ž›Ž—ȱŠ™™ŽŠ›œȱ˜ȱ ŗŚȲȱ

Traditional Land Rights

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“žœ’ęŒŠ’˜—ǰȱ‘Žȱ˜ȱ ŠȬ¢’ȱtsoȱ›ŽŠ’—ŽȱŠȱŒ•Š’–ȱ˜ȱ™Š¢–Ž—ȱ–ŠŽȱ›˜–ȱ™Ž›Ȭ ™ŽžŠ••¢ȱ›Š—œŽ››Žȱ•Š—ǯȱ The Interpretation of the Hong Kong High Court —ȱ ‘Žȱ Œ˜ž›œŽȱ ˜ȱ ‘Žȱ ’œ™žŽȱ ‹Ž ŽŽ—ȱ ‘Žȱ ˜ȱ •’—ŽŠŽȱ Š—ȱ ‘Žȱ Š‹‹˜ǰȱ ‘Žȱ Œ˜ž›ȱ‘Šȱ˜ȱŽŒ’Žȱ˜—ȱ‘Žȱ–ŽŠ—’—ȱ˜ȱ‘ŽȱŽ›–œȱdianduanȱŠ—ȱduantianȱŠœȱ ›ŽŒ˜›Žȱ’—ȱ‘ŽȱŗŞŞŖȱŠŒŒ˜ž—ȱ‹˜˜”ǯȱœȱ’—’ŒŠŽȱŽŠ›•’Ž›ǰȱ˜›ȱ‘ŽȱŽ›–ȱdianduanȱ‘Žȱ›Š—œ•Š’˜—ȱȃŠœœ’—Žȱ‹¢ȱ–˜›ŠŽȱ˜›ȱ™Ž›™Žž’¢Ȅȱ ŠœȱŠŒŒŽ™Žǰȱ  ‘’•Žȱ˜›ȱduantianȱ‘ŽȱŽ›–ȱȃ™Ž›™ŽžŠ••¢ȱ›Š—œŽ››Žȱ•Š—Ȅȱ ŠœȱžœŽǯȱŠ›Ȭ ’Žœȱ˜ȱ‘Žȱ˜ȱ•’—ŽŠŽȱ‘Ž•ȱ‘Šȱ‘Žȱ•’—ŽŠŽȱŒ˜—’—žŽȱ˜ȱ˜ —ȱ‘ŽȱŽ–™•Žǰȱ  ‘’•Žȱ‘ŽȱŠĴ˜›—Ž¢ȱŽ—Ž›Š•ȂœȱŒŠœŽȱ Šœȱ‘Šȱ‘Žȱ˜ȱ•’—ŽŠŽȱ‘ŠȱœŽŸŽ›Žȱ’œȱ ›Ž•Š’˜—œ‘’™ȱ ’‘ȱ‘Žȱœ’—ȱŠ—ȱ ž—ǯȱ ‘Žȱ Œ˜ž›ǰȱ ›Ž•¢’—ȱ –˜œ•¢ȱ ˜—ȱ Ž¡™Ž›ȱ ŽŸ’Ž—ŒŽǰȱ ŠŸŽȱ ‘Žȱ ˜••˜ ’—ȱ ’—Ž›™›ŽŠ’˜—DZ ’›œǰȱ ‘Žȱ ’››ŽŸ˜ŒŠ‹•Žȱ ™Ž›™ŽžŠ•ȱ œŠ•Žœǰȱ duanmaiȱ ˜›ȱ juemaiǰȱ Š—ȱ ‘Žȱ ȃ›ŽȬ Ÿ˜ŒŠ‹•ŽȄȱ œŠ•Žœȱ  Ž›Žȱ ˜™™˜œŽȱ ’—ȱ Šȱ ’Œ‘˜˜–¢ǯȱ ˜›Ž˜ŸŽ›ǰȱ Œ˜—ŒŽ›—’—ȱ ‘Žȱ •ŠĴŽ›ȱ’ȱ ŠœȱœŠ’ȱ‘Šȱ‘Ž¢ȱ Ž›Žȱȃœ’–’•Š›ȱ’—ȱ‘Ž’›ȱŽ›–œȱ˜ȱȁdian mai ‫݌‬䊷ǰȂȱ ˜ĞŽ—ȱ›Š—œ•ŠŽȱŠœȱȁ–˜›ŠŽœȂȹȄ (To Kan Chi and Others v. Pui Man Yau and Others ŗşşŘǰȱŝŗȮŝŘǼǯȱ‘Žȱ’Œ‘˜˜–¢ȱ’œŽ•ǰȱŠ•˜—ȱ ’‘ȱ‘ŽȱŠ—Š•˜¢ȱ‹Ž ŽŽ—ȱ ‘ŽȱdianȱŠ—ȱ‘Žȱ›ŽŸ˜ŒŠ‹•ŽȱœŠ•Žǰȱhuomaiǰȱ’œȱ ’Ž•¢ȱœ‘Š›ŽȱŠ–˜—ȱœŒ‘˜•Š›œǯȱ

˜ ŽŸŽ›ǰȱ‘Žȱ—Ž¡ȱœŽ™ȱ’—ȱ‘ŽȱŒ˜ž›Ȃœȱ’—Ž›™›ŽŠ’˜—ȱ Šœȱ•Žœœȱœ˜ž—DZȱŠȱ ˜›–ž•Š’˜—ȱ Šœȱ™žȱ˜› Š›ȱ’—ȱ ‘’Œ‘ȱ‘Žȱ›ŽŸ˜ŒŠ‹•ŽȱœŠ•Žǰȱ ’‘ȱ‘ŽȱŸŽ—˜›ȱ ›ŽŠ’—’—ȱ‘Žȱ›’‘ȱ˜ȱ›ŽŽ–™’˜—ǰȱ Šœȱ•’—”Žȱ˜ȱ‘Žȱœž›ŠŒŽȬœž‹œ˜’•ȱ’Ÿ’Ȭ œ’˜—ȱ˜ȱ˜ —Ž›œ‘’™ǯȱ ‘Žȱ›’‘ȱ˜ȱ›ŽŽŽ–ȱ•Š—ȱ ‘’Œ‘ȱ Šœȱ›ŽŠ’—Žȱ‹¢ȱ‘ŽȱœŽ••Ž›ȱž—Ž›ȱŠȱ›ŽŸ˜Ȭ ŒŠ‹•Žȱ œŠ•Žȱ  Šœȱ  ’Ž•¢ȱ ”—˜ —ȱ ‹¢ȱ ‘Žȱ Ž¡™›Žœœ’˜—ȱ ȃ’Š—ȱ ǽsicǾȱ Ž—ȱ ⬄ḍǰȄȱ •’Ž›Š••¢ȱȃ›˜˜ȱ˜ȱ‘Žȱ•Š—ǰȄȱŠ—ȱ‘Žȱ›’‘ȱŠŒšž’›Žȱ‹¢ȱ‘Žȱ™ž›Œ‘ŠœŽ›ȱ Šœȱ ȃ’Š—ȱ–’Š—ȱ⬄䴶ǰȄȱȃœž›ŠŒŽȱ˜ȱ‘Žȱ•Š—ǯȄȱ‘Žȱ›Žœž•ȱ˜ȱ‘Žȱ›ŽŸ˜ŒŠ‹•ŽȱœŠ•Žȱ œ¢œŽ–ȱ Šœȱ‘žœȱ‘ŽȱŒ›ŽŠ’˜—ȱ˜ȱ ˜ȱŒ˜–™•Ž–Ž—Š›¢ȱ‹žȱœŽ™Š›ŠŽȱ™›˜™›’Ȭ ŽŠ›¢ȱ’—Ž›Žœœȱ’—ȱ‘Žȱ•Š—ȱ ‘’Œ‘ȱ–’‘ȱŒ˜ȬŽ¡’œȱŠ•–˜œȱ’—Žę—’Ž•¢ǯȱ‘Žȱ ™ž›Œ‘ŠœŽ›ǰȱ  ‘˜ȱ ‘Šǰȱ Šœȱ ™Š›ȱ ˜ȱ ‘Žȱ ȃœž›ŠŒŽȄȱ ˜ȱ ‘Žȱ •Š—ǰȱ ‘Žȱ Ž¡Œ•žœ’ŸŽȱ ›’‘ȱ˜ȱŒž•’ŸŠ’˜—ǰȱ Šœȱ‹˜ž—ȱ˜ȱ‘Š—ȱ˜ŸŽ›ȱ˜ȱ‘ŽȱœŽ••Ž›ȱŠȱœžĜŒ’Ž—ȱœž–ȱ ˜ȱ–˜—Ž¢ȱ˜›ȱšžŠ—’¢ȱ˜ȱ›Š’—ȱ˜ȱŽ›Š¢ȱ‘ŽȱŠ¡ǯȱǻTo Kan Chi and Others v. Pui Man Yau and Others ŗşşŘǰȱŝŘǼ

‘’œȱŽœŒ›’™’˜—ȱ˜ȱ‘Žȱ™›˜ŒŽœœȱ•ŽŠ’—ȱ˜ȱȃœŽ™Š›ŠŽȱ™›˜™›’ŽŠ›¢ȱ’—Ž›Ȭ ŽœœȄȱ‹ŽŠ›œȱ—˜ȱ›ŽœŽ–‹•Š—ŒŽȱ˜ȱŠ—¢ȱ˜ȱ‘Žȱœž’ŽœȱŠ‹˜žȱyitian liangzhuȱǻ˜›ȱ ‘Žȱœž›ŠŒŽȬœž‹œ˜’•ȱ˜›–ȱ˜ȱ’Ÿ’Žȱ˜ —Ž›œ‘’™Ǽȱ›ŽŽ››Žȱ˜ȱŽŠ›•’Ž›ǯȱȱ‘Žȱ ŸŽ—˜›ȱ›ŽŠ’—œȱ‘Žȱ›’‘ȱ˜ȱ›ŽŽ–™’˜—ȱ˜ȱ‘Žȱ•Š—ǰȱ‘Žȱ›’‘ȱ˜ȱ‘Žȱ™ž›Ȭ Œ‘ŠœŽ›ȱ ’œȱ ŸŽ›¢ȱ ’쎛Ž—ȱ ›˜–ȱ ‘Šȱ ˜ȱ Šȱ œž›ŠŒŽȱ ˜ —Ž›ǰȱ  ‘’Œ‘ǰȱ ž—Ž›ȱ ˜—Žȱ ‘ŠŸŽȱ‹ŽŽ—ȱ–ŽŠœž›Žȱ‹¢ȱ•Š—ȱŠŒ›ŽŠŽǰȱ‘Žȱ›ŽŒ˜›œȱ˜ȱ‘ŽȱžŽ—ȱž—ȱ˜œȱ’ŸŽȱ‘Ž’›ȱŠ¡ȱ‹ž›Ž—ȱ ’—ȱœ’•ŸŽ›ǯȱ˜›ȱŠ—ȱŠ—Š•¢œ’œȱ˜ȱ‘Žȱ’Š—œ‘Š—ȱŒŠœŽǰȱœŽŽȱŠœž‹Š›ŠȱǻŘŖŖŚǰȱŒ‘Š™ǯȱŗǼǯȱ

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formulation, was a position that enjoyed a perpetual right not to be removed from the land (Terada Hiroaki 1983). Moreover, the court’s formulation sees the subsoil owner as lianghu ㊻᠊, the “taxpayer,” and the surface owner as dianhu ԗ᠊, the “cultivator.” This on its own is a valid observation about the standard formulation of the surface-subsoil form of divided ownership. However, by linking the practice with the revocable sale and the dian transaction, the court gives rise to an unfortunate confusion of categories: the transaction that creates the position of dianhu, usually translated “tenant,” is not a revocable sale but what is usually called a tenancy contract, in which the categories used are pi ᡍ (decide on) or zhao ᢯ (invite) and dian ԗ (tenancy) rather than dian ‫( ݌‬mortgage) and mai (sale).15ȱ‘Žȱ•ŠĴŽ›ȱŒŠŽ˜›’ŽœȱŠ›Žȱ’›ŽŒ•¢ȱ›Ž•Žvant to the position of the “owner,” the yezhu, whereas the former are not. Moreover, the characterization of dian (mortgage) as a transaction where the “possession and enjoyment of the land was vested” in the mortgagee, the dianzhu, is clearly inaccurate.16 The court appears to have combined the previous fallacious formulation with the testimony of expert witness Anthony Dicks, who (quite reasonably) opined that a possible explanation for the phrase duantian was that it referred to the surface right (To Kan Chi and Others v. Pui Man Yau and Others 1992, 74–75). The result has been a formulation where: (1) the court endorses the dichotomy between the perpetual sale duan and the revocable sale similar to the dian; (2) the surface-subsoil form of divided ownership is described as usually arising from the dian transaction; but (3) the term duan in duantian somehow refers to the alienation of the surface right only or, in other words, is akin to the dian. This formulation would have been in line with the court’s accepting the interpretation of the term dianduan as meaning “assigned by mortgage for perpetuity.” Whereas the court’s interpretation of the relationship between the situation of landholding in the pre-British New Territories and the categories of land transaction is rather misleading, its conclusion—that the To lineage’s claim on the Tsing Wan Kun was akin to that of a subsoil holder— appears reasonable. This can be inferred from the fact that the To Ka-yi tso had given up certain property rights for perpetuity (as suggested by the term duan), and that they were collecting a certain annual payment, possibly related to taxation. Moreover, although this is circumstantial, the colonial government treated this property in the same way that it treated ˜Žȱ‘Šȱ‘Žȱꛜȱdian here is ԗ (tenancy) and the second dian is ‫( ݌‬mortgage). In a collection of 279 land cases from the Xingke tiben (Memorial notes to the throne from the Bureau of Punishment) of the Qianlong period (1736–1795), there are 54 cases where a dian transaction took place. Of these, in 25 cases it was clearly stated that there was no change in the cultivator (Zhongguo diyi lishi danganguan and Zhongguo shehui kexueyuan lishi yanjiusuo 1988). ŗśȲȱ ŗŜȲȱ

Traditional Land Rights

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property whose rights were divided into surface and subsoil. The proper’Žœȱ˜ȱ‘Žȱœ’—ȱŠ—ȱ ž—ȱ Ž›Žȱ‘Žȱœž‹“ŽŒȱ–ŠĴŽ›ȱ˜ȱ•˜Œ”ȱ›˜ —ȱŽŠœŽœȱ in 1905, and these properties were registered under the name of the Tsing Š—ȱ ž—ȱǻ˜œȱŗǰȱŘǰȱřǰȱŚŗŜȱ’—ȱȱŗřŗǼǯȱ‘ŽȱŠ—ȱ˜ž›ȂœȱŽ—Ž›Š•ȱ™˜•’Œ¢ȱ toward the surface-subsoil form of divided ownership was to destroy it through registering the surface holders as crown lessees (Wesley-Smith ŗşşŞǰȱŗřŗȮŗřŞǼǯȱ However, when one accepts that the arrangement of land rights for this property was basically one of surface-subsoil division, a question arises Š‹˜žȱ ‘Žȱ ‘’—”’—ȱ ‹Ž‘’—ȱ ‘Žȱ ˜›–ž•Š’˜—ȱ Š˜™Žȱ ’—ȱ ‘Žȱ ŗŞŞŖȱ ŠŒŒ˜ž—ȱ ‹˜˜”ȱ˜—ȱ‘Žȱ™Š›ȱ˜ȱ‘Žȱ˜ȱ•’—ŽŠŽǯȱ—ȱ˜‘Ž›ȱ ˜›œǰȱ‘˜ ȱŒ˜ž•ȱ‘ŽȱŒŠŽ˜›¢ȱ duanȱ‹Žȱ“žœ’ꮍȱ’—ȱ›Ž•Š’˜—ȱ˜ȱ‘ŽȱŒ›ŽŠ’˜—ȱ˜ȱŠȱœž›ŠŒŽȱ˜ —Ž›ǵȱ Landholding Arrangements and Categories of Transaction ‘Žȱꛜȱ™˜’—ȱ˜ȱž—Ž›œŠ—ȱŠ‹˜žȱ‘Žȱ’—’’Š•ȱ›Š—œŠŒ’˜—ȱŒ˜—ŒŽ›—’—ȱ‘Žȱ property of the Tsing Wan Kun is that the original deed has not been preœŽ›ŸŽȱǻ˜›ȱ Šœȱ—˜ȱ™›˜žŒŽȱ’—ȱ‘ŽȱŒ˜ž›ȱ™›˜ŒŽŽ’—œǼǯȱœȱ Žȱ‘ŠŸŽȱœŽŽ—ǰȱ the arrangements for surface-subsoil division were not made by drawing ž™ȱ Šȱ ŽŽȱ žœ’—ȱ Šȱ œ’—•Žȱ ŒŠŽ˜›¢ȱ ›ŽœŽ›ŸŽȱ ˜›ȱ ‘Ž’›ȱ Œ›ŽŠ’˜—ǯȱ ˜ȱ –Š”Žȱ –ŠĴŽ›œȱ ŽŸŽ—ȱ –˜›Žȱ Œ˜–™•Ž¡ǰȱ ™›ŠŒ’ŒŽœȱ ŽœŒ›’‹Žȱ Šœȱ œž›ŠŒŽȬœž‹œ˜’•ȱ ’Ÿ’sion might have more to do with power relations between landlord and Ž—Š—ȱ‘Š—ȱ ’‘ȱ‘Žȱ›’‘œȱŒ˜—Ž››Žȱ‹¢ȱŠȱŽŽǯȱ‘Ž›ŽŠœȱ Žȱ‘ŠŸŽȱ•˜˜”Žȱ ŠȱŽ¡Š–™•Žœȱ˜ȱŽ—Š—Œ¢ȱŽŽœȱŒ›ŽŠ’—ȱœž›ŠŒŽȬœž‹œ˜’•ȱ’Ÿ’œ’˜—ǰȱ’쎛Ž—ȱ categories appear to have been used for the Tsing Wan Kun. We cannot ”—˜ ȱ‘Žȱ ˜›’—ȱ˜ȱ‘ŽȱŽŽȱǻŠœœž–’—ȱ‘Ž›Žȱ Šœȱ˜—ŽǼǰȱ‹žȱ‘ŽȱŽ—›¢ȱ’—ȱ ‘ŽȱŗŞŞŖȱŠŒŒ˜ž—ȱ‹˜˜”ȱœžŽœœȱ‘Šȱ‘ŽȱŠ››Š—Ž–Ž—ȱžœŽȱŠȱŒ˜–‹’—Š’˜—ȱ of duanȱǻ’››ŽŸ˜ŒŠ‹•Žȱ›Š—œŽ›ǼȱŠ—ȱŠŽȱŒ˜—’’˜—œȱ‘Šȱ’쎛Ž—’ŠŽȱ‘Žȱ ›Š—œŠŒ’˜—ȱ›˜–ȱŠȱœ›Š’‘˜› Š›ȱ™Ž›™ŽžŠ•ȱœŠ•Žǯȱ‘Šȱ ŽȱŒŠ—ȱ”—˜ ȱ˜ȱ ‘ŽœŽȱŒ˜—’’˜—œȱ’œȱŽ¡›Ž–Ž•¢ȱ•’–’Žǯȱ—ŽȱœžŒ‘ȱŒ˜—’’˜—ȱ ŠœȱŠ—ȱŠ——žŠ•ȱ ™Š¢–Ž—ȱ˜ȱ‘Žȱ˜ȱ•’—ŽŠŽǯȱ—˜‘Ž›ǰȱ—˜ȱ’›ŽŒ•¢ȱ›Ž•ŠŽȱ˜ȱ™›˜™Ž›¢ȱ›’‘œȱ in the narrow sense but nevertheless relevant, appears to have been the ›’‘ȱ˜ȱŽ¡™ŽŒȱŠȱȃ›ŽŽȱŸŽŽŠ›’Š—ȱ–ŽŠ•ȄȱŠȱ‘Žȱ’–Žȱ˜ȱ‘ŽȱŠ——žŠ•ȱ•Š—Ž›—ȱ lighting ceremony (To Kan Chi and Others v. Pui Man Yau and OthersȱŗşşŘǰȱ ŜŘȮŜŜǼǯȱ˜›Ž˜ŸŽ›ǰȱȃ˜’•ȱŠ—ȱ’—ŒŽ—œŽȱ–˜—Ž¢Ȅȱ ŠœȱŒžœ˜–Š›’•¢ȱ™Š’ȱ‹¢ȱ‘Žȱ ˜œȱŠĞŽ›ȱ‘’œȱ–ŽŠ•ǰȱŠŒŒ˜›’—ȱ˜ȱ‘ŽȱœŠ–Žȱ˜Œž–Ž—ȱǻ™ǯȱŜśǼǯȱ ȱ’œȱ’ĜŒž•ȱ˜ȱ’œ˜•ŠŽȱ‘Žȱ•Š—ȱ›’‘œȱ’—ȱ‘Žȱ–ž•’•Š¢Ž›Žȱ›Ž•Š’˜—œ‘’™œȱ between the Tos and the Tsing Wan Kun, since the rights established in ‘Žȱ•Š—ȱ›Š—œŠŒ’˜—ȱ’—Œ•žŽȱ‘Žȱ›’žŠ•ȱŠœȱ Ž••ȱŠœȱ‘Žȱ™›ŠŒ’ŒŠ•ǯȱ˜›Ž˜ŸŽ›ǰȱ it is possible that this arrangement came about not as the direct result of a deed of duan, but as the result of later developments in the power relations involving the To lineage. Either way, the use of the term duan does appear to represent one aspect of the transaction, that the Tos were giving

ŗŜŚ

Kentaro Matsubara

ž™ȱŒŽ›Š’—ȱ›’‘œȱ™Ž›–Š—Ž—•¢ǯȱ ˜ ŽŸŽ›ǰȱ‘Žȱ˜œȱ ˜ž•ȱŒ˜••ŽŒȱŠȱ›Ž—ǰȱŽ—ter the property in their own account book, and issue a grant to an abbot in 1914. This situation, in which the Tos are clearly retaining certain rights that could be understood as ownership, poses a more general question about the term duan: what arrangements could it represent and what arrangements could it not? If the actual conditions of a land transaction were the result of balancing the various complex relationships between parties, and the land rights could evolve in accord with these relationships without being completely constrained by the deed, then the land rights established through these ›Ž•Š’˜—œȱ ˜ž•ȱ‹Žȱ˜ȱ’—ę—’Žȱ’ŸŽ›œ’¢ǯȱŽȱŠŠ’—œȱ‘’œȱ’ŸŽ›œ’¢ȱ˜ȱ•Š—ȱ rights formed through the social relations and land transactions between ™Š›’Žœǰȱ‘Žȱ™ŠžŒ’¢ȱ˜ȱ ›’ĴŽ—ȱ˜›–ž•Šœȱ˜ȱž—Ž› ›’Žȱ•Š—ȱ›Š—œŠŒ’˜—œȱ’œȱ —˜’ŒŽŠ‹•Žȱǻ ’œ‘’–˜˜ȱ’˜ȱŗşşřǼǯȱ‘Žȱ›Ž•Š’ŸŽ•¢ȱŽ ȱŒŠŽ˜›’ŽœȱŠ—ȱ¢™’ŒŠ•ȱ Œ˜—’’˜—œȱ ŠŽȱ ˜ȱ Šȱ •Š—ȱ ŽŽȱ –’‘ȱ  Ž••ȱ ‘ŠŸŽȱ ˜›’’—œȱ ’—ȱ ‘Žȱ  ›’ĴŽ—ȱ •Š ǯȱ’‘Ž›ȱ Š¢ǰȱ‘ŽœŽȱŒŠŽ˜›’Žœȱ ˜ž•ȱ‘ŠŸŽȱ˜ȱœžĜŒŽȱ’—ȱœ™Ž••’—ȱ˜žȱ‘Žȱ conditions of a land transaction, although the categories might not accu›ŠŽ•¢ȱ›ŽĚŽŒȱ‘ŽȱŽ¡ŠŒȱŒ˜—’’˜—œȱ˜ȱ‘ŽȱŠŒžŠ•ȱŠ››Š—Ž–Ž—œȱ‘Šȱ Ž›ŽȱŒ›Žated by the transaction. The land deeds with their limited contents would separate the considerations laid down in the deeds from the many other Œ˜—œ’Ž›Š’˜—œȱ ’—ĚžŽ—Œ’—ȱ ‘Žȱ •˜—ȬŽ›–ȱ ›Ž•Š’˜—œ‘’™œȱ ‹Ž ŽŽ—ȱ ‘Žȱ ™Š›’Žœǯȱ ˜ ŽŸŽ›ǰȱŠœȱ•˜—ȱŠœȱŠȱŒ˜–™•ŽŽȱœŽ™Š›Š’˜—ȱ Šœȱ’–™˜œœ’‹•ŽǰȱŠȱŸŠ›’Ž¢ȱ of arrangements would necessarily be associated with each category of transaction, and in some cases certain arrangements might appear to run counter to the implications of the categories used. Regardless of the degree to which such a generalization explains the rather odd use of the term duan in the To case, not enough is understood about the relationship between land transactions and long-term social relations among parties. A study of the correlations between the land deeds Š—ȱŠŒŒ˜ž—ȱ‹˜˜”œȱ’—ȱ ˜’ȱ Šȱ’••ŠŽȱ’—ȱŠ’ȱ ž—ȱ›ŽŸŽŠ•Žȱ‘˜ ȱŽŠŒ‘ȱ•Š—ȱ ›Š—œŠŒ’˜—ȱ Šœȱ™Ž›˜›–ŽȱŠœȱ™Š›ȱ˜ȱŠȱꗊ—Œ’Š•ȱ›Ž•Š’˜—œ‘’™ȱ˜ŸŽ›ȱŽ¡Ž—ed periods of time, even if each land deed suggested a single transaction on the day of the deed. Moreover, the parties that could enter into these ꗊ—Œ’Š•ȱ›Ž•Š’˜—œ‘’™œȱŠ™™ŽŠ›ȱ˜ȱ‘ŠŸŽȱ‹ŽŽ—ȱ•’–’Žȱ˜ȱ‘Žȱ›Žœ’Ž—œȱ—ŽŠ›ȱ

˜’ȱ ŠȱŠ—ȱ—Ž’‘‹˜›’—ȱŠ”ȱ‘Šȱǯȱ‘ŽœŽȱ™Š›’Žœȱ˜ĞŽ—ȱ‘ŠȱŠȱ•˜—ȱ‘’œ˜›¢ȱ of intermarriage and of entering into territorial arrangements about their grave rituals and dealings with their subsoil owners (Matsubara 2004, Œ‘Š™ǯȱŚǼǯȱ—ȱ‘ŽȱŠ‹œŽ—ŒŽȱ˜ȱŽŠ’•Žȱ˜ŸŽ›—–Ž—ȱ›ŽŒ˜›œȱŠ‹˜žȱ ‘˜ȱ‘Ž•ȱ what land, and in a legal system where the enforcement of judgments relied on the compliance of the parties involved (Shiga Shuzo 1984, 149–197, ŘśŘȮŘśśǼǰȱ‘Žȱ‘˜•’—ȱ˜ȱŽŠŒ‘ȱ™•˜ȱ˜ȱ•Š—ȱ ˜ž•ȱ‘ŠŸŽȱ‹ŽŽ—ȱžŠ›Š—ŽŽȱ’—ȱ the communal contexts that were created, reinforced, and given nuance through these relationships.

Traditional Land Rights

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In these multilayered relationships between parties, a certain social equilibrium—helped by a common cultural repertoire of formal and informal institutions, norms, values, and so on—is maintained during mul’™•ŽȱŽ¡Œ‘Š—Žœȱǻ˜—Žȱ˜›–ȱ˜ȱ ‘’Œ‘ȱ ˜ž•ȱ‘ŠŸŽȱ‹ŽŽ—ȱ•Š—ȱ›Š—œŠŒ’˜—œǼǯȱ

˜ ŽŸŽ›ǰȱŠ—ȱŠœ¢––Ž›¢ȱ—Šž›Š••¢ȱŽ–Ž›Žœȱ›˜–ȱ‘ŽœŽȱŽ¡Œ‘Š—Žœǰȱ’—ȱ›Ž•Š’˜—ȱ˜ȱ™›˜™Ž›¢ǰȱ™˜ Ž›ǰȱŠ—ȱ™›Žœ’ŽǯȱžŒ‘ȱœ˜Œ’Š•ȱ™›˜ŒŽœœŽœȱ˜ĞŽ—ȱ›ŽŽ››Žȱ to in connection with the notion of préstation totale have been observed widely outside the New Territories or China,17 and a cursory investigation into the social relationships between parties dealing in land suggests that land transactions are indeed made in this context. One of the strengths of historical material from the New Territories is that, as we saw in the case of the Tuen Mun Tos, it can reveal the discrepancies between the categories used in transactions and the actual land rights in operation. This opens the way to investigations into the more complex interactions between law (to the extent that the contents of a deed can be ŒŠ••Žȱ•Š ǼȱŠ—ȱ™›ŠŒ’ŒŽǰȱŠ—ȱ™›ŠŒ’ŒŽȱŒŠ—ȱ‹Žȱž—Ž›œ˜˜ȱ’—ȱ‘ŽȱŒ˜—Ž¡ȱ˜ȱ the social groupings that form the bases of local communities. I will now ž›—ȱ˜ȱ‘ŽȱšžŽœ’˜—ȱ˜ȱ‘˜ ȱŠ›ȱœžŒ‘ȱꗍ’—œȱ›˜–ȱ‘ŽȱŽ ȱŽ››’˜›’ŽœȱŒŠ—ȱ be applied to land transactions in Qing China. Land Transactions in Qing China: The Limits of “Absolute” Sales Land Transactions in Qing China Land transactions, disputes arising from them, and the related legislation in the Qing period are subjects relatively well covered in the literature ǻŽ›ŠŠȱ ’›˜Š”’ȱ ŗşŞŝDzȱ ’—ȱ ŗşşŚDzȱ Ž•’—ǰȱ Š›Ž••Šǰȱ Š—ȱ Œ”˜ȱ ŘŖŖŚǼǯȱ Šeleine Zelin took the view that the dian and the huomai, characterized together as the “conditional sale,” were, along with the priority given to relatives and neighbors in purchasing land, factors “with the potential to •’–’ȱ›’‘œȱ˜ȱ™›˜™Ž›¢ȄȱǻŘŖŖŚŠǰȱŘŜǼǯȱ˜—’’˜—Š•ȱœŠ•Žǰȱ’—ȱ‘Ž›ȱŸ’Ž ǰȱȃ›ŠŒŽȱ its origins to the same belief that it was the responsibility of descendants to protect the inherited patrimony from alienation” and became a source ˜ȱ Œ˜—žœ’˜—ȱ  ’‘ȱ ›ŽŠ›ȱ ˜ȱ ™›˜™Ž›¢ȱ ›’‘œǰȱ ˜ĞŽ—ȱ •ŽŠ’—ȱ ˜ȱ •’’Š’˜—ȱ Š—ȱŸ’˜•Ž—ŒŽǯȱ‘ŽȱœŠ ȱ•Ž’œ•Š’ŸŽȱ–ŽŠœž›Žœȱ˜ȱŗŝřŖȱŠ—ȱŗŝśřȱŠœȱŠĴŽ–™œȱ to “clarify and contain” conditional sales and prevent disputes, through such means as dispelling ambiguities about whether a particular sale was “conditional” or irrevocable and prohibiting the vendor in an irrevocable sale to ask for supplementary payment, not to mention redemption (Zelin ŘŖŖŚŠǰȱŘŜȮŘŝDzȱ ’—ȱŗşşŚǰȱŜŞȮŝŖǼǯ Zelin’s observations, while largely valid, have the following characteristics: ŗŝȲȱ A paradigm for such a social formation is found in the classic essay by Marcel Mauss ǻŗşŘřȮŗşŘŚǼǯȱ

ŗŜŜ

Kentaro Matsubara

First, land transaction begins with the premise of an “unconditional” ™›˜™Ž›¢ȱ ›’‘ǰȱ ŠŒšž’›Žȱ ‹¢ȱ ǻŠ—ȱ ’ŽŠ•’£Žȱ ˜›–ȱ ˜Ǽȱ juemai, endorsed in the substatutes of the Qing code. From here, it follows that this was the normative form of sale, and “conditional” sales had to be “contained.”

˜ ŽŸŽ›ǰȱŠœȱŽ•’—ȱŠŒ”—˜ •ŽŽœǰȱ‘ŽȱŠŒžŠ•ȱ›Š—œŠŒ’˜—œȱ‘Šȱ‘Žȱ™Š›’Žœȱ conducted as juemai—and it cannot be assumed that these parties read, let alone operated within the premises of, the code—would frequently inŸ˜•ŸŽȱ‘ŽȱŽ–Š—ȱ˜›ȱŠȱœž™™•Ž–Ž—Š›¢ȱ™Š¢–Ž—ȱŠĞŽ›ȱ‘ŽȱŒ˜–™•Ž’˜—ȱ˜ȱ an irrevocable “absolute” sale of juemai. One could even cite a case where a party held that it was a village custom (xiangjian suli 䛋䭧֫՟Ǽȱ˜ȱŽ–Š—ȱ˜—Žȱœž™™•Ž–Ž—Š›¢ȱ™Š¢–Ž—ȱŠĞŽ›ȱŠ—ȱŠ‹œ˜•žŽȱœŠ•ŽǰȱŠ—ȱ‘ŽȱŽŸŽ—tual judgment included a clause ensuring this supplementary payment ǻ ‘’Œ‘ȱ‘Šȱ‹ŽŽ—ȱ˜—•¢ȱ™Š›•¢ȱ–ŠŽǼȱ˜ȱ‹Žȱ–ŠŽȱ’—ȱž••ǯ18 Another custom that can be cited from the same class of cases is one where the vendor in an irrevocable sale could retain the right to a gratuity when the purchaser sold the same property to another party (Zhongguo diyi lishi danganguan Š—ȱ ‘˜—ž˜ȱ œ‘Ž‘ž’ȱ ”Ž¡žŽ¢žŠ—ȱ •’œ‘’ȱ ¢Š—“’žœž˜ȱ ŗşŞŞǰȱ ŒŠœŽȱ ŗŜŗǼǯȱ ‘ŽœŽȱ cases underscore the tension between customary practice and the legisla’ŸŽȱ–ŽŠœž›Žœȱ˜ȱ ‘’Œ‘ȱŽ•’—ȱ›Š œȱŠĴŽ—’˜—ǯȱ‘’œȱŽ—œ’˜—ȱœžŽœœȱ‘Šȱ if one focuses on the parties’ perception of such categories as juemai rather than the perception of the code, the use of the term “absolute sale” in a ›Š—œŠŒ’˜—ȱ’ȱ—˜ȱŽ¡Œ•žŽȱŸŠ›’˜žœȱŒ˜—’’˜—œȱ›˜–ȱ‹Ž’—ȱŠĴŠŒ‘Žȱ˜ȱ‘Žȱ œŠ•Žǰȱ ŽěŽŒ’ŸŽ•¢ȱ –Š”’—ȱ ‘Žȱ œŠ•Žȱ —˜ȱ Š‹œ˜•žŽǯȱ ‘’œȱ ›Š’œŽœȱ ‘Žȱ ˜••˜ ’—ȱ question: what social factors made these nominally “absolute” sales “conditional” in reality? The second characteristic of Zelin’s formulation is closely connected to this question. Whereas Zelin does point to the origins of the conditional sale—namely, the responsibility to protect inherited patrimony from alienation—her formulation does not go into the contemporary interests that might have induced the parties to follow this ancient practice.19 Al‘˜ž‘ȱ’ȱ’œȱ’ĜŒž•ȱ˜ȱŠ™™›Š’œŽȱ‘˜ ȱœ›˜—•¢ȱ‘Žȱ™›ŽŸ’˜žœ•¢ȱ–Ž—’˜—Žȱ œŽ—œŽȱ ˜ȱ ›Žœ™˜—œ’‹’•’¢ȱ ŠěŽŒŽȱ Š¢Ȭ˜ȬŠ¢ȱ •Š—ȱ ›Š—œŠŒ’˜—œȱ ž›’—ȱ ‘Žȱ Qing period, one possible line of argument is to follow Zelin’s own assessment of the 1730 legislative reform. There, she argues that this reform was in response to excessive litigation resulting from conditional sale (Zelin ŘŖŖŚŠǰȱŘŜȮŘŝǼǯȱȱœž‹œŠžŽȱ’—ȱ‘Žȱ’—ȱŒ˜Žȱ™›˜–ž•ŠŽȱ’—ȱŗŝśŜȱ’—Ÿ˜•ŸŽȱ the punishment of descendants for selling ancestral property (that was set aside permanently, as opposed to property inherited from ancestors ‘›˜ž‘ȱ ‘˜žœŽ‘˜•ȱ ’Ÿ’œ’˜—Ǽȱ ‹¢ȱ œŽŠ•‘ǯȱ ‘’œ may well suggest that this ŗŞȲȱ Zhongguo diyi lishi danganguan and Zhongguo shehui kexueyuan lishi yanjiusuo ŗşŞŞǰȱŒŠœŽȱŘŖŞȱǻ žŠ’—’—ȱ˜ž—¢ǰȱ—‘ž’ȱ›˜Ÿ’—ŒŽǼǯȱ‘ŽȱœŠ•Žȱ˜˜”ȱ™•ŠŒŽȱ’—ȱŗŝŞŘȱŠ—ȱ‘Žȱzhaojia ’—ȱŗŝŞŜǰȱŠĞŽ›ȱ‘Žȱ•Ž’œ•Š’ŸŽȱ–ŽŠœž›Žœȱ–Ž—’˜—Žȱ™›ŽŸ’˜žœ•¢ǯȱ ŗşȲȱ ’’Šȱ˜‹˜›žǰȱ˜›ȱŽ¡Š–™•Žǰȱ›ŠŒŽœȱ‘’œȱ˜›–ȱ˜ȱœŠ•Žȱ˜ȱ Š—ȱ’–ŽœȱǻŗşşŗǰȱŚŞŚǼǯ

Traditional Land Rights

ŗŜŝ

™›ŠŒ’ŒŽǰȱ ‘’Œ‘ȱŒ˜—œ’žŽœȱŠȱ–žŒ‘ȱ–˜›Žȱ’›ŽŒȱŸ’˜•Š’˜—ȱ˜ȱꕒŠ•ȱ™’Ž¢ȱ‘Š—ȱ the mere alienation of inherited property, was prevalent enough to necesœ’ŠŽȱ•Ž’œ•Š’ŸŽȱ–ŽŠœž›Žœǯȱȱ‘’œȱ Šœȱ‘ŽȱŒŠœŽǰȱ‘ŽȱœŽ—œŽȱ˜ȱꕒŠ•ȱ™’Ž¢ȱŠ—ȱ responsibility to protect inherited patrimony in the mid-eighteenth century would have been overridden habitually, if not put in serious jeopardy. ’‘Ž›ȱ Š¢ǰȱ’ȱœŽŽ–œȱ’—œžĜŒ’Ž—ȱ˜ȱŠĴ›’‹žŽȱ‘Žȱ™›ŽŸŠ•Ž—ŒŽȱ˜ȱŒ˜—’’˜—Š•ȱ œŠ•Žœȱ˜ȱ‘ŽœŽȱꕒŠ•ȱŽŽ•’—œǯȱ Whatever the origins of the conditional sale, it is clear that from the viewpoint of those buying and selling, both conditional and unconditional sales could be conducted in a way that retained certain claims to the property on the vendor’s part. Such claims included a payment supplementary to the original property price and the payment of a gratuity on a second sale by the purchaser to another party. That the vendor retained certain claims to property, even when the property was irrevocably sold, formed a salient feature of the transaction described as duan in the account book of the To Ka-yi tso. The Tos, despite having alienated the property by this duan transaction, retained a right to annual payment from the Tsing Wan Kun, along with other privileges. Moreover, this retention of certain claims to alienated property underwrote the long-term relationships among parties, and not just in the narrow context of the land transaction. Thus, in Qing China even absolute land transactions were conducted in a way that allowed the vendor to retain certain claims to the land. To ‘ŽȱŒ˜—›Š›¢ǰȱ‘Ž›Žȱ’œȱŠȱŒŠœŽȱ’—ȱ‘ŽȱŽ ȱŽ››’˜›’Žœȱ˜ȱ ˜—ȱ ˜—ȱ ‘Ž›ŽȱŠ—ȱ absolute duan transaction was conducted with similar restrictions. Such commonality is only the starting point of the debate on whether analyzing cases from the New Territories would “explain” those characteristics ˜ȱ•Š—ȱ›Š—œŠŒ’˜—œȱ˜‹œŽ›ŸŽȱ–˜›Žȱ ’Ž•¢ȱ’—ȱ’—ȱ‘’—Šǯȱ ˜ ŽŸŽ›ǰȱŠ—ȱ ŠĴŽ–™ȱ‘Ž›Žȱ˜ȱ›Ž•ŠŽȱ˜ž›ȱ”—˜ •ŽŽȱ˜ȱœ˜Œ’Š•ȱœ›žŒž›’—ȱ˜ȱ‘Žȱ˜›–œȱ˜ȱ land transactions in the New Territories would not be out of place. Social Structuring in the New Territories Previous scholarship has examined how long-term social relationships  Ž›Žȱ ŽœŠ‹•’œ‘Žȱ ’—ȱ Ÿ’••ŠŽœȱ ’—ȱ ‘Žȱ Ž ȱ Ž››’˜›’Žœȱ Š—ȱ ‘˜ ȱ ‘Ž¢ȱ ’—Ěženced land transactions between the parties to such relationships. These ™›˜ŒŽœœŽœȱ’—Ÿ˜•ŸŽȱœŽĴ•Ž–Ž—ȱŠ—ȱ•’—ŽŠŽȱ‹ž’•’—Dzȱ‘Žȱ˜›–Š’˜—ȱ˜ȱŽ››’˜›’Š•ȱ’Žœȱ‹ŠœŽȱ˜—ȱ›Ž•’’˜—ǰȱ˜ĞŽ—ȱŠ’–ŽȱŠȱ–žžŠ•ȱŽŽ—œŽDzȱ–Š›”Žȱ˜›Š—’£Š’˜—DzȱŠ—ȱ‘Žȱ›’œŽȱ˜ȱ™˜ Ž›ȱŠ—ȱ™›Žœ’Žȱ’—ȱ•˜ŒŠ•ȱ™˜•’’ŒœȱǻŠž›ŽȱŗşŞŜDzȱ Šž›ŽȱŠ—ȱ’žȱŗşşśǼǯȱ Whereas these processes brought various groups together, they frešžŽ—•¢ȱ ™›˜Ÿ˜”Žȱ ꎛŒŽȱ Œ˜–™Ž’’˜—ȱ Š–˜—ȱ ™Š›’Žœȱ Šȱ ‘Žȱ œŠ–Žȱ ’–Žǰȱ repeatedly leading to violent confrontation or lineage warfare. The

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Kentaro Matsubara

œŽĴ•Ž–Ž—ȱŠ—ȱŠŒŒž–ž•Š’˜—ȱ˜ȱ™›˜™Ž›¢ȱ‹¢ȱ˜—Žȱ™Š›¢ȱŒ˜ž•ȱ–ŽŠ—ȱ‘ŽȱŽ›˜œ’˜—ȱ˜ȱ‘Žȱ–ŠŽ›’Š•ȱ‹ŠœŽȱ˜›ȱŠ—˜‘Ž›ǯȱ‘Žȱ˜›–Š’˜—ȱ˜ȱŽ››’˜›’Š•ȱŠ••’Š—ŒŽœȱ ’—ȱ‘Žȱ—’—ŽŽŽ—‘ȱŒŽ—ž›¢ǰȱ’—ȱ ‘’Œ‘ȱ•ŠŽŒ˜–Ž›œȱ˜ȱ‘Žȱ›Ž’˜—ȱ™•Š¢Žȱ˜–’—Š—ȱ›˜•ŽœǰȱŠ™™ŽŠ›œȱ˜ȱ‘ŠŸŽȱ’—Ÿ˜•ŸŽȱŠĴŽ–™œȱ˜ȱ˜ŸŽ›Œ˜–Žȱ‘Žȱ‘ŽŽ–˜—¢ȱ ˜ȱŠȱ™Š›’Œž•Š›ȱ•˜ŒŠ•ȱ•’—ŽŠŽȱǻŠž›ŽȱŗşŞŜǰȱŗŘŜȮŗŘŝǼǯȱ‘’œȱžŠ•ȱ›Ž•Š’˜—œ‘’™ǰȱ  ‘Ž›Žȱ —Ž Œ˜–Ž›œȱ  Ž›Žȱ Šȱ ꛜȱ ŠŒŒŽ™Žȱ ‹¢ȱ ˜•Ž›ȱ ’—‘Š‹’Š—œȯ˜ĞŽ—ȱ Šœȱ œž›ŠŒŽȱ˜ —Ž›œȱ—ŽŽŽȱ˜›ȱ•Š—ȱ›ŽŒ•Š–Š’˜—ȯ‹žȱ ‘Ž›Žȱ‘ŽœŽȱ—Ž Œ˜–Ž›œǰȱ ‘’•Žȱ‹ŽŒ˜–’—ȱŠ—ȱ’—Ž›Š•ȱ™Š›ȱ˜ȱ•˜ŒŠ•ȱœ˜Œ’Ž¢ȱŠ—ȱ˜ĞŽ—ȱŽ—‘Š—Œ’—ȱ ‘Žȱ’—Ž›Žœœȱ˜ȱ‘Žȱ˜•Ž›ȱ’—‘Š‹’Š—œǰȱŒ˜ž•ȱŠ•œ˜ȱŽŸŽ—žŠ••¢ȱŒ‘Š••Ž—Žȱ‘Žȱ ’—’Ž—˜žœȱ™Š›’Žœǰȱ ŠœȱŽ¡›Ž–Ž•¢ȱŒ˜––˜—ȱ’—ȱ‘ŽȱŽ ȱŽ››’˜›’Žœǯȱ˜›Ž˜ŸŽ›ǰȱ•Š—ȱ›Š—œŠŒ’˜—œȱ Ž›ŽȱŠ—ȱ’–™˜›Š—ȱ™Š›ȱ˜ȱ‘’œȱ™˜•’’ŒŠ•ȱ™›˜ŒŽœœǯȱ —ȱŽ¡Š–™•ŽȱŒŠ—ȱ‹Žȱ˜ž—ȱ’—ȱ‘Žȱ•Š—ȱ›Š—œŠŒ’˜—œȱŽœŒ›’‹ŽȱŽŠ›•’Ž›ȱ‘Šȱ ˜˜”ȱ™•ŠŒŽȱ’—ȱ ˜’ȱ Šȱ’—Ÿ˜•ŸŽȱ‘Žȱž—ȱ•’—ŽŠŽǰȱ•ŠŽŒ˜–Ž›œȱ˜ȱ‘ŽȱŠ›ŽŠǰȱ •Ž—’—ȱ–˜—Ž¢ȱ˜ȱ‘Žȱ’—Œž–‹Ž—œȱŠ—ȱŠ”’—ȱ‘Žȱ•Š—ȱ’—ȱ‘Žȱ’—Œž–‹Ž—ȱ Ÿ’••ŠŽȱǻŠ”ȱ‘ŠȱǼȱŠœȱœŽŒž›’¢ǯȱ‘’œȱ•Š—ȱ ŠœȱŽŸŽ—žŠ••¢ȱ‹˜ž‘ȱž™ȱ‹¢ȱ‘Žȱ ž—œǰȱ ‘˜ȱ Ž—ȱ˜—ȱ˜ȱŠŒŒž–ž•ŠŽȱ™›˜™Ž›¢ȱ’—ȱŠ—ȱŠ›˜ž—ȱ‘Žȱ’—Œž–‹Ž—ȱ Ÿ’••ŠŽǯȱ•‘˜ž‘ȱ‘Žȱ’—Œž–‹Ž—œȱ‘Šȱ˜›–ŽȱŸŠ›’˜žœȱ’Žœȱ ’‘ȱ‘Žȱž—œȱ ˜ŸŽ›ȱ‘Žȱ¢ŽŠ›œǰȱ‘Ž’›ȱ™˜ Ž›ȱ’—ȱ‘ŽȱŠ›ŽŠȱ›Ž•Š’ŸŽȱ˜ȱ‘Žȱ—Ž Œ˜–Ž›œȱ ŠœȱŽŒ•’—’—ǯȱ‘ŽȱŽŠ›•¢ȱ Ž—’Ž‘ȱŒŽ—ž›¢ȱ’—ȱ‘Žȱ ˜’ȱ ŠȮŠ”ȱ‘ŠȱȱŠ›ŽŠȱŒ˜ž•ȱ ‹ŽȱŒ‘Š›ŠŒŽ›’£Žȱ‘›˜ž‘ȱ‘Žȱ›’œŽȱ˜ȱ˜—Žȱž—ȱ£ŽȬŒ‘’žȱ˜ȱ ˜’ȱ ŠȱŠœȱ‘Žȱ ™˜•’’ŒŠ•ȱ•ŽŠŽ›ȱ˜ȱ‘ŽȱŠ›ŽŠȱǻŠœž‹Š›ŠȱŘŖŖŚǰȱŒ‘Š™œǯȱřȮŚǼǯȱ ‘Žȱ ›Ž•Š’˜—œ‘’™ȱ ‹Ž ŽŽ—ȱ ‘Žȱ žŽ—ȱ ž—ȱ ˜œȱ Š—ȱ ‘Žȱ Š‹‹˜œȱ ˜ȱ œ’—ȱ Š—ȱ ž—ȱŒ˜ž•ȱŠ•œ˜ȱ‹Žȱ™•ŠŒŽȱ’—ȱ‘’œȱŒ˜—Ž¡ǯȱ•‘˜ž‘ȱ‘Žȱ˜›’’—œȱ˜ȱ‘Žȱ œ’—ȱŠ—ȱ ž—ȱŠ›Žȱž—Œ•ŽŠ›ǰȱ‘ŽȱŽ–™•ŽȱŒ•ŽŠ›•¢ȱž—Œ’˜—ŽȱŠœȱŠȱŸŽ‘’Œ•Žȱ˜›ȱ ‘Žȱ˜ȱ•’—ŽŠŽȂœȱ™›Žœ’ŽǰȱŠœȱ Ž••ȱŠœȱ˜›ȱŠȱŒŽ›Š’—ȱ•˜ŒŠ•ȱŒ˜‘Žœ’˜—ǯȱ‘Žȱ˜œȱ  Ž›Žȱ•’œŽȱŠœȱ‘Žȱ˜–’—Š—ȱ˜—˜›œȱ˜ȱ‘Žȱœ’—ȱŠ—ȱ ž—ȱ’—ȱŠȱŠ‹•Žȱ›˜–ȱ ŗŞŚřDzȱŠ—ȱŽ™’Š™‘ȱ˜›ȱ˜ȱ Šȱ’ȱ’—’ŒŠŽȱ‘Žȱ Šœȱ‘Žȱ˜ž—Ž›ȱ˜ȱ‘Žȱœ’—ȱ Š—ȱ ž—Dzȱ Šȱ •Š—Ž›—Ȭ•’‘’—ȱ Žœ’ŸŠ•ȱ Ž¡Œ•žœ’ŸŽ•¢ȱ ˜›ȱ ‘Žȱ ˜œȱ  Šœȱ ‘Ž•ȱ ’—ȱ ‘ŽȱŽ–™•Žȱœ’—’¢’—ȱ‘Ž’›ȱœ™ŽŒ’Š•ȱ™˜œ’’˜—DzȱŠ—ȱ‘Ž’›ȱ™˜œ’’˜—ȱŠœȱshanzhu ቅЏȱǻ–˜ž—Š’—ȱ˜ —Ž›œǼȱ ŠœȱŠĜ›–Žȱ’—ȱ‘Žȱ›Š—ȱ˜ȱŗşŗŚ ǻTo Kan Chi and Others v. Pui Man Yau and Others ŗşşŘǰȱŚşȮŜŚǼǯȱ‘ŽȱŠ™™˜’—–Ž—ȱ˜ȱŠ—ȱŠ‹‹˜ȱ˜ȱ•˜˜”ȱŠĞŽ›ȱ‘ŽȱŽ–™•ŽȱŠ—ȱ™Ž›˜›–ȱ‘ŽœŽȱ›’žŠ•œȱ ˜ž•ȱ‘ŠŸŽȱ‹ŽŽ—ȱ’—ȱ ‘Žȱ’—Ž›Žœȱ˜ȱ‘Žȱ˜œȂȱ™›Žœ’Žǯȱ˜›Ž˜ŸŽ›ǰȱœ˜ȱ•˜—ȱŠœȱ‘ŽœŽȱž—Œ’˜—œȱ Ž›Žȱ ž•ę••Žǰȱ Œ•ŽŠ›•¢ȱ Ž•’—ŽŠŽȱ •Š—ȱ ›’‘œȱ ˜›ȱ ‘Žȱ ˜œȱ Š—ȱ ‘Žȱ Š‹‹˜ȱ  ˜ž•ȱ ‘ŠŸŽȱœŽŽ–Žȱ•Žœœȱ’–™˜›Š—ǯȱ ˜ ŽŸŽ›ǰȱŠœȱ‘ŽȱŠ‹‹˜ȱŠœœž–Žȱ–˜›ŽȱŒ˜—›˜•ȱ ˜ŸŽ›ȱ ‘Žȱ Ž–™•Žǰȱ ‘Žȱ ‹ŽŒŠ–Žȱ ŒŠ™Š‹•Žȱ ˜ȱ Œ‘Š••Ž—’—ȱ ‘Žȱ ˜œȂȱ ˜–’—Š—ŒŽǯȱ

’œȱŒ•Š’–ȱ˜ȱ‘Žȱ™›˜™Ž›¢ȱ›’‘œȱ˜›ȱ‘ŽȱŽ–™•Žȱ›Ž™›ŽœŽ—œȱœžŒ‘ȱŠȱŒ‘Š••Ž—Žǯȱ •ŠŒŽȱ’—ȱœžŒ‘ȱŠȱŒ˜—Ž¡ȱ˜ȱœ˜Œ’Š•ȱ’—Ž›Š’˜—ȱŠ—ȱŒ˜–™Ž’’˜—ȱŠ–˜—ȱ —Ž Œ˜–Ž›œȱ Š—ȱ ’—Œž–‹Ž—œȱ ’—ȱ Šȱ œ™ŽŒ’ęŒȱ •˜ŒŠ•ȱ Œ˜––ž—’¢ǰȱ œ˜–Žȱ ˜ȱ ‘Žȱ ™›ŠŒ’ŒŽœȱ’—ȱ•Š—ȱ›Š—œŠŒ’˜—œǰȱ˜‹œŽ›ŸŽȱ‹˜‘ȱ’—ȱ‘ŽȱŽ ȱŽ››’˜›’ŽœȱŠ—ȱ –˜›Žȱ ’Ž•¢ȱ˜ŸŽ›ȱ’—ȱ‘’—ŠǰȱŠ›Žȱ–˜›Žȱž—Ž›œŠ—Š‹•Žǯȱȱ‘Žȱ’—Œž–‹Ž—œȱ ‘Šȱ Š—ȱ ’—Ž›Žœȱ ’—ȱ ˜‹œ›žŒ’—ȱ ‘Žȱ Ž›˜œ’˜—ȱ ˜ȱ ‘Ž’›ȱ ™˜ Ž›ȱ ‘›˜ž‘ȱ •Š—ȱ ŠŒšž’œ’’˜—ȱ ‹¢ȱ —Ž Œ˜–Ž›œǰȱ ‘Žȱ ™›ŠŒ’ŒŽȱ ˜ȱ ›Š—’—ȱ ™›’˜›’¢ȱ ˜ȱ ›Ž•Š’ŸŽœȱ

Traditional Land Rights

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in purchasing the property in question would have served this purpose well, particularly if many facets of local society were organized through •’—ŽŠŽȱ’ŽœǰȱŠœȱ Šœȱ‘ŽȱŒŠœŽȱ’—ȱ‘ŽȱŽ ȱŽ››’˜›’ŽœǯȱǰȱŠœȱ’—ȱ ˜’ȱ Šǰȱ‘ŽœŽȱ ™ž›Œ‘ŠœŽœȱ Ž›Žȱ˜ĞŽ—ȱ‘Žȱ›Žœž•ȱ˜ȱ•˜—ȬŽ›–ȱ•˜Š—œȱ’œœžŽȱ‹¢ȱ—Ž Œ˜–Ž›œǰȱ prohibiting zhunzhe—the purchase of land taken as security—would have blocked such a purchase. Moreover, if these incumbents had to part with their property rights, the various practices—both the legally endorsed “conditional” sales and the customary practices rendering the “absolute” sale not quite absolute—allowing previous owners to retain claims over ‘Ž’›ȱ ǻŠ•’Ž—ŠŽǼȱ ™›˜™Ž›¢ȱ  ˜ž•ȱ ‘ŠŸŽȱ ‹ŽŽ—ȱ Œ˜—Ž—’Š•ȱ ˜ȱ ‘Ž’›ȱ Ž››’˜›’Š•ȱ interests.

˜ ŽŸŽ›ǰȱ ‘ŽœŽȱ ™›ŠŒ’ŒŽœȱ Ž—‘Š—Œ’—ȱ ‘Žȱ ’—Œž–‹Ž—œȂȱ ’—Ž›Žœœȱ  ˜ž•ȱ ‘ŠŸŽȱ‹ŽŽ—ǰȱŠ•–˜œȱ‹¢ȱŽę—’’˜—ǰȱ˜™™˜œŽȱ˜ȱ‘Žȱ—Ž Œ˜–Ž›œȂȱ’—Ž›Žœœȱ’—ȱ œŽĴ•’—ǰȱŠŒšž’›’—ȱ•Š—ǰȱŠ—ȱŒ›ŽŠ’—ȱŠȱ–ŠŽ›’Š•ȱ‹ŠœŽǯȱ‘ŽœŽȱ•ŠĴŽ›ȱ’—Ž›Žœœȱ  ˜ž•ȱŠ•œ˜ȱ‘ŠŸŽȱ‹ŽŽ—ȱ›ŽĚŽŒŽȱ’—ȱ•Š—ȱ›Š—œŠŒ’˜—œǰȱŠ—ȱ‘Žȱ’—ŒŽ—’ŸŽȱ‘Ž›Žȱ would have been to limit the vendor’s retention of land rights to a minimum. A common clause found in deeds throughout China, stressing the “absolute” nature of an absolute sale as “forever, there shall be no troublemaking or regrets, no additional payment, no redemption, or any other misconduct,” would be entirely in line with this newcomer-purchaser’s interest. In other words, the interest to “contain” conditional sales could be held by the parties themselves and did not belong exclusively to the state. ‘’œȱŠĴŽ–™ȱŠȱ™•ŠŒ’—ȱœ˜–Žȱ˜›–œȱ˜ȱ•Š—ȱ›Š—œŠŒ’˜—ȱ’—ȱ‘ŽȱŒ˜—Ž¡ȱ˜ȱ social dynamics observed in the New Territories provides, at best, only a •’–’ŽȱŽ¡™•Š—Š’˜—ȱ˜›ȱ‘ŽœŽȱ™›ŠŒ’ŒŽœǯȱ ˜ ŽŸŽ›ǰȱ’ȱ˜ŽœȱœžŽœȱ‘Šȱ‘Žȱ tension between “absolute” land rights and the various limitations posed ‹¢ȱ‘ŽȱȃŒ˜—’’˜—Š•Ȅȱ Ž›Žȱ’—ȱ•’—Žȱ ’‘ȱŠȱ›ŽŒž››’—ȱ™ŠĴŽ›—ȱ’—ȱ‘Žȱ¢—Š–’Œœȱ of local politics. This would be a step forward from an explanation that had to rely on seeing “absolute” land rights as a state interest and condi’˜—Š•ȱœŠ•ŽȱŠœȱ‹ŠœŽȱ˜—ȱꕒŠ•ȱ™’Ž¢ȱŠ—ȱŠȱœŽ—œŽȱ˜ȱ›Žœ™˜—œ’‹’•’¢ȱ˜ȱ™›˜ŽŒȱ inherited patrimony. Conclusion: Land Transactions, Social Structures, and Economic Growth This chapter started with a discussion of how traditional land rights may have related to the development of a market economy for land. In cases ›˜–ȱ‘ŽȱŽ ȱŽ››’˜›’ŽœǰȱŠ—Š•¢£Žȱ‘Ž›ŽȱŠ—ȱ’—ȱ™›ŽŸ’˜žœȱ ˜›”œǰȱ Žȱꗍȱ that land transactions were conducted as part of multilayered social re•Š’˜—œȱ‹Ž ŽŽ—ȱ™Š›’ŽœȱŠ—ȱ Ž›Žȱ‘ŽŠŸ’•¢ȱ’—ĚžŽ—ŒŽȱ‹¢ȱŠ–’•¢ǰȱŽ››’˜›¢ǰȱ ritual, and local politics. The social processes associated with such considŽ›Š’˜—œǰȱŠ–˜—ȱ‘Ž–ȱ•’—ŽŠŽȱ‹ž’•’—ǰȱ˜›Š—’£Š’˜—ȱ˜ȱ›’žŠ•œǰȱœŽĴ•Ž–Ž—ǰȱ

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and territorial competition, have been studied in these cases. Some institutions of land transaction, widely observed in Qing China, appear to provide for particular needs in the context of these social processes; this chapter has tried to clarify the formal and informal rules, or institutions, regulating land transactions. —Žȱ’–Ž—œ’˜—ȱ˜ȱ•Š—ȱ›Š—œŠŒ’˜—œȱŒ˜—žŒŽȱŠœȱ™Š›ȱ˜ȯŠ—ȱ˜ĞŽ—ȱ inseparably from—various social relations was that the transactions were ’—ĚžŽ—ŒŽȱ‹¢ȱŠŒ˜›œȱ•’–’’—ȱ‘ŽȱœŒ˜™Žȱ˜ȱ™˜Ž—’Š•ȱ™Š›’Œ’™Š—œǰȱ‘Šȱ’œǰȱ interests in keeping parties outside a particular social sphere from becoming potential purchasers. Moreover, the institutions that allowed parties alienating land to retain certain rights to the property were much used, making for “weak” property rights. It is possible that the situation is representative of the notion that where the economy is “embedded” in the social structure, a market cannot fully develop.20ȱ ˜ ŽŸŽ›ǰȱ’ȱ ˜ž•ȱ—˜ȱ‹Žȱ enough to say that the economy was thus embedded. The state’s legislative measures were designed to contain the disputes arising from ambiguous property rights, and parties with an interest to establish “stronger” property rights, thus trying to ensure absolute sales, certainly existed. A process needing further study here is the interaction between the notion of absolute sales and land rights—eventually fully endorsed in the  ›’ĴŽ—ȱ •Š ȯŠ—ȱ ‘Žȱ —˜›–œȱ ŽŸŽ•˜™Žȱ ‘›˜ž‘ȱ ™›ŠŒ’ŒŽǰȱ ˜ĞŽ—ȱ  ’‘ȱ ›Žgional variations that limited, or sometimes undermined, these property rights. What can be said at this stage is the following. ’›œǰȱ‘Ž›Žȱ Šœȱ—˜ȱŠȱœ’–™•Žȱ’Œ‘˜˜–¢ȱ‹Ž ŽŽ—ȱœŠŽȱ•Š ȱŠ—ȱǻ™›’ŸŠŽǼȱ practice. Strong property rights were desired when private parties were dealing with each other, and the traditional categories of land transaction  Ž›ŽȱŒŠ™Š‹•Žȱ˜ȱœŽĴ’—ȱ˜žȱŒ•ŽŠ›ȱ™›˜Ÿ’œ’˜—œȱ›ŽĚŽŒ’—ȱ‘’œȱŽœ’›Žǯȱ ˜ ŽŸŽ›ǰȱ‘Žȱ™˜ Ž›ȱ‹Š•Š—ŒŽȱ‹Ž ŽŽ—ȱ‘Žȱ™Š›’Žœǰȱ˜ĞŽ—ȱŒ›ŽŠŽȱ˜ŸŽ›ȱ•˜—ȱ™Ž›’˜œȱ in the process of local social structuring, also allowed for these provisions to be undermined. This could, for example, take place through the establishment of customary practices allowing the retention of certain rights despite an absolute sale. Moreover, whereas Qing legislative measures did endorse strong property rights through clarifying how ambiguous sales might be determined as absolute, and disallowing such practices as zhaojia ŠĞŽ›ȱŠ—ȱŠ‹œ˜•žŽȱœŠ•Žǰȱ‘ŽȱŒ˜ž›œȱŠ›ŽȱŠ•œ˜ȱ”—˜ —ȱ˜ȱ‘ŠŸŽȱŽ—˜›œŽȱŠȱ•˜ŒŠ•ȱ custom for the payment of such a form of zhaojia (Zhongguo diyi lishi danganguan and Zhongguo shehui kexueyuan lishi yanjiusuo 1988, case ŘŖŞǼǯȱ Second, and more important, this tension did not represent a dichotomy between an “embedded” customary economy and a market-oriented economy. Whereas the tensions among private parties regarding strong ȱŒ•Šœœ’ŒŠ•ȱœŠŽ–Ž—ȱ˜ȱ‘’œȱ—˜’˜—ȱ’œȱ˜ž—ȱ’—ȱ˜•Š—¢’ȱǻŗşśŝǼǯ

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or weak property rights appear to have been part of the power relationships among the parties, the government’s concern had more to do with the keeping of the peace than with the establishment of these rights as Š—ȱŽ—ȱ’—ȱ’œŽ•ǯȱ—ȱ‘Žȱ•˜ŒŠ•ȱœ˜Œ’Š•ȱœ›žŒž›’—ǰȱ‘Žȱ™Š›’ŽœȱŠĴŽ–™’—ȱ˜ȱ ensure the absolute nature of a sale are unlikely to have been concerned  ’‘ȱŒ›ŽŠ’—ȱŠȱ–Š›”ŽȱŽ—Ÿ’›˜—–Ž—ȱ˜›ȱ•Š—ǯȱž—ȱ£ŽȬŒ‘’žȱ˜ȱ ˜’ȱ Šǰȱ˜›ȱ example, was more concerned with building a territorial base for himself and the Yungs, and he certainly did not proceed to sell his property to outsiders. There is no reason to assume that the government had the same motives as private parties did in endorsing strong property rights, but even if the containment of property disputes had economic implications, in a system where land-tax collection was based largely on Ming records Š—ȱ ›Ž•’Žȱ ˜—ȱ ‘Žȱ ž—Œ’˜—’—ȱ ˜ȱ •˜ŒŠ•ȱ œ˜Œ’Š•ȱ ›˜ž™œǰȱ ’ȱ ’œȱ ’ĜŒž•ȱ ˜ȱ œŽŽȱ how the government might have wished to pursue this as an economic –ŽŠœž›ŽȱǻŠœž‹Š›ŠȱŘŖŖŚǼǯȱ Thus, the institutions of land transactions in Qing China had elements that were both detrimental to and compatible with the development of a –Š›”Žȱ ŽŒ˜—˜–¢ǯȱ ˜ ŽŸŽ›ǰȱ Šȱ œž¢ȱ ˜ȱ œ˜–Žȱ Ž ȱ Ž››’˜›’Žœȱ ŒŠœŽœȱ œžgests that these elements coexisted in a social environment where the market was not a primary concern, both among private parties and in their relations with the Qing government.

 

Chinese Enterprises across Cultures: ‘Žȱ ˜—ȱ ˜—ȱžœ’—Žœœȱ¡™Ž›’Ž—ŒŽ in the Early Twentieth Century

 ȱȬȱ 

˜•˜—’Š•ȱ ˜—ȱ ˜—ȱ ŠœȱŠȱȃ›˜—’Ž›ȱœ˜Œ’Ž¢Ȅȱ˜—ȱ‘Žȱ‹˜›Ž›ȱ˜ȱ ˜ȱŒž•ž›Žœȱ and trading communities. By using both Chinese and British business inœ’ž’˜—œǰȱŸŠ›’˜žœȱ›˜ž™œȱ˜ȱ›ŠŽ›œȱŽ—Ž›Žȱ ˜—ȱ ˜—ȱŠȱ’쎛Ž—ȱœŠes of their business ventures. Western business laws and traditional Chinese business customs also converged in the “mixing vessel” of colonial

˜—ȱ ˜—ǯȱ‘Žȱ—Š››Š’ŸŽȱ‘Ž›Žȱ’••žœ›ŠŽœȱ‘˜ ȱŠŒžŽȱ™˜•’’ŒŠ•ȱ’—œŠ‹’•’¢ȱ in southern China accelerated this mixing process in the early twentieth century. Company Law and Its Migration to the Far East

˜—ȱ ˜—Ȃœȱœ˜›¢ȱ‘Šœȱ‹ŽŽ—ȱ˜•ȱ’—ȱ–Š—¢ȱ Š¢œȱŠ—ȱ›˜–ȱ–Š—¢ȱ™Ž›œ™ŽŒtives. One way to view that story is through the lens of economic history, especially the making of its hybrid business traditions. Born of an encounŽ›ȱž›’—ȱ‘Žȱ™’ž–ȱŠ›ȱ‹Ž ŽŽ—ȱ‘Žȱ›’’œ‘ȱŠ—ȱ‘’—ŽœŽȱŽ–™’›Žœǰȱ ˜—ȱ Kong’s story is vividly told through the plot of how Western business laws migrated to the East. For instance, with the passing of the Joint Stock Com™Š—’ŽœȱŒȱ’—ȱŗŞŚŚȱ’—ȱ›’Š’—ǰȱ›’’œ‘ȱꛖœȱ Ž›Žȱ’ŸŽ—ȱ•Ž’’–ŠŽȱŒ‘Š——Ž•œȱ ˜ȱ’—Œ˜›™˜›ŠŽȱ‘Ž–œŽ•ŸŽœȱŠœȱŒ˜–™Š—’Žœȱ ’‘˜žȱŠȱ›˜¢Š•ȱŒ‘Š›Ž›ǯȱ—ȱŗŞśśǰȱ the Limited Liability Act was introduced. New and old company statžŽœȱ Ž›ŽȱŒ˜—œ˜•’ŠŽȱ’—˜ȱ‘Žȱ—•’œ‘ȱ˜–™Š—’ŽœȱŒȱ˜ȱŗŞŜŘǯȱ’‘ȱ‘’œȱ legislation, incorporating companies into new business enterprises with limited liability became a legal vehicle accessible to the general public. Companies could be incorporated not only by charter or a special act of Parliament but by registration under the company law. This institutional

Chinese Enterprises across Cultures

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Œ‘Š—Žȱ Œ›ŽŠŽȱ Š–™•Žȱ ˜™™˜›ž—’’Žœȱ ˜›ȱ ›’’œ‘ȱ Ž—›Ž™›Ž—Žž›œǯȱ Ž—ŒŽǰȱ many scholars argue that these developments greatly induced the remarkable growth of commerce within the British empire from the middle of the —’—ŽŽŽ—‘ȱ ŒŽ—ž›¢ȱ ǻ ž—ȱ ŗşřŜDzȱ ˜Ž‹žŒ”ȱ ŗşşśDzȱ ’••–Š—ȱ Š—ȱ ŠŽȱ ŗşşśDzȱ ’Š›ȱŠ—ȱŽŸ¢ȱŗşŝŝǼǯȱ‘Žȱ—Ž¡ȱ‘Š™Ž›ȱǻ˜ȱŠ—ȱŽŽȂœǼȱ ’••ȱ›Žž›—ȱ˜ȱ‘Žȱ bearing of this model on China in further detail. With the rise of Western imperialism and colonialism, corporation and company enterprises quickly spread to other parts of the world. By the nineteenth century, corporate laws had been transplanted to the British Œ˜•˜—’Žœǯȱ ’‘ȱ ›’’œ‘ȱ Œ˜•˜—’Š•ȱ ›ž•Žȱ ŽœŠ‹•’œ‘Žȱ ꛜȱ ’—ȱ Ž—Š—ǰȱ ‘Ž—ȱ ’—ȱ ’—Š™˜›Žǰȱ ˜—ȱ ˜—ǰȱŠ—ǰȱŠȱ‘Žȱž›—ȱ˜ȱ‘ŽȱŒŽ—ž›¢ǰȱ‘Žȱ˜›Ž’—ȱŒ˜—cessions of Canton and Shanghai, a commercial corridor slowly developed in maritime Asia. In particular, the three maritime metropolises of ’—Š™˜›Žǰȱ ˜—ȱ ˜—ǰȱ Š—ȱ ‘Š—‘Š’ȱ ›ŠžŠ••¢ȱ ‹ŽŒŠ–Žȱ ‘Žȱ frontier par excellence for many Chinese and Western merchants. On this Singapore ˜—ȱ ˜—Ȭ‘Š—‘Š’ȱ Š¡’œǰȱ ‹žœ’—Žœœȱ •Š œȱ ’—Œ›ŽŠœ’—•¢ȱ ™›ŽŸŠ’•Žȱ  ’‘’—ȱ the mixed mercantile circles. These cities became commercial hubs where ‘’—ŽœŽȱ–’›Š—œȱŒ˜ž•ȱ˜‹Š’—ȱž—œȱ›˜–ȱŠȱꗊ—Œ’Š•ȱ–Š›”ŽȱŠœȱ Ž••ȱŠœȱ –Š›”Žȱ’—˜›–Š’˜—ȱ˜›ȱ‘Ž’›ȱ‹žœ’—ŽœœȱŽ—ŽŠŸ˜›œȱǻŽ’ȱŗşşŜǼǯ In concessions such as Canton and Shanghai, foreign laws transformed the cities into “special economic zones.” Under extraterritoriality, the legal frameworks of these concessions became increasingly detached from that of the Chinese state. These new commercial institutions, protected by a Western legal framework, represented new business opportunities for Chinese merchants. As we will see, the foreign concessions of coastal Chi—Šȱ™›˜Ÿ’ŽȱŠȱ™•ŠŒŽȱ˜›ȱ‘’—ŽœŽȱ–Ž›Œ‘Š—œȱ˜ȱꗍȱœŠŽȱ‘ŠŸŽ—ȱ’—ȱ’–Žœȱ˜ȱ ™˜•’’ŒŠ•ȱŒ›’œŽœǯȱ‘Ž¢ȱœ˜ž‘ȱ‘Žȱ•ŽŠ•ȱ™›˜ŽŒ’˜—ȱ˜ěŽ›Žȱ‹¢ȱ˜›Ž’—ȱŒ˜ž›œȱ ’—ȱ ˜—ȱ ˜—ȱ Š—ȱ ˜‘Ž›ȱ ›ŽŠ¢ȱ ™˜›œǰȱ Šœȱ  Ž••ȱ Šœȱ ‹¢ȱ —Ž ˜›”œȱ ˜ȱ ™˜•’’cal patrons based around these coastal cities. Through their familial and regional networks, Chinese merchants mobilized capital to operate their business ventures, built market connections, and shielded themselves ›˜–ȱ ‘Š›Šœœ–Ž—ȱ ‹¢ȱ ‘’—ŽœŽȱ ˜ĜŒ’Š•œȱ ǻŠ’›‹Š—”ȱ ŗşŜŞDzȱ Š˜ȱ ŗşŞŜDzȱ ˜‘Ž—ȱ ŗşŝŖDzȱ ‘ž—ȱ ŗşşŞǰȱ řȮŜǰȱ ŗŘŝȮŗřŘǼǯȱ ‘Žȱ Œ‘Š™Ž›ȱ ‹¢ȱ Ž‹’—ȱ Šȱ ’—ȱ ‘’œȱ Ÿ˜•ume discusses the case of commercial laws in the Shanghai concession in ›ŽŠŽ›ȱŽŠ’•Dzȱȱ ’••ȱ˜Œžœȱ˜—ȱ‘Žȱœ’žŠ’˜—ȱ’—ȱ ˜—ȱ ˜—ȱ‘Ž›Žǯ Traditional Chinese Business Practice in Hong Kong As early as the beginning of the nineteenth century, the term “company” (translated kungsze ݀ৌ in Cantonese and gongsiȱ ’—ȱ Š—Š›’—Ǽȱ  Šœȱ ’—troduced to Canton by Western missionaries active in southern China.1 ‘Žȱ˜–™Š—’Žœȱ›’—Š—ŒŽȱ˜ȱŗŞŜśǰȱŽ—ŠŒŽȱ’—ȱ ˜—ȱ ˜—ǰȱ Šœȱ‘Žȱꛜȱ ŗȲȱ

For a detailed historical account of the term gongsiǰȱœŽŽȱŠ—ȱ’žŠ—ȱǻŘŖŖŘǼǯ

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Stephanie Po-yin Chung

company law for regulating businesses on the China coast. It was enacted ‹Š›Ž•¢ȱ‘›ŽŽȱ¢ŽŠ›œȱŠĞŽ›ȱ‘Žȱ›’’œ‘ȱ˜–™Š—’ŽœȱŒȱŗŞŜŘǯȱ‘Žȱ˜–™Š—’Žœȱ Ordinance was used by a small number of Western companies that operŠŽȱ’—ȱ‹˜‘ȱ ˜—ȱ ˜—ȱŠ—ȱ‘Š—‘Š’Dzȱ’ȱ‘Šȱ•’Ĵ•ŽȱŽěŽŒȱ˜—ȱ‘’—ŽœŽȱ‹žœ’—ŽœœŽœǯȱŠ—¢ȱ‘’—ŽœŽȱŽ—Ž›™›’œŽœǰȱ ’‘˜žȱ›Ž’œŽ›’—ȱ ’‘ȱ•˜ŒŠ•ȱ˜ĜŒ’Š•œǰȱ ™›ŽŽ››Žȱ˜ȱ˜™Ž›ŠŽȱž—Ž›ȱ›Š’’˜—Š•ȱꛖȱ—Š–ŽœǯȱžǰȱŠȱ›Š’’˜—Š•ȱꛖȱ —Š–Žȱ ˜—ȱ ’œȱ ˜ —ȱ Œ˜ž•ȱ —˜ȱ ’—˜›–ȱ ˜ĜŒ’Š•œȱ ˜ȱ ˜ —Ž›œ‘’™ǰȱ Š—ȱ ‘Šȱ Œ›ŽŠŽȱ’ĜŒž•’Žœȱ˜›ȱ˜ĜŒ’Š•œȱ ‘Ž—ȱ‘Ž¢ȱ›’Žȱ˜ȱŽ—˜›ŒŽȱŒ˜—›ŠŒœȱž›’—ȱ business disputes. This practice confused not only the foreign community ‹žȱ Š•œ˜ȱ ‘Žȱ ‘’—ŽœŽȱ Œ˜––ž—’¢ȱ Š•’”Žǯȱ ˜•˜—’Š•ȱ ˜ĜŒ’Š•œȱ ’—ȱ ˜—ȱ ˜—ȱ noted that one of the strangenesses of these Chinese practices rested in the mobilizing of capital in the name of a tong ූ (Cantonese pronunciation; tang ’—ȱŠ—Š›’—Ǽ.ȱ—ȱ‘ŽȱŽ¢Žœȱ˜ȱ›’’œ‘ȱ˜ĜŒ’Š•œȱ’—ȱ ˜—ȱ ˜—ǰȱ‘Žȱ˜—ȱ was an entity like the corporate estate owned by Chinese traders. It was common for Chinese merchants to adopt one or several tong names to represent their corporate interests in a wide array of business ventures. As tong shares could be inherited by the descendants of the tong’s founder, ‘Žȱž—’ȱ˜ȱ˜ —Ž›œ‘’™ȱ Šœȱ—˜ȱŒ•ŽŠ›•¢ȱŽę—ŽȱŠœȱŠȱ‘˜žœŽ‘˜•ȱ˜›ȱŠ—ȱ’—’Ÿ’žŠ•ȱ ǻ ˜—ȱ ˜—ȱ ˜ŸŽ›—–Ž—ȱ ŗşŖŗǼǯȱ ‘Žȱ ™›˜™Ž›¢ȱ ›’‘œȱ ˜ȱ ‘Žȱ ˜—ȱ  Ž›Žȱ‘Ž—ŒŽȱ›Š‘Ž›ȱŠ–‹’ž˜žœȱ‹žȱŠȱ‘ŽȱœŠ–Žȱ’–ŽȱŸŽ›¢ȱ̎¡’‹•Žǯ Recent historical discoveries suggest that the origin of the idea of the tong can be traced back to the sixteenth century. The Chinese character denoting the word “tong” is identical to the character used for “hall” (e.g., an ancestral hall, ⼴ූǼǯȱ‘Žȱ’ŽŠȱœŠ—œȱ˜›ȱŠȱ™‘¢œ’ŒŠ•ȱ‹ž’•’—ǰȱ‹žȱ’—ȱ’œȱ economic application, no concrete building is implied. By the sixteenth century, it was common practice to register a tong name (for instance, the —Š–Žȱ˜ȱŠ—ȱŠ—ŒŽœ›Š•ȱ‘Š••Ǽȱ˜—ȱ‘ŽȱŠ¡ȱ‹˜˜”œȱ˜ȱ˜ĜŒ’Š•ȱ‘˜žœŽ‘˜•ȱ›ŽŒ˜›œǯȱ ‘ŽœŽȱ˜—œȱ˜ĞŽ—ȱ˜ —Žȱ™›˜™Ž›’Žœȱ˜—ȱ‘Žȱž—Ž›œŠ—’—ȱ‘Šȱ‘Ž¢ȱ Ž›Žȱ žœŽȱ ˜ȱ –Š’—Š’—ȱ Š—ŒŽœ›Š•ȱ  ˜›œ‘’™ȱ ˜›ȱ ›Ž•’’˜žœȱ œŠŒ›’ęŒŽœȱ ǻ’žȱ ‘’ Ž’ȱ ŗşşŝDzȱ‘˜’ȱŗşşśDzȱŠœž‹Š›ŠȱŘŖŖŚǼǯ2 ‘’œȱ™›ŠŒ’ŒŽȱŒ˜ž•ȱŠ•œ˜ȱ‹Žȱ˜ž—ȱ’—ȱŒ˜•˜—’Š•ȱ ˜—ȱ ˜—ǯȱ–‹’ž˜žœȱ as it may be, there is a rationale for the institution to prevail among Chinese merchants. The institutions of tong can be easily found in both rural Š—ȱž›‹Š—ȱ ˜—ȱ ˜—ȱǻœŽŽȱ˜—ȱŗşşŖǼǯȱ‘Žȱ˜—Ȃœȱ̎¡’‹’•’¢ȱŠ••˜ Žȱ’œȱ ˜ —Ž›œȱ˜ȱž—Ž›Š”Žȱ’쎛Ž—ȱŠŒ’Ÿ’’Žœǯȱ—ȱŠȱ“ž–Ž—ȱ–ŠŽȱ’—ȱŗşŗŖǰȱ‘Žȱ Œ˜ž›ȱ ’—ȱ ˜—ȱ ˜—ȱ šžŽœ’˜—Žȱ ‘Žȱ •ŽŠ•ȱ Œ‘Š›ŠŒŽ›ȱ ˜ȱ ‘Žȱ ˜—ȱ ǻŽžŽ›ǰȱ ›˜Œ”Ž•–Š——ǰȱ Š—ȱ ˜ǯǰȱ™™Ž••Š—œǰȱ Ÿǯȱ ž—ȱ ˜”ȱ ˜—ȱ ŗşŗŖǼǯȱ ‘Žȱ ›’’œ‘ȱ court held that the Chinese tong was not a legal entity with a right to œžŽȱ˜›ȱ‹ŽȱœžŽǯȱ—ȱ ˜ȱ˜‘Ž›ȱ ˜—ȱ ˜—ȱŒ˜ž›ȱŒŠœŽœǰȱ‘Žȱ•ŽŠ•ȱœŠžœȱ˜ȱ the tong was contested. The court decided that a tong was not a legal ŘȲȱ ŽŽȱ Š•œ˜ȱ ‘Žȱ ‘’œ˜›¢ȱ ˜ȱ ‘Žȱ ‘’—ŽœŽȱ ›žœ˜›Žȱ ˜—›Ž—ȱ Š—ȱ ’—ȱ Žħ’—ȱ ǻ˜Œ‘›Š—ȱ ŘŖŖŜǰȱ Œ‘Š™ǯȱŘǼǯ

Chinese Enterprises across Cultures

ŗŝś

person (Tung Sang Wing Firm v. Chow Chun Kit 1910; Chow Cham v. Yuet Seem ŗşŗŖǼDzȱ‘Ž›Ž˜›Žǰȱ’ȱŒ˜ž•ȱ—˜ȱŽ—“˜¢ȱ•ŽŠ•ȱ›ŽŒ˜—’’˜—ȱ’—ȱ ˜—ȱ Kong. Nor was a tong entitled to accumulate wealth or transfer or inherit company shares. These cases highlight the imposition of British company law on Chinese business practice. The result was the surfacing of a grey legal area between Chinese customary commercial law and British law. ȱꛜȱ•Š—ŒŽǰȱ‘’œȱ›Ž¢ȱŠ›ŽŠȱŸŽ›¢ȱ•’”Ž•¢ȱ˜‹œ›žŒŽȱ•Š ȱŽ—˜›ŒŽ–Ž—ȱŠ—ȱ increased transaction costs. But ironically, for many Chinese merchants ǻŽœ™ŽŒ’Š••¢ȱ‘˜œŽȱ ‘˜ȱŒ‘˜œŽȱ˜ȱ’—ŸŽœȱ ’‘ȱ˜—ȱ—Š–ŽœǼǰȱ‘’œȱ•ŽŠ•ȱŠ–‹’ž’¢ȱŠ—ȱ̎¡’‹’•’¢ȱ™›˜Ÿ’ŽȱŠȱœ‘’Ž•ȱ˜ȱ™›˜ŽŒȱ‘Ž–ȱ›˜–ȱ™˜•’’ŒŠ•ȱ’—œŠ‹’•ity in China, where they were usually based. To illustrate how Chinese –Ž›Œ‘Š—œȱ–ŠŽȱžœŽȱ˜ȱ‘’œȱ•ŽŠ•ȱ̎¡’‹’•’¢ǰȱ•ŽȱžœȱŽ¡Š–’—Žȱ‘ŽȱŒ˜–™Š—¢ȱ ›Ž’œ›Š’˜—ȱ›ŽŒ˜›œȱ’—ȱ ˜—ȱ ˜—ȱŠ—ȱ ‘Šȱ‘Ž¢ȱ›ŽŸŽŠ•ǯȱ East Meeting West ˜•˜—’Š•ȱ ˜—ȱ ˜—ȱǻŗŞŚŗȮŗşşŝǼȱ ŠœȱŠ—ȱ’––’›Š—ȱœ˜Œ’Ž¢ȱ–ŠŽȱž™ȱ˜ȱ several generations of transient populations. By using Eastern and WestŽ›—ȱ’—œ’ž’˜—œǰȱ’쎛Ž—ȱ›˜ž™œȱ˜ȱ‘’—ŽœŽȱ›ŠŽ›œȱœŽȱž™ȱ‘Ž’›ȱŸŽ—ž›Žœȱ ’—ȱ ˜—ȱ ˜—ǯȱ ‘’œȱ ŽŸŽ•˜™–Ž—ȱ ’œȱ ›ŽĚŽŒŽȱ ’—ȱ ˜—ȱ ˜—Ȃœȱ Œ˜–™Š—¢ȱ registration records,3 which can be seen as a barometer of China’s political and economic instability. ’—ŒŽȱ ‘Žȱ ’—›˜žŒ’˜—ȱ ˜ȱ Œ˜–™Š—¢ȱ •Š ȱ ˜ȱ ˜—ȱ ˜—ȱ ’—ȱ ŗŞŜśǰȱ –˜œȱ registered companies were foreign owned and managed. According to the Š›Œ‘’ŸŽȱŠŸŠ’•Š‹•Žȱ˜Š¢ǰȱŠ‹˜žȱ꟎ȱ‘’—ŽœŽȱꛖœȱ Ž›Žȱ›Ž’œŽ›Žȱ’—ȱ ˜—ȱ

˜—ȱ‹Ž˜›ŽȱŗşŖŖǯȱ˜ž›ȱ˜ȱ‘Ž–ȱ Ž›ŽȱŽ—ŠŽȱ’—ȱ‘ŽȱꛎȱŠ—ȱ–Š›’—Žȱ’—surance business. These companies were Man On Insurance (Wanan yangmian baoxian 㨀ᅝ⋟䴶ֱ䱾Ǽǰȱ‘ž—ȱ—ȱ—œž›Š—ŒŽȱǻžŠ—Š—ȱ‘ž˜¡’Š— ܼᅝ ☿䱾Ǽǰȱȱ—ȱŠ›’—ŽȱŠ—ȱ’›Žȱ—œž›Š—ŒŽȱǻ’Š—ȱ¢Š—–’Š—ȱ“’Š—ȱ‘ž˜£‘žȱ‹Š˜Ȭ xian ᅰᅝ⋟䴶‫ֱ⟁☿ݐ‬䱾ǼǰȱŠ—ȱž—ȱ—ȱ’›Žȱ—œž›Š—ŒŽȱǻ˜—ȂŠ—ȱ‹Š˜¡’Š— ৠᅝֱ䱾Ǽǯ4 According to the registration records, these companies had a small number of founders and shareholders who were mainly immigrants ›˜–ȱ Š–ȱ ˜’ȱ ǻŠ—‘Š’ȱ फ⍋Ǽǰȱ Š—¢žȱ ⬾⾎, and Chiuchow (Chaozhou ╂⌆Ǽȱ˜ž—’Žœȱ˜ȱ žŠ—˜—ȱ›˜Ÿ’—ŒŽǯȱ•–˜œȱŠ••ȱ˜ȱ‘Ž–ȱ Ž›ŽȱŽ—ŠŽȱ ’—ȱ‘ŽȱŠ–ȱŠ”ȱ ˜—ȱǻŠ—‹Ž’ȱ‘Š—ȱफ࣫㸠Ǽȱ‹žœ’—Žœœȱ’—ȱ ˜—ȱ ˜—ǰȱ‘Šȱ Š—¢ȱ ˜ŸŽ›—–Ž—ȱ ›ŽŒ˜›œȱ ’—ȱ ˜—ȱ ˜—ǰȱ ’—Œ•ž’—ȱ ‘˜œŽȱ ›Ž•ŠŽȱ ˜ȱ Œ˜–™Š—¢ȱ registration, were destroyed or damaged during the Second World War. The company registration records used in this chapter were reconstructed from the surviving records. ŚȲȱ ‘Ž›ȱ ‘Š—ȱ ‘ŽœŽȱ ˜ž›ȱ ’—œž›Š—ŒŽȱ Œ˜–™Š—’Žœǰȱ Šȱ ˜—ȱ ˜—ȱ Š—ȱ ˜ •˜˜—ȱ Š—ȱ Š—ȱ ˜Š—ȱ —ŸŽœ–Ž—ȱ ˜ǯȱ ȱ ǻŗŞşşǼȱ  Šœȱ Š•œ˜ȱ ›Ž’œŽ›Žǯȱ ŽŽȱ ˜–™Š—¢ȱ Ž’œ›Š’˜—ȱ ŽŒ˜›œǰȱ ›’Œ•Žȱ˜ȱœœ˜Œ’Š’˜—ȱŠ—ȱ’œœȱ˜ȱ‘Š›Ž‘˜•Ž›œǰȱŽ›’ŽœȱŗŘŘǰȱŗŘřȱǻ

ȱŗŘŘǰȱŗŘřǼDzȱ˜–™Š—¢ȱ Ž’œ›Š’˜—ȱ ˜ž›ǰȱ ’œȱ ˜ȱ ˜–™Š—’Žœȱ ˜ž—Ȭž™ȱ ’—ȱ ˜—ȱ ˜—DZȱ ŗşŘśȮŗşŜśǰȱ Ž›’Žœȱ ŗŘŚȱ ǻ

ȱŗŘŚǼǯȱŽŽȱŠ•œ˜ȱ ˜—ȱ ˜—ȱ ˜ŸŽ›—–Ž—ǰȱ‘Žȱž™›Ž–Žȱ˜ž›ȱ˜ȱ ˜—ȱ ˜—ǰȱ™›˜‹ŠŽȱ “ž›’œ’Œ’˜—ǰȱ ’••œȱǻ

ȱŗŚŚǼǯ řȲȱ

ŗŝŜ

Stephanie Po-yin Chung

’œǰȱ›Š’—ȱꛖœȱŽŠ•’—ȱ ’‘ȱ’–™˜›œȱŠ—ȱŽ¡™˜›œȱ˜ȱŒ˜––˜’’ŽœȱŠ–˜—ȱ œ˜ž‘ȱ‘’—ŠǰȱŠ•Š¢ŠǰȱŠ—ȱ—˜›‘Ž›—ȱ‘’—ŠǼǯȱŽŸŽ›Š•ȱ˜ȱ‘Ž–ȱ Ž›ŽȱŠ•œ˜ȱ’rectors of the Nam Pak-hong Kung-so (Nanbei hang gongsuo फ࣫㸠݀ ᠔Dzȱ•’Ž›Š••¢ǰȱ‘ŽȱŠ–ȱŠ”ȱ ˜—ȱœœ˜Œ’Š’˜—Ǽǯȱ‘Ž¢ȱ Ž—ȱ˜ȱ ˜—ȱ ˜—ȱ˜ȱ ˜™Ž›ŠŽȱ‘Ž’›ȱ‹žœ’—ŽœœŽœȱœŠ›’—ȱ›˜–ȱ‘ŽȱŗŞŜŖœȱ ‘Ž—ȱ™˜•’’ŒŠ•ȱœŠ‹’•’¢ȱ’—ȱ œ˜ž‘ȱ‘’—Šȱ Šœȱž™œŽȱ‹¢ȱ‘ŽȱŠ’™’—ȱŽ‹Ž••’˜—ǯȱ—Š’—ȱ’—ȱ‘ŽȱꛎȱŠ—ȱ –Š›’—Žȱ’—œž›Š—ŒŽȱ‹žœ’—Žœœȱǻ‹žȱ—˜ȱ’—ȱ‘Žȱ•’Žȱ’—œž›Š—ŒŽȱ‹žœ’—ŽœœǼȱœŽŽ–œȱ˜ȱ have been an extension of their core import-export business (which always ’—Ÿ˜•ŸŽȱœ‘’™™’—ȱŠ—ȱ Š›Ž‘˜žœŽȱœ˜›ŠŽȱ˜ȱ˜˜œǼǯȱȱ’œȱ—˜Ž ˜›‘¢ȱ‘Šȱ —˜—Žȱ˜ȱ‘ŽœŽȱ–Ž›Œ‘Š—œȱ›Ž’œŽ›Žȱ‘Ž’›ȱŒ˜›Žȱ‹žœ’—ŽœœȱǻŠ–ȱŠ”ȱ ˜—Ǽȱ under the Companies Ordinance. The risk involved in the insurance business, especially the need to obtain protection from the clause of “limited liability,” may partly explain their tactic of registration. Given their shared ‹ŠŒ”›˜ž—ȱ’—ȱ‘ŽȱŠ–ȱŠ”ȱ ˜—ȱ‹žœ’—Žœœǰȱ‘ŽœŽȱ’—œž›Š—ŒŽȱŒ˜–™Š—’Žœȱ could be regarded as a group of cooperative insurers. It might not be a coincidence that all these companies had the character on ᅝ (“safety” or ȃœŽŒž›’¢ȄǼȱ’—ȱ‘Ž’›ȱŒ˜–™Š—¢ȱ—Š–Žœǯ From 1900 to 1920, the number of Chinese businesses registered under the Companies Ordinance visibly increased. About twenty-two Chinese ꛖœȱŒŠ—ȱ‹Žȱ˜ž—ȱ’—ȱ‘Žȱ›Ž’œ›Š’˜—ȱ›ŽŒ˜›œǯȱ‘ŽœŽȱŽ—Ž›™›’œŽœȱ’—Œ•žŽȱ ‘’—ŽœŽȱ ꛖœȱ Ž—ŠŽȱ ’—ȱ ‘Žȱ œŽŠ–œ‘’™ȱ ›Š—œ™˜›ȱ ‹žœ’—Žœœǰȱ ›ŽŠ•ȱ ŽœŠŽǰȱ Western-style banks, and Western-style department stores. Most of them had a small number of founders but a large number of shareholders. According to the registration records, these company founders and shareholders mainly originated from Xiangshan 佭ቅ and Siyi ಯ䙥 (“Siyi” literally means “Four Counties,” referring to Toishan ৄቅ, Enping ᘽᑇ, Kaiping 䭟ᑇ, and Xinhui ᮄ᳗Ǽǯȱ˜‘ȱ’¢’ȱŠ—ȱ’Š—œ‘Š—ȱ Ž›ŽȱŠ–˜žœȱ˜›ȱ ™›˜Ÿ’’—ȱ•Š›Žȱ—ž–‹Ž›œȱ˜ȱ˜ŸŽ›œŽŠœȱ‘’—ŽœŽȱ•Š‹˜›Ž›œȱǻŽœ™ŽŒ’Š••¢ȱŠĞŽ›ȱ‘Žȱ ’œŒ˜ŸŽ›¢ȱ ˜ȱ ˜•ȱ ’—ȱ Š•’˜›—’Šȱ Š—ȱžœ›Š•’ŠǼǯȱ Š—¢ȱ ˜ȱ ‘ŽœŽȱ Œ˜–™Š—¢ȱ founders were Chinese immigrants who had returned from the United States or Australia in the 1890s. They returned to China mainly because of American and Australian exclusion policies, which came into operation in the 1880s, targeting Chinese immigrants. Most of these immigrants returned to their native counties, but a number of them chose to reside in

˜—ȱ ˜—ǰȱ ‘Ž›Žȱ‘Ž›Žȱ Ž›ŽȱŠ–™•Žȱ‹žœ’—Žœœȱ˜™™˜›ž—’’ŽœǯȱœȱŠȱŒ˜––ž—’¢ȱ–Š›’—Š•ȱ˜ȱ‘ŽȱŽœŠ‹•’œ‘Žȱ–Ž›Œ‘Š—ȱ›˜ž™œȱ’—ȱ ˜—ȱ ˜—ȱǻŽǯǯǰȱ ‘Žȱ Š–ȱ Š”ȱ ˜—ȱ –Ž›Œ‘Š—œǼǰȱ ‘Ž¢ȱ  Ž›Žȱ ›ŽŠ›Žȱ Šœȱ Šȱ ›˜ž™ȱ ˜ȱ •ŠŽcomers to the colony. They maintained close connections with their home Œ˜ž—’ŽœȱŠ—ȱ‹ŽŒŠ–Žȱ™›’—Œ’™Š•ȱ˜—˜›œȱ˜›ȱ̘˜ȱ›Ž•’Žǰȱ•˜ŒŠ•ȱŽŽ—œŽǰȱŠ—ȱ the building of new schools. The most famous of these overseas-returned immigrants are Ma Yingbiao 侀ឝᔾ and Li Yutang ᴢ✰ූ. Ma was a Xiangshan man returned from Australia, and Li was a Toishan man (of

Chinese Enterprises across Cultures

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‘Žȱ’¢’ȱ›Ž’˜—Ǽȱ›Žž›—Žȱ›˜–ȱ‘Žȱ—’ŽȱŠŽœǯȱ˜‘ȱ˜ȱ‘Ž–ȱœŽĴ•Žȱ’—ȱ

˜—ȱ ˜—ȱ’—ȱ‘ŽȱŗŞşŖœǯȱ In south China, a new set of vocabulary developed to describe these returnees from overseas. They were addressed as “Gold Mountain guests” (Jinshanke 䞥ቅᅶ, with “Old Gold Mountain” referring to California Š—ȱȃŽ ȱ ˜•ȱ˜ž—Š’—Ȅȱ›ŽŽ››’—ȱ˜ȱžœ›Š•’ŠǼǯȱ˜‘ȱŠȱŠ—ȱ’ȱ Ž›Žȱ —Š–Žȱ˜—ȱ–Š—¢ȱ˜ȱ‘Žȱ˜ž—Ž›œȂȱ•’œœȱ˜ȱ‘Žȱ ˜—ȱ ˜—ȱŒ˜–™Š—’Žœȱ™›ŽŸ’ously mentioned. These merchants constituted a community marginal to ‘ŽȱŽœŠ‹•’œ‘Žȱ–Ž›Œ‘Š—ȱ›˜ž™œȱ’—ȱ ˜—ȱ ˜—ǯȱœȱŠȱ›˜ž™ȱ˜ȱȃ—Ž Œ˜–ers” to the colony, they maintained close connections in their joint business ventures. Subscription lists indicate that the adoption of company •Š ȱ‹›˜ž‘ȱ•’Ĵ•ŽȱŒ‘Š—Žȱ˜ȱ‘Žȱ–Ž‘˜ȱ˜ȱŒŠ™’Š•ȱŒ˜••ŽŒ’˜—ȱ˜›ȱ‘ŽœŽȱ—Ž ȱ Chinese businesses. Very clear familial and geographical networks can be ’Ž—’ꮍȱŠ–˜—ȱ‘Žȱœ‘Š›Ž‘˜•Ž›œǯȱ—ȱ’—Ž›Ÿ’Ž ȱ ’‘ȱŠȱ›Ž’›Žȱ–Ž–‹Ž›ȱ˜ȱ the Sincere Company (Xiansi gongsi ‫ܜ‬ᮑ݀ৌǰȱ‘ŽȱꛜȱŽœŽ›—Ȭœ¢•ŽȱŽ™Š›–Ž—ȱœ˜›ŽȱŽœŠ‹•’œ‘Žȱ’—ȱ ˜—ȱ ˜—Ǽȱ›ŽŸŽŠ•œȱ‘Šȱœ˜–Žȱ˜ȱ‘ŽȱŒŠ™’Š•ȱ collected for the department store was raised through the founder’s ances›Š•ȱ‘Š••ȱ’—ȱ’Š—œ‘Š—ȱǻ‘ŽȱŒ˜–™Š—¢Ȃœȱ˜ž—Ž›ȱ ŠœȱŠȱ’—‹’Š˜Ǽǯȱȱ•ŽŠœȱ before the outbreak of the Second World War, a regular amount of Sincere Company’s dividends was distributed to male members of the Ma family in Xiangshan through their ancestral hall there, because several tongs were registered shareholders of the Sincere Company (author’s interview  ’‘ȱ ›ǯȱ ǯȱ ǯȱ Šǰȱ Řȱžžœȱ ŗşşŘǼǯȱ ›ǯȱ ŠȂœȱ ŠŒŒ˜ž—ȱ ŒŠ—ȱ ‹Žȱ ŸŽ›’ꮍȱ ‹¢ȱ the company subscription records. Some of the Sincere Company’s shares were subscribed in the names of tongs. ‘ŽȱŒ˜–™Š—¢ȱ•Š ȱ’—ȱ ˜—ȱ ˜—ȱ™›˜Ÿ’Žȱ‘ŽœŽȱꛖœȱ ’‘ȱ ˜ȱ—Ž ȱ devices for doing business: the concept of limited liability and the practice of interlocking shares. In the absence of a stock market and with the ŽŠœ¢ȱŠŸŠ’•Š‹’•’¢ȱ˜ȱ‹Š—”ȱ•˜Š—œǰȱ‹žœ’—ŽœœŽœȱŽ—Žȱ˜ȱ•’—”ȱ˜Ž‘Ž›ȱ’쎛ent groups of merchants. Shareholding was also interlocked. In the case of ’¢’ȱ–Ž—Ȃœȱ‹žœ’—ŽœœŽœǰȱ˜›ȱ’—œŠ—ŒŽǰȱ‘Žȱ ˜—ȱ’—ȱŠŸ’—œȱŠ—”ȱǻ Š——’Š—ȱ yinhang ᒋᑈ䡔㸠Ǽȱœž‹œŒ›’‹Žȱ˜ȱ‘’—Šȱ ˜—ȱ’—ȱ’Žȱœœž›Š—ŒŽȱǻ Š—nian rensou ᒋᑈҎ໑ǼǰȱŠ—ȱ‘’—Šȱ ˜—ȱ’—ȱ’Žȱœœž›Š—ŒŽǰȱ’—ȱž›—ǰȱ Šœȱ Šȱ–Š“˜›ȱœž‹œŒ›’‹Ž›ȱ˜ȱ‘Žȱ ˜—ȱ’—ȱŠ—”ǯȱ—Žȱ˜ȱ‘Žȱ™›’—Œ’™Š•ȱ˜ž—Ž›œȱ of these two companies was Li Yutang, the previously mentioned Toishan –Ž›Œ‘Š—ȱ•ŽŠŽ›ȱ’—ȱ ˜—ȱ ˜—ǯȱ¢ȱ’—Ž›•˜Œ”’—ȱœ‘Š›ŽœȱŠ–˜—ȱœ’œŽ›ȱŒ˜–panies, the resulting joint-stock companies were able to create credit because subscribed shares were not required to be fully paid. By distributing ‘Žȱ›’œ”ȱ˜ŸŽ›ȱŠȱ—ž–‹Ž›ȱ˜ȱ”’—›Žȱž—Ž›Š”’—œǰȱ›’œ”œȱ Ž›Žȱ˜ěœŽǯȱ—ȱ‘’œȱ way, it may be said that interlocking investments created a group of cooperative businesses. With personal connections in the United States and Australia, many of ‘Žȱ ˜•ȱ˜ž—Š’—ȱžŽœœȱŠ•œ˜ȱŽœŠ‹•’œ‘Žȱ›Š’—ȱꛖœȱ’—ȱ ˜—ȱ ˜—ȱ˜›ȱ

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Stephanie Po-yin Chung

‘ŽȱœŠ•Žȱ˜ȱ‘’—ŽœŽȱ˜˜œȱ˜ȱ˜ŸŽ›œŽŠœȱ‘’—ŽœŽȱŒ˜––ž—’’Žœǯȱ‘ŽœŽȱꛖœȱ  Ž›ŽȱŒŠ••Žȱȃ ˜•ȱ˜ž—Š’—ȱ ˜žœŽœȄȱǻ䞥ቅ㥞; Kam Shan Chong in Can˜—ŽœŽDzȱ ’—œ‘Š—ȱ£‘žŠ—ȱ’—ȱŠ—Š›’—Ǽȱœ˜ȱ‘Ž¢ȱŒ˜ž•ȱ‹Žȱ’œ’—ž’œ‘Žȱ›˜–ȱ ‘ŽȱŠ–ȱŠ”ȱ ˜—ǯȱ‘Žȱ–Ž›Œ‘Š—ȱꛖœȱ™›˜Ÿ’ŽȱŠȱ—Ž ˜›”ȱŠ—ȱ—ž–Ž›ous services that connected Chinese to their homeland and around the  ˜›•ǯȱŽœ’ŽœȱŽŠ•’—ȱ’—ȱ‘’—ŽœŽȱ˜˜œǰȱ‘ŽœŽȱꛖœȱ Ž›ŽȱŽ—ŠŽȱ’—ȱ‘Žȱ ›Ž–’ĴŠ—ŒŽȱ‹žœ’—ŽœœȱŠ–˜—ȱ žŠ—˜—ǰȱ ˜—ȱ ˜—ǰȱŠ—ȱ˜ŸŽ›œŽŠœȱ‘’nese communities. Li Yutang was the owner of several Kam Shan Chong ꛖœȱŠŒ’ŸŽȱ’—ȱ‘Žȱ›Ž–’ĴŠ—ŒŽȱ‹žœ’—ŽœœǰȱŠ—ȱ’ȱ’œȱ—˜Ž ˜›‘¢ȱ‘Šȱ‘’œȱ Š–ȱ ‘Š—ȱ‘˜—ȱꛖœȱ Ž›Žȱ—˜ȱ›Ž’œŽ›Žȱž—Ž›ȱ‘Žȱ˜–™Š—’Žœȱ›’—Š—ŒŽȱ˜ȱ

˜—ȱ ˜—ǯȱȱ Šœȱ—˜ȱžŽȱ˜ȱŠȱ•ŠŒ”ȱ˜ȱ•ŽŠ•ȱ”—˜ •ŽŽȱ‘Šȱ‘Žȱꛖœȱ Ž›Žȱ —˜ȱ›Ž’œŽ›ŽDzȱ›Š‘Ž›ǰȱ‹¢ȱ‹Ž’—ȱž—›Ž’œŽ›Žǰȱ‘ŽœŽȱꛖœȱ’ȱ—˜ȱ‘ŠŸŽȱ˜ȱ ’œŒ•˜œŽȱ‘Ž’›ȱꗊ—Œ’Š•ȱŠŒŒ˜ž—œȱŠœȱ›Žšž’›Žȱ‹¢ȱ‘Žȱ˜–™Š—’Žœȱ›’—Š—ŒŽǯȱ Žȱ ‘ŠŸŽȱ ŸŽ›¢ȱ •’–’Žȱ Œ•žŽœȱ ˜›ȱ ŽŽ›–’—’—ȱ ‘Žȱ œ’£Žȱ ˜ȱ ‘’œȱ ›Ž–’ĴŠ—ŒŽȱ business, but according to a survey conducted by C. F. Remer from 1930 ˜ȱŗşřŗǰȱŠ‹˜žȱśŖȱ™Ž›ŒŽ—ȱǻ˜›ȱ

ǞŗřŜǯŞȱ–’••’˜—ȱ˜ȱ

ǞŘŝŘǯŝȱ–’••’˜—Ǽȱ˜ȱŠ••ȱ ›Ž–’ĴŠ—ŒŽœȱœŽ—ȱ˜ȱ‘’—Šȱ‘›˜ž‘ȱ ˜—ȱ ˜—ȱŒŠ–Žȱ›˜–ȱ˜›‘ȱ–Ž›’ŒŠǯȱ ‘’œȱ›Ž–’ĴŠ—ŒŽȱ—Ž ˜›”ȱ Šœȱ—˜ȱ˜ž‹ȱŒ›žŒ’Š•ȱ˜›ȱ‘Žȱ˜’œ‘Š—ȱ–Ž›Œ‘Š—œȱ in their business and political endeavors in south China.ś ‘Žȱ ˜—ȱ ˜—ȱ˜ŸŽ›—–Ž—ȱ Šœȱ Ž••ȱŠ Š›Žȱ‘Šȱ˜’œ‘Š—ȱ–Ž›Œ‘Š—œȱ who had returned from North America were active in the political circle ˜ȱ ˜—ȱ ˜—ǯȱ˜›ȱ’—œŠ—ŒŽǰȱ˜’œ‘Š—ȱ–Ž›Œ‘Š—œȱ’—ȱ ˜—ȱ ˜—ȱ Ž›ŽȱŽ¡ŒŽ™’˜—Š••¢ȱŠŒ’ŸŽȱ’—ȱœ˜ž‘ȱ‘’—ŠȂœȱ‹˜¢Œ˜Ĵȱ˜ȱ˜›Ž’—ȱ˜˜œǯȱ—ȱŗşŖŚǰȱ‘Ž¢ȱ were founders of the Society to Oppose the United States Exclusion Treaty against Chinese Laborers (Guangzhou juyuehui ᒷᎲᢦ㋘᳗Ǽǯȱ‘Ž¢ȱ’—’’ŠŽȱŠȱ•Š›ŽȬœŒŠ•Žȱ‹˜¢Œ˜Ĵȱ˜ȱ–Ž›’ŒŠ—ȱ˜˜œȱ’—ȱ žŠ—˜—ȱŠ—ȱ ˜—ȱ ˜—ȱ as a protest of the renewal of the United States Exclusion Treaty in Chinese ˜˜œǯȱ–’ȱ‘Žȱ‹˜¢Œ˜Ĵǰȱœ˜–Žȱ˜’œ‘Š—ȱ–Ž›Œ‘Š—œȱœŽ’£Žȱ‘Žȱ˜™™˜›ž—’¢ȱ provided by the crisis and mobilized themselves into capital syndicates to invest in steamship transportation and railway construction in south China. Their decision to invest in steamships and railways was far from ŠŒŒ’Ž—Š•ǯȱ›˜–ȱŗşŖśȱ˜— Š›ǰȱŽ–™•˜¢’—ȱ‘Žȱœ•˜Š—ȱȃ›’‘ȱ›ŽŒ˜ŸŽ›¢ǰȄȱ‘Žȱ Qing government began to recover railway concessions given to foreign investors. The notion of rights recovery was soon taken up by merchant groups in various provinces, who embarked on schemes to amass capital ˜ȱꗊ—ŒŽȱ›Š’• Š¢ȱŒ˜—œ›žŒ’˜—ȱ’—ȱ‘Ž’›ȱ˜ —ȱ™›˜Ÿ’—ŒŽœǯȱ—ȱ–Š—¢ȱ™›˜Ÿ’—Œes, especially in such poor provinces as Yunnan and Guangxi, merchants could not collect adequate capital for investments, and funds from local governments were used to assure the purchases. Guangdong was one of the very few provinces in which merchants managed to raise adequate funds among themselves for building railways. śȲȱ

˜›ȱ›ŽŠŽ›ȱŽŠ’•ǰȱœŽŽȱŽ–Ž›ȱǻŗşřřǼǯ

Chinese Enterprises across Cultures

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—ȱŠ¢ȱŗşŗŗǰȱŽħ’—Ȃœȱ™›˜™˜œŠ•ȱ˜›ȱ›Š’• Š¢ȱ—Š’˜—Š•’£Š’˜—ȱŽ—Žȱ ’‘ȱ violent resistance by various provincial groups. Railway protection societies were formed that protested against the policy of railway nationalization and declared it an infringement on provincial interests. In Guang˜—ǰȱ™˜•’’ŒŠ•ȱŒ‘Š˜œȱ ŠœȱŠ•œ˜ȱœŽȱ˜ěȱ‹¢ȱ‘Žȱ›Š’• Š¢ȱ’œ™žŽœǯȱ—ȱžžœȱ 1911, the Railway Protection Society of Guangdong was established in

˜—ȱ ˜—ȱ›Š‘Ž›ȱ‘Š—ȱŠ—˜—Dzȱ˜—Žȱ˜ȱ’œȱŒ‘Š’›–Ž—ȱ Šœȱ’ȱžŠ—ǯȱŽœ’’—ȱ’—ȱ ˜—ȱ ˜—ǰȱ‘ŽœŽȱ–Ž›Œ‘Š—œȱŽ—“˜¢ŽȱŠȱœŠŽȱ‘ŠŸŽ—ȱ’—ȱ ‘’Œ‘ȱ˜ȱŒ˜—tinue their political and economic activities in south China (Chung 1998, řśȮśśǰȱŗŝŚȮŗŝśǼǯ Chaos in South China and Safe Haven in Hong Kong Š›’—ȱ ›˜–ȱ ŗşŗŗǰȱ ‘Žȱ ›˜•Žȱ ˜ȱ ˜—ȱ ˜—ȱ Šœȱ Šȱ œŠŽȱ ‘ŠŸŽ—ȱ ˜›ȱ ‘’—ŽœŽȱ merchants active in south China became more apparent. As we will see, ‘’œȱŽŸŽ•˜™–Ž—ȱŠ•œ˜ȱ•ŽĞȱ’œȱ•ŽŠŒ¢ȱ’—ȱ ˜—ȱ ˜—ȂœȱŒ˜–™Š—¢ȱ›Ž’œ›Š’˜—ȱ records. In October 1911, the tartar-general of Guangdong Province was assassinated, and a massive defection of government troops in Guang˜—ȱ Ž—œžŽǯȱ ȱ •ŽŠœȱ ęĞ¢ȬœŽŸŽ—ȱ Œ˜–™Ž’—ǰȱ œŽ•Ȭœ¢•Žȱ ›ŽŸ˜•ž’˜—Š›¢ȱ troops, known as “people’s armies,” gathered in Canton and its surrounding areas. The collapse of the Qing court in 1911 led China into decades of political chaos and continuous warfare. As the confrontation between the Peking and Canton governments sharpened, both were desperate for economic resources to consolidate their military strength. The Canton government was actually a loose coalition of warlords, including those from such provinces as Yunnan and Guangxi (troops under their control were ›ŽŽ››Žȱ˜ȱŠœȱȃžŽœȱŠ›–’ŽœȄȱǽkejun ᅶ䒡Ǿȱ‹¢ȱ‘ŽȱŠ—˜—ŽœŽǼǯȱ˜˜’—œȱŠ—ȱ Œ˜—ęœŒŠ’˜—œȱ˜ȱ™›’ŸŠŽȱ™›˜™Ž›’Žœȱ‹¢ȱŒ•’šžŽœȱ˜ȱž—›ž•¢ȱŠ›–Žȱ›˜˜™œȱ Ž›Žȱ rampant. But to sustain this fragile regime, the Canton government also —ŽŽŽȱ ˜ȱ œšžŽŽ£Žȱ ›Žœ˜ž›ŒŽœȱ ˜ȱ ‹›’‹Žȱ ‘ŽœŽȱ Š›–¢ȱ •ŽŠŽ›œǯȱ ‘Žȱ ꗊ—Œ’Š•ȱ system in Canton continued to deteriorate as a result (Chung 1998, 99– ŗŘŜǼǯȱ‘ŽȱŠ—˜—ȱ˜ŸŽ›—–Ž—ȱŠ•œ˜ȱ—ŽŽŽȱȃ–Ž›Œ‘Š—œȂȱ˜—Š’˜—œȄȱ˜ȱœžœtain its rule. Toishan merchants who had returned from the United States were among the important donors. In return, many of them were ap™˜’—Žȱ‘’‘ȱ˜ĜŒ’Š•ȱ™˜œ’’˜—œǯȱ’›ȱ Ž—›¢ȱŠ¢ǰȱ‘Žȱ ˜—ȱ ˜—ȱ˜ŸŽ›—˜›ǰȱ was particularly concerned that the treasury of the Canton government was under Li Yuktang’s control. Governor May observed in 1912 that the treasury “has been managed very badly. It was practically emptied.… The ‘’—ŽœŽȱŒ˜––ž—’¢ȱ˜ȱ ˜—ȱ ˜—ȱœž™™•’Žȱ‹Ž ŽŽ—ȱǽ

ǾǞŘǰŖŖŖǰŖŖŖȱŠ—ȱ ǞřǰŖŖŖǰŖŖŖȯ‘Šœȱ ‹ŽŽ—ȱ œ™Ž—ȱ ǻ˜›ȱ Ž–‹Ž££•ŽǼȱ  ’‘˜žȱ Š—¢ȱ ŠŒŒ˜ž—ȱ ‘ŠŸ’—ȱ been kept. Following this, the pernicious device was resorted to of issuing —˜Žœȱ ’‘˜žȱŠ—¢ȱ›ŽœŽ›ŸŽȱ˜ȱœŽŒž›Žȱ‘Ž–Ȅȱǻšž˜Žȱ›˜–ȱ‘ž—ȱŗşşŞǰȱŚśǼǯȱ Governor May also estimated that in October 1912, Canton’s depreciating

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Stephanie Po-yin Chung

Œž››Ž—Œ¢ȱǻ ’‘ȱŠȱŠŒŽȱŸŠ•žŽȱ˜ȱ˜—Žȱ–’••’˜—ȱ˜••Š›œǼȱ ŠœȱŒ’›Œž•Š’—ȱ’—ȱ ˜—ȱ

˜—ǯȱ ŽȱŽ¡™•Š’—Žȱ‘Šȱ‘ŽȱŒ’›Œž•Š’˜—ȱ˜ȱ‘Žȱž—™˜™ž•Š›ȱŠ—˜—ȱŒž››Ž—Œ¢ȱ  Šœȱ–Š’—Š’—Žȱ’—ȱ ˜—ȱ ˜—ȱ—˜ȱ˜—•¢ȱ‹¢ȱ˜ĜŒ’Š•ȱ™›Žœœž›Žȱ›˜–ȱŠ—˜—ȱ but also by means of intimidation practiced by so-called patriotic associa’˜—œȱ’—ȱ ˜—ȱ ˜—ǯȱ‘ŽœŽȱŠœœ˜Œ’Š’˜—œȱ Ž›ŽȱŒ˜—›˜••Žȱ‹¢ȱœ˜–Žȱȃꗊ—Œ’Š••¢ȱ ’—Ž›ŽœŽȄȱ ‘’—ŽœŽȱ ˜ȱ ’—ĚžŽ—ŒŽǯȱ ˜ŸŽ›—˜›ȱ Š¢ȱ  Šœȱ ™˜’—’—ȱ ‘’œȱ ꗐŽ›ȱŠȱ‘Žȱ˜’œ‘Š—ȱ–Ž—ȱ’—ȱ ˜—ȱ ˜—ȱǻ‘ž—ȱŗşşŞǰȱŚśǼǯ In 1923, the Canton government formally implemented a land registration ordinance in the city. All common properties controlled by lineages, Ž–™•ŽœǰȱŠ—ȱž’•ȱ‘Š••œȱǻ–Š—¢ȱ˜ȱ‘Ž–ȱ‘Ž•ȱ’—ȱ˜—ȱ—Š–ŽœǼȱ Ž›ŽȱŽŒ•Š›Žȱ public property (gongchan ݀⫶Ǽȱ˜›ȱ˜ŸŽ›—–Ž—ȱ™›˜™Ž›¢ȱǻguanchan ᅬ⫶Ǽȱ unless “red deeds” (hongqi ㋙༥; sealed deeds, i.e., land deeds endorsed ‹¢ȱ‘Žȱ’—ȱ˜ŸŽ›—–Ž—Ǽȱ Ž›Žȱ™›˜žŒŽǯȱžȱ‹Ž˜›Žȱ‘ŽȱŗşŘŖœǰȱ’ȱ Šœȱž—common for property owners to seek endorsement of a property transfer ›˜–ȱ˜ŸŽ›—–Ž—ȱ˜ĜŒ’Š•œǯȱŠ—¢ȱ˜ȱ‘Žȱ•Š—ȱ‘˜•’—œȱ’—ȱŠ—˜—ȱ‘Šȱ˜—•¢ȱ private contracts (i.e., contracts signed by seller and buyer, without govŽ›—–Ž—ȱŽ—˜›œŽ–Ž—Ǽȱ˜ȱŒŽ›’¢ȱ‘Ž’›ȱ•ŽŠ•ȱœŠžœȱǻ‘ž—ȱŗşşŞǰȱşřȮşśǼǯȱ Using this policy, the Canton government sought to increase its revŽ—žŽȱ ‹¢ȱ Œ˜—ęœŒŠ’—ȱ •Š—ȱ ™›˜™Ž›’Žœȱ ž—ŠŒŒ˜ž—Š‹•Žȱ ˜›ǰȱ  ‘’Œ‘ȱ  Ž›Žȱ hitherto concealed in private hands. Properties of this nature but held by known civilian organizations such as temples, guilds, ancestral halls, and regional associations became vulnerable targets of this policy. As a result, many property owners looked for alternative methods to hide their assets. Some tong property owners tried to liquidate their immoveable wealth Š—ȱ›Š—œŽ›ȱ‘Žȱ™›˜ŒŽŽœȱ˜ȱ ˜—ȱ ˜—ǯȱ‘Žȱ•˜˜’—ȱ˜ȱ˜—ȱ™›˜™Ž›’Žœȱ ‹¢ȱ•˜ŒŠ•ȱž—›ž•¢ȱŠ›–’ŽœǰȱŠ—ȱ‘ŽȱŒ˜—ęœŒŠ’˜—ȱ˜ȱ˜—ȱ™›˜™Ž›’Žœȱ‹¢ȱ‘ŽȱŠ—˜—ȱ˜ŸŽ›—–Ž—ǰȱ›˜ŸŽȱŠȱ—ž–‹Ž›ȱ˜ȱ˜—ȱ˜ —Ž›œȱ˜ȱ–˜ŸŽȱ˜ȱ ˜—ȱ ˜—ȱ ǻ‘ž—ȱŗşşŞǰȱŗŖřȮŗŖŜǼǯŜ Parallel to the political changes in Canton, the number of Chinese˜ —Žȱ ‹žœ’—ŽœœŽœȱ ›Ž’œŽ›Žȱ ’—ȱ Œ˜•˜—’Š•ȱ ˜—ȱ ˜—ȱ šž’Œ”•¢ȱ ’—Œ›ŽŠœŽȱ ›˜–ȱ ŗşŘŚȱ ˜ȱ ŗşřŚǯȱŒŒ˜›’—ȱ ˜ȱ Ž¡’œ’—ȱ Š›Œ‘’ŸŽœȱ ’—ȱ ˜—ȱ ˜—ǰȱ Š‹˜žȱ ˜›¢Ȭ—’—Žȱ‘’—ŽœŽȱꛖœȱ Ž›Žȱ›Ž’œŽ›Žȱž—Ž›ȱ‘Žȱ›’’œ‘ȱŒ˜–™Š—¢ȱ•Š ȱ ’—ȱ ˜—ȱ ˜—ȱž›’—ȱ‘’œȱ™Ž›’˜ǯȱȱ‘Žȱ˜›¢Ȭ—’—Žȱ“˜’—Ȭœ˜Œ”ȱŒ˜–™Š—’Žœȱ ’Ž—’ꮍȱ ’—ȱ ‘Žȱ ›ŽŒ˜›œǰȱ Šȱ •ŽŠœȱ  Ž—¢ȬœŽŸŽ—ȱ ›Ž’œŽ›Žȱ ‘Ž–œŽ•ŸŽœȱ Šœȱ engaging in the loan, mortgage, and land investment businesses. Some of these registered companies even carried the character tong in their name—for example, Tsang Chung Shun Tong Co. Ltd. (Ceng zhongxin tang youxiangongsi ᳒ᖴֵූ᳝䰤݀ৌǼǰȱ‘ž–ȱŽŽȱ ’—ȱ˜—ȱǭȱ˜ǯȱǯȱ (Shen Yuqing tang youxiangongsi ብ们ᝊූ᳝䰤݀ৌǼǰȱ Š—ȱ žȱ —ȱ Š’ȱ Tong Land Investment Loan and Agency Co. Ltd. (Yu Anli tang youxian ŜȲȱ ‘Žȱ‘’œ˜›¢ȱ˜ȱ‘Žȱ˜—ȱŠ’ȱ’—ȱŽ–™•ŽȱŠ•œ˜ȱ›ŽĚŽŒœȱ‘’œȱŽŸŽ•˜™–Ž—ǯȱ˜›ȱŽŠ’•œǰȱœŽŽȱ Š—ȱŠ—ȱŠŸŠ•ȱǻŗşşřǼǯȱ

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gongsi ԭᅝ⾂ූ᳝䰤݀ৌǼǯȱ••ȱ‘ŽœŽȱ Ž—¢ȬœŽŸŽ—ȱŒ˜–™Š—’ŽœȱŠ•œ˜ȱ‘Šȱ‘Žȱ following three features in common. First, directors and shareholders of the same company shared the same surname and the same place of origin; some even shared the same registered address. Second, although the œ‘Š›Ž‘˜•Ž›œȂȱ™•ŠŒŽœȱ˜ȱ›Žœ’Ž—ŒŽȱ Ž›ŽȱœŒŠĴŽ›ŽȱŠŒ›˜œœȱ ˜—ȱ ˜—ǰȱœ˜ž‘ȱ China, Southeast Asia, and North America, all the directors registered ‘Ž–œŽ•ŸŽœȱŠœȱ ˜—ȱ ˜—ȱ›Žœ’Ž—œǯȱ‘’›ǰȱŠ••ȱ‘ŽœŽȱŒ˜–™Š—’ŽœȱŽ—ŠŽȱ ’—ȱ•Š—ȱ’—ŸŽœ–Ž—ȱŠ—ȱ–˜›ŠŽœǯȱ˜’œ‘Š—ȱ–Ž—ȱ™•Š¢ŽȱŠȱœ’—’ęŒŠ—ȱ›˜•Žȱ in the development; according to the company registration records, many of these shareholders registered their place of origin as Toishan County. To understand how these companies operated, we can consider the following registration materials and what they reveal. The Toi Shan Investment Co. Ltd. (Taishan qiao gang Chenshi lianhe youxiangongsi ৄቅ‫ڥ‬ ␃䱇⇣㙃ড়᳝䰤݀ৌǼȱ  Šœȱ ›Ž’œŽ›Žȱ ’—ȱ ŗşřŖǯȱ ‘Žȱ Š›’Œ•Žœȱ ˜ȱ Šœœ˜Œ’Š’˜—ȱ claimed that its major businesses were mortgages and real estate, stating that “the objects for which the Company is formed” included “to purchase for investment or resale, and to trade in land and house and other property of any tenure and any interest therein, and to recreate, sell, and deal in freehold and leasehold ground rents, and to make advances upon the security of land or house or other property, or any interest therein, and generally to deal in, trade by way of sale, lease, exchange, or otherwise with land and house property and any other property whether real or ™Ž›œ˜—Š•ǯȄȱ‘ŽȱŒŠ™’Š•ȱ˜ȱ‘ŽȱŒ˜–™Š—¢ȱ Šœȱ

ǞřŖǰŘŖŖǰȱ ‘’Œ‘ȱ Šœȱ’Ÿ’Žȱ ’—˜ȱŜǰŖŚŖȱœ‘Š›ŽœǰȱŽŠŒ‘ȱŸŠ•žŽȱŠȱ

Ǟśǯȱ‘Žȱ•’œȱ˜ȱœ‘Š›Ž‘˜•Ž›œȱœ‘˜ Žȱ that the company had forty; all of them had the same place of origin: ˜’œ‘Š—ǯȱŽŸŽ—ȱ›Žœ’Žȱ’—ȱ˜’œ‘Š—ǰȱŠ—ȱ Ž—¢ȬŽ’‘ȱ’—ȱ ˜—ȱ ˜—ǯȱ••ȱ œŽŸŽ—ȱ’›ŽŒ˜›œȱ›Žœ’Žȱ’—ȱ ˜—ȱ ˜—ǰȱŠ—ȱ‘Ž¢ȱœ‘Š›ŽȱŠȱœž›—Š–Žȱǻ’ǯŽǯǰȱ䱇; ‘Š—ȱ’—ȱŠ—˜—ŽœŽDzȱ‘Ž—ȱ’—ȱŠ—Š›’—Ǽǯ7 It is noteworthy that high on Toi Shan Investment’s shareholders’ list  Šœȱ Šȱ ‘’—ȱ ‘ž—ȱ ˜Œ”ȱ žȱ ǻ‘Ž—ȱ ‘Ž—¡žŽȱ £žȱ 䱇⿟ᅌ⼪Ǽǰȱ  ‘’Œ‘ȱ  Šœȱ Šȱ ˜—ȱŽœŠ‹•’œ‘Žȱ’—ȱ‘Žȱ—Š–Žȱ˜ȱ‘’—ȱ‘ž—ȱ ˜Œ”ȱǻ’ȱ ŠœȱŠ•œ˜ȱ‘Žȱ•Š›Žœȱ œ‘Š›Ž‘˜•Ž›ǰȱ‘˜•’—ȱœ’¡ȱ‘ž—›Žȱœ‘Š›ŽœǼǯȱŽȱ‘ŠŸŽȱ—˜ȱŽŸ’Ž—ŒŽȱ˜ȱ™›˜ŸŽȱ that the tong was established or managed by his direct descendants, but ˜ȱ˜—Žȱ‘’—ȱ ŽȱŠ›Žȱœž›Žȯ‘’—ȱ‘ž—ȱ ˜Œ”ȱ ŠœȱŠȱ‘˜žœŽ‘˜•ȱ—Š–Žȱ’—ȱ‘Žȱ history of Toishan men’s migration to North America. Toishan immigrants had good reason to remember his name. Chin was known to be one of ‘ŽȱŽŠ›•’Žœȱ‘’—ŽœŽȱ–Ž—ȱ˜ȱœŽĴ•Žȱ’—ȱŠ•’˜›—’Šǰȱ’—ȱ‘ŽȱŗŞŜŖœǯȱ¢ȱŗŞŜŞǰȱ‘Žȱ had founded a general merchandising store, the Wa Chong Company ǻ žŠŒ‘Š—ȱ˜—œ’ 㧃ᯠ݀ৌǼǰȱ’—ȱŽŠĴ•Žǯȱ‘’—Ȃœȱ™Š›—Ž›œȱ’—ȱŠȱ‘˜—ȱŠ•œ˜ȱ ŝȲȱ

œžȱǻŘŖŖŖǼȱ’ŸŽœȱŠ—ȱŽ•Š‹˜›ŠŽȱ—Š››Š’ŸŽȱ˜ȱ‘Žȱœ›˜—ȱ•’—”ȱ‹Ž ŽŽ—ȱ˜’œ‘Š—ȱ–Ž›Œ‘Š—œȱ who migrated to the United States and their relatives remaining in Guangdong at the turn of ‘ŽȱŒŽ—ž›¢ǯȱž›‘Ž›ȱœž’Žœȱ–Š¢ȱ›ŽŸŽŠ•ȱ›Ž•Š’˜—œ‘’™œȱ‹Ž ŽŽ—ȱ‘Žȱ ˜—ȱ ˜—ȱ˜’œ‘Š—ȱ˜—œȱ and their native counterparts in the United States from the 1920s.

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’—Œ•žŽȱ Šȱ ‘’—ȱ ŽŽȱ ŽŽȱ ǻ‘Ž—ȱ ’¡’ȱ 䱇ᅰ⽻Ǽȱ  ‘˜ȱ  Ž—ȱ ‹ŠŒ”ȱ ˜ȱ ˜’œ‘Š—ȱ ’—ȱŗşŖśȱŠ—ȱŽœŠ‹•’œ‘Žȱ˜—Žȱ˜ȱ‘Žȱꛜȱ›Š’•›˜Šœȱ‘Ž›Žǰȱ‘Žȱž——’—ȱŠ’•road (Xinning tielu ᮄᆻ䨉䏃Ǽǯȱ’‘ȱ‘’—ȱ‘ž—ȱ ˜Œ”Ȃœȱ—Š–Žȱ˜—ȱ‘Žȱœ‘Š›Žholders’ list, the company might have enjoyed high popularity among the Toishan men’s circle in south China.8 Let us place the Chens’ story in a broader political context. Madeleine

œžǰȱ’—ȱ‘Ž›ȱ‹˜˜”ȱDreaming of Gold, Dreaming of Home: Transnationalism and Migration between the United States and South China, gives an elaborate narrative of the strong link between Toishan merchants who migrated to the United States and their relatives back in Guangdong. The company reg’œ›Š’˜—ȱ›ŽŒ˜›œȱ’œŒžœœŽȱ‘Ž›ŽȱœžŽœȱ‘Šȱ ˜—ȱ ˜—ȱ ŠœȱŽę—’Ž•¢ȱŠȱ –’œœ’—ȱ•’—”ȱ‹Ž ŽŽ—ȱ‘ŽȱȃŠ•’˜›—’Šȱ›ŽŠ–’—ȄȱŠ—ȱ‘Žȱȃ Ž›˜’Œȱǻ ˜–ŽǼȱ Returns” in these stories. In the following paragraphs, let us visit a less “heroic” side to the Toishan men’s story in south China and see what it reveals. ŽŠ•ȱ–‹’ž’¢DZȱ‘Žȱ˜—Ě’Œ

˜—ȱ ˜—ȱ’ȱ—˜ȱ˜—•¢ȱ˜ěŽ›ȱ‘Žȱ™›˜ŽŒ’˜—ȱ˜ȱ›’’œ‘ȱ•Š ǰȱ’ȱŠ•œ˜ȱŠě˜›Žȱ a political safe haven for cross-border speculation activities. The company ›Ž’œ›Š’˜—ȱ›ŽŒ˜›œȱ’—ȱ ˜—ȱ ˜—ȱœžŽœȱ‘ŠǰȱŠȱ•ŽŠœȱ›˜–ȱŗşŘŚȱ˜ȱŗşřŚǰȱ a substantial portion of the Chinese-owed companies registered themselves as engaging in land investment and mortgages. This development was not accidental. To understand this story, we must go into further details of the 1911 chaos in Guangdong and the Canton government’s land policy in 1923 mentioned previously. Starting from 1911, with the collapse of the Qing government, competing cliques of army leaders began to auction their seized properties in Canton. Ironically, this move activated the real estate market of Canton. This trend grew stronger from 1919, when Sun Yat-sen’s son, Sun Ke ᄿ⾥, was appointed mayor of Canton city. Being an idealist keen on exerting ‘’œȱ™˜•’’ŒŠ•ȱ’—ĚžŽ—ŒŽǰȱž—ȱ ŽȱœŽȱ˜žȱ™•Š—œȱ˜ȱž›‹Š—ȱ›ŽŽŸŽ•˜™–Ž—ȱŠ—ȱ started to demolish the old city wall of Canton. Many public and government buildings were also demolished. The trend got another boost in 1923, the year when the Canton government formally implemented a land registration ordinance. Accordingly, all common properties controlled by lineages, temples, and guild halls without red deeds were declared public property or government property. This resulted in the holding of a œž‹œŠ—’Š•ȱŠ–˜ž—ȱ˜ȱŒ˜—ęœŒŠŽȱ™ž‹•’Œȱ•Š—ȱ‹¢ȱ‘ŽȱŠ—˜—ȱ˜ŸŽ›—–Ž—ǯȱ ˜ȱŒŠœ‘ȱ‘ŽœŽȱŽœŠŽœǰȱ‘Žȱ˜ŸŽ›—–Ž—ȱŠžŒ’˜—Žȱ‘Ž–ǯȱžŒ’˜—’—ȱŒ˜—ęœŒŠŽȱ™›˜™Ž›’ŽœȱŠĴ›ŠŒŽȱŠ—ȱ’—Ěž¡ȱ˜ȱŒŠ™’Š•ȱǻœ˜–Žȱ‘›˜ž‘ȱ ˜—ȱ ˜—Ǽȱ into the real estate market and created a land boom in Canton. In 1923, ŞȲȱ ˜›ȱ Šȱ Ž—Ž›Š•ȱ ‘’œ˜›¢ȱ ˜ȱ ‘Žȱ ˜’œ‘Š—ȱ Œ˜––ž—’¢ȱ ’—ȱ ˜›‘ȱ –Ž›’ŒŠǰȱ œŽŽȱ œžȱ ǻŘŖŖŖǰȱ Œ‘Š™ǯȱŜǼǯ

Chinese Enterprises across Cultures

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‘Žȱ›’’œ‘ȱŠ›ȱĜŒŽȱœŠŽȱ‘Šȱȃ’—ȱ‘Žȱ•ŠœȱŽ ȱ–˜—‘œȱ‘Ž›Žȱ‘Šœȱ‹ŽŽ—ȱŠȱ considerable rise in the prices fetched by land sold by auction on the open market and an outburst of speculation in real estate.” A foreign reporter also recorded that “the boom in lands and shares was the most outstand’—ȱ ŽŸŽ—ȱ ’—ȱ ŗşŘřǯdzȱ ˜—Ž¢ȱ ǽ’œǾȱ ˜˜ȱ ™•Ž—’ž•ȱ Š—ȱ œ™ŽŒž•Š’˜—ȱ ǽ’œǾȱ ›’ŽȄȱ (China Weekly ReviewǰȱŝȱŽ‹›žŠ›¢ȱŗşŘŚǼǯȱž›’—ȱ‘Žȱ•Š—ȱ‹˜˜–ǰȱ—˜ȱŽŸŽ›¢ȱ ™’ŽŒŽȱ ˜ȱ Œ˜—ęœŒŠŽȱ ™›˜™Ž›¢ȱ  Šœȱ ˜™Ž—•¢ȱ ŠžŒ’˜—Žǯȱ ‘˜œŽȱ ™Ž˜™•Žȱ  ’‘ȱ ˜ĜŒ’Š•ȱŒ˜——ŽŒ’˜—œȱǻŽǯǯǰȱ‘Žȱ˜’œ‘Š—ȱ–Ž›Œ‘Š—œǼȱ Ž›ŽȱŠ‹•Žȱ˜ȱ–Š—’™ž•ŠŽȱ the supply, and they acquired the best properties at largely reduced prices ǻ‘ž—ȱŗşşŞǰȱşřȮşśǼǯȱ‘Žȱ˜••˜ ’—ȱ’—Œ’Ž—ȱ’••žœ›ŠŽœȱ‘’œȱŽŸŽ•˜™–Ž—ǯ In 1920, the year when the old city wall of Canton was demolished and the Canton government implemented its plan for urban redevelop–Ž—ǰȱ–Š—¢ȱ™ž‹•’Œȱ˜›ȱŒ˜—ęœŒŠŽȱ™›˜™Ž›’Žœȱ Ž›Žȱ™žȱž™ȱ˜›ȱŠžŒ’˜—ǯȱ—ȱ ‘ŽȱœŠ–Žȱ¢ŽŠ›ǰȱŠȱ›˜ž™ȱ˜ȱ˜’œ‘Š—ȱ–Ž—ȱ’—ȱ ˜—ȱ ˜—ȱŒ˜••Š‹˜›ŠŽȱ ’‘ȱ their counterparts in Toishan to apply to the Canton government for the purchase of three parcels of land. The application was put under the name of the “Toishan Regional Association” (Taishan huiguan ৄቅ᳗仼Ǽǯȱ ‘Žȱ purchased properties had previously been a police station, a police training school, and a prison. To encourage fellow Toishan men to subscribe, Ž–’—Ž—ȱ ꐞ›Žœȱ ǻ’ǯŽǯǰȱ  ŽŠ•‘¢ȱ ˜ŸŽ›œŽŠœȱ ˜’œ‘Š—ȱ –Ž›Œ‘Š—œȱ œžŒ‘ȱ Šœȱ ‘’—ȱ ‘ž—ȱ ˜Œ”ȱŠ—ȱ’ȱžŠ—Ǽȱ Ž›Žȱ™›ŽœŽ—ŽȱŠœȱ™›˜–˜Ž›œȱ˜ȱ‘ŽȱŒ˜••Š‹˜›Štion on the “call for subscription” notice. In additions, all subscribers were entitled to install their ancestors’ spirit tablets in one of the rebuilt hall constructions (also called tong ූǼǯȱ‘Žȱ—ž–‹Ž›ȱŠ—ȱ‘Žȱœ’£Žȱ˜ȱ‘ŽȱŠ—ŒŽœtral tablets were in proportion to the amount of the contribution. GenerŠ••¢ǰȱ‘Žȱœž‹œŒ›’™’˜—ȱ Šœȱ’Ÿ’Žȱ’—˜ȱ‘›ŽŽȱŒ•ŠœœŽœǰȱǞŜŖǰȱǞŗŖŖǰȱŠ—ȱǞŗŗşǯȱ ž‹œŒ›’™’˜—œȱ˜ȱ–˜›Žȱ‘Š—ȱǞŘŖǰŖŖŖȱ ˜ž•ȱŒ›ŽŠŽȱ‘ŽȱŽ—’•Ž–Ž—ȱ˜ȱ—Š–ŽȱŠȱ ‘Š••ǯȱȱ˜Š•ȱ˜ȱŜŘşȱ˜’œ‘Š—ȱ–Ž—ȱœž‹œŒ›’‹ŽǰȱŠ—ȱŠ‹˜žȱ˜—Žȱ–’••’˜—ȱŠ—˜—ȱ silver dollars were gathered as a result (Toishan gonghui yuekanȱŗşřřǼǯȱ‘Žȱ –˜—Ž¢ȱ  Šœȱ Ž™˜œ’Žȱ ’—ȱ ˜—ȱ ˜—ȱ Šȱ ŽœŽ›—Ȭœ¢•Žȱ ‹Š—”œȱ ˜ —Žȱ ‹¢ȱ Toishan men in the colony. Due to the political instability in Canton, the land deeds, the surplus after the purchases, as well as the management documents were all kept by ˜’œ‘Š—ȱ–Ž—ȱ›Žœ’’—ȱ’—ȱ ˜—ȱ ˜—ǯȱ¢ȱŗşřŗǰȱ‘ŽȱŸŠ•žŽȱ˜ȱ‘Žȱ™ž›Œ‘ŠœŽȱ property described previously had almost doubled. A dispute broke out among these Toishan men over the nature of the collaboration when the

˜—ȱ ˜—ȱ›˜ž™ȱŸ˜Žȱ˜ȱœŽ••ȱ‘Žȱ™›˜™Ž›’ŽœȱǻŠ—ȱŒŠœ‘ȱ˜žȱ‘Žȱ™›˜ęǼǯȱ The native group in Toishan and Canton, however, insisted on retaining the properties for charity, because the native associations in Toishan and Canton regarded the collaboration as one of a tong, which traditionally was perpetual and normally not supposed to be divided by the descenŠ—œǯȱ—ȱ‘ŽȱŒ˜—›Š›¢ǰȱ‘Žȱ˜’œ‘Š—ȱ–Ž—ȱ’—ȱ ˜—ȱ ˜—ȱŒ•Š’–Žȱ‘Šȱ‘Žȱ collaboration was that of a “joint-stock company,” and as the majority

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Stephanie Po-yin Chung

shareholders they were entitled to make the business decision to sell the •Š—œȱŠȱ˜˜ȱ™›’ŒŽœǯȱ’Ÿ’—ȱ’—ȱ ˜—ȱ ˜—ȱŠ—ȱ”ŽŽ™’—ȱ‘Žȱ•Š—ȱŽŽœȱ in their hands could have given this clique of Toishan men the upper hand over their counterparts on the Mainland. But, the native group in Toishan and Canton fought back by soliciting support from political and –’•’Š›¢ȱꐞ›Žœȱ’—ȱ‘˜œŽȱŠ›ŽŠœȱŠ—ȱ™žĴ’—ȱŽ—˜›–˜žœȱ™˜•’’ŒŠ•ȱ™›Žœœž›Žȱ˜—ȱ ‘Žȱ ˜—ȱ ˜—ȱ˜’œ‘Š—œǯȱ—ȱ‘ŽȱŽ—ǰȱ‘Žȱ•ŠĴŽ›ȱ Ž›Žȱ˜›ŒŽȱ˜ȱ‹ŠŒ”ȱ˜ —ȱ Š—ȱ’ŸŽȱž™ȱ‘Ž’›ȱ™•Š—œȱ˜ȱœŽ••ȱ‘Žȱ™›˜™Ž›’Žœȱ’—ȱŠ—˜—ȱ˜›ȱ™›˜ęȱǻToishan gonghui yuekanȱŗşřřǼǯ The interest of this case lies not so much in the issue of business dis™žŽœȱ‹Ž ŽŽ—ȱ ˜ȱ›˜ž™œȱ˜ȱ˜’œ‘Š—ȱ–Ž—ǯȱ‘ŽȱŒŠœŽȱ’œȱœ’—’ęŒŠ—ȱ‹ŽŒŠžœŽȱ it indicates the ambiguous relationship between “tong” and “company” ’—ȱ œ˜ž‘ȱ ‘’—Šǯȱ Žȱ ꗍȱ ‘Šȱ ‹¢ȱ ‘Žȱ ‹Ž’——’—ȱ ˜ȱ ‘Žȱ  Ž—’Ž‘ȱ ŒŽ—ž›¢ǰȱ the Chinese tong might adopt a double identity—it could be a traditional Chinese tong and concurrently a Western-style corporation. It was not uncommon for some members of a tong to secure foreign legal protection by registering themselves as a company in the treaty ports. Neither was ’ȱ›Š›Žȱ˜›ȱ˜—ȱ˜ž—Ž›œȱ˜ȱ—Šž›Š•’£Žȱ‘Ž–œŽ•ŸŽœȱŠœȱ˜›Ž’—Ž›œȱ’—ȱ ˜—ȱ

˜—ȱ ǻ˜›ȱ ˜‘Ž›ȱ ›ŽŠ¢ȱ ™˜›œǼǯȱ ‘Žȱ ™˜•’’ŒŠ•ȱ œ’žŠ’˜—ȱ ’—ȱ œ˜ž‘ȱ ‘’—Šȱ ‘Šȱ driven Chinese merchants to look for alternative venues for protecting ‘Ž’›ȱ‹žœ’—ŽœœȱŸŽ—ž›ŽœǰȱŠ—ȱ‘Žȱ‹žœ’—Žœœȱ•Š œȱ’—ȱ ˜—ȱ ˜—ȱœŽŽ–ȱ˜ȱ‘ŠŸŽȱ ™›˜Ÿ’Žȱ˜—Žȱ˜™’˜—ȱ˜›ȱ‘ŽœŽȱ˜—ȱ‘˜•Ž›œǯȱ ˜—ȱ ˜—ȱ‘Šȱ‹ŽŒ˜–ŽȱŠȱœŠŽȱ heaven for Chinese merchants who endeavored to invest in a politically disintegrating China. By registering their investments under British com™Š—¢ȱ •Š ȱ ’—ȱ ˜—ȱ ˜—ǰȱ ‘Žȱ –Ž›Œ‘Š—œȱ œ˜ž‘ȱ ˜ȱ œ‘’Ž•ȱ ‘Ž’›ȱ ‹žœ’—Žœœȱ ventures from the political instability in or interference from the Chinese government. These Chinese merchants believed that the British presence ’—ȱ ˜—ȱ ˜—ȱ˜ěŽ›Žȱ‘Ž–ȱ™˜•’’ŒŠ•ȱŠœȱ Ž••ȱŠœȱ•ŽŠ•ȱ™›˜ŽŒ’˜—ǯȱ The dispute discussed here between two groups of Toishan men is but a single example that survived because of exceptional circumstances. Even so, it reveals much about the conditions facilitating cross-border land speculations among merchant cliques in south China. The British presence ’—ȱ ˜—ȱ ˜—ȱ Šœȱ•Š›Ž•¢ȱ›Žœ™˜—œ’‹•Žȱ˜›ȱ™›˜Ÿ’’—ȱŠȱ•ŽŠ•ȱœŠŽȱ‘ŠŸŽ—ȱ˜›ȱ ‘’—ŽœŽȱ–Ž›Œ‘Š—œȱ•’Ÿ’—ȱ’—ȱ ˜—ȱ ˜—ȱ˜ȱŒŠ››¢ȱ˜žȱŒ›˜œœȬ‹˜›Ž›ȱœ™ŽŒžlations. But, this legal protection had limits. As revealed by the case of ‘Žȱ’œ™žŽǰȱ’ȱŒ˜ž•ȱ—˜ȱ˜ȱ‹Ž¢˜—ȱ‘Žȱ™˜•’’ŒŠ•ȱ‹˜ž—Š›¢ȱ˜ȱ ˜—ȱ ˜—ǯȱ In south China, especially in the 1920s and 1930s, political reality always spoke louder than institutional protection. Conclusion On the surface, it looks as though the transplantation of British com™Š—¢ȱ•Š ȱ˜ȱ ˜—ȱ ˜—ȱ’—ȱ‘ŽȱŗŞŜŖœȱ‘Šȱ’—’’ŠŽȱ‘Žȱ›Š—œ˜›–Š’˜—ȱ˜ȱ

Chinese Enterprises across Cultures

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the Chinese business institution, which could have eventually led to the breakdown of the traditional mode of economic organization in China. The discussion here demonstrates that both British business laws and Chinese business traditions played crucial roles in creating an environ–Ž—ȱ‘ŠȱŠĴ›ŠŒŽȱ‘’—ŽœŽȱ–Ž›Œ‘Š—œȱ˜ȱŽ—ŠŽȱ’—ȱŒ›˜œœȬ‹˜›Ž›ȱœ™ŽŒž•Štion activities in south China. By examining company registration records ’—ȱ ˜—ȱ ˜—ǰȱ ‘’œȱ Œ‘Š™Ž›ȱ ›ŠŒŽȱ ‘˜ ȱ Œ˜›™˜›ŠŽȱ ˜›–œȱ  Ž›Žȱ ’ěžœŽȱ ›˜–ȱ›’Š’—ȱŠ—ȱŽŸŽ•˜™Žȱ’—ȱ ˜—ȱ ˜—ǯȱ‘Žȱ™Š‘ȱ˜›ȱ‘ŽȱŽŸŽ•˜™–Ž—ȱ of these forms was constrained and shaped by the particular historical Œ˜—ꐞ›Š’˜—ȱ’—ȱœ˜ž‘ȱ‘’—Šȱž›’—ȱ‘Šȱ’–Žǯȱ‘Žȱ›Š—œ˜›–Š’˜—ȱ Šœǰȱ however, not a straightforward replacement of the Chinese model with a British institution. Rather, traditional business practices in China were actively reinvented during this mixing process.

NINE

Legalization of Chinese Corporation, 1904–1929: Innovation and Continuity in Rules and Legislation

BILLY K. L. SO AND ALBERT S. LEE

In the early twentieth century, China tried to adopt two Western institutions—company law and the corporate form of the joint stock company with limited liability (gufen yuxian gongsi 㙵ӑ᳝䰤݀ৌ, referred to here Šœȱ‘Žȱȃ˜›™˜›Š’˜—ȱ˜Ž•Ȅȱ˜›ǰȱœ’–™•¢ǰȱ‘Žȱȃ˜›™˜›Š’˜—ȄǼǯȱ‘ŽœŽȱ’—œ’žtions have been widely perceived as among the most crucial in China’s quest for economic modernization. This chapter examines the evolution of company law in relation to the Corporation Model. The Corporation Model is generally considered the foundation for the separation of ownership and management in modern business history. ‘’œȱŒ˜–™Š—¢ȱ–˜Ž•ȱꛜȱ̘ž›’œ‘Žȱ’—ȱ‘ŽȱŽœǰȱŽœ™ŽŒ’Š••¢ȱ’—ȱ‘Žȱ—’Žȱ States and Great Britain from the nineteenth century. It embodies what we today commonly term “an open corporation,” or the Berle-Means type ˜ȱŒ˜›™˜›Š’˜—ȱ’—ȱ’œȱ™ž›Žȱ˜›–ȱǻŽ›•ŽȱŠ—ȱŽŠ—œȱŗşřŘǼǯȱȱ’œȱŠ•œ˜ȱ ’Ž•¢ȱ viewed as a modern business practice that would have been impracticable had there not been the corresponding third-party regulating mechanism of an impartial state, manifested in a corporate governance framework under the rule of law. There is an intrinsic assumption of a close relationœ‘’™ȱ ‹Ž ŽŽ—ȱ ‘Žȱ •Š ȱ Š—ȱ ‘Žȱ –˜Ž•ȱ ǻŠœŽ›‹›˜˜”ȱ Š—ȱ ’œŒ‘Ž•ȱ ŗşşŗǼǰȱ ’—ȱ  ‘’Œ‘ȱ ‘Žȱ ꛜȱ ’œȱ Šȱ ™›ŽŒ˜—’’˜—ȱ ˜›ǰȱ Š—ȱ Š—ȱ ’—žŒŽ–Ž—ȱ ˜ǰȱ ‘Žȱ œŽŒ˜—Dzȱ this view is common across disciplines from legal studies to economics Š—ȱ‘’œ˜›¢ǰȱŠ—ȱ’—ȱœž’Žœȱ˜ȱ’쎛Ž—ȱŠ›ŽŠœǰȱ’—Œ•ž’—ȱ‘’—ŠȱǻŠȱ˜›Šȱ et al. 1998, 2000; Bebchuk 1999; Black 2001a, 2001b; Gugler, Mueller, and ž›˜•žȱŘŖŖŗǼǯȱ

˜ ŽŸŽ›ǰȱ Šœȱ Šž›Žȱ ǻŗşşŜǰȱ ŘŜśǰȱ ŘŝŝȮŘŝŞǼȱ ˜—ŒŽȱ ˜‹œŽ›ŸŽǰȱ ‘’œȱ Šœœž–™tion, which was largely derived from rigorous theoretical inference and

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mainly Anglo-American experiences in law and business, may not necessarily apply to empirical cases in historical contexts of other cultural œŽĴ’—œǯȱŽȱŠ™™›˜ŠŒ‘ȱ‘’œȱ’œœžŽȱ‹¢ȱ˜••˜ ’—ȱ‘Žȱ›Š“ŽŒ˜›¢ȱ˜ȱŒ˜–™Š—¢ȱ •Ž’œ•Š’˜—ȱ’—ȱ‘’—Šȱ›˜–ȱŗşŖŚȱ˜ȱŗşŘşǰȱ ‘Ž—ȱ‘Žȱ—Ž •¢ȱž—’ꮍȱœŠŽȱ™›˜mulgated the third version of the Chinese company law. We are interested ’—ȱ‘ŽȱŠŽ—œȱ˜ȱŒ‘Š—ŽȱŠȱ‘Žȱ•Ž’œ•Š’ŸŽȱ•ŽŸŽ•œȱ˜ȱœŽŽȱ‘˜ ȱ‘Ž¢ȱ’—ĚžŽ—ŒŽȱ the historical perceptions of the Corporation Model. Since company law legislation encompasses a wide variety of issues, we focus our empirical examinations on areas pertaining to corporate governance and, more speŒ’ęŒŠ••¢ǰȱ’›ŽŒ˜›œȂȱž’ŽœǰȱŒ˜—Ě’Œœȱ˜ȱ’—Ž›ŽœœǰȱŠ—ȱœ‘Š›Ž‘˜•Ž›œȂȱ›’‘œǯ Our approach asks who did what in the process of legal development Š—ȱ ‘¢ȱ‘Ž¢ȱ’ȱ‘˜œŽȱ‘’—œǯȱŽȱ™Š¢ȱŠĴŽ—’˜—ȱ˜ȱ‘Žȱ’—Ž›™•Š¢ȱ‹Ž ŽŽ—ȱ the ideal type of Corporation Model and the thinking and behavior of •ŽŠ•ȱ›Ž˜›–Ž›œȱŠ—ȱŒ˜›™˜›ŠŽȱ˜ĜŒ’Š•œȱ ‘˜ȱ’—ĚžŽ—ŒŽȱ‘ŽȱŽŸ˜•ž’˜—ȱ˜ȱ’—œ’ž’˜—Š•ȱŒ‘Š—Žȱǻ˜›‘ȱŗşşŗǰȱŘŖŖśDzȱ˜ŽȱŗşşŚǰȱŘŖŖŖǼǯȱž›ȱ‘’œ˜›’ŒŠ•ȱŠ—Š•¢ses of the legislators and other important players describe the legislative ™›˜ŒŽœœȱ Š—ȱ —Ž ȱ •Š œȱ ‘Šȱ ›ŽĚŽŒŽȱ •ŽŠ•ȱ ˜›ȱ ’—œ’ž’˜—Š•ȱ Œ‘Š—Žȱ ’—ȱ Š—ȱ evolving legal environment. In terms of legal history, we do not take legal ŽŸŽ•˜™–Ž—œȱ ’—ȱ ‘ŽœŽȱ •Ž’œ•Š’˜—ȱ ŒŠœŽœȱ Šœȱ ˜—•¢ȱ ‘Žȱ ŽěŽŒœȱ ˜ȱ Š—ȱ ’–™Ž›sonal “state” imagined as a lone actor in legislation for either normative or pragmatic purposes.1 The next section introduces the law and the events that coincided with its establishment with the ideal type, or Corporation Model, in China during the period of our inquiry. We examine the process that produced institutional change and corresponding incentive structures for how company law actually evolved. Later sections look into the legal reform provisions in relation to our chosen area—corporate governance—of the Corporation Model, as well as the agents of change and the legislative measures that tried to reform the three company laws of 1904, 1914, and 1929. A conŒ•žœ’˜—ȱ‹›’ŽĚ¢ȱ’—Ž›™›Žœȱ‘Žȱ›Ž•Š’˜—œ‘’™ȱ‹Ž ŽŽ—ȱ‘ŽȱŒ‘Š—’—ȱŒ˜–™Š—¢ȱ law and the Corporation Model. Chinese Company Laws from 1904 to 1929 —ȱ ‘Žȱ ŗŞśŖœǰȱ ŽœŽ›—Ȭœ¢•Žȱ “˜’—ȱ œ˜Œ”ȱ Œ˜–™Š—’Žœȱ Ž–Ž›Žȱ Šȱ ‘Žȱ œŠ–Žȱ ’–Žȱ ‘Šȱ ˜›Ž’—ȱ ꛖœȱ œŠ›Žȱ ˜ȱ ˜™Ž›ŠŽȱ Šȱ ‘Žȱ —Ž •¢ȱ ˜™Ž—Žȱ ›ŽŠ¢ȱ ™˜›œȱ Š—ȱ ˜ȱ ŠĴ›ŠŒȱ œ’£ŽŠ‹•Žȱ ‘’—ŽœŽȱ ™›’ŸŠŽȱ ’—ŸŽœ–Ž—œǯȱ ‘Žȱ ŒŠ™’Š•ȱ funds these stock companies assembled overseas and in China enabled them to expand quickly in the new market. A new corporate form was the ŗȲȱ Ž›–ŠȱŠ—ȱ ›Š¢ȱǻŘŖŖşǼȱŠ•œ˜ȱžœŽȱŠȱ•Ž’œ•Š’ŸŽȱ™›˜ŒŽœœȱŠ™™›˜ŠŒ‘ǰȱ‹žȱ˜ŒžœŽȱ˜—ȱŠȱœ’—•Žȱ •Ž’œ•Š’˜—ǰȱ ˜ȱ Š—Š•¢£Žȱ ‘Žȱ ™›˜–ž•Š’˜—ȱ ˜ȱ ‘Žȱ ˜–™Š—’Žœȱ Œȱ ˜ȱ ŗşśŜȱ ’—ȱ —’Šȱ ‹ŠœŽȱ ˜—ȱ Šȱ ‘›ŽŽȬ™‘ŠœŽȱœŒ‘Ž–Žȱǻœ˜ž›ŒŽǰȱ’ěžœ’˜—ǰȱŠ—ȱ›ŽŠŒ’˜—ǼȱŠ—ȱŒ˜—Œ•žŽȱ‘Šȱ’—ȱŠ••ȱ‘›ŽŽȱ™‘ŠœŽœȱ‘Žȱ Ž—ŠŒ–Ž—ȱ Šœȱ–žŒ‘ȱ’—ĚžŽ—ŒŽȱ‹¢ȱ‘Žȱœ˜Œ’Š•ȱŠ—ȱŒž•ž›Š•ȱŒ˜—Ž¡ȱ˜ȱ—’ŠȱŠ—ȱ™˜•’’ŒŠ•ȱ™›˜ŒŽœœŽœǯ

188

Billy K. L. So and Albert S. Lee

˜›™˜›Š’˜—ǯȱ‘’—ŽœŽȱ˜ĜŒ’Š•œȱœ˜˜—ȱ‹˜››˜ Žȱ™›ŠŒ’ŒŽœȱœ’–’•Š›ȱ˜ȱ‘˜œŽȱ˜ȱ ‘Žȱ ˜›™˜›Š’˜—ȱ ˜ȱ Œ˜–™ŽŽȱ  ’‘ȱ ˜›Ž’—ȱ ꛖœȱ ‹˜‘ȱ ˜›ȱ ‘’—ŽœŽȱ ’—ŸŽœment and for markets in the 1870s and 1880s. Government policies followed, in 1898, to encourage and reward those who could successfully do ‹žœ’—Žœœȱ˜›ȱ˜™Ž—ȱŠŒ˜›’ŽœǰȱŽœ™ŽŒ’Š••¢ȱ‹¢ȱœŽĴ’—ȱž™ȱ–˜Ž›—ȱŒ˜–™Š—’Žœǯȱ ĜŒ’Š•ȱꐞ›Žœȱœ‘˜ ȱ‘Šȱ˜—ȱ‘ŽȱŽŸŽȱ˜ȱ‘Žȱ™›˜–ž•Š’˜—ȱ˜ȱ‘ŽȱŗşŖŚȱ ˜–™Š—¢ȱ˜Žǰȱ‘Ž›Žȱ Ž›ŽȱŗřśȱŒ˜–™Š—’Žœȱ ’‘ȱŠȱ˜Š•ȱŒŠ™’Š•ȱ˜ȱ—ŽŠ›•¢ȱ ŗǰşŖŖǰŖŖŖȱ¢žŠ—ǯȱŠ’—œȱ‘’œȱ‹ŠŒ”›˜™ȱ˜ȱ̘ž›’œ‘’—ȱŽœŽ›—Ȭœ¢•ŽȱŒ˜–™Š—’ŽœȱŠ—ȱ˜ȱŠ—ȱ˜ĜŒ’Š•ȱ™˜•’Œ¢ȱ™›˜–˜’—ȱ‘Ž–ǰȱ’–™˜›Š—ȱ‘’—ŽœŽȱ˜Ĝcials of the Self-Strengthening Movement such as Zhang Zhidong ᔉП⋲ and Liu Kunyi ࡝സϔ called for a company law to further the development of large Chinese companies in industries such as shipping and manufacturing. A contemporary had argued that legislation was needed to achieve these goals and to give Chinese merchants a competitive edge against forŽ’—ȱ–Ž›Œ‘Š—œȱǻ’ȱžȱŠ—ȱ’˜—ȱ ’ž•’Š—ȱŗşşśǰȱşśȮşŞDzȱ ’›‹¢ȱŗşşśǰȱŚŚȮŚŝDzȱ ’Žȱ‘ž—–’—ȱŘŖŖŖǰȱŞŖřȮŞŖŚǼǯȱ‘žœǰȱŠ•‘˜ž‘ȱ•Ž’œ•Š’—ȱŠȱŒ˜–™Š—¢ȱ•Š ȱ in China was a response to existing practices among Chinese merchants ˜ȱ’—Œ˜›™˜›Š’—ȱŒ˜–™Š—’ŽœȱǻŠž›ŽȱŗşşŜǼǰȱ‘Žȱ—ŽŽȱ˜›ȱŠȱ—Ž ȱ•Š ȱ‘ŠȱŠ•œ˜ȱ much to do with limited liability, which was new and outside Chinese business traditions. The very fact that Chinese investors felt comfortable investing in foreign enterprises but were reluctant to do so in Chinese establishments prompted advocates to believe that new laws could change ‹Ž‘ŠŸ’˜›ǯȱĴ›ŠŒ’—ȱ‘’—ŽœŽȱŒŠ™’Š•ȱ˜ȱ‘Žȱ‘’—ŽœŽȱ˜›™˜›Š’˜— was the real reason for initiating new company laws. The Assumption and Predicament of the Corporation in China One prevalent view was that the Corporation was needed for China’s economic modernization. This view was shared by eminent thinkers in lateQing and Republican China and was echoed by those who studied China in the second half of the twentieth century. For instance, Liang Qichao ṕ ଳ䍙ǰȱ ˜—Žȱ ˜ȱ ‘Žȱ –˜œȱ ’—ĚžŽ—’Š•ȱ ‘’—ŽœŽȱ ’—Ž••ŽŒžŠ•œȱ Š—ȱ ™˜•’’Œ’Š—œȱ Šȱ the turn of the twentieth century, wrote an article in 1910 on Chinese enterprises. Liang made it clear that poverty in China could be ended only ‹¢ȱ™›˜–˜’—ȱ—Ž ȱŽ—Ž›™›’œŽœȱ‘Šȱ ˜ž•ȱǻŗǼȱŠœœŽ–‹•Žȱ‘žŽȱŒŠ™’Š•ȱ›˜–ȱ ‘Žȱ™ž‹•’Œȱ˜›ȱ˜™Ž—ȱŒŠ™’Š•ȱ–Š›”ŽœǰȱǻŘǼȱŽŠœ’•¢ȱŽ¡™Š—ȱ‘Ž’›ȱ˜™Ž›Š’˜—œǰȱŠ—ȱ ǻřǼȱ‹Žȱ–Š—ŠŽȱ‘›˜ž‘ȱ–˜›Žȱ™Š›’Œ’™Š˜›¢ȱŠ—ȱŽ–˜Œ›Š’ŒȱŽŒ’œ’˜—ȱ–Š”ing. Liang further argued that the so-called modern enterprise model he favored was the Corporation, a model that had become well known in China at the time. Wu Tingfang ӡᓋ㢇, a contemporary of Liang Qichao, had this to say about the Corporation:

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We Chinese have a reputation for being good business men. When in business on our own account, or in partnership with a few friends, we succeed marvelously well; but we have yet much to learn regarding large concerns such as corporations or joint stock companies. This is not to be wondered at, for joint stock companies and corporations as conducted in the West were unknown in China before the advent of foreign merchants in our midst. Since then a few joint stock companies have been started ’—ȱ ˜—ȱ ˜—ǰȱ ‘Š—‘Š’ǰȱ Š—ȱ ˜‘Ž›ȱ ™˜›œDzȱ ‘ŽœŽȱ ‘ŠŸŽȱ ‹ŽŽ—ȱ ŒŠ››’Žȱ ˜—ȱ by Chinese exclusively, but the managers have not yet mastered the systematic Western methods of conducting such concerns. Even unpracticed and inexpert eyes can see great room for improvement in the management of these businesses.… Corporations and joint stock companies are œ’••ȱ’—ȱ‘Ž’›ȱ’—Š—Œ¢ȱ’—ȱ‘’—ŠǯȱǻžȱŗşŗŚǰȱŗŚşȮŗśŖǼ

’‘¢ȱ¢ŽŠ›œȱ•ŠŽ›ǰȱ’—ȱŗşşśǰȱ‘ŽȱšžŽœ’˜—ȱ Šœȱ›Š’œŽȱŠŠ’—ȱ‹¢ȱ’••’Š–ȱ Kirby in what is now commonly called the “Kirby Puzzle” (Rose and BowŽ—ȱŗşşŞDzȱŠ—ȱ’žŠ—ȱŘŖŖŘǼDZȱ‘¢ȱ‘Šȱ‘’—ŽœŽȱŒ˜–™Š—¢ȱ•Š ȱ›Ž’–Žœȱ’—ȱ the past century failed in one of their major tasks, that is, to promote the Western-style corporation as a model for Chinese enterprises and thereby achieve economic development? The Western model Kirby referred to was the Corporation. The same issue has been described in the history of Chi—ŽœŽȱŒ˜–™Š—¢ȱ’—œ’ž’˜—œȱ‹¢ȱ‘Š—ȱ‘˜—–’—ȱǻŘŖŖŘǼǯȱ

˜ ŽŸŽ›ǰȱ›˜–ȱ‘Žȱ’–Žȱ˜ȱ’Š—ȱ’Œ‘Š˜ȱ˜ȱ‘Šȱ˜ȱ‘Š—ȱ‘˜—–’—ǰȱ Ž ȱ‘’—ŽœŽȱꛖœȱŠ˜™Žȱ‘Žȱ˜›™˜›Š’˜—ȱ˜Ž•ǯȱ’Š—ȱ•Š–Ž—Žȱ‘Šȱ Š•‘˜ž‘ȱ ‘Žȱ ’—ȱ ˜ŸŽ›—–Ž—ȱ ‘Šȱ –ŠŽȱ Œ˜—œ’Ž›Š‹•Žȱ Žě˜›œȱ ˜ȱ ™›˜mote a company code in 1904, and over a thousand companies had incorporated, at the time Liang wrote his article in 1910, the situation was far from satisfactory for two reasons. First, enormous obstacles blocked the way for those who tried to incorporate. Second, most who did take the incorporation path failed miserably and went bankrupt. Liang sugŽœŽȱ ‘ŽœŽȱ Œ˜–™›Ž‘Ž—œ’ŸŽȱ ™›ŽœŒ›’™’˜—œȱ ˜ȱ ŠŒ”•Žȱ ‘Žȱ ™›˜‹•Ž–DZȱ ǻŗǼȱ introduce a constitutional government for establishing the rule of law; ǻŘǼȱŽžŒŠŽȱŒ’’£Ž—œȱ˜ȱ‹Žȱ™ž‹•’ŒȬœ™’›’ŽDzȱŠ—ȱǻřǼȱŽœŠ‹•’œ‘ȱŠ—ȱ’—›Šœ›žŒture such as a stock exchange and banking system to support business enterprises. In discussing China’s slow economic modernization, Kirby questioned whether the Corporation Model could ever be the dominant form of Chinese enterprise. This reservation needed to take into account the economic performance of Chinese business enterprises in the later decades of the •ŠœȱŒŽ—ž›¢ǰȱŠœȱ ’›‹¢ȱŠ•œ˜ȱŠ–’ĴŽȱǻŗşşśǼǰȱ ‘’Œ‘ȱ–’‘ȱœž™™˜›ȱ‘Žȱ™˜œsibility of an alternative model of modern corporation. Like Kirby, Zhang Zhongmin also suggested immense cultural and political obstacles block’—ȱ‘Žȱ’–™›˜ŸŽ–Ž—ȱ˜ȱ‘’—ŽœŽȱŒ˜–™Š—’ŽœȱǻŘŖŖŘǼǯ

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Issues Concerning Chinese Company Law and the Development of the Corporation First, how should the Corporation be legally regulated in the Chinese context? The Corporation Model has great potential for tapping funds. This form of company enables investors of all kinds to invest their savings. In the aggregate, the pool of capital becomes enormous and can support an ever-expanding, capitalistic, large-scale enterprise. But, why would people invest so much capital on an impersonal basis? The answer is that peo™•Žȱ‘ŠŸŽȱŒ˜—ꍮ—ŒŽȱŠȱ ˜ȱ•ŽŸŽ•œDZȱꛜǰȱ‘Šȱ‘ŽȱŒ˜–™Š—¢ȱ ’••ȱ–Š”Žȱ–˜—Ž¢ȱ Š—ȱ‘Šȱ’—ŸŽœ–Ž—ȱ’—ȱ’œȱœ˜Œ”ȱ ’••ȱ¢’Ž•ȱŠȱ™›˜ęȱ‘’‘Ž›ȱ‘Š—ȱ‘Šȱ˜ȱ˜‘Ž›ȱ investments; second, that company managers will protect the interests of ‘˜œŽȱ’—ŸŽœ˜›œȱ—˜ȱ‘ŠŸ’—ȱ™Ž›œ˜—Š•ȱŒ˜——ŽŒ’˜—œȱ ’‘ȱ‘Žȱꛖǯȱ—ȱ‘’—ŽœŽȱ tradition, trust in business investment relies heavily on personal networks Š—ȱ›Ž•Š’˜—œ‘’™œȱǻ Š–’•˜—ȱŗşşŗǼǯȱ‘Žȱ™›˜–˜’˜—ȱ˜ȱ’–™Ž›œ˜—Š•ȱ’—ŸŽœment needs a new form of trust in addition to, if not in replacement of, the personal trust upon which investment had been made possible before ǻ˜Œ‘›Š—ȱŘŖŖŖDzȱ‘ŽŽ‘Š—ȱŘŖŖřǼǯȱ’‘˜žȱ›Š’’˜—Š•ȱ’—œ’ž’˜—œȱ˜ȱŠ••ȱ‹ŠŒ”ȱ on, entrepreneurs will turn to the state or administrative mechanisms to œ›Ž—‘Ž—ȱ’—ŸŽœ˜›ȱ›žœȱŠ—ȱŒ˜—ꍮ—ŒŽǯȱ‘žœǰȱœ˜–Žȱ–ŽŒ‘Š—’œ–ȱ’œȱ—ŽŽed to convince investors that there are adequate third-party controls over management or company directors—controls that will protect investors’ interests. The Chinese company law regime needed to address this investment dimension of the Corporation. But, how could shareholders be empowered to control the directors and monitor a company’s important decisions so that shareholders feel safe to invest? The second question about the Corporation ˜Ž•ȱ Œ˜—ŒŽ›—œȱ ŽĜŒ’Ž—ȱ management of capital in company decision making. A company’s performance depends upon capital, assembled from the public, to be invested in ‹žœ’—Žœœȱ˜™™˜›ž—’’Žœȱ’—ȱ Š¢œȱ‘ŠȱŽĜŒ’Ž—•¢ȱŽ—Ž›ŠŽȱ–Š¡’–ž–ȱ›Žž›—œȱ ˜›ȱ œ‘Š›Ž‘˜•Ž›œȱ  ‘’•Žȱ Šȱ ‘Žȱ œŠ–Žȱ ’–Žȱ Š••˜ ’—ȱ œžĜŒ’Ž—ȱ ›ŽœŽ›ŸŽœȱ ˜›ȱ expanding the business. Also, a company must be rationally managed by experts. Capital should be placed in the best hands to maximize return Š—ȱ˜ȱŠŸ˜’ȱ’—ŽĜŒ’Ž—ȱ–Š—ŠŽ–Ž—ȱ‹¢ȱŠ–ŠŽž›ȱ’—ŸŽœ˜›œǯȱ With these two dimensions in mind, let us ask what was the legislative process for the three Chinese company laws and how did they address the issues related to the Corporation as outlined here? Our analytical frame ˜›”ȱ˜ŒžœŽœȱ˜—ȱ˜ž›ȱŠœ™ŽŒœȱ˜ȱ‘ŽœŽȱ•Š œDZȱǻŗǼȱ’›ŽŒ˜›Ȃœȱ™Š¢ȱŠ—ȱ’œȱ’œŒ•˜œž›ŽDzȱǻŘǼȱ‘Žȱ’›ŽŒ˜›Ȃœȱž’Žœȱǻ’œ‘˜—Žœ¢ȱŠ—ȱ—Ž•’Ž—ŒŽȱ’œœžŽœǼDzȱǻřǼȱ‘Žȱ ’œŒ•˜œž›Žȱ˜ȱŒ˜—Ě’Œœȱ˜ȱ’—Ž›Žœȱ’—ȱ–Š“˜›ȱŒ˜–™Š—¢ȱŽŒ’œ’˜—œȱŠ‹˜žȱŒ˜–™Š—¢ȱ•˜Š—œȱ˜ȱ’›ŽŒ˜›œDzȱŠ—ȱǻŚǼȱ‘Žȱœ‘Š›Ž‘˜•Ž›œȂȱ›’‘œȱŠ—ȱ‘ŽȱŠž‘˜›’¢ȱ of the shareholders’ general meeting. These four legal elements serve as reference points for a normative theory of company law to confront managerial shareholder problems.

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The Company Code of 1904 The legislative process in late-Qing China has been mentioned in many writings about Chinese company law. There is a need to clarify this process, since only one piece of source material is extant, which many scholars have referred to exclusively. Until new information emerges, we will look carefully into this document, of which the full translation follows: ȃȱŽ–˜›’Š•ȱž‹–’ĴŽȱ‹¢ȱ‘Žȱ’—’œ›¢ȱ˜ȱ˜––Ž›ŒŽȱŽ™˜›’—ȱ‘Šȱ’—ȱ ‘Žȱ ›˜ŒŽœœȱ ˜ȱ ›ŠĞ’—ȱ Šȱ ˜Žȱ ˜ȱ ˜––Ž›ŒŽȱ ȱ ˜ ȱ ’›œȱ ž‹–’œȱ ‘Žȱ Chapter of the Company Law for Imperial Examination and Awaits Further Imperial Instruction” I, Minister of Commerce Zaizhen 䓝ᤃ, received an imperial order on 22 April 1903 stating that facilitating commerce and promoting industries were among key areas of state policies of national importance since Š—Œ’Ž—ȱ ’–Žœȱ ‘Šȱ  Š››Š—Žȱ ’––Ž’ŠŽȱ ŠĴŽ—’˜—ȱ Š—ȱ Žě˜›œȱ Š—ȱ ‘Šȱ Zaizhen, Yuan Shikai 㹕Ϫ߅ǰȱŠ—ȱžȱ’—Š—ȱ Ž›ŽȱŠœœ’—Žȱ˜ȱ›ŠĞȱŠȱ commercial code. This shows how high a priority the imperial court regards commerŒ’Š•ȱ™˜•’Œ’ŽœȱŠ—ȱ’œȱœ›˜—ȱ’—Ž—’˜—ȱ˜ȱ™›˜–˜ŽȱŒ˜––Ž›ŒŽǯȱ ˜ ŽŸŽ›ǰȱŠȱ that time Wu Tingfang was participating in the diplomatic negotiation ˜ȱ‘Žȱ›ŽŠ¢ȱ˜ȱ˜––Ž›ŒŽȱǻ ’‘ȱ›’Š’—ȱŠ—ȱœ˜ȱ˜—Ǽȱ’—ȱ‘Š—‘Š’ǯȱȱ ›˜Žȱ ˜ȱ‘’–ȱŠ—ȱŒŠ–Žȱ˜ȱ‘ŽȱŒ˜—Œ•žœ’˜—ȱ‘Šȱ‘Žȱ ˜ž•ȱꛜȱ›Š—œ•ŠŽȱœŽ•ŽŒŽȱ parts of commercial laws of other countries for our reference. —ȱŝȱŽ™Ž–‹Ž›ȱǻ‘Žȱœ’¡ŽŽ—‘ȱŠ¢ȱ˜ȱ‘ŽȱœŽŸŽ—‘ȱ–˜—‘Ǽǰȱ‘Ž›Žȱ ŠœȱŠȱ new imperial order to establish a Ministry of Commerce, and Wu was ap™˜’—ŽȱŽ™ž¢ȱ–’—’œŽ›ȱ’—ȱ–¢ȱ–’—’œ›¢ȱǽ˜––Ž›ŒŽǾǯȱ ŽȱŒŠ–Žȱ˜ȱ‘Žȱ–perial Capital the following month. We discussed face-to-face and came to the conclusion that due to the complexity of commercial law it would be unrealistic to compile a comprehensive one in a short period of time. For the time being, the most urgent task was to help organize various companies and rectify the former problem of overdispersed resources. In œ˜ȱ˜’—ǰȱŒ˜––Ž›Œ’Š•ȱŠěŠ’›œȱŒ˜ž•ȱ‹Žȱ’–™›˜ŸŽȱŠ—ȱ‘ŽȱŒ˜ž—›¢ȱ ˜ž•ȱ —˜ȱ’—˜›Žȱ˜ž›ȱ’—Ž›ŽœœȱŠ—ȱ›’‘œǯȱ—ȱ‘’œȱŒŠœŽǰȱ‘Žȱꛜȱ™›’˜›’¢ȱœ‘˜ž•ȱ‹Žȱ the compilation of a company ordinance for merchants to follow. When ‘Ž›ŽȱŠ›Žȱ’œ™žŽœȱǽŠ›’œ’—ȱ’—ȱ‘’œȱ˜–Š’—ȱ’—ȱ‘Žȱžž›ŽǾǰȱ–¢ȱ–’—’œ›¢ȱŒŠ—ȱ Š•œ˜ȱŠ“ž’ŒŠŽȱŠ—ȱ˜ěŽ›ȱ™›˜ŽŒ’˜—ȱ’—ȱŠŒŒ˜›Š—ŒŽȱ ’‘ȱ‘Žȱ•Š ǯȱ‘Ž›Ž˜›Žǰȱ Žȱž›Ž—•¢ȱ›ŠĞŽȱŠȱŒ˜–™Š—¢ȱ•Š ȱœŽŒ’˜—ȱ˜ȱ‘ŽȱŒ˜––Ž›Œ’Š•ȱŒ˜Žȱ and added at the beginning a set of general ordinances on merchants. Ў›ȱ Žȱ’ȱ‘’œǰȱ Žȱ–Š’•Žȱ‘Ž–ȱ˜ȱ‘Žȱ˜ŸŽ›—˜›ȬŽ—Ž›Š•ȱ˜ȱ‘’•’ǰȱžŠ—ȱ ‘’”Š’ǰȱŠœ”’—ȱ˜›ȱ‘’œȱŒ˜––Ž—œȱ‹Ž˜›Žȱ‘Žȱ˜Œž–Ž—ȱ Šœȱ˜ȱ‹Žȱœž‹–’ĴŽȱ ˜ȱ‘Žȱ–™Ž›’Š•ȱĜŒŽȱ˜ȱ’•’Š›¢ȱŠ—ȱ˜•’’ŒŠ•ȱ슒›œȱǻ ž—“’Œ‘žȱ䒡″㰩Ǽǯȱ A subsequent edict of 29 December (the eleventh day of the eleventh –˜—‘Ǽȱ œŠŽȱ ‘Šȱ žŽȱ ˜ȱ ‘’œȱ ‘ŽŠŸ¢ȱ ž’Žœȱ žŠ—ȱ ›ŽšžŽœŽȱ ˜ȱ Ž¡Ž–™ȱ himself from excessive tasks. Since a Ministry of Commerce had already ‹ŽŽ—ȱŽœŠ‹•’œ‘Žȱ˜ȱ‘Š—•ŽȱŒ˜––Ž›Œ’Š•ȱŠěŠ’›œȱŠ—ȱ•Š œǰȱ’ȱœ‘˜ž•ȱ‹Žȱ›Žsponsible for detailed examinations of the law.

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Billy K. L. So and Albert S. Lee With the consent of Governor-General Yuan and in accordance with the previous edict, we now submit a general ordinance for merchants of 9 articles and a company code of 131 articles for your imperial examination. If it receives your approval, please promulgate it as an imperial law that would be put in print and circulated by my ministry. Other parts of the commercial law will be our next tasks of lawmaking. Recently, Wu ’—Š—ȱ ŠœȱŠ™™˜’—Žȱ˜ȱ‘Žȱ’—’œ›¢ȱ˜ȱ˜›Ž’—ȱ슒›œȱŠœȱŠ—ȱŠœœ’œŠ—ȱ minister. We know well that he has been overseas for a very long time Š—ȱ Šœȱ Ž••ȱŸŽ›œŽȱ ’‘ȱǽŽœŽ›—Ǿȱ•Š œǯȱ›˜–ȱ—˜ ȱ˜—ǰȱ Žȱ ’••ȱœŽŽ”ȱ‘’œȱ Šœœ’œŠ—ŒŽȱ’—ȱ‘Žȱ›ŠĞ’—ȱ˜ȱ˜‘Ž›ȱŒ˜––Ž›Œ’Š•ȱ•Š œȱ›˜–ȱ’–Žȱ˜ȱ’–Žȱœ˜ȱ that the outcome will be more favorable. Our humble memorial to the Emperor. 21 January 1904. (DQGXXFL ŗşŖşǰȱŗŖǯŗŠȮ‹Dzȱ›Š—œ•Š’˜—ȱ‹¢ȱ‘ŽȱŠž‘˜›œǼ

The legislative process described here was standard for late imperial ‘’—ŠDZȱ‘Žȱ›ŠĞ’—ȱ˜ȱ•Š ȱ Šœȱ‘Žȱ›Žœ™˜—œ’‹’•’¢ȱ˜ȱŠȱŒŽ—›Š•ȱ˜ŸŽ›—–Ž—ȱ –’—’œ›¢ǰȱŠ—ȱ‘Žȱ•Š ȱ Šœȱ™›˜–ž•ŠŽȱž—Ž›ȱ’–™Ž›’Š•ȱ˜›Ž›ǯȱ ˜ ŽŸŽ›ǰȱ the agent of change, as indicated in this text, seems to have been overlooked in previous scholarship. Many have assumed that it was a product of three persons assigned to the job. Based on the full translation here, Œ•ŽŠ›•¢ǰȱ‘Žȱ•˜—Žȱ›ŠĞŽ›ȱ˜ȱ‘’œȱ•Š ȱ Šœȱžȱ’—Š—ǯȱŠ’£‘Ž—ȱ”—Ž ȱ˜˜ȱ •’Ĵ•Žȱ˜ȱ‘Žȱœž‹“ŽŒǰȱŠ—ȱžŠ—ȱ’ȱ—˜ȱŽŸŽ—ȱ‹˜‘Ž›ȱ˜ȱ’ŸŽȱŠ—¢ȱ’—™žǯȱ‘Šȱ Wu Tingfang was the sole agent of change in this process merits more attention than it has received so far. This legislation drew considerable criticism from contemporaries such Šœȱ ’Š—ȱ ’Œ‘Š˜ȱ ǻŗşŗŖǼȱ Š—ȱ ›˜–ȱ –Š—¢ȱ  ‘˜ȱ œž’Žȱ ’ȱ •ŠŽ›ȱ ǻ’ȱ žȱ Š—ȱ ’˜—ȱ ’ž•’Š—ȱ ŗşşśǰȱ ŗŖŝǼǰȱ ‹žȱ Ž ȱ  Ž—ȱ ž›‘Ž›ȱ ˜ȱ —˜Žȱ ‘Žȱ •ŽŠ•ȱ ‹ŠŒ”ground of Wu when discussing this company law in China, except Shi–ŠŠȱŠœŠ˜ȱǻŗşŞŖǰȱřŜǼȱŠ—ȱŠŸ’ȱŠž›ŽȱǻŘŖŖŖǰȱŞŝǼǯȱžȱ ŠœȱŠ–˜—ȱ‘Žȱ top Chinese authorities on Western law in the Self-Strengthening Move–Ž—ȱŠ—ȱ‘Žȱ•ŠŽȬ’—ȱ˜ŸŽ›—–Ž—ǯȱŒ‘˜•Š›œȱ™Š’ȱŠĴŽ—’˜—ȱ˜ȱ‘’œȱŠŒ˜›ȱ only when they discussed the role of Wu as a reformer (Pomeratz-Zhang ŗşşŘǼǯȱ‘Žȱ–˜œȱŸ’Š•ȱŽ•Ž–Ž—ȱ’—ȱ‘’œȱ•ŽŠ•ȱ‹ŠŒ”›˜ž—ȱ Šœȱ‘’œȱ‹Ž’—ȱŒŠ••Žȱ ˜ȱ ‘Žȱ ‹Š›ȱ ’—ȱ ‘Žȱ ’•Žȱ Ž–™•Žȱ ——ȱ ’—ȱ ˜—˜—ȱ ’—ȱ ‘Žȱ ŽŠ›•¢ȱ ŗŞŞŖœǯȱ Žȱ was practicing as a common law barrister in the United Kingdom when ꛜȱŠ™™›˜ŠŒ‘Žȱ˜ȱ“˜’—ȱ‘Žȱ‘’—ŽœŽȱ˜ŸŽ›—–Ž—ǯȱŽŒ•’—’—ȱ‘Šȱ˜ěŽ›ǰȱ‘Žȱ ›Žž›—Žȱ ˜ȱ ™›ŠŒ’ŒŽȱ •Š ȱ ’—ȱ ˜—ȱ ˜—ȱ ’—ȱ ‘Žȱ •ŠŽȱ ŗŞŞŖœȱ Š—ȱ ‹ŽŒŠ–Žȱ Šȱ •Ž’œ•Š’ŸŽȱŒ˜ž—Œ’•˜›ȱ ’‘ȱœ›˜—ȱ’Žœȱ˜ȱ‘Žȱ ˜—ȱ ˜—ȱ˜ŸŽ›—˜›ǯȱ‘ŽœŽȱ ¢ŽŠ›œȱ˜ȱŒ˜––˜—ȱ•Š ȱ™›ŠŒ’ŒŽȱ™›ŽŒŽŽȱ‘’œȱ“˜’—’—ȱ‘Žȱ™Ž›œ˜—Š•ȱœŠěȱ˜ȱ ’ȱ ˜—£‘Š—ȱᴢ匏ゴ and his later appointments as envoy to the United ŠŽœȱŠ—ȱŽ›žǯȱ ’œȱž—Ž›œŠ—’—ȱ˜ȱ—•’œ‘ȱ•Š ȱŠ—ȱŽœŽ›—ȱ‹žœ’—Žœœȱ practices, and his role in the negotiation of the Treaty of Commerce, in which he faced a strong counterpart in the British delegation, had providŽȱ‘’–ȱ ’‘ȱꛜ‘Š—ȱ”—˜ •ŽŽȱ˜ȱ‘ŽȱŽœŽ›—ȱ™˜ Ž›œǯȱ‘ŽȱŒ˜––Ž—ȱ‘Žȱ

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made on the Corporation as cited previously reveals his mind-set when he had to advise Zaizhen about the commercial code. Wu was very likely ‘Žȱ™Ž›œ˜—ȱ ‘˜ȱ›ŠĞŽȱ‘ŽȱŗřŗȱŠ›’Œ•Žœȱ’—ȱŠȱœ‘˜›ȱ™Ž›’˜ȱ˜ȱŠȱŽ ȱ–˜—‘œȱ  ’‘ȱ•’Ĵ•Žȱ‘Ž•™ȱ›˜–ȱ˜‘Ž›œȱ ‘˜ǰȱŽŸŽ—ȱ‘˜ž‘ȱ̞Ž—ȱ’—ȱ˜›Ž’—ȱ•Š—žŠŽœǰȱ might not have understood the law well enough to translate it. ‘Žȱ Žħ’ȱ Š™Š—ŽœŽȱ Œ˜–™Š—¢ȱ Œ˜Žȱ  Šœȱ ˜›–Š••¢ȱ ™›˜–ž•ŠŽȱ ’—ȱ ’œȱ Ž—’›Ž¢ȱ ’—ȱ ŗŞşşȱ Š—ȱ –’‘ȱ ‘ŠŸŽȱ ’—ĚžŽ—ŒŽȱ žȂœȱ ›ŠĞ’—ȱ ˜ȱ ‘Žȱ ’—ȱ Œ˜–™Š—¢ȱŒ˜Žȱǻ‘Š—ȱ’—¡’—ȱŠ—ȱŠ—ȱž“’ŽȱŘŖŖřǰȱŗśŖȮŗśŗǼǯȱ˜—Ž‘Žless, this Qing legislation was not a translation of the Japanese code, even though Wu had the Japanese company code at hand. A comparison of the ’—ȱ Œ˜Žȱ Š—ȱ ‘Žȱ ŗŞşşȱ Š™Š—ŽœŽȱ Œ˜–™Š—¢ȱ Œ˜Žȱ ǻ ȱ ŗşŝŚǼȱ ˜Žœȱ —˜ȱ yield much evidence of a strong genealogical tie, even in Chinese characters. For one thing, Wu did not use the important legal term of “stock” found in the Japanese law, that is, kabushiki ᷾ᓣ, but instead introduced the more conventional Chinese term gufen 㙵ӑ. At least one company law Ž¡™Ž›ȱ ‘˜ȱ™ž‹•’œ‘Žȱ’—ȱ‘Žȱ˜ĜŒ’Š•ȱ—Ž œ™Š™Ž›ȱ˜—ȱŒ˜––Ž›ŒŽǰȱGongshang guanbao Ꮉଚᅬฅ, in 1907 still used the term kabushiki instead of gufen ǻŠ—ȱ‘’¡ž—ȱŗşŖŝǼǯȱžȂœȱŒ‘˜’ŒŽȱ˜ȱ‘ŽȱœŽŒ˜—ȱŽ›–ȱ’—’ŒŠŽœȱ‘’œȱ’—Ž™Ž—Ž—ŒŽȱ›˜–ȱ Š™Š—ŽœŽȱ’—ĚžŽ—ŒŽǯȱ˜›ȱ’ȱ‘Žȱ’–™˜›ȱ‘ŽȱŽ›–ȱkaisha ᳗⼒ for “company” but kept the conventional Chinese term gongsi ݀ৌ. The most ˜‹Ÿ’˜žœȱ’쎛Ž—ŒŽȱ’œȱ‘ŽȱŽę—’’˜—ȱ˜ȱȃŒ˜–™Š—¢ǰȄȱ ‘’Œ‘ȱ‘Žȱ’—ȱŒ˜Žȱ Žę—ŽȱŠœȱŠ—ȱȃ˜›Š—’£Š’˜—ȱ˜ȱ™Ž˜™•ŽȱŠœœŽ–‹•’—ȱ‘Ž’›ȱŒŠ™’Š•ȱž—œȱ˜›ȱ business (maoyi 䊓ᯧǼȄȱǻ›’Œ•ŽȱŗǼǰȱ‹žȱ‘Žȱ Š™Š—ŽœŽȱŒ˜ŽȱŽę—Žȱ’ȱŠœȱŠ—ȱ “organization formed for the purpose of conducting commercial behavior (œ‘ç”ç’ȱଚ㸠⚎ǼȄȱǻ›’Œ•ŽȱŚŘǼǯȱ‘’œȱŸ’Š•ȱ’쎛Ž—ŒŽȱ’—ȱ‘Žȱ•ŽŠ•ȱŽę—’’˜—ȱ˜ȱ “company” will be discussed later as regards the 1914 legislation, which ‹˜››˜ Žȱ–˜›Žȱ›˜–ȱ‘Žȱ Š™Š—ŽœŽȱŒ˜Žȱ‘Š—ȱ’ȱžǯȱžǰȱŠĞŽ›ȱŠ••ǰȱ‘ŠȱŠȱ much stronger background in Anglo-American common law. It is more likely that at least some of his main jurisprudence was transplanted from the British and U.S. common law systems, rather than coming from the continental European civil law system. This is especially salient for the parts pertaining to the Corporation Model, since the form was common not only in the United States but also in Great Britain. We now consider how the 1904 Company Code (DQGXXFL 1909, ŗŖǯ؊ȮŗŗŠǼȱ˜™Ž›ŠŽȱŠŒŒ˜›’—ȱ˜ȱ˜ž›ȱŠ—Š•¢’ŒŠ•ȱŒŠŽ˜›’Žœǯȱ ǻŗǼȱThe director’s pay and its disclosureDZȱ›’Œ•Žȱǻ‘Ž›ŽŠĞŽ›ȱ›ǯǼȱŜŜȱœ’™ž•ŠŽœȱ that unless indicated in the incorporation contract, the director’s pay will ‹ŽȱŽŒ’Žȱ‹¢ȱ‘Žȱœ‘Š›Ž‘˜•Ž›œȂȱŽ—Ž›Š•ȱ–ŽŽ’—ȱǻ Ǽǯȱ‘’œȱŠ›’Œ•ŽȱœŽȱŠȱ policy of openness about compensation and authorized shareholders to Œ˜––Ž—ȱ’ȱŒ˜–™Ž—œŠ’˜—ȱ Šœȱ—˜ȱę¡Žȱ ‘Ž—ȱ‘ŽȱŒ˜—›ŠŒȱ Šœȱ›Š —ȱž™ǯ ǻŘǼȱ The director’s duties (dishonesty and negligence issues): Art. 17 stipulates that the founding members of a corporation will not hide unreasonable private interests from other shareholders in cases of fraudulence

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Billy K. L. So and Albert S. Lee

ǻŒ˜—Ě’Œȱ ˜ȱ ’—Ž›ŽœǼȱ Š—ȱ ‘Šȱ Š••ȱ Œ˜–™Š—¢Ȭ›Ž•ŠŽȱ ™Ž›œ˜—Š•ȱ ’—Ž›Žœœȱ ˜ȱ ‘ŽœŽȱ–Ž–‹Ž›œȱ–žœȱꛜȱ‹ŽȱŠ™™›˜ŸŽȱ‹¢ȱ‘Žȱ ǯȱ•œŽ ‘Ž›Žǰȱ’›ŽŒ˜›œȱ were required not to engage in business similar to what the company was ˜’—ȱ ’‘˜žȱ™Ž›–’œœ’˜—ȱ›˜–ȱ‘Žȱ ȱǻ›ǯȱŝŚǼDzȱ—˜›ȱŒ˜ž•ȱ‘Ž¢ȱžœŽȱ‘Žȱ company’s capital stock for any purpose other than what the company Œ˜—›ŠŒȱ‘ŠȱœŽȱ˜›‘ȱǻ›ǯȱŝśǼǯȱ‘Žȱ’›ŽŒ˜›œȱ Ž›ŽȱŠ•œ˜ȱ›Žšž’›Žȱ‹¢ȱ•Š ȱ ǻ›ǯȱŝŜǼȱ˜ȱŒŠ••ȱŠ—ȱ ȱ’ȱŠ——˜ž—ŒŽȱŒ˜–™Š—¢ȱŒŠ™’Š•ȱ‘Šȱ›˜™™Žȱ‹¢ȱ śŖȱ™Ž›ŒŽ—ȱ˜›ȱ–˜›Žȱ‹ŽŒŠžœŽȱ˜ȱ‹žœ’—ŽœœȱŠ’•ž›Žǯȱȱ Šœȱ‘Žȱ’›ŽŒ˜›Ȃœȱž¢ȱ to prepare and disclose company information in an annual report that contained a balance sheet, a transaction report, a report of any loss, the suggested dividends for share and the amount for reserve, and an account of capital stocks, inventory, and assets, as well as of borrowing and lend’—ȱ ›Š—œŠŒ’˜—œȱ ǻ›ǯȱ ŗŖşǼǯȱ ‘Ž›Žȱ  Ž›Žȱ ˜ȱ ‹Žȱ Šȱ •ŽŠœȱ  ˜ȱ ™Š’ȱ Šž’˜›œȱ (chazhangren ᶹ䋀ҎǼȱ œŽ•ŽŒŽȱ ›˜–ȱ Š–˜—ȱ ‘Žȱ œ‘Š›Ž‘˜•Ž›œȱ Šȱ Š—ȱ  ȱ who were responsible for auditing the company accounts for disclosure ǻ›ǯȱŗŖŞǼǯȱ‘Ž›Žȱ’œȱŠ—ȱŠ›’Œ•Žȱǻ›ǯȱŗŘŜǼȱ•’œ’—ȱŽ•ŽŸŽ—ȱ”’—œȱ˜ȱ–’œŒ˜—žŒȱ by directors that warranted a penalty. Directors were liable to a penalty ꗎȱ ˜ȱ ž™ȱ ˜ȱ śŖŖȱ ¢žŠ—ȱ ˜›ȱ —˜ȱ ˜••˜ ’—ȱ ‘Žȱ ’œŒ•˜œž›Žȱ ›Žšž’›Ž–Ž—œȱ ˜›ȱ ˜›ȱ Š’•’—ȱ ˜ȱ ’œŒ•˜œŽȱ ‘Žȱ ›ž‘ȱ ǻ›ǯȱ ŗŘŜǯŘǼǰȱ ’—Œ•ž’—ȱ Žœ™ŽŒ’Š••¢ȱ ‘Žȱ Š—nual reports, founding contract, minutes of every SGM, and so on (Art. ŗŘŜǯşǼDzȱ˜›ȱ—˜ȱŒŠ••’—ȱŠ—ȱ ȱ ‘Ž—ȱŒŠ™’Š•ȱœ˜Œ”ȱŽ••ȱśŖȱ™Ž›ŒŽ—ȱ‹Ž‘’—ȱ‘Žȱ ˜›’’—Š•ȱŒŠ™’Š•ȱœ˜Œ”ȱǻ›ǯȱŗŘŜǯŗŖǼDzȱ˜›ȱ˜›ȱŸ’˜•Š’—ȱ›ǯȱŗŝǰȱ ‘’Œ‘ȱ™›˜‘’‹’Žȱž—›ŽŠœ˜—Š‹•ŽȱŒ˜—Ě’Œœȱ˜ȱ’—Ž›Žœȱ‹¢ȱ˜ž—’—ȱ–Ž–‹Ž›œȱǻ›ǯȱŗŘŜǯŗŗǼǯȱ ˜›Žȱꗎœǰȱ˜ȱž™ȱ˜ȱśǰŖŖŖȱ¢žŠ—ǰȱ Ž›Žȱ’–™˜œŽȱ˜›ȱ‘ŽȱŸ’˜•Š’˜—ȱ˜ȱ›ǯȱŝśǰȱ allocating company property for purposes other than those authorized by ‘ŽȱŒ˜–™Š—¢ȱǻ›ǯȱŗŘŝǼǯȱ‘˜œŽȱ’—Ÿ˜•ŸŽȱ’—ȱŽ–‹Ž££•Ž–Ž—ȱ˜›ȱ›Šžž•Ž—ŒŽȱ  ˜ž•ȱ‹ŽȱꗎȱŠœȱ–žŒ‘ȱŠœȱŗŖǰŖŖŖȱ¢žŠ—ȱŠ—ȱ’–™›’œ˜—Žȱ›˜–ȱ˜—Žȱ˜ȱ‘’›¢Ȭ œ’¡ȱ–˜—‘œȱǻ›ǯȱŗŘşǼǯ ǻřǼȱ‘Žȱ’œŒ•˜œž›Žȱ˜ȱŒ˜—Ě’Œœȱ˜ȱ’—Ž›Žœœȱ’—ȱ–Š“˜›ȱŒ˜–™Š—¢ȱŽŒ’œ’˜—œǰȱ’—ȱ™Š›ticular about company loans to directorsDZȱ ‘Ž›Žȱ ’œȱ ˜—•¢ȱ ˜—Žȱ Š›’Œ•Žȱ ǻ›ǯȱ ŗŝǼȱ ›Žž•Š’—ȱ‘ŽȱŒ˜—Ě’Œœȱ˜ȱ’—Ž›Žœȱ˜ȱ’›ŽŒ˜›œȱ‘ŠȱŽŠ•œȱ ’‘ȱ‘Žȱ˜ž—’—ȱ –Ž–‹Ž›œȱ˜ȱŠȱŒ˜–™Š—¢ǯȱ‘Ž›Žȱ’œȱ—˜ȱœ™ŽŒ’ęŒȱŒ•ŠžœŽȱ˜—ȱ’›ŽŒ˜›ȂœȱŒ˜—Ě’Œœȱ of interest, even though there are some regulatory rules on the misuse of company resources. Those rules make clear one important aspect of the Corporation, which is distinct from other private Chinese business operations: the principle of prohibiting the use of a company’s resources without the formal approval of the shareholders. ǻŚǼȱShareholders’ rights and the authority of the shareholders’ general meeting: One major development in company law was the provision that introduced the rule of limited liability for a Corporation ǻ›ǯȱŘşǼǯȱ’–’Žȱ liability exempted the liability of a shareholder beyond the share that he ˜›ȱœ‘Žȱ‘ŠȱŒ˜––’ĴŽǯȱȱŠ•œ˜ȱŒ•ŽŠ›•¢ȱœŠŽȱ‘Šȱœ‘Š›Ž‘˜•Ž›œȱœ‘˜ž•ȱŽ—“˜¢ȱ ŽšžŠ•ȱ›’‘œȱŠœȱ™›˜ŽŒŽȱ‹¢ȱ‘’œȱ•Š ȱ›ŽŠ›•Žœœȱ˜ȱ‘Ž’›ȱ˜ĜŒ’Š•ȱ˜›ȱ™›’ŸŠŽȱ

Legalization of Chinese Corporation

ŗşś

œŠžœȱǻ›ǯȱřśǼȱ˜›ȱ˜ȱ‘Ž’›ȱ—Š’˜—Š•’¢ȱǻ›œǯȱŚŚȱŠ—ȱśŝǼǯȱ‘ŽœŽȱŽšžŠ•ȬœŠžœȱ provisions were probably of concern at the time because the earlier dis™žŽœȱŠ—ȱ™›˜‹•Ž–œȱ˜ȱ‘’—ŽœŽȱ“˜’—ȱŸŽ—ž›Žœȱ‘Šȱ˜ĞŽ—ȱ’—Ÿ˜•ŸŽȱ‘Žȱ˜ŸŽ›—–Ž—ȱŠ—ȱ‘ŽȱŽ•’Žǯȱ‘Žȱž—ŽšžŠ•ȱ™˜œ’’˜—œȱ˜ȱ˜ĜŒ’Š•œȱŠ—ȱŒ˜––˜—Ž›œȱ apparently deterred many from investing substantially in such enterprises. Another concern was that of possible disputes arising from foreigners’ investing in Chinese joint stock ventures. That issue posed complex legal issues under the extraterritoriality rules of treaty ports. These problems represented important issues holding back both Chinese private investment and foreign capital from Chinese joint stock ventures. Shareholders were given a certain authority to monitor their directors, mainly through the SGM. Art. 39 recognized the transferability of shares in the open market insofar as there was no violation of company regulations. In principle, each share represented one vote. The law empowered a company to decide, according to its regulations, whether those holding more than ten shares could exercise a diminishing voting right such as ten or twenty shares for one vote in addition to holding ten votes ˜›ȱ‘ŽȱꛜȱŽ—ȱœ‘Š›Žœȱǻ›ǯȱŗŖŖǼǯȱ‘Ž›Žȱ Šœȱ—˜ȱœ™ŽŒ’ęŒȱ›Žž•Š’˜—ȱŠ‹˜žȱ which company decisions required the SGM’s approval except for decisions about increasing the capital stock of the company or about a merger  ’‘ȱ Š—˜‘Ž›ȱ Œ˜–™Š—¢ȱ ǻ›ǯȱ ŗŖřǼǯȱ ‘Ž›Žȱ  Šœȱ —˜ȱ ™›˜Ÿ’œ’˜—ȱ ™›˜™˜œŽȱ ˜ȱ require compliance with SGM resolutions by the directors. Unless the di›ŽŒ˜›œȱŒ˜––’ĴŽȱ˜ěŽ—œŽœȱœ’™ž•ŠŽȱ’—ȱ›œǯȱŗŘŜȱ‘›˜ž‘ȱŗřŖǰȱ‘Ž›Žȱ Šœȱ no mention of any shareholders’ right to sue the directors if the directors had violated any SGM resolutions. The shareholders, by a majority vote, could decide important company business; for example, the selection and ›ŽŒŠ••ȱ˜ȱ’›ŽŒ˜›œȱǻ›œǯȱŜŘǰȱŝŘǼDzȱ‘Žȱ’›ŽŒ˜›Ȃœȱ™Š¢ȱǻ›ǯȱŜŜǼDzȱ‘ŽȱŠ™™›˜ŸŠ•ȱ˜ȱ annual reports, including all accounts and balance sheets as well as diviŽ—œȱǻ›ǯȱŚŞǼDzȱ‘Žȱ–Ž›Ž›ȱ˜›ȱ’œœžŠ—ŒŽȱ˜ȱ—Ž ȱœ˜Œ”ȱǻ›ǯȱŗŖřǼDzȱ‘ŽȱŠ–Ž—–Ž—ȱ˜ȱ‘ŽȱŒ˜–™Š—¢Ȃœȱ›Žž•Š’˜—œȱŠ—ȱ˜ž—’—ȱŒ˜—›ŠŒȱǻ›ǯȱŗŗŚǼDzȱŠ—ȱ œ˜ȱ˜—ȱǻœŽŽȱŠ•œ˜ȱ›œǯȱşŞȱ‘›˜ž‘ȱŗŖŜǼǯȱ•‘˜ž‘ȱ‘ŽȱŠž‘˜›’¢ȱ˜›ȱŽŽ›–’—’—ȱ’Ÿ’Ž—œȱ•Š¢ȱ ’‘ȱ‘Žȱ ǰȱ‘Ž›Žȱ ŠœȱŠ—ȱ˜ĜŒ’Š•ȱ›Žšž’›Ž–Ž—ȱ‘Šȱśȱ ™Ž›ŒŽ—ȱ˜ȱ™›˜ęȱ‹Žȱ›ŽœŽ›ŸŽȱ’—ȱŠȱŒ˜–™Š—¢ȱž—ȱŠŒŒ˜ž—ȱ˜›ȱ›Ž’—ŸŽœ–Ž—ȱ ™ž›™˜œŽœǯȱ—ȱŠȱŒŠœŽȱ ‘Ž—ȱ‘Žȱ™›˜ęȱ˜ȱśȱ™Ž›ŒŽ—ȱŽ¡ŒŽŽŽȱŘśȱ™Ž›ŒŽ—ȱ˜ȱ‘Žȱ stock capital, the shareholders could decide at an SGM whether the extra ™›˜ęȱœ‘˜ž•ȱ‹Žȱ”Ž™ȱ’—ȱ‘ŽȱœŠ–ŽȱŠŒŒ˜ž—ȱ˜›ȱ‹Žȱ’œ›’‹žŽȱŠœȱ’Ÿ’Ž—œȱ ǻ›ǯȱŗŗŘǼǯ œȱ’œŒžœœŽȱŽŠ›•’Ž›ǰȱ‘Žȱꛜȱ‘’—ŽœŽȱŒ˜–™Š—¢ȱ•Š ȱ ŠœȱŽœ’—Žȱ˜ȱŠtract more Chinese investments in Chinese Corporations by boosting Chi—ŽœŽȱ’—ŸŽœ˜›œȂȱŒ˜—ꍮ—ŒŽȱ ’‘ȱ—Ž ȱ›Žž•Š’˜—œȱ˜›ȱŒ˜–™Š—¢ȱ’›ŽŒ˜›œǯȱœȱ promulgation did enjoy a certain success. In the following few years, there  Ž›ŽȱŘŜśȱŒ˜–™Š—’Žœȱ›Ž’œŽ›Žǰȱ˜ȱ ‘’Œ‘ȱŗśŚȱǻśŞȱ™Ž›ŒŽ—Ǽȱ Ž›Žȱ˜›™˜›Štions ǻ’ȱžȱŠ—ȱ’˜—ȱ ’ž•’Š—ȱŗşşśǰȱŗŖřȮŗŖŚǼǯȱŽœ™’Žȱ‘Žȱ•’–’Žȱ–Ž›’œȱ

ŗşŜ

Billy K. L. So and Albert S. Lee

˜ȱ‘ŽœŽȱŒ˜–™Š—’Žœȱ’—ȱŽ—Ž›Š•ǰȱŠœȱŸ’Ÿ’•¢ȱŠŒŒ˜ž—Žȱ‹¢ȱ ’›‹¢ȱǻŗşşśǰȱŚŞǼǰȱ there were exemplary cases of large-scale Chinese corporations emerging. Most noticeable is the establishment of eighteen railway companies and forty mining companies with a total public investment of 74,000,000 yuan ›˜–ȱ ŗşŖśȱ ˜ȱ ŗşŖŞȱ Š•˜—Žȱ ǻ ’Š—ȱ Ž’ȱ ŘŖŖŖǰȱ řşǼǯȱ ˜–Žȱ ‹ŽŒŠ–Žȱ ™›˜–’—Ž—ȱ ’—ȱ ‘Ž’›ȱ ›Žœ™ŽŒ’ŸŽȱ ’—žœ›’Žœǰȱ ‹žȱ ™›˜›Žœœȱ  Šœȱ œ•˜ ǯȱ ‘’•Žȱ ŠĴŽ–™’—ȱ to promote the Corporation to shareholders in Chinese capital markets Wu still needed to maintain the appeal of the Corporation to entrepreneurs and thus could not incorporate too many managerial constraints. Before 1904, China had no tradition of Corporation. Promoting the new corporate model for two parties of divergent interests was a formidable Šœ”ǯȱȱ’œȱ—˜ȱœž›™›’œ’—ȱ˜ȱœŽŽȱ’—ŠŽšžŠŒ’Žœȱ’—ȱ‘ŽȱꛜȱŒ˜–™Š—¢ȱ•Š ȱŠœȱ viewed from the perspective of either management or investors. Even so, the legal framework established in a timely way and promoted the ability of any systematic company law regime in China to regulate and facilitate the Corporation. In this regard, Wu Tingfang, with his British common •Š ȱ‹ŠŒ”›˜ž—ǰȱ‘Šȱœ’—’ęŒŠ—•¢ȱŒ˜—›’‹žŽȱ˜ȱŒ‘Š—’—ȱ‘Žȱ›ž•Žœȱ˜›ȱ corporate governance. The Company Ordinance of 1914 The Company Code of 1904 was supposed to promote the Western model ˜ȱ˜›™˜›Š’˜—ǯȱœȱ“žœȱ—˜Žǰȱ˜ŸŽ›ȱŗśŖȱŒ˜–™Š—’Žœȱ–˜Ž•Žȱ˜—ȱ‘Žȱ˜›poration entered the Chinese capital market in the next few years. Before long, however, the code and other commercial laws were found inadešžŠŽȱŠ—ȱ—ŽŽŽȱšž’Œ”ȱŠ–Ž—–Ž—œȱǻ‘Š—ȱ‘˜—–’—ȱŘŖŖŘǰȱŝŖȮŝŗǼǯȱ˜›ȱ instance, there were many reports on clashes between shareholders and directors at shareholders’ meetings, especially among the railways and mining companies.2 Such problems had much to do with implementation, but a legal reform might address some of the clarity issues involved, for example, the authorities of the SGM and the directors. The Chinese ž›ŽŠžȱ˜ȱŽ’œ•Š’˜—ȱ›ŠĞŽ›œȱ›Žœ™˜—ŽȱŠ—ȱ’—Ÿ’Žȱœ˜–Žȱ Š™Š—ŽœŽȱ•Š ȱ ™›˜Žœœ˜›œǰȱ’—Œ•ž’—ȱ‘’Šȱ 睊›çȱᖫ⬄䠔໾䚢, to prepare new legislation ˜ȱ‘ŽȱŽ—’›ŽȱŒ˜––Ž›Œ’Š•ȱ•Š ǯȱ‘Žȱ›ŠĞȱ•Š œȱ‘Žȱ‹ž›ŽŠžȱ•ŠŽ›ȱœž‹–’ĴŽȱ to the court, however, did not include the company law (Wang Zonghui ŗşŘŜǰȱŗȮřǼǯȱŽŠ— ‘’•Žǰȱ‘Žȱ‘’—ŽœŽȱ‹žœ’—ŽœœȱŒ˜––ž—’¢ȱ–ŠŽȱœŽŸŽ›Š•ȱ’—’’Š’ŸŽœȱ˜ȱŽ¡Ž›ȱ’œȱ’—ĚžŽ—ŒŽȱ’—ȱ‘Žȱœ‘Š™’—ȱ˜ȱ‘ŽȱŽ–Ž›’—ȱ›ž•Žœȱ˜ȱ‘Žȱ game. The company registration procedure as stipulated in the 1904 code Some examples can be drawn from Shenbao to illustrate the kinds of problems. For selection of chief executive and inspection of company expenditures, see the case of Guangdong Railway in Shen Baoȱǻşȱ˜ŸŽ–‹Ž›ȱŗşŖşǰȱřDZŘDzȱŜȱ Š—žŠ›¢ȱŗşŗŖǰȱŘDZŘǯȱ˜›ȱœ‘Š›Ž‘˜•Ž›œȂȱ challenge to directors’ authorities, see 2 December 1908, 3:2. For property rights disputes, see 9 November 1909, 3:4. ŘȲȱ

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provided that a new company might register with the Ministry of Commerce and Industry through the local chambers of commerce if they existed. The chambers were directly involved in carrying out the law. On the contrary, in the treaty ports, particularly Shanghai, merchants and their Œ‘Š–‹Ž›œȱ‘Šȱ›ŠžŠ••¢ȱ‹ŽŒ˜–Žȱ–˜›Žȱ’—ĚžŽ—’Š•ȱ’—ȱ‘Žȱ™˜•’’ŒŠ•ȱŠ›Ž—Šȱ‹¢ȱ 1900. This new interest group felt strongly that the 1904 code had been pro–ž•ŠŽȱ ’‘ȱ•’Ĵ•ŽȱŒ˜—œž•Š’˜—ȱ›˜–ȱ‘Ž–ȱŠ—ȱ Šœȱ—˜ȱŒ˜–™Š’‹•Žȱ ’‘ȱ Chinese business practices. The group lobbied hard for the government to reform the law in ways that would satisfy businesses’ needs. For instance, the Shanghai Chamber of Commerce rallied support from the Shanghai Federation of Businesses and the Shanghai Association for Business Studies and organized a public conference on commercial law in Shanghai in •ŠŽȱŗşŖŝǯȱ‘ŽȱŒ˜—Ž›Ž—ŒŽȱ Šœȱ Ž••ȱ›ŽŒŽ’ŸŽDZȱŗŚřȱ›Ž™›ŽœŽ—Š’ŸŽœȱ›˜–ȱŞśȱ Œ‘Š–‹Ž›œȱŠ›˜ž—ȱ‘ŽȱŒ˜ž—›¢ȱŠĴŽ—Žǯȱ—Žȱ›Žœ˜•ž’˜—ȱ–ŠŽȱ‹¢ȱ‘ŽȱŒ˜—Ž›Ž—ŒŽȱ  Šœȱ ˜ȱ ˜›Š—’£Žȱ Šȱ ™›Ž™Š›Š˜›¢ȱ ŠŸ’œ˜›¢ȱ Œ˜––’ĴŽŽȱ ˜—ȱ Œ˜–™Š—¢ȱ •Š ȱ˜ȱ™›˜žŒŽȱ›ŠĞȱ•Ž’œ•Š’˜—ȱ˜›ȱ‘Žȱ˜ŸŽ›—–Ž—ǯȱȱœŽŒ˜—ȱŒ˜—Ž›Ž—ŒŽȱ was held in Shanghai in 1909 (Shenbao 21 December, 2:2–3; 22 December, ŘDZŘDzȱ Řřȱ ŽŒŽ–‹Ž›ǰȱ ŘDZŘǼǯȱ ˜—Ž›Ž—ŒŽȱ Ž•ŽŠŽœȱ Ž—˜›œŽȱ Šȱ —Ž ȱ Œ˜–™Š—¢ȱ law proposal that was prepared by legal experts whom the group had commissioned earlier; the proposal was supplemented by a document ofŽ›’—ȱ ›ŽŠœ˜—œȱ ˜›ȱ ŽŠŒ‘ȱ ™›˜™˜œŽȱ ™›˜Ÿ’œ’˜—ǯȱ ‘Žȱ •ŠĴŽ›ȱ ˜Œž–Ž—ȱ ’œȱ œ’••ȱ Ž¡Š—ȱ ǻ‘Š—ȱ ’Š£‘Ž—ȱ Žȱ Š•ǯȱ ŘŖŖřǰȱ ŘŗŗȮŚřśǼǯȱ ‘’œȱ Š™™›˜ŠŒ‘ȱ œ¢—‘Žœ’£Žȱ the legal concepts and principles from company laws enacted in both Europe and the United States at the time. This comparative study closely ›ŽœŽ–‹•Žȱ‘Šȱ˜ȱŠ—˜‘Ž›ȱ Š™Š—ŽœŽȱŒ˜–™Š—¢ȱ•Š ȱŽ¡™Ž›ǰȱŠœž–˜˜ȱ‘ç“’ȱ ᵒᴀ⚱⊏ȱ ǻŗşŖŚȮŗşŖśǼǯȱ ‘Žȱ ‘Š—‘Š’ȱ ‘Š–‹Ž›ȱ ˜ȱ ˜––Ž›ŒŽȂœȱ ›ŠĞȱ  Šœȱ later accepted and further improved for intended legislation by the Qing ˜ŸŽ›—–Ž—ȱ ’—ȱ •ŠŽȱ ŗşŗŗȱ ǻ’ȱ žȱ Š—ȱ ’˜—ȱ ’ž•’Š—ȱ ŗşşśǰȱ ŗŖŝDzȱ ‘Š—ȱ ’Š£‘Ž—ȱŽȱŠ•ǯȱŘŖŖřǰȱŘǼǯȱ Contemporary intellectual reformists also saw the 1904 law as inadŽšžŠŽȱ˜ȱ–˜Ž›—’£Žȱ‘’—ŽœŽȱŒ˜›™˜›Š’˜—œȱǻŽǯǯǰȱ’Š—ȱŗşŗŖǼǯȱ–˜—ȱ‘Ž–ȱ was the famous intellectual and industrialist Zhang Jian ᔉ䃛ȱǻ‘žȱŗşŜśǼǯȱ Zhang was a self-made entrepreneur who managed various enterprises ’—ȱ‘Žȱ˜ Ž›ȱŠ—£’ȱŽ•ŠȱŠĞŽ›ȱŠȱŽŒŠŽȬ•˜—ȱœ›ž•Žȱ ’‘ȱ’—ŠŽšžŠŽȱ ž—’—ȱ ›˜–ȱ ‘Žȱ ‘’—ŽœŽȱ ŒŠ™’Š•ȱ –Š›”Žȱ ǻ  ȱ ŗşŜśǰȱ Ÿ˜•ǯȱ Śǰȱ ™™ǯȱ ŗŠȮ‹Ǽǯȱ ‘Š—Ȃœȱ ꛜ‘Š—ȱ Ž¡™Ž›’Ž—ŒŽȱ ‘Šȱ Œ˜—Ÿ’—ŒŽȱ ‘’–ȱ ˜ȱ ‘Žȱ ’–™˜›Š—ŒŽȱ ˜ȱ accessing a capital market for Chinese entrepreneurs (Yu Xiaobo 2003, ŗŜŚǼǯȱ‘Ž—ȱžŠ—ȱ‘’”Š’ȱ’—Ÿ’Žȱ‘Š—ȱ˜ȱ“˜’—ȱ‘’œȱ—Ž •¢ȱ˜›–ŽȱŒŠ‹’—Žȱ in Republican China as the minister of agriculture and commerce, Zhang saw it as an opportunity to reform the company law regime and accepted Yuan’s appointment. In his inaugural speech to the parliament on 8 November 1913, Zhang proposed four priorities: legislating commercial

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Billy K. L. So and Albert S. Lee

•Š œȱǻ’—Œ•ž’—ȱŒ˜–™Š—¢ȱ•Š ǼDzȱ›Ž˜›–’—ȱ‘ŽȱŒŠ™’Š•ȱ–Š›”Žȱǻ‹Š—”’—ȱŠ—ȱ –˜—ŽŠ›¢ȱœ¢œŽ–ȱ›Ž˜›–œǼDzȱ›Ž˜›–’—ȱŠ¡Š’˜—DzȱŠ—ȱ™›˜Ÿ’’—ȱ’—ŒŽ—’ŸŽœȱ to promote important industries as risk management measures (Zhang ’Š˜›ž˜ȱŗşřŖǰȱŗŞŗȮŗŞśDzȱ‘Ž—ȱ ’Š žȱŗşŞŝǰȱŗŘǼǯ Company law reform was probably the highest priority on Zhang’s ŠŽ—Šǯȱžǰȱ ‘Šȱ’—ĚžŽ—ŒŽȱ‘Š—Ȃœȱ–˜Ž•ȱ˜ȱŒ˜–™Š—¢ȱ•Š ǵȱŽȱ–’‘ȱ not expect that Zhang’s knowledge of Western law would have surpassed Wu Tingfang’s, but Zhang’s proposed company law followed closely (with ˜ŒŒŠœ’˜—Š•ȱŽ¡ŒŽ™’˜—œǰȱœžŒ‘ȱŠœȱ‘ŽȱŽę—’’˜—ȱ˜ȱȃŒ˜–™Š—¢ǰȄȱ˜ȱ‹Žȱ’œŒžœœŽȱ •ŠŽ›ǼȱŠȱ›ŠĞŽȱŸŽ›œ’˜—ȱ˜ȱŒ˜–™Š—¢ȱ•Š ȱŽ—˜›œŽǰȱ‹žȱ—˜ȱŽ—ŠŒŽǰȱ‹¢ȱ‘Žȱ ’—ȱ’—ȱ’œȱꗊ•ȱ¢ŽŠ›œǯȱ‘’œȱ›ŠĞȱŸŽ›œ’˜—ȱ Šœȱ‹Šœ’ŒŠ••¢ȱŠ—ȱŠ˜™’˜—ȱ˜ȱŠȱ ›ŠĞȱ ˜Œž–Ž—ȱ ˜ȱ Œ˜–™Š—¢ȱ •Ž’œ•Š’˜—ȱ ™›˜™˜œŽȱ ‹¢ȱ ‘Žȱ ‘Š—‘Š’ȱ ‹žœ’ness community in 1909. The spirit of this reform came from merchants Š—ȱ ‘Ž’›ȱ Œ‘Š–‹Ž›œȱ  ’‘ȱ œ›˜—ȱ Š™Š—ŽœŽȱ ’—ĚžŽ—ŒŽǯȱ ‘Žȱ ˜‘Ž›ȱ ’––Ž’ŠŽȱŒ‘Š••Ž—Žȱ Šœȱ‘˜ ȱ˜ȱ™›˜–˜Žȱ’—ŸŽœ˜›œȂȱŒ˜—ꍮ—ŒŽȱŠ—ȱ’—ŸŽœ–Ž—ǯȱ On 13 January 1914, a new company ordinance was enacted by order of President Yuan. The new ordinance superseded the previous company Œ˜Žǯȱ‘Žȱ˜›Š—’£Š’˜—ȱ˜ȱ‘ŽȱŗşŗŚȱ•Ž’œ•Š’˜—ȱŠĴŽœŽȱ˜ȱ‘Žȱ’–™˜›Š—ŒŽȱ ˜ȱ˜›™˜›Š’˜—ǰȱ ‘’Œ‘ȱ‘ŠȱŽ¡™Š—Žȱ˜ȱŠȱ˜Š•ȱ˜ȱŘśŗȱŠ›’Œ•Žœǯȱȱ‘˜œŽȱŘśŗȱ Š›’Œ•ŽœǰȱŗřŘȱ Ž›ŽȱŒŠŽ˜›’£Žȱž—Ž›ȱŠȱŒ‘Š™Ž›ȱǻŒ‘Š™Ž›ȱŚǼȱ‘Šȱ›Ž™›ŽœŽ—Žȱ ˜ŸŽ›ȱśŖȱ™Ž›ŒŽ—ȱ˜ȱ‘Žȱ˜›’—Š—ŒŽœȱœ™ŽŒ’ęŒŠ••¢ȱ›Ž•ŠŽȱ˜ȱ˜›™˜›Š’˜—ǯȱ‘Žȱ remaining provisions dealt with three other types of companies: the unlimited company (wuxian gongsi ⛵䰤݀ৌǼǰȱ Œ˜–‹’—Žȱ Œ˜–™Š—¢ȱ ǻlianghe gongsi ܽড়݀ৌǼǰȱŠ—ȱ“˜’—ȱœ˜Œ”ȱŒ˜–™Š—¢ȱ ’‘ȱŒ˜–‹’—Žȱ•’Š‹’•’’Žœȱǻgufen lianghe gongsi 㙵ӑܽড়݀ৌǼǰȱ ‘’Œ‘ȱŠ›Žȱ˜žœ’Žȱ‘ŽȱœŒ˜™Žȱ˜ȱ˜ž›ȱ’—šž’›¢ȱ ǻ‘Š—ȱ‘˜—–’—ȱŘŖŖŘǰȱŝřȮŝŚDzȱ’Žȱ‘ž—–’—ȱŘŖŖŖǰȱŞŖŚȮŞŖŜǼǯȱ ’—Š••¢ǰȱ‘ŽȱꛜȱŠ›’Œ•Žǰȱ ‘’Œ‘ȱŽę—Žȱ‘ŽȱŽ›–ȱȃŒ˜–™Š—¢Ȅȱ’—ȱ‘ŽȱŗşŗŚȱ ordinance, was identical to a provision in the 1899 Japanese company Œ˜Žȱ ǻ›ǯȱ ŚŘǼǯȱ ȱ Žę—Žȱ Šȱ ȃŒ˜–™Š—¢Ȅȱ Šœȱ ȃŠ—ȱ ˜›Š—’£Š’˜—ȱ ˜›–Žȱ ˜›ȱ the purpose of conducting commercial behavior (shangxingwei ଚ㸠⚎ǼǯȄȱ —ȱ ŠŒǰȱ œžŒ‘ȱ Šȱ Žę—’’˜—ȱ ’ŸŽ›Žȱ ›˜–ȱ ‘Žȱ ‘Š—‘Š’ȱ –Ž›Œ‘Š—ȱ ›˜ž™Ȃœȱ ˜›’’—Š••¢ȱ™›˜™˜œŽȱŽę—’’˜—ȱ˜ȱŠ—ȱȃ˜›Š—’£Š’˜—ȱ˜›–Žȱ˜›ȱ‘Žȱ™ž›™˜œŽȱ ˜ȱŒ˜––Ž›ŒŽȱ˜›ȱ˜‘Ž›ȱ™›˜ęȬ–Š”’—ȱ‹žœ’—Žœœȱǻyi shangye huo biezhong yinglishi wei ye ҹଚὁ៪߹。➳߽џ⚎ὁǼȄȱǻ‘Š—ȱ ’Š£‘Ž—ȱŽȱŠ•ǯȱŘŖŖřǰȱşŖǼǯȱ‘Žȱ œ’—’ęŒŠ—ŒŽȱ˜ȱ‘’œȱ’ŸŽ›Ž—ŒŽȱ’œȱ‘ŠȱȃŒ˜––Ž›Œ’Š•ȱ‹Ž‘ŠŸ’˜›Ȅȱ’—ȱ‹˜‘ȱ‘Žȱ ŗŞşşȱ Š™Š—ŽœŽȱŒ˜Žȱǻ›œǯȱŘŜřȮŘŜŚǼȱŠ—ȱ‘Žȱ›’—Œ’™•Žœȱ˜ȱ‘ŽȱŗşŗŚȱ‘’—ŽœŽȱ ˜––Ž›Œ’Š•ȱ Š ȱ ǻ›ǯȱ ŗǼȱ  Šœȱ Œ˜—œ›žŽȱ —Š››˜ •¢ȱ ˜ȱ Ž¡Œ•žœ’ŸŽ•¢ȱ Š™™•¢ȱ ˜ȱŠȱ•’œȱ˜ȱŽŒ˜—˜–’ŒȱŠŒ’Ÿ’’Žœȱ ’‘˜žȱ›ŽŽ››’—ȱ˜ȱ™›˜ęȬ˜›’Ž—Žȱž—Ž›Š”’—œȱœžŒ‘ȱŠœȱ꜑’—ǰȱ–’—’—ǰȱ’—žœ›¢ǰȱŠ›’Œž•ž›Žǰȱ˜›Žœ›¢ǰȱ‘žœ‹Š—›¢ǰȱ and so on.3ȱ‘ŽœŽȱ•ŠĴŽ›ȱŽ—Ž›™›’œŽœȱ‘Šȱ˜ȱ›Ž’œŽ›ȱ—˜ȱŠœȱŒ˜–™Š—’Žœȱ‹žȱŠœȱ řȲȱ The economic activities include trading, renting, light manufacturing and processing, supplying energy and water, publishing and printing, banking, foreign exchange, money-

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organizations regulated by the same rules as the “Implementation Regulations of the Company Ordinance” (“Gongsi fa shixing xize ݀ৌ⊩ᮑ㸠 ㌄ࠛǰȄȱ›ǯȱŗǯŘDzȱ‘Š— žȱ‹’Š—¢’œž˜ȱŗşŘŚǰȱŗŗŜśǼǰȱ ‘’Œ‘ȱ ŠœȱŠ•œ˜ȱŽ—ŠŒŽȱ’—ȱ ŗşŗŚǯȱ‘ŽȱŠ’’˜—Š•ȱ˜™Ž—’—ȱ˜ȱ‘Žȱ˜›™˜›Š’˜—ȱ›Ž’œ›Š’˜—ȱ˜ȱ‘ŽœŽȱ•ŠĴŽ›ȱ industries without giving them a full company legal implication did not create much enthusiasm within these sectors to register, which is underœŠ—Š‹•Žǯȱ‘Žȱ’쎛Ž—’Š’˜—ȱ–Š¢ȱ‘ŠŸŽȱ‹ŽŽ—ȱžŽȱ˜ȱ˜ŸŽ›Ž—‘žœ’Šœ–ȱ ’‘ȱ ‘Žȱ Š™Š—ŽœŽȱ–˜Ž•ȱ˜—ȱ‘Žȱ•Š ȱ›ŠĞŽ›œȂȱœ’Žǯȱ—ȱŠ—¢ȱŽŸŽ—ǰȱ‘’œȱœ›ŠŽ¢ȱ˜ȱ ‘ŽȱŗşŗŚȱ˜›’—Š—ŒŽȱ˜ȱ’쎛Ž—’ŠŽȱ‘Žȱȃ˜–™Š—¢Ȅȱ˜Žœȱ—˜ȱœŽŽ–ȱ˜ȱ‘ŠŸŽȱ ‹ŽŽ—ȱŸŽ›¢ȱŽěŽŒ’ŸŽȱ’—ȱ™›˜–˜’—ȱ‘Žȱ˜›™˜›Š’˜—ȱ’—ȱ‘Žȱ‘’—ŽœŽȱ‹žœ’—Žœœȱ community. Several Corporation provisions relating to corporate governance are •’œŽȱŠœȱ˜••˜ œȱǻœŽŽȱ‘Š— žȱ‹’Š—¢’œž˜ȱŗşŘŚǰȱŗŗśřȮŗŗŜśǼDZ ǻŗǼ Director’s pay and its disclosure: The rule governing directors’ pay remained unchanged in that it was decided by the SGM if not already stated in the company’s regulations; it was information open to shareholdŽ›œȱǻ›ǯȱŗśŚǼǯ ǻŘǼȱThe director’s duties (dishonesty and negligence issues): A director’s duties were decided by the majority of the shareholders at the SGM, unless ˜‘Ž› ’œŽȱœ™ŽŒ’ꮍȱ’—ȱ‘ŽȱŒ˜–™Š—¢Ȃœȱ›Žž•Š’˜—œȱǻ›ǯȱŗśŝǼǯȱȱ’›ŽŒ˜›ȱ Šœȱ therefore answerable to the regulated area of duties and authorities in rep›ŽœŽ—’—ȱ‘ŽȱŒ˜–™Š—¢ȱǻ›ǯȱŗśŞǼǯȱ‘’œȱ—Ž ȱ›ž•Žȱ‹ŽĴŽ›ȱŽę—Žȱ‘Žȱ’›ŽŒtor’s authority and duties. Each director could represent the company in –Š”’—ȱŽŠ•œȱ ’‘ȱ˜‘Ž›ȱ™Š›’Žœȱǻ›ǯȱŗśŞǼǰȱŠ—ȱ‘ŽȱŒ˜–™Š—¢ȱ ŠœȱŽ¡Ž–™ed from the liabilities of any damages caused by that if there was mischief ˜›ȱ—Ž•’Ž—ŒŽȱ˜—ȱ‘Žȱ™Š›ȱ˜ȱ‘Žȱ’›ŽŒ˜›ȱǻ›ǯȱřřǼǯȱ‘’œȱ—Ž ȱ™›˜Ÿ’œ’˜—ȱ Šœȱ important in making directors’ negligence a legal defense so that companies could wash their hands of transactions by negligent directors. It also gave shareholders some comfort by protecting them from potential mis–Š—ŠŽ–Ž—ȱ‹¢ȱ’›ŽŒ˜›œǯȱ’—Š••¢ǰȱ›ǯȱŗŜřǯŗȱœ’™ž•ŠŽȱŠȱ›ž•Žȱ˜ȱŒ˜––’ȱ directors to the interest of the company and its shareholders. It required directors to “follow the company’s regulations and conduct business in great care and caution.” Also, “A director failing this responsibility and thereby causing damages to the company would become liable for com™Ž—œŠ’˜—ȱ˜ȱ‘ŽȱŒ˜–™Š—¢Ȅȱǻ›ǯȱŗŜřǯŗǼǯȱ˜›ȱ‘Žȱꛜȱ’–Žȱ’—ȱ‘’—ŽœŽȱŒ˜–pany law history, tough constraints were imposed on directors by these —Ž ȱ™›˜Ÿ’œ’˜—œȱ˜ȱ‹˜˜œȱ’—ŸŽœ˜›œȂȱŒ˜—ꍮ—ŒŽȱ’—ȱ‘Žȱ˜›™˜›Š’˜—ȱ˜Ž•ǰȱ Šȱ™Š›’Œž•Š›•¢ȱž›Ž—ȱŒ˜—ŒŽ›—ȱŠĞŽ›ȱ‘’‘Ȭ™›˜ę•Žȱ‹Š—”›ž™Œ¢ȱŠ—ȱ–’œ–Š—agement scandals followed the promulgation of the 1904 code, reported ‹¢ȱ’–™˜›Š—ȱŒ˜—Ž–™˜›Š›’ŽœȱœžŒ‘ȱŠœȱ’Š—ȱ’Œ‘Š˜ȱǻŗşŗŖǰȱŘŜŞȮŘŜşǼǯȱ lending, trust, service providing, hotels, warehouses, insurance, transportation, consignment, agency and middleman, and so on.

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Since many sponsors of the 1914 ordinance were business leaders  ‘˜ȱ Ž›Žȱ’›ŽŒ˜›œȱ‘Ž–œŽ•ŸŽœǰȱ‘ŽȱœŽŒ˜—ȱœŽŒ’˜—ȱ˜ȱ›ǯȱŗŜřȱ™›˜Ÿ’ŽȱŠȱ backdoor liability exemption for the directors. It stipulated that a director could be relieved from liabilities arising from the violations of law or of the company’s regulations if the director’s course of action was approved ˜›ȱ›Š’ꮍȱ‹¢ȱ‘Žȱœ‘Š›Ž‘˜•Ž›œȱŠȱ‘Žȱ ǯȱ‘Žȱ˜—•¢ȱŒ˜—’’˜—ȱ’—ȱ‘’œȱŒŠœŽȱ was that the director must have voiced his objection at the SGM or have informed the supervisor (jiancharen ⲷᆳҎǼǰȱ  ‘˜ȱ  Šœȱ ˜—Žȱ ˜ȱ ‘Žȱ œ‘Š›Žholders and selected by the SGM for this post, of his or her disagreement with such a decision. The other duties of the directors, for instance, to disclose the company’s ꗊ—Œ’Š•ȱ ’—˜›–Š’˜—ȱ ’—ȱ Š—ȱ Š——žŠ•ȱ ›Ž™˜›ȱ Š—ȱ ˜ȱ ŒŠ••ȱ Š—ȱ  ȱ  ‘Ž—ȱ ‘Žȱ œ˜Œ”ȱŒŠ™’Š•ȱŽ••ȱ‹Ž•˜ ȱśŖȱ™Ž›ŒŽ—ǰȱ›Ž–Š’—Žȱ–˜›Žȱ˜›ȱ•Žœœȱ‘ŽȱœŠ–ŽȱŠœȱ’—ȱ ‘ŽȱŗşŖŚȱ˜–™Š—¢ȱ˜Žȱǻ›œǯȱŗŝŞȮŗŞŘǼǯȱžŒ‘ȱ›Ž™˜›œȱŠ—ȱŠŒŒ˜ž—œȱ‘Šȱ˜ȱ be approved by the SGM before the directors could be exempted from any •’Š‹’•’¢ȱ˜ȱ‹Ž’—ȱ—Ž•’Ž—ȱǻ›ǯȱŗŞŘǼǰȱž—•Žœœȱ‘˜œŽȱ›Ž™˜›œȱŠ—ȱŠŒŒ˜ž—œȱ contained fraudulent information. ȱǻřǼȱ‘Žȱ’œŒ•˜œž›Žȱ˜ȱŒ˜—Ě’Œœȱ˜ȱ’—Ž›Žœȱ’—ȱ–Š“˜›ȱŒ˜–™Š—¢ȱŽŒ’œ’˜—œǰȱ’—ȱ™Š›ticular about company loans to directorsDZȱ›ǯȱŗŜŘȱ’—›˜žŒŽȱŠȱ—Ž ȱ›ž•Žȱ‘Šȱ required directors to obtain approval from the supervisor before they could transact with their own company on behalf of outside third parties. This self-dealing rule is one of the most common forms of regulation on ’›ŽŒ˜›œȂȱ Œ˜—Ě’Œœȱ ˜ȱ ’—Ž›Žœȱ ’—ȱ –˜Ž›—ȱ Œ˜›™˜›ŠŽȱ ˜ŸŽ›—Š—ŒŽȱ ›Ž’–Žœǯȱ This principle was to enhance directors’ accountability and transparency. ǻŚǼȱ The shareholders’ rights and the authority of the shareholders’ general meeting: The authority of shareholders to contest management was en‘Š—ŒŽȱ ’—ȱ ‘’œȱ •Ž’œ•Š’˜—ǯȱ  ˜ȱ Š›’Œ•Žœȱ ǻ›œǯȱ ŗŜŚȮŗŜśǼȱ ›˜ŸŽȱ Šȱ  ŽŽȱ between the company and shareholders, as one group, and directors, as ‘Žȱ˜‘Ž›ȱ›˜ž™ǰȱ˜—ȱ•’’Š’˜—ȱ’œœžŽœǯȱȱ’œȱŠȱŒ•ŽŠ›ȱ’—’ŒŠ’˜—ȱ˜ȱ‘Žȱ›ŠĞers’ concern about possible litigation between management and investors. Since many scandals had involved directors’ fraudulence or negligence,  ‘’Œ‘ȱ  ŽŠ”Ž—Žȱ ’—ŸŽœ˜›œȂȱ Œ˜—ꍮ—ŒŽȱ ’—ȱ ‘Žȱ ˜›™˜›Š’˜—ǰȱ ‘ŽœŽȱ ›ž•Žœȱ  Ž›ŽȱŽœ’—Žȱ˜ȱŽ–™˜ Ž›ȱœ‘Š›Ž‘˜•Ž›œȱ˜ȱꗍȱ›Ž–Ž’ŽœȱŠŠ’—œȱ’›ŽŒtors’ mismanagement. Š›•’Ž›ǰȱ Žȱ–Ž—’˜—Žȱ‘Šȱ’›ŽŒ˜›œȂȱž’Žœȱ Ž›ŽȱŽę—Žȱ‹¢ȱ‘Žȱ ȱ and the company’s regulations, of which the approval of the SGM was presumed. There were also new measures to empower shareholders and thus create a safer environment for investors to make investments. The SGM continued to be the approval forum for any amendment to the com™Š—¢Ȃœȱ ›Žž•Š’˜—œȱ Š—ȱ ‘Žȱ ’œœž’—ȱ ˜ȱ —Ž ȱ ŒŠ™’Š•ȱ œ˜Œ”ȱ ǻ›œǯȱ ŗşşȮŘŖśǼǰȱ except that incumbent shareholders had preemptive rights, that is, the ›’‘œȱ ˜ȱ ™›’˜›’¢ǰȱ ˜ȱ ™ž›Œ‘ŠœŽȱ —Ž •¢ȱ ’œœžŽȱ œ‘Š›Žœȱ ǻ›ǯȱ ŘŖřǼǯȱ ‘Žȱ ŗşŗŚȱ ˜›’—Š—ŒŽȱŠ•œ˜ȱ‘ŠȱŠȱŒ•ŠžœŽȱǻ›ǯȱŗŚśǼȱ‘ŠȱŽŠ•ȱ ’‘ȱ‘ŽȱŸ˜’—ȱ›’‘œȱ˜ȱ

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–Š“˜›ȱ œ‘Š›Ž‘˜•Ž›œǯȱ›ǯȱ ŗŚśȱ Žę—Žȱ Šȱ –Š“˜›ȱ œ‘Š›Ž‘˜•Ž›ȱ Šœȱ Š—¢ȱ œ‘Š›Žholder who held more than ten shares of the company. This article also called for the regulation of major shareholders’ voting rights as set forth in ‘ŽȱŒ˜–™Š—¢Ȃœȱ›Žž•Š’˜—œǯȱ ˜ ŽŸŽ›ǰȱ‘Ž›Žȱ Ž›Žȱ—˜ȱœ™ŽŒ’ęŒȱ›Žšž’›Ž–Ž—œȱ ˜—ȱ‘Žȱœž‹œŠ—ŒŽȱ˜ȱœžŒ‘ȱ›Žž•Š’˜—œǰȱŠ—ȱ‘’œȱ ŽŠ”Ž—Žȱ›ǯȱŗŚśǯ The 1914 ordinance introduced two new instruments, not available in ‘ŽȱŗşŖŚȱŒ˜Žǰȱ˜ȱŠĴ›ŠŒȱ’—ŸŽœ–Ž—DZȱŒ˜–™Š—¢ȱ‹˜—œȱǻgongsizhai ݀ৌ‫;ډ‬ ›œǯȱŗşŖȮŗşŞǼǰȱŠ—ȱ—˜–’—ŽŽȱœ‘Š›Ž‘˜•’—ǰȱ˜›ȱž——Š–Žȱœ˜Œ”œȱǻ›œǯȱŗřŗǰȱ ŗřşǯŘǰȱŗŚŖǯŘǰȱŠ—ȱŗŚśǯŚǼǯȱ•‘˜ž‘ȱ‘ŽœŽȱ ˜ȱ—Ž ȱŽ•Ž–Ž—œȱŠ›Žȱ—˜ȱ’—ȱ˜ž›ȱ Š—Š•¢’ŒŠ•ȱ›Š–Ž ˜›”ǰȱ‘Ž¢ȱ—˜—Ž‘Ž•Žœœȱ Ž›ŽȱŠĴ›ŠŒ’ŸŽȱŒ˜›™˜›ŠŽȱ˜˜•œȱ˜›ȱ managers and directors. Company bond issuance was a convenient practice of amassing additional funds from the capital market without issuing additional equity or borrowing from money-lending institutions. Most important, the Corporation was the only corporate form allowed to issue such bonds among the three types of companies prescribed by the 1914 ordinance. Nominee shareholding allowed a shareholder to hold an unlim’ŽȱŠ–˜ž—ȱ˜ȱœ˜Œ”ȱ’—ȱœŽŒ›ŽŒ¢ǯȱ‘Žȱž•’–ŠŽȱ‹Ž—ŽęŒ’Š•ȱ˜ —Ž›œȱ˜ȱ‘Žȱœ˜Œ”ȱ did not have to disclose their identities unless they needed added votes at an SGM. To do so, they had only to convert the nominee stocks into named œ˜Œ”œȱ‘Ž•ȱž—Ž›ȱ‘Ž’›ȱ˜ —ȱ—Š–ŽœȱŠȱ•ŽŠœȱ꟎ȱŠ¢œȱ‹Ž˜›Žȱ‘Žȱ ǯȱ‘’œȱ nominee shareholding system gave major shareholders, usually directors or other controlling parties, the ability to conceal their company stocks until they were forced to convert them into voting powers under hostile circumstances at the SGM. As noted previously, business scandals and failures following the 1904 code were observed by prominent people at the time and weakened pub•’ŒȱŒ˜—ꍮ—ŒŽȱ’—ȱ‘Žȱ˜›™˜›Š’˜—ǯȱ‘Šǰȱ’—ȱž›—ǰȱ™›˜–™Žȱ‘Žȱ˜ŸŽ›—–Ž—ȱ to promulgate the 1914 legislation. The substance of the new law came mostly from the business community, and particularly from Shanghai. The emerging legal profession, which understood Western laws well (Xu ’Š•’ȱŗşşŞǼǰȱŠ•œ˜ȱŒ˜—›’‹žŽȱ˜ȱ™›Ž™Š›’—ȱ‘ŽȱŗşŗŚȱ•Ž’œ•Š’˜—ǯȱ Moreover, the new legislation was introduced by Zhang Jian, whose comments provided credibility and were easily accepted by the general ™ž‹•’Œȱ ǻ 㕕ȱ ŘŖŖřǰȱ ŗŘŚȮŗřŗǼǯȱ ž›‘Ž›–˜›Žǰȱ ’Š—ȱ ’Œ‘Š˜ǰȱ  ‘˜ȱ  Šœȱ –’—ister of justice in 1913 and 1914, had devotedly promoted reform of the legal system. Although we cannot be sure of Liang’s role in the company ordinance, the new law certainly was born in a favorable environment in the cabinet of Yuan Shikai with considerable political support (Xu 2008, Œ‘Š™ǯȱŘǼǯ ‘Žȱ—Ž ȱ•Š ȱŠ™™ŽŠ›Žȱ˜ȱŠ›ŽœœȱŒ˜—ŒŽ›—œȱŠ‹˜žȱ’—ŸŽœ˜›œȂȱŒ˜—ꍮ—ŒŽȱ by strengthening the regulations for management and by giving shareholders more statutory authority to safeguard their interests. In addition, most of the new articles were introduced to clarify corporate organization,

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including the boundaries of each party’s respective rights and duties. The new law was a legal response designed to give incentives to entrepreneurs to incorporate. Kirby is skeptical of how far this 1914 legislation promoted the Corpo›Š’˜—ȱ˜Ž•ǯȱ Žȱ˜ž‹œȱ’œȱŽĜŒŠŒ’Žœȱ˜—ȱ‘Žȱ˜••˜ ’—ȱ›˜ž—œDZȱꛜǰȱŠœȱǯȱ ǯȱ ˜Ž—ŽŸȱ˜‹œŽ›ŸŽȱ’—ȱŗşŘśǰȱ‘Žȱž™›Ž–Žȱ˜ž›ȱǻŠ•’¢žŠ—ȱ໻⧚䰶ǼȱŽŠ•ȱ  ’‘ȱ˜—•¢ȱ꟎ȱ•’’Š’˜—œȱŒ˜—ŒŽ›—’—ȱ˜›™˜›Š’˜— between 1914 and 1923; second, the enforcement of registration was poor, allowing many unregistered companies to use the name “Corporation”; third, the fears of local government might have accounted for the lack of interest in registrations ‹¢ȱ‘’—ŽœŽȱŒ˜–™Š—’ŽœDzȱŠ—ǰȱꗊ••¢ǰȱ•Š›ŽȱŽ—Ž›™›’œŽœȱœžŒ‘ȱŠœȱ˜—ȱŠ—ȱ‘Žȱ Nanyang Brothers’ Tobacco Company continued to be family businesses, though registered as Corporations. Kirby concludes that even during the “most dynamic and unencumbered growth” of Chinese capitalism’s “golden age,” the Chinese business community continued to reject the –˜Ž•ȱ‘Šȱ̘ž›’œ‘Žȱ’—ȱŒ˜—Ž–™˜›Š›¢ȱŽœŽ›—ȱŒ˜ž—›’ŽœǰȱŠȱ—Ž ȱŒ˜›™˜›ŠŽȱ˜›–ȱ‘Šȱ‘Žȱ•Š ȱ›Š–Ž›œȱ’—Ž—Žȱ˜ȱ™›˜–˜Žȱ’—ȱ‘’—ŠȱǻŗşşśǰȱŚşȮśŗǼǯȱ

˜•’—ȱ Šȱ –˜›Žȱ ™˜œ’’ŸŽȱ Ÿ’Ž ǰȱ ‘Š—ȱ ‘˜—–’—ȱ Ž›’ŸŽȱ ›˜–ȱ Ž¡’œ’—ȱœŠ’œ’Œœȱ˜—ȱ˜›™˜›Š’˜—œȱ›Ž’œŽ›ŽȱŠĞŽ›ȱ‘Žȱ’—›˜žŒ’˜—ȱ˜ȱ‘ŽȱŗşŗŚȱ Company Ordinance an understanding that the new law did induce more Œ˜–™Š—’Žœȱ ˜ȱ ’—Œ˜›™˜›ŠŽȱ Šœȱ ˜›™˜›Š’˜—œȱ ǻŘŖŖŘǰȱ ŝśȮŝŜǰȱ ŘśŚȮŘśŜǼǯ Jiang Ž’ȱŠ•œ˜ȱ—˜Žȱ‘Šȱŝśŝȱ—Ž ȱŒ˜–™Š—’Žœȱ’—Œ˜›™˜›ŠŽȱŠœȱ•’–’Žȱ•’Š‹’•’¢ȱ ones within nine years with a total investment of over 433,000,000 yuan, roughly 7.7 times more than the total number of registered limited com™Š—’Žœȱ’—ȱ‘Žȱ™›ŽŸ’˜žœȱ ˜ȱ‘ž—›Žȱ˜›ȱœ˜ȱ¢ŽŠ›œǯȱ Žȱž›‘Ž›ȱ‘’‘•’‘Žȱ large companies that raised large sums of capital from the public such as the Wing On ∌ᅝ Group of the Kuo 䛁 family, which operated in diverse ‹žœ’—ŽœœŽœǰȱ ’—Œ•ž’—ȱ Šȱ Ž™Š›–Ž—ȱ œ˜›Žȱ Š—ȱ Ž¡’•Žœǰȱ ›˜–ȱ ˜—ȱ ˜—ȱ ˜ȱ‘Š—‘Š’ǰȱ ’‘ȱ™ž‹•’Œȱ’—ŸŽœ–Ž—ȱ˜ȱśǰŖŖŖǰŖŖŖȱ¢žŠ—ȱŠĞŽ›ȱ’ȱ Šœȱ’—Œ˜›™˜›ŠŽȱ Šœȱ Šȱ •’–’Žȱ Œ˜–™Š—¢ȱ ’—ȱ ŗşŗŞȱ ǻ ’Š—ȱ Ž’ȱ ŘŖŖŖǰȱ ŚŖDzȱ ‘Š—ȱ ŗşşśǼǯȱ ˜›Ž˜ŸŽ›ǰȱ ˜Ž—ŽŸȂœȱꐞ›Žœȱ–Š¢ȱ—˜ȱ‘ŠŸŽȱ›Ž™›ŽœŽ—Žȱ‘ŽȱŽ—’›Žȱ™’Œž›Žǯȱ A company law textbook published in 1934 cited at least eight Supreme Court cases concluded from 1914 to 1919, all of them involving the Cor™˜›Š’˜—ȱǻ‘žȱ ˜—ŠȱŗşřŚǰȱŜŜǰȱŝŗǰȱŝşǰȱŞśǰȱŗŖŜǰȱŗŘŚǼǯȱ‘ŽȱœŠ–ŽȱŽ¡‹˜˜”ȱ ž›‘Ž›ȱŽœ’ꮍȱ‘Šȱž™ȱž—’•ȱ‘ŽȱŽŠ›•¢ȱŗşřŖœȱ–˜œȱ›Ž’œŽ›ŽȱŒ˜–™Š—’Žœȱ were organized as Corporations ǻ‘žȱ ˜—Šȱ ŗşřŚǰȱ ŜřǼǯȱ ’›‹¢ȱ ›’‘•¢ȱ points out that those who chose to incorporate never practically transformed from network-based family businesses into the Berle-Means cor™˜›Š’˜—ǯȱžǰȱ ŽȱŠœ”ȱŠȱ’쎛Ž—ȱšžŽœ’˜—DZȱŠœȱ‘ŽȱŗşŗŚȱ•Ž’œ•Š’˜—ȱ–ŽŠ—ȱ ˜ȱŽ—Œ˜ž›ŠŽȱ‘’—ŽœŽȱŽ—›Ž™›Ž—Žž›œȱ˜ȱžœŽȱ‘Žȱ˜›™˜›Š’˜—ȱ˜›–ȱ˜ȱŠĴ›ŠŒȱ impersonal investment from the Chinese capital market? Or, to put it another way, did Chinese investors respond to the new corporate model by Œ˜––’Ĵ’—ȱ‘Ž’›ȱœŠŸ’—œȱ˜ȱ‘˜œŽȱŸŽ—ž›ŽœǰȱŠ•‹Ž’ȱ”—˜ ’—ȱ‘Šȱ‘Ž’›ȱœ˜Œ”ȱ

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ownerships would not necessarily give them control over management as the new law might have intended? The answers for both questions are positive. The legislative intent was ‘Ž›ŽǰȱŠ—ȱ‘Žȱ‹žœ’—ŽœœȱŒ˜––ž—’¢ȱ’ȱ›Žœ™˜—ȱ˜ȱ‘’œȱŠ•Ž›—Š’ŸŽȱꗊ—Œing channel positively with the increased adoption of the Corporation Model. The 1914 legislation may have served its objectives to put the development of Corporation in China on a solid path while making every Žě˜›ȱ˜ȱ›Žœ˜•ŸŽȱ‘Žȱ’ŸŽ›’—ȱ’—Ž›Žœœȱ˜ȱ’—ŸŽœ˜›œȱŠ—ȱ–Š—ŠŽ–Ž—ǯ The Company Law of 1929 Kirby gives a succinct account of a common view on the Company Law of ŗşŘşǰȱ ‘’Œ‘ȱ Šœȱ™›˜–ž•ŠŽȱ‹¢ȱ‘ŽȱŠ’˜—Š•’œȱǻ ž˜–’—Š—Dzȱ‘Ž›ŽŠĞŽ›ȱ Ǽȱ›Ž’–ŽǯȱžŒ‘ȱŠȱŸ’Ž ȱŒ‘Š›ŠŒŽ›’£Žœȱ‘ŽȱŗşŘşȱ•Ž’œ•Š’˜—ȱŠœȱŠ—’‹žœ’ness because it imposed harsher regulations with punitive penalties on private enterprises, especially Corporations, and their managers. The GMD initiated the review process under one of its founding father’s (Sun ŠȬœŽ—ȂœǼȱ™›’—Œ’™•Žœȱ˜ȱȃ›Žž•Š’—ȱ™›’ŸŠŽȱŒŠ™’Š•ȄȱŠ—ȱŠ˜™ŽȱŒ‘Š—Žœȱ through substantial amendments to the Company Ordinance of 1914. For instance, Art. 129 of the 1929 law diminished the powers of major shareholders by limiting their voting rights to a maximum of 20 percent of the total votes regardless of actual shareholding. More importantly, the new •Š ȱ›ŽŽę—Žȱ‘Žȱ™ž›™˜œŽȱ˜ȱŠȱŒ˜–™Š—¢ǯȱ‘Ž›ŽŠœȱ‘Žȱ™›ŽŸ’˜žœȱǻŗşŗŚǼȱ•ŽŠ•ȱŽę—’’˜—ȱ˜ȱŠȱŒ˜–™Š—¢ȱ Šœȱ˜ȱŠ—ȱ˜›Š—’£Š’˜—ȱ˜›–Žȱ˜ȱȃŒŠ››¢ȱ˜žȱ Œ˜––Ž›Œ’Š•ȱ›Š—œŠŒ’˜—œȄȱǽ˜›ȱȃ˜›–Žȱ˜›ȱ‘Žȱ™ž›™˜œŽȱ˜ȱŒ˜—žŒ’—ȱŒ˜––Ž›Œ’Š•ȱ‹Ž‘ŠŸ’˜›ǰȄȱŠœȱ›Š—œ•ŠŽȱ™›ŽŸ’˜žœ•¢Ǿǰȱ‘ŽȱŗşŘşȱ•ŽŠ•ȱŽę—’’˜—ȱ˜›–Š••¢ȱ–ŠŽȱ‘ŽȱŒ˜–™Š—¢ȱŠȱȃ•ŽŠ•ȱ™Ž›œ˜—Ȅȱ ’‘ȱȃŠȱŸ’Ž ȱ˜ȱ™›˜ęǯȄȱ ’›‹¢ȱ concludes his review of the 1929 legislation by claiming that it deterred merchants from engaging in business activities, rather than encouraged ‘Ž–ȱǻŗşşśǰȱśŗȮśŘǼǯȱ ŽŒŽ—ȱ  ˜›”ȱ ‹¢ȱ ’Žȱ ‘ž—–’—ȱ ǻŘŖŖŖǰȱ ŞŖřȮŞŗŚǼȱ ˜—ȱ ‘Žȱ •Ž’œ•Š’ŸŽȱ ™›˜ŒŽœœȱ˜ȱ‘Žȱ ȱ˜ŸŽ›—–Ž—ȱŠĞŽ›ȱ’ȱŽœŠ‹•’œ‘Žȱ’œȱ›Ž’–Žȱ‘Šœȱ™›˜Ÿ’Žȱ a more detailed account of the complicated procedure to promulgate this ŗşŘşȱ•Ž’œ•Š’˜—ǯȱ—ȱ ž•¢ȱŗşŘŞǰȱŠȱŒ˜––’ĴŽŽȱ˜—ȱ’—žœ›’Š•ȱŠ—ȱŒ˜––Ž›Œ’Š•ȱ laws was formed by the Bureau of Industry and Commerce to provide a legal framework for the regulation of those undertakings. The review Œ˜––’ĴŽŽȱ ‘Šȱ ‘›ŽŽȱ –Š’—ȱ ’œœžŽœȱ ˜—ȱ ’œȱ ŠŽ—ŠDZȱ ꛜǰȱ –Š”’—ȱ Œ˜–™Š—¢ȱ law conform with the guiding principles of the GMD; second, dealing with the mushrooming of companies in China; and third, taking into account experience accumulated since 1904. The new legislation proposal  Šœȱ™›˜–™•¢ȱ™›Ž™Š›ŽȱŠ—ȱœž‹–’ĴŽȱ˜ȱ‘Žȱ¡ŽŒž’ŸŽȱžŠ—ȱǻ¡ŽŒž’ŸŽȱ ˜ž—Œ’•Ǽǯȱȱ Šœȱœž‹œŽšžŽ—•¢ȱ™ŠœœŽȱ‹¢ȱ‘ŽȱŽ—›Š•ȱŽŽ’—ȱ˜ȱ˜•’’ŒŠ•ȱ 슒›œȱǻ‘˜—¢Š—ȱ£‘Ž—£‘’ȱ Š’¢žŠ—‘ž’ȱЁ༂ᬓ⊏ྨવ᳗Dzȱ‘Ž›ŽŠĞŽ›ǰȱ‘Žȱ

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Ž—›Š•ȱ˜––’œœ’˜—Ǽǰȱ‘ŽȱŽ facto supreme decision-making body of the GMD. ‘Žȱ Ž’œ•Š’ŸŽȱ žŠ—ȱ ǻŽ’œ•Š’ŸŽȱ ˜ž—Œ’•Ǽȱ ˜ȱ ‘Žȱ ȱ ˜ŸŽ›—–Ž—ȱ Š™™˜’—Žȱ꟎ȱ–Ž–‹Ž›œȱ˜ȱ˜›–ȱ‘Žȱ›ŠĞ’—ȱ˜––’ĴŽŽȱ˜—ȱ˜––Ž›Œ’Š•ȱ Š œȱ ’—ȱ Š—žŠ›¢ȱ ŗşŘşǰȱ  ‘’Œ‘ȱ  Šœȱ Šž‘˜›’£Žȱ ˜ȱ ›ŠĞȱ •Š œȱ  ’‘˜žȱ ‘Žȱ —ŽŽȱ˜ȱ˜••˜ ȱ‘ŽȱŽŠ›•’Ž›ȱ›ŽŒ˜––Ž—Š’˜—œȱ›˜–ȱ‘Žȱ›ŽŸ’Ž ȱŒ˜––’ĴŽŽȱ ˜ȱ ‘Žȱ ž›ŽŠžȱ ˜ȱ —žœ›¢ȱ Š—ȱ ˜––Ž›ŒŽǯȱ ‘Žȱ ›ŠĞ’—ȱ ˜––’ĴŽŽȱ Šœsigned Wei Tingsheng 㸲ᤎ⫳ȱ˜ȱ›ŠĞȱŠȱ—Ž ȱŒ˜–™Š—¢ȱ•Š ǰȱŠ—ȱ‘Žȱ˜›Šnized meetings from March 7 to July 17 of the same year to compile the ›ŠĞȱ›˜™˜œŠ•ȱ˜ȱ›’—Œ’™•Žœȱ˜ȱ˜–™Š—¢ȱŠ ȱǻ’—ȱ‘’›¢Ȭ ˜ȱ™˜’—œǼǯȱ‘’œȱ ›ŠĞȱ™›˜™˜œŠ•ȱ Šœȱœž‹–’ĴŽȱ˜ȱ‘ŽȱŗşŖ‘ȱŽŽ’—ȱ˜ȱ‘ŽȱŽ—›Š•ȱ˜––’œœ’˜—ȱ‹¢ȱ‘ŽȱŒ‘Š’›–Š—ȱ˜ȱ‘ŽȱŽ’œ•Š’ŸŽȱžŠ—ǰȱ žȱ Š—–’—ȱ㚵⓶⇥, in August. The same meeting asked Kong Xiangxi ᄨ⼹❭ and Li Wenfan ᴢ᭛㆘ȱ˜ȱŽ¡Š–’—Žȱ‘Žȱ›ŠĞǯȱ‘ŽœŽȱ ˜ȱ–Ž—ȱ–ŠŽȱŠ–Ž—–Ž—œȱŠ—ȱ›Žturned it to the 191st meeting, where a resolution of the Central Commisœ’˜—ȱ Šœȱ™ŠœœŽȱ˜ȱŠŒŒŽ™ȱ‘ŽȱŠ–Ž—Žȱ›ŠĞǰȱ ‘’Œ‘ȱ Šœȱ‘Ž—ȱ™ŠœœŽȱ‹ŠŒ”ȱ ˜ȱ‘ŽȱŽ’œ•Š’ŸŽȱžŠ—ǯȱȱ‘’œȱœŠŽǰȱ‘Žȱ›ŠĞȱ™›˜™˜œŠ•ȱŒ˜—Š’—Žȱ‘’›¢Ȭ œ’¡ȱ’Ž–œǯȱȱ Šœȱ›Ž™˜›ŽȱŠȱ‘Žȱ˜›¢Ȭꛜȱ–ŽŽ’—ȱ˜ȱ‘ŽȱŽ’œ•Š’ŸŽȱžŠ—ȱ Š—ȱ›Žž›—Žȱ˜ȱ‘Žȱ꟎Ȭ–Ž–‹Ž›ȱ›ŠĞ’—ȱ˜––’ĴŽŽȱ˜›ȱž›‘Ž›ȱŠŒ’˜—ǯ ‘Ž›Žȱ ŠœȱŠ—ȱŽ¡Œ‘Š—Žȱ‹Ž ŽŽ—ȱ‘Žȱ›ŠĞ’—ȱ˜––’ĴŽŽȱŠ—ȱ‘ŽȱŽ—›Š•ȱ˜––’œœ’˜—ȱ‘›˜ž‘ȱ žȱ Š—–’—ȱ˜ȱŠ•Ž›ȱ˜—Žȱ™˜’—ȱ’—ȱ‘Žȱ›Žž›—Žȱ ›ŠĞȱ˜Œž–Ž—ǯȱ—•¢ȱŠĞŽ›ȱŒ˜–™•¢’—ȱ ’‘ȱœžŒ‘ȱ•˜—ȱ™›˜ŒŽž›ŽœȱŠ—ȱœŽŒž›’—ȱŠž‘˜›’£Š’˜—ȱ›˜–ȱ‘ŽȱŽ—›Š•ȱ˜––’œœ’˜—ȱ˜ȱ˜ȱŠ‘ŽŠȱ’ȱ›ŠĞŽ›ȱ Ž’ȱ‹Ž’—ȱ˜ȱ ›’Žȱ‘Žȱꛜȱ›ŠĞȱ˜ȱ‘ŽȱŒ˜–™Š—¢ȱ•Š ǯȱЎ›ȱ–˜›Žȱ‘Š—ȱŽ—ȱ intensive meetings, with the help of external experts, from late Novem‹Ž›ȱ˜ȱŚȱŽŒŽ–‹Ž›ǰȱ‘ŽȱŒ˜––’ĴŽŽȱŒ˜–™•ŽŽȱŠȱ›ŠĞȱŒ˜–™Š—¢ȱ•Š ȱ ’‘ȱŜȱ Œ‘Š™Ž›œȱŠ—ȱŘřŚȱŠ›’Œ•ŽœǯȱœȱŒ‘Š’›–Š—ȱ˜ȱ‘ŽȱŽ’œ•Š’ŸŽȱžŠ—ǰȱ žȱŒŠ••Žȱ Šȱ–ŽŽ’—ȱ˜ȱŠ••ȱŒ˜––Ž›Œ’Š•ȱ•Š ȱ›ŠĞŽ›œǰȱŒ’Ÿ’•ȱ•Š ȱ›ŠĞŽ›œǰȱ‘Žȱ–’—’œŽ›ȱ˜ȱ industry and commerce Kong Xiangxi, and his deputy minister to reexam’—Žȱ‘Žȱ›ŠĞȱ•Ž’œ•Š’˜—ǯȱЎ›ȱ‘Žȱ›ŽŽ¡Š–’—Š’˜—ȱ ŠœȱŒ˜–™•ŽŽȱŠ—ȱ˜—•¢ȱ ˜—ŽȱŒ‘Š—Žȱ Šœȱ–ŠŽǰȱ‘Žȱ›ŠĞȱ Šœȱ’ŸŽ—ȱ˜ȱ‘ŽȱŽ’œ•Š’ŸŽȱžŠ—ǰȱ ‘’Œ‘ȱ ‘Ž—ȱ™ŠœœŽȱ‘ŽȱŽ—’›Žȱ›ŠĞǰȱŽ¡ŒŽ™ȱ˜›ȱ˜—ŽȱŠ›’Œ•Žȱž—›Ž•ŠŽȱ˜ȱ˜›™˜›Štion, through the legislative process of three readings. The newly enacted Œ˜–™Š—¢ȱ •Š ȱ  Šœȱ ˜›–Š••¢ȱ Š——˜ž—ŒŽȱ ‹¢ȱ ‘Žȱ ȱ ˜ŸŽ›—–Ž—ȱ ˜—ȱ ŘŜȱ ŽŒŽ–‹Ž›ȱŗşŘşǰȱŠ—ȱ’ȱ˜˜”ȱŽěŽŒȱ˜—ȱŗȱ ž•¢ȱŗşřŖǯȱ‘Žȱꗊ•ȱŸŽ›œ’˜—ȱ˜ȱ‘Žȱ ŗşŘşȱŒ˜–™Š—¢ȱ•Ž’œ•Š’˜—ȱŒ˜—Š’—ŽȱŜȱŒ‘Š™Ž›œȱŠ—ȱŘřřȱŠ›’Œ•Žœȱǻ’Žȱ‘ž—–’—ȱŘŖŖŖǰȱŞŖŜȮŞŗŗǼǯ The promulgation process of the 1929 legislation has important aspects ‘Šȱ–Ž›’ȱŠĴŽ—’˜—DZȱꛜǰȱ‘Žȱ™›˜ŒŽž›Žȱ Šœȱ•Ž—‘¢ǰȱ‘˜›˜ž‘ǰȱŠ—ȱ–Ž’Œulous; second, it used many experts, including one of the top economists of the time, Ma Yinchu 侀ᆙ߱DzȱŠ—ȱ‘’›ǰȱ’ȱ ŠœȱŽ—˜›œŽȱ‹¢ȱ’—ĚžŽ—’Š•ȱ people, such as Minister Kong Xiangxi, who were politically powerful in the GMD yet at the same time represented the interests of the business

Legalization of Chinese Corporation

ŘŖś

Œ˜––ž—’¢ȱ’—ȱ‘Š—‘Š’ǯȱŽŒŠžœŽȱ˜ȱŠ••ȱ‘ŽȱŽě˜›œȱŽŸ˜Žȱ˜ȱ‘’œȱ•Ž’œ•Štive process, there was reason to expect that the new law would represent Šȱœ˜•’ȱ‹›ŽŠ”ȱ ’‘ȱ‘ŽȱŒž››Ž—•¢ȱŽ¡’œ’—ȱ•Š ǯȱ ˜ ŽŸŽ›ǰȱŠœȱŠ›ȱŠœȱ˜›™˜›Štion is concerned, this new company law showed surprising continuity with the earlier ones. This can be demonstrated by a careful comparison, article by article, of the 1914 and 1929 legislation. There were changes of wording but these were mostly for clarity; much of the wording remained the same. There were 132 articles on Corporation in the 1914 Company Ordinance but only 127 articles on the same concerns in the 1929 one. Several new articles were introduced to clarify previous provisions. Some subsec’˜—œȱ Ž›Žȱ‹›˜”Ž—ȱž™ȱ’—˜ȱ’쎛Ž—ȱŠ›’Œ•Žœȱ ‘’•Žȱ˜‘Ž›ȱŠ›’Œ•Žœȱ Ž›Žȱ›Žmoved. With a few exceptions, there were no major changes in legislative principles. Those that are most relevant to our discussion are noted here ǻœŽŽȱŠ•œ˜ȱ‘Š—ȱ‘˜—–’—ȱŘŖŖŘǰȱŝşȮŞŖǼǯ 1. Unnamed shares could not exceed 33 percent of the total stock (Art. ŗŗŞǼǯȱ(This was new.) 2. An individual shareholder’s voting rights could not exceed 20 percent ˜ȱ‘Žȱ˜Š•ȱŸ˜Žœȱǻ›ǯȱŗŘşǼǯȱ(This was new.) řǯȱ‘Š›Ž‘˜•Ž›œȱ˜ȱśȱ™Ž›ŒŽ—ȱ˜›ȱ–˜›Žȱ˜ȱ‘Žȱ˜Š•ȱœ˜Œ”œȱŒ˜ž•ȱ›ŽšžŽœȱŠ—ȱ Ž¡›Š˜›’—Š›¢ȱœ‘Š›Ž‘˜•Ž›œȂȱ–ŽŽ’—ȱǻ›ǯȱŗřřǼǯȱ(The threshold was lowered from 10 percent in 1914.) Śǯȱ‘Ž›Žȱœ‘˜ž•ȱ‹ŽȱŠȱ•ŽŠœȱ꟎ȱ’›ŽŒ˜›œȱǻ›ǯȱŗřŞǼǰȱŠ—ȱ’ȱ‘Žȱ—ž–‹Ž›ȱ˜ȱ ’›ŽŒ˜›œȱ Ž›Žȱ˜ȱ›˜™ȱ‹Ž•˜ ȱŜŜȱ™Ž›ŒŽ—ǰȱŠ—ȱŽ¡›Š˜›’—Š›¢ȱœ‘Š›Ž‘˜•Ž›œȂȱ –ŽŽ’—ȱœ‘˜ž•ȱ‹ŽȱŒŠ••Žȱǻ›ǯȱŗŚřǼǯȱ(This was new.) śǯȱȱ‘ŽȱŒ˜–™Š—¢ȱœžěŽ›Žȱ›˜–ȱŠȱ•˜œœȱ˜ȱ–˜›Žȱ‘Š—ȱřřȱ™Ž›ŒŽ—ȱ˜ȱ’œȱœ˜Œ”ȱ capital, an extraordinary shareholders’ meeting should be called (Art. ŗŚŝǼǯȱ(The threshold was lowered from 50 percent in 1914.) Ŝǯȱ‘Žȱ˜–™Š—¢ȱŠ ȱ˜ȱŗşŘşȱ›Ž–˜ŸŽȱŠȱŗşŗŚȱ›Žšž’›Ž–Ž—ȱǻ›ǯȱŗŜŘǼȱ‘Šȱ directors could do business with the company only with the supervisor’s approval. 7. Another 1914 requirement that was removed was that directors should “manage with care and caution.” Instead, the 1929 legislation required directors to follow not only the company’s regulations but also the “reso•ž’˜—œȱ˜ȱŠ—¢ȱœ‘Š›Ž‘˜•Ž›œȂȱ–ŽŽ’—Ȅȱǻ›ǯȱŗŚŞǼǯ Şǯȱ›ǯȱŗŝŖȱ›Žšž’›ŽȱŠȱŗŖȱ™Ž›ŒŽ—ȱ›ŽœŽ›ŸŽȱ˜ȱ™›˜ęȱ˜›ȱŠȱŒ˜–™Š—¢Ȃœȱ™›˜Ÿ’Ž—ȱ ž—ǰȱ ž™ȱ ›˜–ȱ śȱ ™Ž›ŒŽ—ȱ ’—ȱ ŗşŗŚǯȱ ž›‘Ž›ǰȱ ‘Žȱ •’–’ȱ ˜ȱ ‘’œȱ ›ŽœŽ›ŸŽȱ ›Žšž’›Ž–Ž—ȱ Šœȱ›ŽžŒŽȱ›˜–ȱŠ—ȱŽšž’ŸŠ•Ž—ŒŽȱ˜ȱśŖȱ™Ž›ŒŽ—ȱ˜ȱ‘Žȱ˜Š•ȱ ŒŠ™’Š•ȱœ˜Œ”ȱ˜ȱ‘ŽȱŒ˜–™Š—¢ȱ˜ȱŘśȱ™Ž›ŒŽ—ǯ şǯȱ ›ǯȱ ŗŝśȱ Š••˜ Žȱ œ‘Š›Ž‘˜•Ž›œȱ ˜ȱ śȱ ™Ž›ŒŽ—ȱ ˜ȱ ‘Žȱ ˜Š•ȱ ˜žœŠ—’—ȱ stocks to request the court to send an inspector to investigate the business of their company. This amount was down from 10 percent in 1914. 10. In the penalty section, there was a new article listing four counts of offense with punishment of up to one year of imprisonment or up to 2,000

ŘŖŜ

Billy K. L. So and Albert S. Lee

¢žŠ—ȱ ’—ȱ ꗎǯȱ ‘Žȱ •Šœȱ Œ˜ž—ȱ ˜ȱ ˜ěŽ—œŽȱ  Šœȱ ‘Žȱ –’œŠ™™›˜™›’Š’˜—ȱ ˜ȱ ‘Žȱ company’s property for speculation activities outside of the company’s •’—Žȱ ˜ȱ ‹žœ’—Žœœȱ Šœȱ Žę—Žȱ ’—ȱ ‘Žȱ Œ˜–™Š—¢Ȃœȱ ›Žž•Š’˜—œǯȱ ‘’œȱ ›ž•Žȱ  Šœȱ present in the 1904 Company Code but absent in the 1914 Company Or’—Š—ŒŽǯȱ‘Žȱ•ŽŸŽ•ȱ˜ȱ’–™›’œ˜—–Ž—ȱŠ—ȱ‘’‘Ž›ȱŠ–˜ž—ȱ˜ȱꗎœȱŠ•œ˜ȱœžgested a tightening of control over management’s violations of investors’ interests. The outcome of this legislative process in 1929 did not fundamentally depart from the 1914 Company Ordinance. Most important changes re̎ŒŽȱ‘Žȱž›‘Ž›ȱ’‘Ž—’—ȱ˜ȱ›Žšž’›Ž–Ž—œȱ˜—ȱ–Š—ŠŽ–Ž—ȱ˜›ȱŽŠœ’—ȱ of requirements for investors to monitor management. From this perspective, the 1929 Company Law was a piece of pro-investor legislation, a continuation along the same path as that of the Chinese company law regime of 1914, a path that was probably reinforced by GMD ideology. Moreover, as the 1929 framework on Corporation remained largely the same as that in the 1914 law, the 1914 reform was a greater qualitative departure from the 1904 reform than the 1929 reform was from the 1914 one. The 1929 legislation had three new clauses that are noteworthy. First, the maximum limit of unnamed nominee stocks was at 33 percent of toŠ•ȱ ˜žœŠ—’—ȱ œ‘Š›Žœǯȱ ‘’œȱ —Ž ȱ ž™™Ž›ȱ •’–’ȱ –žœȱ ‘ŠŸŽȱ ›ŽĚŽŒŽȱ ™›˜‹lems associated with some companies issuing too many unnamed shares. When there were too many unnamed shares outstanding, shareholders ‘Šȱ •’Ĵ•Žȱ ’—ŒŽ—’ŸŽȱ ˜ȱ ™Š›’Œ’™ŠŽȱ ’—ȱ ‘Žȱ ŠěŠ’›œȱ ˜ȱ ‘Žȱ Œ˜–™Š—¢ǯȱ ŽŒ˜—ǰȱ the cap of 20 percent voting rights for any individual shareholder seems •’”ŽȱŠȱŒ˜—›˜•ȱ˜ȱ‘Žȱ•Š›Žȱœ‘Š›Ž‘˜•Ž›œǯȱ ˜ ŽŸŽ›ǰȱ‘ŽȱŸ˜’—ȱŒŠ™ȱ ˜ž•ȱ ‘ŠŸŽȱ‘Šȱ•’Ĵ•ŽȱŽěŽŒȱ’—ȱŠȱœ˜Œ’Ž¢ȱ ‘Ž›Žȱ‘Žȱ‘˜žœŽ‘˜•ȱ˜ —Ž›œ‘’™ȱ˜ȱ™›˜™erty had prevailed throughout its history. A major shareholder could eas’•¢ȱꗍȱŽ—˜ž‘ȱŒ•˜œŽȱ›Ž•Š’ŸŽœȱ˜ȱ‘˜•ȱœ‘Š›Žœȱ˜—ȱ‘’œȱ‹Ž‘Š•ǯȱ—ȱ‘’œȱ Š¢ǰȱ the major shareholder could circumvent the rule and maintain control of ‘ŽȱŒ˜–™Š—¢ȱŠȱ‘Žȱ ǯȱ‘Ž›Ž˜›Žǰȱ‘Žȱœ˜ȬŒŠ••ŽȱŒ˜—›˜•ȱŽěŽŒȱ Šœȱ–˜›Žȱ rhetorical than realistic. The legislative intent behind the 20 percent voting ŒŠ™ȱ ›ŽĚŽŒŽȱ ‘Žȱ ˜ŸŽ›—–Ž—Ȃœȱ Žœ’›Žȱ ˜ȱ ™›˜ŽŒȱ –’—˜›’¢ȱ œ‘Š›Ž‘˜•Ž›œDzȱ however, there were no provisions elsewhere that would suggest such an intention to limit the rights of major shareholders. More important, one ˜ȱ‘Žȱ‘’›¢Ȭ ˜ȱ™›’—Œ’™•ŽœȱŽ—˜›œŽȱ‹¢ȱ‘Žȱ›ŠĞȱ›’—Œ’™•Žœȱ˜ȱ‘Žȱ˜–™Š—¢ȱŠ ȱ̊•¢ȱŒ•Š’–Žȱ‘Šȱ–Š“˜›ȱœ‘Š›Ž‘˜•Ž›œȱœ‘˜ž•ȱ‘ŠŸŽȱ–˜›Žȱ•Ž’’mate rights because they had more genuine concerns about the company’s •˜—ȬŽ›–ȱꗊ—Œ’Š•ȱ™›˜œ™ŽŒȱ‘Š—ȱ‘Žȱ–’—˜›’¢ȱœ‘Š›Ž‘˜•Ž›œǰȱ ‘˜ȱŽ—Žȱ to focus on immediate dividend and interest gains at the expense of the Œ˜–™Š—¢Ȃœȱ’—Ž›ŽœǯȱŠœǰȱ‘Žȱ—Ž ȱ™ž—’œ‘Š‹•Žȱ˜ěŽ—œŽȱ˜ȱ–’œŠ™™›˜™›’Š’—ȱ the company’s resources for illegitimate purposes, in particular for specu•Š’˜—ȱŽ•œŽ ‘Ž›ŽǰȱŠ•œ˜ȱ›ŽĚŽŒŽȱ‘Žȱ˜ŸŽ›—–Ž—ȂœȱŽœ’›Žȱ˜ȱŒž›‹ȱŠ—¢ȱ–Š—agement misconduct responsible for company scandals. This provision

Legalization of Chinese Corporation

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helped ease investors’ fears and reduced their investment risks pertaining to the Corporation. ‘Žȱ—Ž ȱŽę—’’˜—ȱ˜ȱȃŒ˜–™Š—¢Ȅȱ’—ȱ‘ŽȱŗşŘşȱ•Ž’œ•Š’˜—ȱ’œȱŠ•œ˜ȱ—˜Ž ˜›‘¢ǯȱ—ȱ›ǯȱŗǰȱ‘Žȱ•Š ȱ›ŽŽę—ŽȱŠȱŒ˜–™Š—¢ȱŠœȱŠ—ȱ˜›Š—’£Š’˜—ȱ ‘˜œŽȱ ™ž›™˜œŽȱ  Šœȱ ˜›ȱ –Š”’—ȱ ™›˜ęȱ ǻyingli ➳߽Ǽǯȱ ›˜–ȱ ‘Žȱ ›Žœ›’ŒŽȱ Žę—’’˜—ȱ’—ȱ‘ŽȱŗşŗŚȱ˜–™Š—¢ȱ›’—Š—ŒŽǰȱ ‘’Œ‘ȱŽę—ŽȱŠȱȃŒ˜–™Š—¢ȄȱŠœȱŠ—ȱ ˜›Š—’£Š’˜—ȱŽœŠ‹•’œ‘Žȱ˜ȱ™Ž›˜›–ȱȃŒ˜––Ž›Œ’Š•ȱ‹Ž‘ŠŸ’˜›Ȅȱǻ›ǯȱŗǼǰȱ‘Žȱ Žę—’’˜—ȱ—˜ ȱ›Žž›—Žȱ˜ȱ˜—Žȱ™›˜™˜œŽȱ‹¢ȱ‘Žȱ‘Š—‘Š’ȱ–Ž›Œ‘Š—ȱ›˜ž™ȱ in the late 1900s. The broadening of the connotation of company purpose made Corporation more appealing for enterprises such as mining and heavy industry, encouraging them to register formally as Corporations. Raising investment for these enterprises became easier. A contemporary company law expert viewed the law as a technical adjustment to address œžŒ‘ȱ ’œœžŽœȱ ǻ‘žȱ ˜—Šȱ ŗşřŚǰȱ řDzȱ Œǯȱ ’›‹¢ȱ ŗşşśǰȱ śŘǼǯȱ —ȱ ŠŒǰȱ ‘Žȱ ŒŠ–™Š’—ȱ ˜ȱ ›ŽŽę—’—ȱ Š—ȱ ‹›˜ŠŽ—’—ȱ ‘Žȱ Žę—’’˜—ȱ ˜ȱ ȃŒ˜–™Š—¢Ȅȱ ’—ȱ ‘Žȱ 1914 ordinance began before the establishment of the GMD. The event can ‹Žȱ›ŠŒŽȱ‹ŠŒ”ȱŠȱ•ŽŠœȱ˜ȱ‘ŽȱŗşŗŜȱ›ŠĞȱŒ˜–™Š—¢ȱ•Š ȱ™›˜™˜œŽȱ‹¢ȱœ˜–Žȱ “ž›’œœȱǻŠ•û‹’Š—Œ‘Š‘ž’ȱŗşŗŜǰȱŗǼǰȱ‹Š›Ž•¢ȱ ˜ȱ¢ŽŠ›œȱŠĞŽ›ȱ‘ŽȱŽ—˜›ŒŽ–Ž—ȱ˜ȱ the ordinance. ‘Žȱ ›ŠĞŽ›œȱ ˜ȱ ‘Žȱ ŗşŘşȱ •Ž’œ•Š’˜—ȱ ‹Šœ’ŒŠ••¢ȱ ˜••˜ Žȱ ‘Žȱ ŗşŗŚȱ •Ž’œlation. It is impossible to provide a comprehensive investigation of the ›ŠĞŽ›œȂȱ ’Ž˜•˜’Žœǯȱ ˜ ŽŸŽ›ǰȱ Šȱ •ŽŠœȱ ˜—Žȱ ˜ȱ ‘Žȱ –Š’—ȱ ›ŠĞŽ›œȱ  Šœȱ Šȱ ’—Œ‘žǰȱ ‘Žȱ –˜œȱ ’—ĚžŽ—’Š•ȱ ŽŒ˜—˜–’œȱ ˜ȱ ‘Žȱ ’–Žǯȱ ŒŒ˜›’—ȱ ˜ȱ ŠȂœȱ  ˜›”œȱ™ž‹•’œ‘Žȱ’—ȱŗşŘśǰȱ‘’—ŽœŽȱŒ˜–™Š—’Žœȱ Ž›ŽȱœŽ••’—ȱ‘Ž’›ȱœ˜Œ”ȱ’—ȱ ‘Žȱ˜™Ž—ȱ–Š›”ŽœȱŠ—ȱŠĴ›ŠŒŽȱ–Š—¢ȱœ‘Š›Ž‘˜•Ž›œȱ ’‘ȱ—˜ȱ˜›–Ž›ȱ›Ž•Štionship to the companies. The main problem was that those shareholders were interested only in seizing the largest possible amount of dividends each year, and they did not care about the long-term prospects of their companies. This kind of shareholder motivation encouraged management ˜ȱŒ˜—ŒŽŠ•ȱ‘Ž’›ȱŒ˜–™Š—’ŽœȂȱ›ŽŠ•ȱ™›˜ęœǰȱ ‘’Œ‘ȱ’—ȱž›—ȱ™›˜–˜Žȱ’••Ž’’mate managerial activities such as insider trading. In the end, many companies were reluctant to disclose their real balance sheets, and investors began to distrust their company owners and managers. In general, Ma appears to have been pro-business and skeptical about ‘Žȱœ™ŽŒž•Š’ŸŽȱ–˜’ŸŽœȱ˜ȱ’—ŸŽœ˜›œǯȱ Žȱ’ȱ—˜ȱ‹Ž•’ŽŸŽȱ‘Šȱ˜ŸŽ›—Š—ŒŽȱ dominated by the majority will of shareholders would make enterprises honest and successful. Instead, Ma preferred Corporations that were Œ˜—›˜••Žȱ‹¢ȱŠȱœ–Š••Ž›ȱŒ’›Œ•Žȱ˜ȱ–Š“˜›ȱœ‘Š›Ž‘˜•Ž›œȱǻŗşŘśǰȱŘŜřȮŘŜşDzȱŠ•œ˜ȱ ŞŘȮŞŜǼǯȱœȱ –Ž—’˜—Žȱ ™›ŽŸ’˜žœ•¢ǰȱ ‘Žȱ ›ŠĞȱ ›’—Œ’™•Žœȱ ˜ȱ ˜–™Š—¢ȱ Š ȱ included a principle for recognizing the legitimate rights and interests of the major shareholders. This principle was in line with Ma’s writings in the 1920s, which suggested protecting the managing directors while at the same time avoiding short-term, speculative, and irresponsible voting

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Billy K. L. So and Albert S. Lee

by a minor group of impersonal shareholders. In Ma’s mind, the minority shareholders could collude together to take control of the SGM and ˜ŸŽ››’Žȱ‘ŽȱŽŒ’œ’˜—œȱ˜ȱ‘Žȱ–Š“˜›ȱœ‘Š›Ž‘˜•Ž›œǯȱ—ȱŠȱœŽ—œŽǰȱ‘’œȱ›ŽĚŽŒŽȱ Šȱ ̘ž›’œ‘’—ȱ ꗊ—Œ’Š•ȱ ŒŠ™’Š•’œ–ȱ Šȱ  ˜›”ǰȱ ‹žȱ  ’‘˜žȱ Šȱ –Šž›Žȱ ŒŠ™’Š•ȱ –Š›”Žȱ’—›Šœ›žŒž›ŽǯȱŽŒŠžœŽȱ˜ȱꗊ—Œ’Š•ȱŒŠ™’Š•’œ–ǰȱ‘’—ŽœŽȱœ¢•Žǰȱ‘Žȱ newly formed Chinese Corporations in the 1920s encountered problems of huge impersonal investments and resulting corporate mismanagement due to speculative, incompetent directives by short-term-minded shareholders. This development suggests a phenomenon that we can call “democratic dictatorship.” ‘Ž›Žȱ Š›Žȱ ’ĜŒž•’Žœȱ ’—ȱ ž—Ž›œŠ—’—ȱ ‘Žȱ ŽěŽŒœȱ ˜ȱ ‘Žȱ ŗşŘşȱ ˜–pany Law on Chinese Corporations because of the Japanese invasion of —˜›‘ŽŠœŽ›—ȱ‘’—Šȱ’—ȱ‘ŽȱŗşřŖœǯȱ˜˜—ȱŠĞŽ›ȱ‘ŽȱŗşŘşȱ•Š ȱ Ž—ȱ’—˜ȱ˜›ŒŽǰȱ there were a series of Japanese military adventures in China. The GMD also began state enterprise projects. The legal environment for carrying out company law directives was further disrupted following the formal declaration of war between China and Japan in 1937. The general environment for Chinese business in those turbulent years was uncertain, and ‘Žȱ ˜›™˜›Š’˜—ȱ ˜Ž•ȱ  Šœȱ —˜ȱ Ž¡ŒŽ™’˜—ǯȱ ȱ ’œȱ ’ĜŒž•ȱ ˜ȱ ™›Ž’Œȱ  ‘Šȱ would have happened to the Chinese economy during the 1930s had the Š™Š—ŽœŽȱ —˜ȱ ’—ŸŠŽȱ ‘’—Šǯȱ ˜ ŽŸŽ›ǰȱ  Žȱ ˜ȱ ”—˜ ȱ ‘Žȱ ŽŸŠœŠ’—ȱ Žfects the Sino-Japanese War had on the development of the Corporation form in China, especially when we contrast this development with that of the same corporate form in the West during the pre–World War II era of ‘ŽȱŗşŘŖœȱŠ—ȱŗşřŖœȱǻ˜••Š›ȱŗşşŘǰȱŗŗŗȮŗŗŘDzȱ Š——Š‘ȱŗşŞŖǰȱŗşŞřDzȱŽŽȱŘŖŖŘǼǯ4 Conclusion As shown in the trajectory of company law legislations from 1904 to 1929, ’—ȱ ™Š›’Œž•Š›ȱ ›ŽŠ›’—ȱ ‘Ž’›ȱ ™›˜Ÿ’œ’˜—œȱ Žę—’—ȱ ‘Žȱ ›’‘œȱ Š—ȱ ž’Žœȱ of directors and shareholders, there was genuine intention of succeeding regimes to improve the law so as to promote the Corporation Model. The legislative task was how to balance the interests of the directors (or ‹žœ’—Žœœ™Ž˜™•ŽǼȯœ˜ȱ ‘Šȱ ‘Ž¢ȱ  ˜ž•ȱ Š˜™ȱ ‘’œȱ –˜Ž•ȱ ’—œŽŠȱ ˜ȱ –˜›Žȱ conventional forms such as private companies or partnerships—with the ™›˜ŽŒ’˜—ȱ ˜ȱ œ‘Š›Ž‘˜•Ž›œȱ ǻ•Š›Žȱ Š—ȱ œ–Š••ȱ ’—ŸŽœ˜›œȱ Š•’”ŽǼȱ  ‘˜ȱ  Ž›Žȱ supposed to invest on an impersonal basis and whose interest could be protected only by corporate law. This is a task so complicated, and inherently contradictory, that no perfect solution could be found each time the •Š ȱ Šœȱ›Ž˜›–Žǯȱ ˜ ŽŸŽ›ǰȱ‹¢ȱŠ—ȱ•Š›ŽȱŽŠŒ‘ȱ•Ž’œ•Š’˜—ȱ›Žœ™˜—Žȱœž‹stantially to problems and crises arising from the previous circumstance, ˜›ȱ •Ž’œ•Š’˜—ǰȱ Š—ȱ œ‘˜ Žȱ Žę—’Žȱ ’–™›˜ŸŽ–Ž—ǯȱ ‘Ž›Ž˜›Žǰȱ  ‘Ž›ŽŠœȱ ’ȱ ŚȲȱ

See also The EconomistǰȱŗŗȱŽ™Ž–‹Ž›ȱŗşřŝȱǻŝŞDZŚşŖŝǼǰȱ™ǯȱśŖŞǯ

Legalization of Chinese Corporation

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remains true that the much anticipated, enthusiastic, large-scale adoption of the Corporation Model, which accounts for many successful practices in Europe and the United States during the early twentieth century, did not happen in China during those decades, it is not due to lack of bona ꍎȱ’—Ž—’˜—œȱ˜ȱœžŒŒŽœœ’ŸŽȱ‘’—ŽœŽȱŒ˜–™Š—¢ȱ•Š œǯȱž›ȱŠ›ž–Ž—ȱ’œȱ‘Šȱ not only were there genuine legislative intents, they were in fact rather Š›ŽŽŠ‹•Žȱ˜ȱ’—ĚžŽ—’Š•ȱ™ž‹•’Œȱ˜™’—’˜—ȱ˜ȱ‘Žȱ’–Žǯȱ‘Ž›Žȱ ŠœȱŠ•œ˜ȱ—˜ȱ•ŠŒ”ȱ of response from the business sector to pick up the Corporation Model. Regarding the relationship between the law and the model, our study shows that the law did facilitate and promote the model in the Chinese context, though not leading to widespread incorporation. This means that statutory law itself was neither a precondition for, nor adequate inducement to, widespread adoption of the model in China. ȱ‘Žȱ’œœžŽȱ’œǰȱ‘Ž—ǰȱŠȱ–ŠĴŽ›ȱ˜ȱœŒŠ•ŽDZȱ‘¢ȱ—˜ȱ–Šœœ’ŸŽȱ’—Œ˜›™˜›Š’˜—ǵȱ˜ȱ this our answer is that it is likely to be accounted for by structural problems other than the law, which are beyond the scope of this chapter. What we can do is to outline some of them here for further exploration. First of all, the lack of massive incorporation may have had much to do with the lack of complementary and informal institutional constraints to support the formal institutional ones, that is, laws. For instance, the same period saw the pervasive disintegration of Chinese society in the realms of political ideologies, social values, and business ethics. Whereas the absence of a dominant set of these values in Chinese society might ‘ŠŸŽȱŠŒ’•’ŠŽȱŠȱ™›˜ęȬ–Š¡’–’£Š’˜—ȱ–Ž—Š•’¢ȱ‹¢ȱ›Ž–˜Ÿ’—ȱ›Š’’˜—Š•ȱ Œž•ž›Š•ȱŒ˜—œ›Š’—œȱ˜—ȱ–Š›”Žȱ‹Ž‘ŠŸ’˜›œȱŠœȱ’œŒžœœŽȱ’—ȱŒ‘Š™Ž›ȱŗȱǻ‹¢ȱ˜Ǽǰȱ it did not lead to a new code of contractual conduct regulating impersonal ’—ŸŽœ–Ž—ǯȱ Ž—ŒŽǰȱ‘Žȱ™›˜‹•Ž–ȱ˜ȱ›žœȱ’—ȱ‘ŽœŽȱŒ˜›™˜›Š’˜—œȱ˜ĞŽ—ȱ̊›Žȱ up and became a corporate or social crisis. This no doubt hindered the spread of the model. Second, the implementation of Chinese laws during these turbulent ŽŒŠŽœǰȱ ‘’•Žȱ‘’—Šȱ Šœȱ ’‘˜žȱŠ—ȱŽěŽŒ’ŸŽȱŒŽ—›Š•ȱŠž‘˜›’¢ǰȱ Šœȱ’—ŽęŒ’Ž—ȱŠ—ȱ’—ŽěŽŒ’ŸŽǯȱ‘ŽȱšžŽœ’˜—ȱ˜›ȱ‘’—ŠȂœȱ˜›™˜›Š’˜— and its relevant company laws may, therefore, not be so much why the laws had failed that model or how the laws might have been improved to induce more use of the model. Instead, the question is how political order could have been stabilized to the extent that the government would be able to enforce the laws and protect participants in corporations. The response of Chinese entrepreneurs to the new alternative organizational model of Corporation can be considered as quite rational within their cultural mind-set. There were clearly interests, and incentives, to adopt the corporate form from the start during the late nineteenth century, Šȱ’–Žȱ‹Ž˜›Žȱ‘ŽȱꛜȱŒ˜–™Š—¢ȱ•Š ȱ Šœȱ’—›˜žŒŽǯȱ‘Žȱ‘Žœ’Š’˜—ȱŠ—ȱ limited use may have been due to inadequate enforcement characteristics

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of formal institutional constraints and the absence of a complementary informal culture, as noted previously, rather than from a lack of rational’¢ȱœŽ––’—ȱ›˜–ȱŠȱŽŽ™Ȭ›˜˜ŽȱŒž•ž›Š•ȱ‘Ž›’ŠŽǯȱ‘Žȱ—ŽŽȱ˜›ȱŽěŽŒ’ŸŽȱ protection of private property against the state’s unlawful appropriation may have played a role in such organizational business decisions (Rose Š—ȱ˜ Ž—ȱŗşşŞǼǰȱ‹žȱ‘ŽȱŠŒ˜›ȱ˜ȱ‘Žȱȃ™›ŽŠ˜›¢ȱœŠŽȄȱ ˜ž•ȱ‘ŠŸŽȱ‘Šȱ Š—ȱŽšžŠ••¢ȱŽ›’–Ž—Š•ȱŽěŽŒȱ˜—ȱ˜›Š—’£Š’˜—Š•ȱ˜›–œȱ˜ȱꛖȱ˜‘Ž›ȱ‘Š—ȱ Corporation in a politically unstable China. This Chinese business rationality of adopting the new model but only in a conducive environment –Š¢ȱŠ•œ˜ȱ‹ŽȱŠĴŽœŽȱ‹¢ȱŠȱ™˜œœ’‹•Žȱ‘’‘Ž›ȱ˜ŒŒž››Ž—ŒŽȱ˜ȱ’—Œ˜›™˜›ŠŽȱ‘’—ŽœŽȱꛖœȱ’—ȱ‘Žȱ›ŽŠ¢ȱ™˜›ȱŽŒ˜—˜–¢ǰȱ ‘Ž›ŽȱŠ—ȱŽ—˜›ŒŽ–Ž—ȱŠ—ȱŒž•ž›Š•ȱ vacuum were much less a problem than elsewhere in China. To this, we can relate the treaty port economy issue discussed in chapter 1.

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Š–Šœ‘’ŠǰȱŠ”Žœ‘’◅ϟ℺ᖫ. 1989.ȱ‘Ā˜”žȱ”’—Š’ȱ”Ž’£Š’œ‘’ȱ”Ž—”¢ĀDZȱ ‘’—–Šœžȱ”Š’”Š—ȱ£Š’œŽ’ȱ˜ȱ”Š’”ç‹Šȱœ‘ħ甎—ȱЁ೟䖥ҷ㍧△৆ⷨお ⏙᳿⍋ 䮰䉵ᬓǽ䭟␃จᏖจ೜ȱǽŒ˜—˜–’Œȱ‘’œ˜›¢ȱ˜ȱ–˜Ž›—ȱ‘’—ŠDZȱŠ›’’–Žȱ žœ˜–œȱꗊ—ŒŽȱŠ—ȱ˜™Ž—ȱ™˜›ȱ–Š›”Žȱ£˜—Žœȱ’—ȱ•ŠŽȬ’—ȱ‘’—ŠǾ. ˜”¢˜DZȱ ¢Ā”˜ȱœ‘˜’—ǯȱ

Š–’•˜—ǰȱ Š›¢ȱ ǯǰȱŽǯȱŗşşŗǯȱBusiness Networks and Economic Development in East and Southeast Asiaǯȱ ˜—ȱ ˜—DZȱŽ—›Žȱ˜ȱœ’Š—ȱž’Žœǰȱ —’ŸŽ›œ’¢ȱ˜ȱ ˜—ȱ ˜—ǯ

Š—ȱ˜—’—ȱ䶧ᵒҁ. 1933. “Jieshao Shandong Weixian busha chanxiao qingxing ҟ㌍ቅᵅ◄㏷Ꮧ㋫⫶䢋ᚙᔶȄȱǽȱ‹›’Žę—ȱ˜—ȱ‘Žȱ™›˜žŒ’˜—ȱ Š—ȱ–Š›”Ž’—ȱŒ˜—’’˜—œȱ˜ȱŒ•˜‘ȱŠ—ȱ¢Š›—ȱ’—ȱŽ’¡’Š—ǰȱ‘Š—˜—Ǿǯȱ Fangzhi zhoukan ㋵㐨਼ߞȱřǯŘśDZŝŞşǯ

Š——Š‘ǰȱǯȱŗşŞŖǯȱȃ’œ’‹•ŽȱŠ—ȱ—Ÿ’œ’‹•Žȱ Š—œȱ’—ȱ ›ŽŠȱ›’Š’—ǯȄȱ—ȱ Managerial Hierarchies: Comparative Perspectives on the Rise of the Modern Industrial EnterpriseǰȱŽ’Žȱ‹¢ȱǯȱǯȱ‘Š—•Ž›ȱ ›ǯȱŠ—ȱ ǯȱŠŽ–œǰȱŚŗȮŝŜǯȱ Š–‹›’ŽǰȱŠœœǯDZȱ Š›ŸŠ›ȱ—’ŸŽ›œ’¢ȱ›Žœœǯ ______. 1983. The Rise of the Corporate Economy. 2nd ed. London: Methuen.

Š˜ǰȱŽ—Ȭ™Ȃ’—ǯȱŗşŝŖǯȱThe Comprador in Nineteenth Century China: Bridge between East and WestǯȱŠ–‹›’ŽǰȱŠœœǯDZȱ Š›ŸŠ›ȱ—’ŸŽ›œ’¢ȱ›Žœœǯ ȏȏȏȏȏȏǯȱŗşŞŜǯȱThe Commercial Revolution in Nineteenth-Century China: The Rise of Sino-Western Mercantile Capitalism. Berkeley: University of California Press.

Š››’œǰȱ˜—ǯȱŘŖŖřǯȱȃ‘Žȱ—Œ˜ž—Ž›œȱ˜ȱŒ˜—˜–’Œȱ ’œ˜›¢ȱŠ—ȱŽŠ•ȱ ’œtory.” Law and History Review ŘŗǯŘDZřŚŝȮřŜŜǯ

ŠœŽǰȱŠ›’Œ”ǯȱŘŖŖŖǯȱȃ‘Žȱ•Š—ȱŠ—ȱ‘Žȱžœ˜–Š›¢ȱŠ DZȱœ˜ȱŠ—ȱ˜—ȱ in the New Territories.” Nagoya University Journal of Law and Politics ŗŞŘDZŘŗŗȮŘŜŞǯ

Šœ”Ž••ǰȱ‘˜–ŠœȱǯǰȱŠ—ȱ’Œ‘Š›ȱǯȱŽ’Œ‘›ŠŽ‹Ž›ȱǰȱŽœǯȱŗşşřǯȱThe Culture of the Market: Historical Essays. Cambridge: Cambridge University Press.

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ȱǻHorei zensho ⊩՟ܼ᳌ȱǽ‘ŽȱŒ˜–™•ŽŽȱ‹˜˜”ȱ˜ȱ•Š œȱŠ—ȱ˜›’—Š—ŒŽœǾǼǯȱŗşŝŚǯȱ˜–™’•Žȱ‹¢ȱŠ’”Š”žȱ”Š—‹˜”¢˜”žȱܻ䭷ᅬ᠓ሔ (Bureau of Ž—Ž›Š•ȱ슒›œȱ˜ȱ‘Žȱ’ŽǼȱ›˜–ȱŗŞŜŝȱ‘›˜ž‘ȱ‘ŽȱŽ—ȱ˜ȱ‘ŽȱŽħ’ȱ ›Ž’—ǯȱŽ™›’—Žȱ’—ȱŚśȱŸ˜•ž–Žœȱ‹¢ȱ Š›Šȱœ‘˜‹˜ȱ’—ȱŗşŝŚǯȱ‘Žȱ˜–™Š—¢ȱ ˜Žȱ˜ȱŗŞşşȱ’œȱ’—ȱŸ˜•ǯȱřŘǯŘȱǻŝȱŠ›Œ‘ȱŗŞşşǼȱž—Ž›ȱ‘Žȱ—Ž ȱ˜––Ž›Œ’Š•ȱ ˜Žȱǻ˜ŽȱŚŞǼǰȱ™Š›ȱŘǰȱ™™ǯȱŗŗȮśŗǰȱŠ›’Œ•ŽœȱŚŘȮŘŜŘǯ

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žŠ—ǰȱ‘’•’™ȱǯȱǯȱŗşŞśǯȱThe Peasant Economy and Social Change in North China. Stanford, Calif.: Stanford University Press. ______. 1990. The Peasant Family and Rural Development in the Yangzi Delta, 1350–1988. Stanford, Calif.: Stanford University Press.

ž—ǰȱ’œ‘˜™ȱŠ›•Ž˜—ǯȱŗşřŜǯȱThe Development of the Business Corporation ’—ȱ—•Š—ǰȱŗŞŖŖȮŗŞŜŝǯȱŠ–‹›’ŽǰȱŠœœǯDZȱ Š›ŸŠ›ȱ—’ŸŽ›œ’¢ȱ›Žœœǯ Ingram, James C. 1971. Economic Change in Thailand, 1850–1970. Stanford, Calif.: Stanford University Press. Inspectorate General of the Chinese Maritime Customs. 1873. Returns of Trade at the Treaty Ports in China for the Year 1872. Part 1. Shanghai: Inspector General of Customs.

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˜—”˜—ȱŒ‘’’”’ȱ—˜ȱœ‘˜Ȭ“’›Ž’ȱ—’ȱ›’””¢Š”žȱœ‘’Šȱ”˜£˜ȱ‹ž—œŽ”’ȱþᅫᮣÿ ǽþᮣ⫷ÿȧȖǥȠӱ㍅Ё೑⼒Ӯ佭␃ഄඳȃ䃌џ՟Ȁゟ㛮ǬǴᾟ䗴 ߚᵤŘȄȱǽ’—ŽŠŽȱ™›˜™Ž›¢ȱ‘˜•’—ȱŠ—ȱœ˜Œ’Š•ȱœ›žŒž›Žœȱ’—ȱ›Š’’˜—Š•ȱ ‘’—ŠDZȱ—ȱŠ—Š•¢œ’œȱ‹ŠœŽȱ˜—ȱŒŠœŽœȱ›˜–ȱ ˜—ȱ ˜—ȱ›Ž’˜—ȱŘǾǯȱHogaku

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The Treaty Port Economy in Modern China

Ž•’—ǰȱ ˜—Š‘Š—ȱŒ”˜ǰȱŠ—ȱ˜‹Ž›ȱ Š›Ž••ŠǰȱŘřŖȮŘŜŞǯȱŠ—˜›ǰȱŠ•’ǯDZȱ Stanford University Press. ______. 2004c. “Economic Freedom in Late Imperial China.” In Realms of Freedom in Modern ChinaǰȱŽ’Žȱ‹¢ȱ’••’Š–ȱ ’›‹¢ǰȱśŝȮŞřǯȱŠ—˜›ǰȱ Calif.: Stanford University Press. ȏȏȏȏȏȏǯȱŘŖŖśǯȱThe Merchants of Zigong: Industrial Entrepreneurship in Early Modern China. New York: Columbia University Press. ______. 2009. “The Firm in Early Modern China.” Journal of Economic Behavior and Organization.ȱ˜›‘Œ˜–’—Dzȱ˜’DZŗŖǯŗŖŗŜȦ“ǯ“Ž‹˜ǯŘŖŖşǯŖřǯŖŖŘǯ ______, Jonathan K. Ocko, and Robert Gardella, eds. 2004. Contract and Property in Early Modern China. Stanford, Calif.: Stanford University Press. Zhang Jiazhen ᔉᆊ䦂 et al., eds. 2003. Zhongguo shangshi xiguan yu shangshi lifa liyoushu Ё೟ଚџ㖦᜷㟛ଚџゟ⊩⧚⬅᳌ȱǽ¡™˜œ’’˜—Š•ȱ™Š™Ž›œȱ ˜—ȱ›ŠĞȱ•Š œȱ˜—ȱ‘’—ŽœŽȱŒžœ˜–œȱŠ—ȱŒ˜––Ž›ŒŽǾǯȱŽħ’—DZȱ‘˜—ž˜ȱ zhengfa daxue chubanshe. ‘Š—ǰȱ’ǯȱŘŖŖŘǯȱȃŽŠœŠ—ȱ ˜žœŽ‘˜•ȱŒ˜—˜–¢ȱž—Ž›ȱ‘Žȱ—Ž›Ž—ŒŽȱ˜ȱ International Trade, Industrialization, and Urbanization: A Case Study ˜ȱž¡’ȱŽŠœŠ—œȂȱŽœ™˜—œŽȱ˜ȱŒ˜—˜–’Œȱ™™˜›ž—’’ŽœǰȱŗŞŜŖœȮŗşŚŖœǯȄȱ Ph.D. diss., University of California, Los Angeles. Zhang Mingxin ᔉ䡬ᮄ and Wang Yujie ⥟⥝⋕. 2003. “Lue lun Qingmogongsilu de chansheng ji tedian ⬹䂪⏙᳿݀ৌᕟⱘ⫶⫳ঞ⡍咲” ǽ—ȱ‘Žȱ˜›’’—ȱŠ—ȱŒ‘Š›ŠŒŽ›’œ’Œœȱ˜ȱ‘ŽȱŒ˜–™Š—¢ȱŒ˜Žȱ’—ȱ•ŠŽȬ’—ȱ ‘’—ŠǾǯȱFaxue pinglun ⊩ᅌ䀩䂪ȱřDZŗŚŞȮŗśŘǯ Zhang Mingyu ᔉᯢ㚆. 1947. “Weixian Zhibuye zhi jinxi ◄㏷㐨Ꮧὁ ПҞᯨȄȱǽ‘Žȱ™ŠœȱŠ—ȱ™›ŽœŽ—ȱ˜ȱ‘Žȱ ŽŠŸ’—ȱ’—žœ›¢ȱŠȱŽ’¡’Š—Ǿǯȱ Jingjian tongxun ㍧ᓎ䗮㿞:33. Zhang Xiaoruo ᔉᄱ㢹. 1930. Nantong Zhang Jizhi xiansheng zhuanji फ 䗮ᔉᄷⳈ‫ڇ⫳ܜ‬㿬ȱǽȱ‹’˜›Š™‘¢ȱ˜ȱ›ǯȱ‘Š—ȱ ’Š—ȱ›˜–ȱŠ—˜—Ǿǯȱ Shanghai: Zhonghua shuju. Zhang Zhongli ᔉӆ⾂, ed. 1990. Jindai Shanghai chengshi yanjiu 䖥ҷϞ⍋ ජᏖⷨおȱǽž’Žœȱ˜—ȱ–˜Ž›—ȱ‘Š—‘Š’Ǿǯȱ‘Š—‘Š’DZȱ‘Š—‘Š’ȱ›Ž—–’—ȱ chubanshe. Zhang Zhongmin ᔉᖴ⇥. 2002. Jiannan de bian qian: Jindai Zhongguo gongsi zhidu yanjiu 㡅䲷ⱘ䅞䙋 䖥ҷЁ೟݀ৌࠊᑺⓨ䅞ȱǽ‘Žȱž—ŽŠœ¢ȱ Œ‘Š—ŽDZȱŸ˜•ž’˜—ȱ˜ȱŒ˜–™Š—¢ȱ’—œ’ž’˜—œȱ’—ȱ–˜Ž›—ȱ‘’—ŠǾǯȱ‘Š—hai: Shehui kexue yanjiusuo. Zhao Jin 䍭⋹. 1994. Zhongguo chengshi fangdi chanye shilun (1840–1949) Ё೟ජᏖ᠓ഄ⫶ὁ৆䂪̢ ǽȱ‘’œ˜›’ŒŠ•ȱŠ—Š•¢œ’œȱ˜ȱ‘’—ŽœŽȱ ž›‹Š—ȱ›ŽŠ•ȱŽœŠŽȱǻŗŞŚŖȮŗşŚşǼǾǯȱ’Š—“’—DZȱŠ—”Š’ȱŠ¡žŽȱŒ‘ž‹Š—œ‘Žǯ Zheng Youkui 䜁টᦚȱǻžȬ” Ž’ȱ‘Ž—ǼǯȱŗşřŚǯȱȃž˜ž˜ȱ‘Š’žŠ—ȱ–Š˜¢’ȱ tongji bianzhi fangfa ji qi neirong zhi yangekao ៥೟⍋䮰䊓ᯧ㍅㿜㎼ 㻑ᮍ⊩ঞܻ݊ᆍП⊓䴽ᬋȱǽ—ȱ’—ŸŽœ’Š’˜—ȱ˜—ȱ‘ŽȱŽŸ˜•ž’˜—ȱ˜ȱ‘Žȱ

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ž—Š—ȱ›Ž—–’—ȱŒ‘ž‹Š—œ‘Žǯ Zhu Bangxing ᴅ䙺㟜, ed. 1939. Shanghai chanye yu Shanghai zhigong Ϟ ⍋⫶ὁ㟛Ϟ⍋㙋Ꮉȱǽ‘Š—‘Š’ȱ’—žœ›’ŽœȱŠ—ȱ‘Š—‘Š’ȱ•Š‹˜›Ǿǯȱ ˜—ȱ Kong: Yuandong chubanshe. ‘žȱ ˜—Šȱᴅ匏䘨, ed. 1934. Xianxing shida gongshangfa xiangxie huibian ⧒㸠क໻Ꮉଚ⊩䁇㾷ᔭ㎼ȱǽ——˜ŠŽȱŽ¡œȱ˜ȱ‘ŽȱŽ—ȱ–Š“˜›ȱ•Ž’œ•Š’˜—œȱ ˜—ȱ’—žœ›¢ȱŠ—ȱŒ˜––Ž›ŒŽǾǯȱ‘Š—‘Š’DZȱ‘ħ’Žȱœ‘ž“žǯ Zhu Kongfu ᴅᄨ⫿. 1937. “Anhui mishi diaocha ᅝᖑ㉇Ꮦ䂓ᶹȄȱǽ‘Žȱ —‘ž’ȱ›’ŒŽȱ–Š›”ŽǾǯȱShehui jingji yuebao ⼒᳗㍧△᳜ฅȱŚǯřDZŜȮŚśǯ

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ZJZJL (Zhang Jizi jiulu ᔉᄷᄤб䣘ȱǽ’—Žȱ ›’’—œȱ˜ȱ‘Š—ȱ ’Š—ǾǼǯȱŗşŜśǯȱ Edited by Zhang Yizu ᔉᗵ⼪. Taipei: Wenhai chubanshe. Zou Yiren 䛦ձҕ. 1980. Jiu Shanghai renkou bianqian de yanjiu㟞Ϟ⍋Ҏষ 䅞䙋ⱘⷨお ǽȱœž¢ȱ˜—ȱŒ‘Š—Žœȱ’—ȱ™˜™ž•Š’˜—ȱ’—ȱ‘Š—‘Š’Ǿǯȱ‘Š—hai: Shanghai renmin chubanshe.

Index

agricultural production: and ’—žœ›’Š•ȱœ™’••˜ŸŽ›ȱŽěŽŒœǰȱŝǰȱřŝDzȱ and technological change, 37, 119 alleyway dwellings (lilongǼǰȱ ’—›˜žŒŽǰȱśř ancestral property holding: and competing land rights claims, ŗŚŞȮŗśŗDzȱŠ—ȱ‘Žȱ’ŽŠ•ȱ˜ȱzong ǻŠ—ŒŽœ˜›œǼǰȱŗŚŞDzȱ‘Žȱ˜ȱ”ŠȬ¢’ȱtso ŒŠœŽǰȱŗśŞȮŗŜŗǰȱŗŜřȮŗŜŚǰȱŗŜŝǰȱŗŜŞDzȱ and tongju gongcai (household ›˜ž™ǼǰȱŗŚŞǯȱSee also household property; yitian liangzhu (divided ˜ —Ž›œ‘’™Ǽ annual reports of corporations requirements, 194, 200 auditors (chazhangrenǼǰȱŗşŚ bangȱǻŒ•’šžŽœǼȱ˜ȱ›’ŒŽȱ–Ž›Œ‘Š—œǰȱşŚ ‹Š—”’—DZȱ’—ȱŽħ’—ȱ™›’˜›ȱ˜ȱ‘Žȱ•ŠŽȱ ŗşŘŖœǰȱśǰȱŚŗDzȱ˜›Ž’—ȱ‹Š—”ȱ’—Ž›Žœȱ ’—ȱ˜›Ž’—ȱœŽĴ•Ž–Ž—ȱ•Š—ǰȱŜŜȮŜŝǰȱ 72; growth of Shanghai as a ꗊ—Œ’Š•ȱŒŽ—Ž›ǰȱŗşǰȱŚŗǰȱŚŘǰȱŚŝǰȱŜŜDzȱ Š—ȱ–Ž›Œ‘Š—ȱŒŠ™’Š•’œœǰȱŗŗŗȮŗŗśDzȱ –˜Ž›—’£Š’˜—ȱ˜ǰȱřśǰȱŚŘDzȱ™›’—Œ’™Š•ȱ and interest payment regulations, ŜŞȮŜşǰȱŗśŗDzȱŠ—ȱ‘Žȱ‘Š—‘Š’ȱ ›ŽŠ•ȱŽœŠŽȱ–Š›”ŽǰȱŜśȮŝŘDzȱ‘Žȱ Shenxin fangzhichang (Sung Sing Œ˜Ĵ˜—ȱ–’••ǼȱŒŠœŽǰȱŜŝȮŜŞǰȱŜşDzȱŠ—ȱ ˜’œ‘Š—ȱ–Ž›Œ‘Š—œǰȱŗŝŜǰȱŗŞřDzȱŠ—ȱ warlordism, 34. See also collateral

Žħ’—DZȱŠœȱŠȱꗊ—Œ’Š•ȱŒŽ—Ž›ǰȱśǰȱŚŗDzȱ ‘Š–‹Ž›ȱ˜ȱ˜––Ž›ŒŽǰȱśȮŜǰȱ ŗśDzȱ•Š—ȱŸŠ•žŽœǰȱśŖDzȱ›ŽŠ¢ȱ™˜›ȱ ŽŒ˜—˜–¢ȱŠ™™•’Žȱ˜ǰȱśȮŜ Bergère, Marie-Claire: business establishment distribution analyzed by, 42; on foreign trade from 1921 to 1923, 7; on the success of entrepreneurs in Shanghai ˜›Ž’—ȱœŽĴ•Ž–Ž—œǰȱŚŝ ˜¡Ž›ȱŽ‹Ž••’˜—ǰȱś ›’’œ‘ȱŽĴ•Ž–Ž—œǰȱ•Š—ȱŸŠ•žŽœǰȱśŖ business ethics: and Š—’›Š’’˜—Š•’œ–ǰȱŗřȮŗŚǰȱŗŜDzȱ management misconduct, 194, 199, ŘŖŜDzȱ›Š—œ˜›–Š’˜—ȱ˜ȱ›Š’’˜—Š•ȱ ˜›–œȱ˜ǰȱŗśǰȱŘŘ business models: hybrid convergence ˜ǰȱşǰȱŗŞřȮŗŞśDzȱ™›˜•’Ž›Š’˜—ȱ of agents, 84–88, 91–92, 94, şśDzȱ›Š’’˜—Š•ȱ‘’—ŽœŽȱœ˜Œ’Š•ȱ networks, 8–9; vertical integration, ŘŜǰȱŞśǰȱŞŞȮşŘǰȱşś business networks: handloom cloth ’œ›’‹ž’˜—ȱ—Ž ˜›”ȱǻŽ’ȱ˜ž—¢Ǽǰȱ ŗŖŜȮŗŖşDzȱŠ—ȱ‘Žȱ›’ŒŽȱ’—žœ›¢ǰȱ ŞŚȮŞŞǰȱşŗȮşŘǰȱşŚǰȱşśDzȱ˜’œ‘Š—ȱ –Ž›Œ‘Š—œǰȱŗŝŜȮŗŝŞǰȱŗŞŗǰȱŗŞŚǯȱ See also social networks; Toishan merchants ‹žœ’—Žœœȱ˜›Š—’£Š’˜—DZȱ’ŸŽ›œ’ęŒŠ’˜—ȱ strategies by merchant capitalists, ŗŗŗȮŗŗŘǰȱŗŗŚȮŗŗśDzȱŠ–’•¢ȱ

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The Treaty Port Economy in Modern China

businesses and incorporation, 202–203; “organization” and “institution” distinguished, 9; the ™žĴ’—Ȭ˜žȱœ¢œŽ–ǰȱŘŖǰȱŗŖşȮŗŗŘǰȱ ŗŗśȮŗŗŜDzȱ›’ŒŽȱ›ŠŽȱœ›žŒž›Žǰȱ 84–88, 91–92; tong organization, ŗŝŚȮŗŝśǰȱŗŞřȮŗŞśDzȱ ‘ŽŠȱ̘ž›ȱ trade structure, 89–92. See also family businesses Canton. Seeȱ žŠ—£‘˜žȱǻŠ—˜—Ǽ capital markets: and Chinese yarn ꛖœǰȱŗŗŘȮŗŗśDzȱŠ—ȱŒ˜–™Š—¢ȱ bonds (gongsizhaiǼǰȱŘŖŗDzȱŠ—ȱ Œ˜›™˜›ŠŽȱ•Š ǰȱŘŖǰȱŘŘȮŘřǰȱŗşŜǰȱŘŖŗDzȱ and economic modernization, 188, 208; and impersonal investment, 8, 12, 201, 208; and the Shanghai real estate market, 19, 72; and the Corporation model, 188, 201–203. See also farm capital capital stock: directors’ use of, 194; issuance of, 200; and tong property rights practices, 174 Chambers of Commerce: as agents of Œ‘Š—ŽǰȱŗŝDzȱ‘ŽȱŽħ’—ȱ‘Š–‹Ž›ȱ˜ȱ ˜––Ž›ŒŽǰȱŗśDzȱŽ–Ž›Ž—ŒŽȱ˜ǰȱŗś changqi yakuan (or ħ’ŽšžŠ—ȱ‘Ž˜—Ǽȱ mortgaging of factory sites and Žšž’™–Ž—ǰȱŜŝȮŝŖ chazhangrenȱǻŠž’˜›œǼǰȱŗşŚ ‘Ž—ȱ ’—¡žŠ—ǰȱŜŚȮŜś Cheung Man-shing tenancy deed ŒŠœŽǰȱŗśŜǰȱŗśŝ ‘’Š—ȱ Š’Ȭœ‘Ž”ȱǻŠ—ǯȱ ’Š—ȱ ’Žœ‘ŽǼǰȱ Śś Chinese business interests, collaborations with foreign business interests, 2, 72 Chinese Commercial Law of 1914: corporate governance provisions ’—ǰȱŗşşȮŘŖŗDzȱŽę—’’˜—ȱ˜ȱ “company” in, 198 Chinese Maritime Customs Service: and foreign trade, 3; grain market ›ŽŒ˜›œǰȱşǰȱŝŜǰȱŝŝǰȱŝŞǰȱŝşǰȱŞŚǰȱşř Chinese Quarter: economy compared

 ’‘ȱ‘Žȱ—Ž›—Š’˜—Š•ȱŽĴ•Ž–Ž—ǰȱ ŚŘDzȱ•Š—ȱŸŠ•žŽœǰȱŚŘǰȱśŖǰȱśŗDzȱŠœȱ one of three original Shanghai governments, 38; Shanghai City Council in, 39–40 ‘˜—š’—ǰȱ•Š—ȱŸŠ•žŽœǰȱŚŝǰȱśŖ Chung lineage of Tai Om Shan land ŽŽȱŒŠœŽǰȱŗśśȮŗśŜǰȱŗśŝ cities in China, Max Weber’s observations of, 33 cliques (bangǼȱ˜ȱ›’ŒŽȱ–Ž›Œ‘Š—œǰȱşŚ Coble, Parks M., Jr., 44 collateral: used by factory managers, ŜŝDzȱ•Š—ȱ™•ŽŽȱ‹¢ȱŠ›–ȱ ‘˜žœŽ‘˜•œȱŠœǰȱŗŘŜDzȱŠ—ȱ•˜Š—ȱ ŽŠž•’—ǰȱŜŞȮŜşDzȱ’•ŽȱŽŽœȱ ˜›ȱ•Š—ȱžœŽȱŠœǰȱŜŜȮŜŝǯȱSee also banking commercial behavior (Mand. shangxingwei; J. œ‘ç”ç’ǼǰȱŗşřǰȱŗşŞ commercialization: integration of, with the real estate market and ’—žœ›’Š•’£Š’˜—ǰȱŜśǰȱŝŖȮŝŗDzȱ’—ȱ‘Žȱ Jiangnan economy, 139; and the ™žĴ’—Ȭ˜žȱœ¢œŽ–ǰȱŘŖǰȱŗŖşȮŗŗŘǰȱ ŗŗśȮŗŗŜ company bonds (gongsizhaiǼǰȱŗşŗŚȱ Company Law Ordinance and, 201 Company Code of 1904: and the 1914 Company Ordinance, 201; business failures following, 189, 199, 201; and Chinese investment ’—ȱ‘’—ŽœŽȱŽ—Ž›™›’œŽœǰȱŗŞŞǰȱŗşśDzȱ and corporate governance, 193– ŗşśDzȱž••ȱ›Š—œ•Š’˜—ȱ˜ǰȱŗşŗȮŗşŘDzȱ and institutional change, 23, 187; Liang Qichao’s criticism of, 189, ŗşŘDzȱ›Ž˜›–ȱ˜ǰȱŗşŜȮŗşŞDzȱœžŒŒŽœœȱ ˜ǰȱŗşśȮŗşŜDzȱžȱ’—Š—Ȃœȱ›˜•Žȱ’—ǰȱ 192. See also legal reform Company Law of 1929: challenges ˜ȱŠœœŽœœ’—ȱŽěŽŒȱ˜ǰȱŘŖŞDzȱ Company Code of 1904 compared  ’‘ǰȱŘŖŜDzȱŒ˜–™Š—¢ȱŽę—ŽȱŠœȱ a “legal person,” 203, 207; and Œ˜–™Š—¢ȱ˜ŸŽ›—Š—ŒŽǰȱŘŖśǰȱŘŖŜǰȱ

Index 207; Company Ordinance of 1914 Œ˜–™Š›Žȱ ’‘ǰȱŘŖśǰȱŘŖŜǰȱŘŖŝDzȱ Guomindang Legislative Yuan ™›˜–ž•Š’˜—ȱ˜ǰȱŘŖřȮŘŖśDzȱŠ—ȱ ’–™Ž›œ˜—Š•ȱ’—ŸŽœ–Ž—ǰȱŘŖŜȮŘŖŞDzȱ and institutional change, 23, ŗŞŝǰȱŘŖŜȮŘŖŝDzȱŠœȱ™›˜Ȭ’—ŸŽœ˜›ȱ •Ž’œ•Š’˜—ǰȱŘŖŜDzȱŠ—ȱ‘Š—‘Š’ȱ business commmunity, interests, ŘŖŚȮŘŖśDzȱŠ—ȱœ‘Š›Ž‘˜•Ž›œȂȱ›’‘œǰȱ 208. See also legal reform Company Ordinance of 1914: Chinese business community involvement ’—ȱ›ŠĞ’—ȱ˜ǰȱŗşŜȮŗşŝDzȱŒ˜–™Š—¢ȱ bond issuance and, 201; Company Law of 1929 compared with, ŘŖśDzȱŠ—ȱŒ˜›™˜›ŠŽȱ˜ŸŽ›—Š—ŒŽǰȱ 199–201; encouragement of incorporation, 202, 203; and institutional change, 23, 187, 201– 202; and nominee shareholding, 201; and the Company Code of 1904, 201; and Zhang Jian, 197– 198, 201. See also legal reform compensation of company directors, 193, 199 Œ˜–™›Š˜›œDZȱŽ–Ž›Ž—ŒŽȱ˜ǰȱŗŜȮŗŝDzȱ and imperial entrepreneurs compared, 43; and land leasing Š››Š—Ž–Ž—œǰȱśŞǯȱSee also “taipan oligarchy” concessions: business opportunities ˜›ȱ‘’—ŽœŽȱ–Ž›Œ‘Š—œȱ ’‘’—ǰȱŗŜȮ 18, 19, 173; and daoqi (land-lease ŒŽ›’ęŒŠŽǼǰȱśŝȮŜŖǰȱŜşDzȱœŽĴ•Ž–Ž—œȱ Œ˜—›ŠœŽȱ ’‘ǰȱśŝDzȱ ŽŠ•‘ȱ˜ǰȱŘǰȱ 43. See also treaty port cities corporate governance: director’s authority and duties, 23, 190, 193–194, 199–200; disclosure of Œ˜—Ě’Œœȱ˜ȱ’—Ž›ŽœǰȱŗşŖǰȱŗşŚǰȱ 200; self-dealing rules, 200; shareholder-appointed auditors, 194; shareholders rights and the authority of the SGM, 190, 193– ŗşśǰȱŗşşȮŘŖŗ corporate law in China: and capital

Řśŗ –Š›”ŽœǰȱŘŖǰȱŘŘȮŘřǰȱŗşŜǰȱŘŖŗDzȱ Chinese company law regimes, 23; and Chinese investment in Chinese establishments, 188; Œ˜–™Š—¢ȱŽę—ŽȱŠœȱŠȱȃ•ŽŠ•ȱ person,” 203; development of, 22– ŘřDzȱ’–’Žȱ’Š‹’•’¢ȱŒȱǻŗŞśśǼǰȱ 12, 172–173; Supreme Court litigations concerning Corporation ǻŗşŗŚȱŠ—ȱŗşŘřǼǰȱŘŖŘDzȱŠ—ȱ‘Žȱ Corporation Model, 22–23, 187, ŗşŜǰȱŗşŞǰȱŘŖŘȮŘŖřǰȱŘŖŜȮŘŖŝǰȱŘŖşDzȱ Western legal framework of treaty ports, 11–12 Œ˜›™˜›ŠŽȱ•Š ȱ’—ȱ ˜—ȱ ˜—DZȱŠ—ȱ business registration tactics, 17, ŗŝśȮŗŝŜǰȱŗŝŞǰȱŗŞŖȮŗŞŗDzȱŠ—ȱ•’–’Žȱ •’Š‹’•’¢ǰȱŗŝŜǰȱŗŝŝDzȱŠ—ȱ˜ŸŽ›œŽŠœȬ ›Žž›—Žȱ’––’›Š—œǰȱŗŝǰȱŗŝśȮŗŝŝ Corporation Model: and capital management, 190; and Company Ordinance of 1914, 199–201, 201–203; and corporate law development, 22–23, 209; and disclosure, 22, 190, 193, 194, 199, 200; dynamic interaction with social networks, 8–9; and the economic modernization in ‘’—ŠǰȱŗŞŜȮŗŞşDzȱŠ—ȱ žŠ—˜—ȱ Province land policy changes, 22, ŗŞŖȮŗŞśDzȱ’–™Ž›œ˜—Š•ȱ’—ŸŽœ–Ž—ȱ promoted by, 8, 12, 190, 201, 208; and institutional change, 187; joint-stock corporations, 22–23, 177; and the “Kirby Puzzle,” 189; professional services supporting, 13; and the Sino-Japanese War, 208; and the Chinese capital market, 188, 201–203. See also vertical integration Œ˜Ĵ˜—ȱ–’••œDZȱž—ȱ’—ȱŒ˜Ĵ˜—ȱ–’••œȱ ǻ‘Ž—¡’—ȱŠ—£‘’Œ‘Š—ǼǰȱŜŝȮŜŞǰȱŜşǰȱ 89. See also factories court system: Land Court established in the New Territories, 21–22; Shanghai Mixed Court, 12, 39; ž™›Ž–Žȱ˜ž›ȱǻŠ•’¢žŠ—Ǽȱ

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The Treaty Port Economy in Modern China

litigations concerning Corporation ǻŗşŗŚȱŠ—ȱŗşŘřǼǰȱŘŖŘ credit: and company bonds (gongsizhaiǼǰȱŜŝǰȱŘŖŗDzȱ’—˜›–Š•ȱ Œ›Ž’ǰȱŗŘŜǰȱŗřřǰȱŗřŜǰȱŗřŞǰȱŗřşDzȱ and joint-stock corporations, 177; promissory note practices ’—ȱ‘ŽȱŽ¡’•Žȱ’—žœ›¢ǰȱŗŖŜǰȱŗŖşDzȱ Š—ȱ‘Žȱ›ŽŠ•ȱŽœŠŽȱ–Š›”ŽǰȱŜśȮŝŘDzȱ rice dealers (mihao or mihangǼȱ ŠœȱŒ›Ž’˜›œǰȱŞŝDzȱŠ—ȱ¢Š›—ȱꛖȱ merchant capitalists, 110, 111, ŗŗřȮŗŗś Œ›˜ —ȱ•Š—ǰȱŘŗȮŘŘǰȱŗŜř Š•’¢žŠ—ȱǻž™›Ž–Žȱ˜ž›Ǽǰȱ•’’Š’˜—œȱ concerning Corporation (1914 and ŗşŘřǼǰȱŘŖŘ daoqiȱǻ•Š—Ȭ•ŽŠœŽȱŒŽ›’ęŒŠŽǼǰȱśŝȮŜŖǰȱŜş dianȱǻ–˜›ŠŽDzȱ›ŽŽŽ–Š‹•ŽȱœŠ•ŽǼǰȱŠ—ȱ huomaiȱǻŒ˜—’’˜—Š•ȱœŠ•ŽǼǰ ŗśŗȮŗśŘǰȱ ŗśř dianduanȱǻ–˜›ŠŽȱ˜›ȱ™Ž›™Žž’¢Ǽǰȱ ŗŜŖǰȱŗŜŗ directors of companies: authority and duties of, 23, 199–200; compensation of, 193, 199; and fraudulence, 193–194, 200 disclosure requirements: Chinese ꛖœȱ›Žœ’œŠ—ŒŽȱ˜ǰȱŘŘDzȱŠ—ȱ‘Žȱ Corporation Model, 190, 193, 199, 200; overseen by SGM-assigned auditors, 194 economic growth: and commercialization theory, 119; and industrialization, 12–13; and institutions and policies theory, 119; and involution and underdevelopment theory, 118, 119–120; and land transactions in ‘Žȱ’—ǰȱŗŜşȮŗŝŗDzȱŠ—ȱ‘Žȱ›ŽŠ¢ȱ ™˜›ȱŽŒ˜—˜–¢ǰȱŗŖȮŗŗǰȱŗřǰȱŗŞǰȱřŚȮřśǰȱ 72. See also economic performance; treaty port economy economic modernization: and ‹Š—”’—ǰȱřśǰȱŚŘDzȱŒ˜–™›Š˜›œȱŠ—ȱ

imperial entrepreneurs compared, 43; and the Corporation Model, 189; and the political economy, 19, řŚȮřśǰȱŗŝŘǰȱŗŞŖȮŗŞŗ economic modernization in Japan: and Chinese treaty ports compared, 27; modern industrial growth in Shanghai compared with, 37, 43 economic performance: and the Corporation Model, 189; and institutional change introduced, ŗǰȱŗŖǰȱŗŜǰȱŗŞȮŗşǰȱŘřȮŘŚDzȱŠ—ȱ‘Žȱ ›’ŒŽȱŠ—ȱ̘ž›ȱ–Š›”Žȱ’—žœ›’Žœǰȱ 19; and the Shanghai real estate market introduced, 19; traditional Chinese economic ™Ž›˜›–Š—ŒŽǰȱŘŜDzȱŠ—ȱ›Š—œŠŒ’˜—ȱ costs, 10; and the treaty port economy, 4, 8–9. See also economic growth; industrialization; internationalization; Northian framework; urbanization economic rationality: Chinese entrepreneurs’ response to the Corporation model, 209–210; and equity implications, 121; and farm household resource allocation, ŗŘŞȮŗŘşǰȱŗřŜȮŗŚŗDzȱŠ—ȱ’—Ÿ˜•ž’˜—ȱ theory, 118, 119–120; and –Ž›Œ‘Š—ȱŒŠ™’Š•’œȱ’ŸŽ›œ’ęŒŠ’˜—ǰȱ ŗŗŗȮŗŗŘǰȱŗŗŚȮŗŗśDzȱŠ—ȱ—˜—›Š’˜—Š•ȱ human factors, 27, 121; and pawning out land, 139 embezzlement addressed in the Company Code of 1904, 194 entrepreneurs: Chinese merchants with business vision, 17, 22, ŗŗŘȮŗŗśǰȱŗŗŝDzȱ’—ȱ‘ŽȱŒ˜–™›Š˜›ȱ ›Š’’˜—ǰȱŗŜȮŗŝǰȱŚřDzȱŠ—ȱ˜›Ž’—ȱ œŽĴ•Ž–Ž—ȱŽŠž›ŽœǰȱŗŜȮŗŞǰȱŗşǰȱ ŚřǰȱŜŜǰȱŝŗȮŝŘǰȱŗŝřDzȱŠ—ȱ–’›Š—Ȭ ›Žž›—ŽŽœǰȱŗŝǰȱŘŘDzȱŠ—ȱ™›˜ęȱ –Š¡’–’£Š’˜—ǰȱŗŚǰȱŗŜǰȱŗşǰȱŗşDzȱŠ—ȱ the Corporation model, 209–210. See also Toishan merchants equity: and company bonds issuance,

Index 201; and economic rationality, 121 extraterritoriality: business opportunities for Chinese –Ž›Œ‘Š—œȱž—Ž›ǰȱŗşǰȱřśǰȱŗŝřDzȱŠ—ȱ Chinese joint stock ventures, 188, ŗşśDzȱŠ—ȱ•Š ȱŽ—˜›ŒŽ–Ž—ǰȱŘǰȱśǰȱŗŗǰȱ řśǰȱřşDzȱŠ—ȱŽœŽ›—ȱ’–™Ž›’Š•’œ–ǰȱ řśǰȱŚŞ—ŚDzȱŠ—ȱyangshang guahao (foreign merchant land ›Ž’œ›Š’˜—Ǽȱ™›ŠŒ’ŒŽœǰȱśŞǰȱśşǯȱSee also treaty port system factories: and agricultural production household links, 7; Chinese company law encouragement of, 188; distribution of, in Shanghai, ŚŘǰȱŚŝDzȱ̘ž›ȱŠ—ȱ›’ŒŽȱ–’••’—ǰȱ 80–82; and housing of laborers, śřDzȱ’—Œ›ŽŠœŽȱ˜ȱ ‘ŽŠȬ™ž›Œ‘Šœ’—ȱ Š—ȱ̘ž›ȱ–Š›”Ž’—ȱ˜ĜŒŽœǰȱŞşDzȱ in Jiang-Zhe, 38; mortgaging of factory sites and equipment (changqi yakuan or ħ’ŽšžŠ—ȱ hetongǼǰȱŜŝȮŝŖDzȱŠ—ȱŽŒ‘—˜•˜¢ȱ transfer, 8; and the Treaty of Shimonoseki, 33, 81, 102. See alsoȱŒ˜Ĵ˜—ȱ–’••œDzȱ̘ž›ȱ–’••œDzȱ manufacturing sector growth; textile industry factory output: coexistence with Œ˜Ĵ˜—ȱŽ¡’•Žȱ‘Š—’Œ›ŠĞȱ production, 98; weaving zone production statistics for 1931, 100 failure and resilience: business failure disclosure to SGM, 194; business failures following the 1904 Company code, 189, 199, 201; and China’s lack of “transformative growth” before 1949, 118–120; ’ŸŽ›œ’ęŒŠ’˜—ȱ‹¢ȱ¢Š›—ȱ–Ž›Œ‘Š—ȱ ŒŠ™’Š•’œœǰȱŗŗŗȮŗŗŘǰȱŗŗŚȮŗŗśDzȱ ›˜ ‘ȱ˜ȱ‘Žȱ̘ž›ȱ›ŠŽȱ›˜–ȱ 1932 to 1934, 78–79, 84, 90; rice mills’ failure to initiate vertical ’—Ž›Š’˜—ǰȱŝŜǰȱŞśǰȱŞŞǰȱşŘǰȱşŚǰȱşśDzȱ the Shanghai real estate bubble, 48, 71, 72; and the Kirby Puzzle,

Řśř 189; treaty port economy and ’—Ž›—Š’˜—Š•ȱ–Š›”Žȱ̞ŒžŠ’˜—œǰȱ 7, 24; Wei County textile industry, 99–101, 104 Fairbank, John King, treaty port system, 1, 2, 3 Š–’•¢ȱ‹žœ’—ŽœœŽœDZȱŠ—ȱŽ—Ž›ǰȱŗřśDzȱ and incorporation, 202–203; and Wuxi rural households, 129, 130, 134, 137, 138, 139, 140. See also business organization; Sassoon family Fang Xianting, 102 farm capital: and land rental markets, ŗřŜDzȱŽ’ȱ˜ž—¢ȱœ˜ž›ŒŽœȱ˜ǰȱŗŖřȮ 104. See also capital markets farmer rationality: and economic exchange, 119, 120–121; and ˜ěȬŠ›–ȱŽ–™•˜¢–Ž—ǰȱŗŖŘȮŗŖřǰȱ 128–129 Faure, David, on Chung family land ›’‘œǰȱŗśŜǰȱŗśŞ ŽŽ‘Š–ǰȱ’Œ‘Š›ǰȱśşǰȱŜŜ ꗊ—Œ’Š•ȱ–Š›”ŽDZȱŒŠ™’Š•’£Š’˜—ȱ›˜–ȱ Ž’ȂœȱŒ•˜‘ȱꛖœǰȱŗŖŝDzȱ’—’Ž—˜žœȱ merchant capital in Wei, 104; and ‘Žȱ›ŽŠ•ȱŽœŠŽȱ–Š›”ŽǰȱŚŞǰȱŜśȮŝŘǰȱ ŜśȮŜŝǰȱŝŖȮŝŘDzȱŠ—ȱ‘Š—‘Š’Ȃœȱ›ŽŠ•ȱ estate boom, 19 ꗊ—Œ’Š•ȱ›Ž™˜›’—ǰȱœ‘Š›Ž‘˜•Ž›Ȭ appointed auditors, 194 ̘ž›ȱ–’••’—DZȱŠ—ȱ˜›Ž’—ȱ competition, 81–82, 90–91; growth of, 77–80, 81–82, 89–91; and institutional change, 19–20; mechanization of, 80–84; rice –’••’—ȱŒ˜–™Š›Žȱ ’‘ǰȱŝŜǰȱŞŖǰȱŞŚǰȱ şŗȮşŘǰȱşŚȮşśDzȱœŠ—Š›’£Š’˜—ȱ˜ǰȱ ŝŜǰȱŞř—ŜǰȱşŚȮşśǯȱSee alsoȱ̘ž›ȱ›ŠŽ ̘ž›ȱ–’••œDZȱ˜‘ȱ’—ȱ̘ž›ȱ–’••œȱ ǻž¡’—ȱ–’Š—Ž—Œ‘Š—ǼǰȱŞşDzȱ Mow Sing Flour Mills (Maoxin –’Š—Ž—Œ‘Š—ǼǰȱŞşDzȱ˜—ȱ‹›˜‘Ž›œȂȱ organization of, 89–91. See also factories ̘ž›ȱ›ŠŽDZȱŒ˜Ĵ˜—ȱ–’••’—ȱ enterprises associated with, 89;

ŘśŚ

The Treaty Port Economy in Modern China

›’ŒŽȱ›ŠŽȱŒ˜–™Š›Žȱ ’‘ǰȱŝŜǰȱ 91–92; in Shanghai, 77–78; vertical ’—Ž›Š’˜—ȱ˜ǰȱŞşȮşŘǰȱşśǯȱSee also ̘ž›ȱ–’••’— foreign community assets, and technological change, 80, 83 ˜›Ž’—ȱ’›ŽŒȱ’—ŸŽœ–Ž—ȱǻǼDZȱŠ—ȱ nineteenth-century rural China, şŜDzȱŠ—ȱ‘Š—‘Š’ǰȱřŚǰȱřŜDzȱŠĞŽ›ȱ‘Žȱ Treaty of Shimonoseki, 2, 33, 34, 81, 102; during the warlord era, 34. See also investment ˜›Ž’—ȱœŽĴ•Ž–Ž—œDZȱ•Š—ȱ›Ž’œ›Š’˜—ȱ œŠ’œ’ŒœǰȱśşDzȱ–˜›ŠŽœȱ’—ǰȱŚŞDzȱ›ŽŠ•ȱ ŽœŠŽȱ›Š—œŠŒ’˜—œȱ’—ǰȱśŝȮśŞǰȱŜŜDzȱ’—ȱ Shanghai introduced, 47–48 foreign trade: and American and žœ›Š•’Š—ȱŽ¡Œ•žœ’˜—ȱ™˜•’Œ’ŽœǰȱŗŝŜǰȱ 178; and the Chinese Maritime žœ˜–œȱŽ›Ÿ’ŒŽǰȱřDzȱŠ—ȱ̘ž›ȱŠ—ȱ rice trade, 84, 94; during the Great Ž™›Žœœ’˜—ȱǻŗşŘŖœǼǰȱŝDzȱŠ—ȱ˜ Ž›ȱ Š—£’ȱ›’ŒŽȱŠ—ȱ̘ž›ȱ›ŠŽǰȱŝŜȮŞŖǰȱ 91; opening of Wei County by the ’—ȱǻŗşŖŜǼǰȱşŜDzȱŠ—ȱ‘Š—‘Š’Ȃœȱ ̘ž›ȱ–’••œǰȱşŗDzȱŠ—ȱ‘Š—‘Š’Ȃœȱ›’ŒŽȱ –Š›”ŽǰȱşŗDzȱ›Š’—ȱꛖœȱ’—ȱ ˜—ȱ

˜—ǰȱŗŝśȮŗŝŞDzȱŠ—ȱ‘Žȱ›ŽŠ¢ȱ™˜›ȱ economy, 7; and Wei’s weaving ‘Š—’Œ›ŠĞȱ’—žœ›¢ǰȱŗŖśǰȱŗŖş fraudulence of directors: Company Code of 1904 addressing of, 193– 194; and investor trust, 200 freedom of the press and speech, 44 French Concession: governance ˜ǰȱřşDzȱ•Š—ȱŸŠ•žŽœǰȱśŖǰȱśŗDzȱŠœȱ one of three original Shanghai governments, 38, 38 ž£‘˜žǰȱŘǰȱśŖ •˜‹Š•ȱꗊ—Œ’Š•ȱŒ›’œ’œȱǻŘŖŖŞǼǰȱŘŚ globalization, and problems of equality, 24 ȃ ˜•ȱ˜ž—Š’—ȱžŽœœȄȱǻ ’—œ‘Š—”ŽǼǰȱ 177–178 ȃ ˜•ȱ˜ž—Š’—ȱ ˜žœŽœȄȱǻŠ—ǯȱ Kam Shan Chong; Mand. Jinshan

£‘žŠ—ǼǰȱŗŝŞ gongsizhaiȱǻŒ˜–™Š—¢ȱ‹˜—œǼDZȱŗşŗŚȱ Company Law Ordinance and, 201; and credit secured with real estate, 201 ›ŽŠȱŽ™›Žœœ’˜—ȱǻŗşŘŖœǼǰȱŝǰȱŗŗǰȱŚŞ—śǰȱ ŝŗǰȱŝŞǰȱŞŜ “Green Gang,” 44 Guangdong Province, land registration introduced, 22, 180, 182 žŠ—£‘˜žȱǻŠ—˜—ǼDZȱ industrialization of, 47; land ŸŠ•žŽœǰȱŚŝǰȱŚşǰȱśŖȮśŗDzȱ™›˜ŽŒ’˜—ȱ of concessions within, 2; warlord ˜ŸŽ›—Š—ŒŽȱ˜ȱǻŗşŗŗǼǰȱŗŝşǯȱSee also

˜—ȱ ˜—Dzȱ›ŽŠ¢ȱ™˜›ȱŒ’’Žœ guest armies (kejunǼǰȱŗŝş gufenȱǻœ˜Œ”ǼǰȱŸœǯȱ Š™Š—ŽœŽȱ•ŽŠ•ȱŽ›–ȱ kabushiki, 193 gufen yuxian gongsi. See limited liability ž˜–’—Š—ȱǻ DzȱŠ’˜—Š•’œǼDZȱ Legislative Yuan (Legislative ˜ž—Œ’•ǼǰȱŘŖŚDzȱœŠŽȱŽ—Ž›™›’œŽȱ projects, 208; taxation practices, ŚśDzȱŠ—ȱ›ŽŠ¢ȱ™˜›ȱœ’–Š’£Š’˜—ǰȱ 3. See also Company Law of 1929; nationalism ‘Š—’Œ›ŠĞȱ’—žœ›¢DZȱŽ–Š•Žȱ•Š‹˜›ȱ’—ǰȱ ŗŖŖǰȱŗŖŘDzȱŠ—ȱ’—˜›–Š•ȱŒ›Ž’ǰȱŗŘŜDzȱ and Jiang-Zhe manufacturing ˜ž™žǰȱřŝȮřŞDzȱŠ—ȱ‘Žȱ™žĴ’—Ȭ ˜žȱœ¢œŽ–ǰȱŘŖǰȱŗŗŗȮŗŗŘǰȱŗŗśȮŗŗŜDzȱ Ž¡’•Žȱ‘Š—’Œ›ŠĞȱŠ—ȱŠŒ˜›¢ȱ production coexistence, 20, 98–99. See also textile industry

Š—£‘˜žǰȱ•Š—ȱŸŠ•žŽœǰȱśŖ

Š—”˜žDZȱ•Š—ȱ•ŽŠœ’—ȱ˜ȱ˜›Ž’—ȱ —Š’˜—Š•œǰȱŜŖ—şDzȱ•Š—ȱŸŠ•žŽœǰȱŚŝǰȱ śŝ—ŝǰȱśŖǰȱśŗDzȱ•ŽĞȬ ’—ȱ—Š’˜—Š•’œȱ takeover of, 44. See also treaty port cities; Wuhan

Š›˜˜—ǰȱ’•ŠœȱŠ›˜—ǰȱŜŖǰȱŜřȮŜŚ

Ž—Š—ǰȱŠœȱŠȱ–Š›”Žȱ˜›ȱŽ’ȱŒ•˜‘ǰȱŗŖř

˜—ȱ ˜—DZȱ‹žœ’—Žœœȱ›˜ ‘ȱœ™ž››Žȱ

Index ‹¢ȱ‘ŽȱŠ’™’—ȱŽ‹Ž••’˜—ǰȱŗŝŜDzȱŠ—ȱ Œ˜––˜—ȱ•Š ǰȱŘŘDzȱŠ—ȱŒ˜—ęœŒŠŽȱ property, 22, 179, 180, 182–183; ’––’›Š—ȱœ˜Œ’Ž¢ȱ˜ǰȱŗŝśDzȱŠ—ȱ overseas-returned immigrants, ŗŝŜȮŗŝŝDzȱŠ—ȱ‘Š—‘Š’ȱŒŠ™’Š•’œȱ Ž¡˜žœǰȱŚśDzȱ˜—œȱŒ˜—ęœŒŠŽȱ‹¢ǰȱ 180. See alsoȱ žŠ—£‘˜žȱǻŠ—˜—Ǽ

˜—ȱ ˜—ȱŒ˜›™˜›ŠŽȱ•Š DZȱŠ—ȱ business registration tactics, ŗŝśȮŗŝŜǰȱŗŝŞDzȱŠ—ȱ•’–’Žȱ•’Š‹’•’¢ǰȱ ŗŝŜǰȱŗŝŝDzȱ˜ŸŽ›œŽŠœȬ›Žž›—Žȱ ’––’›Š—œǰȱŗŝǰȱŗŝśȮŗŝŝ household property: and taxation ’—ȱ‘Žȱ’—ǰȱŗśŘDzȱŠ—ȱŽ››’˜›’Š•ȱ ties, 148; and tongju gongcai ǻ‘˜žœŽ‘˜•ȱ›˜ž™ǼǰȱŗŚŞDzȱŠ—ȱyitian liangzhuȱǻ’Ÿ’Žȱ˜ —Ž›œ‘’™ǼǰȱŗśŚDzȱ and zhunzheȱǻ•Š—ȱŠœȱœŽŒž›’¢Ǽȱ ™›˜‘’‹’’˜—œǰȱŗśřǰȱŗŜŞȮŗŜşǯȱSee also ancestral property holding; rural economic system housing: alleyway dwellings (lilongǼȱ ’—ȱ™›ŽȬ Š›ȱ‘Š—‘Š’ǰȱśřǰȱŜŘDzȱŠ—ȱ zudizaowu building and leasing ™›ŠŒ’ŒŽœǰȱŜś

žȱ Š—–’—ǰȱŘŖŚ

žŠ—ȱ Š—–’—ǰȱřŜȮřŝǰȱŚř human capital, and farm household decision making, 120, 132 huomaiȱǻŒ˜—’’˜—Š•ȱœŠ•ŽǼǰȱŠ—ȱjuemai ǻŠ‹œ˜•žŽȱœŠ•ŽǼȱŗśŖǰȱŗśŗǰȱŗŜŗǰȱ ŗŜŜȮŗŜŝ income: rental income as a major œ˜ž›ŒŽȱ˜ȱ™›˜ęȱ’—ȱ‘ŽȱŗşŘŖœǰȱŜŘȮ Ŝřǰȱ›ž›Š•ȱ’—Œ˜–ŽȱŠ—ȱŒ˜—œž–™’˜—ȱ –ŽŠœž›ŽœǰȱŗřŜ—ŘŖǰȱŗřŞǰȱŗřş incorporation, of property-holding bodies, 149 industrial performance in Japan, and modern industrial growth in Shanghai compared, 37 industrialization: and corporate law, 22–23; during World Š›ȱǰȱśśDzȱŠœȱœ’Š—ȱ›Ž’˜—Š•ȱ contextualization of, 37–38; and

Řśś economic growth, 11; and foreign ’›ŽŒȱ’—ŸŽœ–Ž—ȱǻǼǰȱŘǰȱřřǰȱřŜDzȱ ›˜ ‘ȱ›ŠŽȱ’—’ŒŽœȱ˜›ǰȱřŚǰȱřŜȮřŝDzȱ integration of, with the real estate –Š›”ŽȱŠ—ȱŒ˜––Ž›Œ’Š•’£Š’˜—ǰȱŜśǰȱ 70–71; and international market ̞ŒžŠ’˜—œǰȱŘŚDzȱ–ŠœœȬ™›˜žŒ’˜—ȱ investment, 12; Shanghai’s role in, řŜȮřŝǰȱśśȮśŜDzȱŠ—ȱ‘Žȱ›ŽŠ¢ȱ™˜›ȱ system, 3, 7. See also economic performance; technology transfer informal credit: and land pawning, ŗŘŜǰȱŗřřǰȱŗřŜǰȱŗřŞǰȱŗřşDzȱŠ—ȱ œŽ›’Œž•ž›ŽǰȱŗŘŜ informal institutions: Chambers of ˜––Ž›ŒŽǰȱŗśǰȱŗŝDzȱ’—’Ÿ’žŠ•’œ–ȱ Š—ȱœŽ—œŽȱ˜ȱ›’‘ǰȱŗśDzȱ–’—ȬœŽœȱ of Chinese communities within ›ŽŠ¢ȱ™˜›œǰȱŗřȮŗśǰȱŗŝȮŗŞDzȱŠ—ȱ‘Žȱ mind-sets of Western business communities, 13 “institution” and “organization” distinguished, 9 institutional change: and Chinese entrepreneurs, 17; Chinese migration into Shanghai foreign œŽĴ•Ž–Ž—œǰȱŗŝǰȱřŞǰȱŚŞǰȱśŗȮśŚǰȱśŝDzȱ and the Corporation Model, 187; and the development of corporate law in China, 11–13, 22–23, 172– 173; economic change spurred by, 48; and economic performance ’—›˜žŒŽǰȱŗǰȱŗŖǰȱŘřȮŘŚDzȱŠ—ȱ̘ž›ȱ –’••’—ȱœŠ—Š›’£Š’˜—ǰȱşŚȮşśDzȱ and land property concepts, ŘŗȮŘŘDzȱŠ—ȱ•Ž’œ•Š’˜—ǰȱŗŞŜȮŗŞŝǰȱ 201–202, 208; and new mind-sets of Chinese communities within ›ŽŠ¢ȱ™˜›œǰȱŗřȮŗśǰȱŗŝȮŗŞDzȱŠ—ȱ ™›˜ęȱ–Š¡’–’£Š’˜—ǰȱŗŚǰȱŗŝȮŗŞǰȱ ŗşǰȱŘśDzȱ‘Žȱ™žĴ’—Ȭ˜žȱœ¢œŽ–ǰȱ ŘŖǰȱŗŖşȮŗŗŘǰȱŗŗśȮŗŗŜDzȱŽ¡Ž–™•’ꮍȱ ‹¢ȱ‘Žȱ›’ŒŽȱŠ—ȱ̘ž›ȱ’—žœ›’Žœǰȱ 19–20; and social constraints, 10; and special economic zones ǻœǼǰȱŘśȮŘŜDzȱŠ—ȱtong ownership traditions, 22; and the treaty

ŘśŜ

The Treaty Port Economy in Modern China

™˜›ȱŽŒ˜—˜–¢ǰȱŗŜȮŗşDzȱŸŽ›’ŒŠ•ȱ ’—Ž›Š’˜—ȱ˜ȱ‘Žȱ̘ž›ȱ›ŠŽǰȱ ŗşȮŘŖǰȱŝŜǰȱŞşȮşŘǰȱşśDzȱŽěŽŒȱ˜ȱ Western lifestyle and value system adaptees, 17–18 ’—œž›Š—ŒŽȱŒ˜–™Š—’ŽœDZȱꛎȱŠ—ȱ–Š›’—Žȱ ’—œž›Š—ŒŽȱ’—ȱ ˜—ȱ ˜—ǰȱŗŝśȮŗŝŜDzȱ and limited liability protection, ŗŝŜ —Ž›—Š’˜—Š•ȱŽĴ•Ž–Ž—DZȱŽŒ˜—˜–¢ȱ ˜ǰȱŚŘDzȱ‘˜žœ’—ǰȱśřǰȱŜŘȮŜřǰȱŜŚDzȱ and Medieval European citystate structure, 38–39; and the merging of British and American Concessions, 38; as one of three original Shanghai governments, 38 internationalization: and the treaty port system, 3. See also economic performance investment: and the 1914 Ordinance, 188, 200–203; by Chinese entrepreneurs in treaty ports economy, 17, 188; and contractual conduct, 209; and Ž¡›ŠŽ››’˜›’Š•’¢ǰȱřśǰȱŗşśDzȱ’—ȱlilong ‘˜žœ’—ǰȱŜŘȮŜřǰȱŜŚDzȱ™›˜Ȭ’—ŸŽœ–Ž—ȱ principles of the 1929 Company ›’—Š—ŒŽǰȱŘŖŜDzȱ™›˜–˜’˜—ȱ˜ȱ impersonal investment, 8, 10, 12, ŗşȮŘŖǰȱŗşŖǰȱŘŖŜȮŘŖŞDzȱ‘Š—‘Š’ȱ›ŽŠ•ȱ ŽœŠŽȱŠŽ—Œ’ŽœǰȱŜŖȮŜśDzȱŠ—ȱ‘Žȱ Corporation Model, 190; by yarn –Ž›Œ‘Š—ȱŒŠ™’Š•’œœǰȱŗŗŘȮŗŗśǯȱ See also foreign direct investment ǻǼ involution and underdevelopment theory: introduced, 118, 119–120; and sericulture, 118, 128; and Wuxi village household economic rationality, 21, 120–121 iron-gear looms (tiefangzhiǼDZȱ‘’—ŽœŽȱ adoption of, 97–99; Wei County cloth industry transformed by, 100–101 Japan: and the Company Ordinance

˜ȱŗşŗŚǰȱŗşŜǰȱŗşŞDzȱŠ—ȱŒžœ˜–Š›¢ȱ law in Taiwan, 11; iron-gear looms imported from, 98; Japanese entrepreneurs in Shanghai, 43; Š™Š—ŽœŽȱŽĴ•Ž–Ž—ȱœŠ’œ’ŒœǰȱśŖǰȱ śŗǰȱśŜDzȱ Š™Š—ŽœŽȱŽ¡’•ŽȱŒ˜—œ˜›’Šǰȱ 102, 113 Š™Š—ŽœŽȱŒ˜–™Š—¢ȱŒ˜ŽȱǻŽħ’ȱŽ›ŠǼDZȱ “company” (kaishaǼȱŽę—Žȱ’—ǰȱ 193, 198; legal term of “stock” (kabushikiǼǰȱŗşřDzȱ’—ȱŒ˜–™Š—¢ȱ code compared with, 193 Japanese economic modernization: and Chinese treaty ports compared, 27; modern industrial growth in Shanghai compared with, 37, 43 jiancharenȱǻœž™Ž›Ÿ’œ˜›Ǽǰȱ ȱ appointment of, 200 ’Š—ȱ ’Žœ‘Žȱǻ‘’Š—ȱ Š’Ȭœ‘Ž”ǼǰȱŚś ’Š—Ȭ‘Žȱǻ ’Š—œžȱŠ—ȱ‘Ž“’Š—Ǽǰȱ manufacturing sector growth, 37–38 ’Š˜“’ȱ’Ž•žȱǻ’—Š˜Ȭ ’—Š—ȱŠ’• Š¢Ǽǰȱ Wei County textile industry and, şŜȮşŝ ’—Ȭžȱ’Ž•žȱǻ’Š—“’—Ȭž”˜žȱŠ’• Š¢Ǽǰȱ 100 Jinshan zhuang (Cant. Kam Shan ‘˜—Dzȱ ˜•ȱ˜ž—Š’—ȱ ˜žœŽœǼǰȱ 178 ’—œ‘Š—”Žȱǻ ˜•ȱ˜ž—Š’—ȱžŽœœǼǰȱ 177 joint-stock corporations: and credit, ŗŝŝDzȱ ˜—ȱ ˜—ȱ˜›–Š’˜—ȱ˜ǰȱŗŝŝDzȱ introduced to China, 12, 22–23; and the modernization of Chinese business, 12; tong interpreted as type of, 183–184; and treaty port ‹žœ’—ŽœœȱŽ¡™Š—œ’˜—ǰȱŗŞŝȮŗŞŞǰȱŗşś juemaiȱǻŠ‹œ˜•žŽȱœŠ•ŽœǼDZȱŠ—ȱhuomai ǻŒ˜—’’˜—Š•ȱœŠ•ŽœǼǰȱŗśŖȮŗśŗǰȱŗŜŗǰȱ ŗŜŜȮŗŜŝǯȱSee also zhunzhe (land as œŽŒž›’¢Ǽȱ™›˜‘’‹’’˜—œ kabushikiȱǻœ˜Œ”Ǽǰȱgufenȱǻœ˜Œ”Ǽȱ compared to, 193

Index kaishaȱǻŒ˜–™Š—¢ǼDZȱŠ—ȱŒ˜––Ž›Œ’Š•ȱ behavior (J. œ‘ç”ç’; Mand. œ‘Š—¡’— Ž’ǼǰȱŗşřǰȱŗşŞDzȱ Š™Š—ŽœŽȱ Œ˜–™Š—¢ȱŒ˜ŽȱŽę—’’˜—ȱ˜ǰȱŗşřǰȱ 198 Kam Shan Chong (Mand. Jinshan £‘žŠ—Dzȱ ˜•ȱ˜ž—Š’—ȱ ˜žœŽœǼǰȱ 178 Kang Chao, 97, 98 kejunȱǻžŽœȱŠ›–’ŽœǼǰȱŗŝş Kirby, William: on business deterred by Company Law of 1929, 203; and corporate law development, ŘřǰȱŚśǰȱŘŖŘǰȱŘŖřDzȱ‘Žȱȃ ’›‹¢ȱ Puzzle,” 189; on network-based family business, 202 Kong Xiangxi, 204 Kotenev, A. M., on litigations concerning Corporation (1914 and ŗşŘřǼǰȱŘŖŘ

ž—–’—ȱ•Š—ȱŸŠ•žŽœǰȱśŖ labor force: gender of workers, ŗŗŞǰȱŗŘŞǰȱŗřŗȮŗřśǰȱŗŚŖDzȱ‘ž–Š—ȱ capital intensive professions, 132, ŗřŚǰȱŗřśDzȱŠ—ȱ‘Žȱ˜•ǰȱŗřŗǰȱŗřřǰȱ 134; rural household economic activities, 133, 134; Wei County household weavers, 102; and young dependents, 131, 133, 134, ŗřś labor market, migrant labor, 129, 134, ŗřśǰȱŗřś labor migration: outmigration from Wei County, 103; to Shanghai, 37, 129–130 laborers: availability of in treaty ports, 2; availability of in Wei ˜ž—¢ǰȱŗŖŘDzȱ‘˜žœ’—ȱ˜›ǰȱśřǰȱŜŘ Land Court, and surface-subsoil ˜ —Ž›œ‘’™ǰȱŘŗȮŘŘǰȱŗśŚȮŗśśǰȱŗŜř landholding practices: and categories ˜ȱ›Š—œŠŒ’˜—œǰȱŗŜřȮŗŜśDzȱŠ—ȱ commercialization, 147; court rulings in the To lineage case, ŗŜŘDzȱŠ—ȱ‘ŽȱŽ¡™•˜’Š’˜—ȱ˜ȱ •Š—ȬŽęŒ’Ž—ȱ‘˜žœŽ‘˜•œǰȱŗŖřǰȱ

Řśŝ ŗŘŚȮŗŘśDzȱŠ—ȱ‘Žȱ•Š—ȱ›Ž—Š•ȱ –Š›”ŽǰȱŗŘřȮŗŘśDzȱŠ—ȱ•Š—ȱ›’‘œȱ categories of yezhu; dianzhu, ŗśŘDzȱ and yitian liangzhu,ȱŗśŚ •Š—Ȭ•ŽŠœŽȱŒŽ›’ęŒŠŽœȱǻdaoqiǼǰȱśŝȮŜŖǰȱ Ŝş •Š—ȱ›Ž’œ›Š’˜—DZȱŠœȱŠȱ‹žœ’—ŽœœǰȱśşǰȱŜŖDzȱ and daoqiȱǻ•Š—Ȭ•ŽŠœŽȱŒŽ›’ęŒŠŽœǼǰȱ ŗşǰȱśŝȮŜŖǰȱŜşDzȱŠ—ȱ žŠ—˜—ȱ Province land policy changes, 22, 180, 182–184; and quanbingdan Ž—›žœ–Ž—ȱ™›ŠŒ’ŒŽœǰȱśŞǰȱśşDzȱ and yangshang guahao (foreign –Ž›Œ‘Š—ȱ›Ž’œ›Š’˜—Ǽǰȱśş land rights: Chinese landownership ’—ȱ˜›Ž’—ȱœŽĴ•Ž–Ž—œǰȱśŝǰȱśşDzȱ discrepancies in categories in ŠŒžŠ•ȱžœŽǰȱŗŜŚȮŗŜśDzȱ•Š—ȱŽŽœȱ used to analyze, 147, 149; and local community involvement, ŗŚŝǰȱŗśŘȮŗśŝǰȱŗŜŚȮŗŜśǰȱŗŜŞȮŗŜşDzȱ œŠŽȱ’—Ž›Žœȱ’—ǰȱŘŗȮŘŘǰȱŗŜŘȮŗŜřǰȱ ŗŜŞȮŗŜşǰȱŗŝŖȮŗŝŗDzȱœž›ŠŒŽȬœž‹œ˜’•ȱ form of ownership, 21–22, ŗśŚǰȱŗśśǰȱŗŜŗȮŗŜřDzȱŠ—ȱŽ—Š—Œ¢ȱ Š›ŽŽ–Ž—œǰȱŗśŘǰȱŗśŚǰȱŗśśǰȱŗŜŗǯȱSee also property rights land title deeds: and absolute land ›’‘œǰȱŗŜşDzȱŠ—ȱŒŠŽ˜›’Žœȱ˜ȱmai ǻœŠ•ŽǼǰȱhuomaiȱǻŒ˜—’’˜—Š•ȱœŠ•ŽǼǰȱ juemaiȱǻŠ‹œ˜•žŽȱœŠ•ŽǼȱŠ—ȱdian ǻ–˜›ŠŽǼǰȱŗśŗȮŗśŘDzȱ‘Žȱ‘Žž—ȱ Š—Ȭœ‘’—ȱŽ—Š—Œ¢ȱŽŽȱŒŠœŽǰȱŗśŜǰȱ ŗśŝDzȱ‘Žȱ‘ž—ȱ•’—ŽŠŽȱ˜ȱŠ’ȱ–ȱ ‘Š—ȱ•Š—ȱŽŽȱŒŠœŽǰȱŗśśȮŗśŜǰȱŗśŝDzȱ deeds of duan, ŗŜřȮŗŜŚDzȱŠ—ȱ•Š—ȱ ›’‘œǰȱŗŚŝǰȱŗŚşǰȱŗśśȮŗśŝDzȱŠ—ȱ•Š—ȱ ›Š—œŠŒ’˜—œǰȱŗśŘDzȱquanbingdan Ž—›žœ–Ž—ȱ™›ŠŒ’ŒŽœǰȱśŝǰȱśŞǰȱ śşȮŜŖǰȱŜşǰȱŝŚDzȱŠ—ȱœ˜Œ’Š•ȱ—Ž ˜›”œǰȱ 147; and yezhuȱǻ˜ —Ž›œǼǰȱŗśŖȮŗśŗDzȱ and zhunzheȱǻ•Š—ȱŠœȱœŽŒž›’¢Ǽȱ ™›˜‘’‹’’˜—œǰȱŗśřǰȱŗŜŞȮŗŜş land transactions: basic forms ’—›˜žŒŽǰȱŗśŖȮŗśŘDzȱ discrepancies in categories in ŠŒžŠ•ȱžœŽǰȱŗŜŚȮŗŜśDzȱŠ—ȱ’Ÿ’Žȱ

ŘśŞ

The Treaty Port Economy in Modern China

˜ —Ž›œ‘’™ǰȱŗśśȮŗśŝǰȱŗŜŗȮŗŜřDzȱ documented in land deeds, 149; juemaiȱǻŠ‹œ˜•žŽȱœŠ•ŽœǼȱŸœǯȱhuomai ǻŒ˜—’’˜—Š•ȱœŠ•ŽœǼǰȱŗśŖȮŗśŗǰȱŗŜŗǰȱ ŗŜŜȮŗŜŝDzȱŠ—ȱ•Š—ȱ•ŽŠœ’—ȱ’—ȱ‘Žȱ ˜›Ž’—ȱœŽĴ•Ž–Ž—œȱǻzujieǼǰȱśŝDzȱŠ—ȱ •’šž’’¢ǰȱŜŜǰȱŜş—ŗŚǰȱŝŘDzȱ–˜›ŠŽœȱ ’—ȱ‘Žȱ˜›Ž’—ȱœŽĴ•Ž–Ž—œǰȱŚŞǰȱŜŝȮ ŝŖǰȱŜş—ŗŚDzȱ’—ȱ‘ŽȱŽ ȱŽ››’˜›’Žœǰȱ ŗśŝȮŗśŞǰȱŗśŞȮŗŜŗDzȱ’—ȱ‘Žȱ’—ǰȱ ŗśŖȮŗśŚǰȱŗŜśȮŗŜŝǰȱŗŝŖȮŗŝŗDzȱŠ—ȱ religious organizations, 148; and surface-subsoil property rights, ŗŜŗȮŗŜřDzȱŠ—ȱŽ—Š—Œ¢ȱŠ›ŽŽ–Ž—œǰȱ ŗśŘDzȱŠ—ȱŽ››’˜›’Š•ȱ’ŽœǰȱŗŚŞDzȱ and yitian liangzu, ŗśśȮŗśŜDzȱŠ—ȱ zhaojia supplementary payments, ŗŚŝǰȱŗśřǰȱŗŝŖDzȱŠ—ȱzhunzhe (land ŠœȱœŽŒž›’¢Ǽȱ™›˜‘’‹’’˜—œǰȱŗśřǰȱ ŗŜŞȮŗŜş land values: and Chinese migration ’—˜ȱ˜›Ž’—ȱœŽĴ•Ž–Ž—œǰȱśŗȮśŘDzȱ ’—ȱ‘Š—‘Š’ȱœŽĴ•Ž–Ž—œǰȱŚŘȮŚřǰȱ ŚŞǰȱśŘǰȱśŚȮśŝDzȱ’—ȱ›ŽŠ¢ȱ™˜›ȱŒ’’Žœȱ Œ˜–™Š›ŽǰȱŚşȮśŖ legal profession: high quality of, in treaty ports, 11, 13, 42; negative portrayal of, 18; Shanghai as stronghold of, 41 legal reform: commercial law conference organized in 1907, 197; and the Corporation Model, ŘŘȮŘřǰȱŗŞŝǰȱŗşŜǰȱŗşŞǰȱŘŖŘȮŘŖřǰȱ ŘŖŜȮŘŖŝǰȱŘŖşDzȱŠ—ȱŽ—˜›ŒŽ–Ž—ȱ˜ȱ Œ˜––Ž›Œ’Š•ȱ•Š ǰȱŜDzȱ’—ȱ™Ž›’˜ȱ •Š—ȱ›Š—œŠŒ’˜—ȱ•Ž’œ•Š’˜—ǰȱŗŜśȮ ŗŜŜDzȱŠ—ȱ›ŽŠ¢ȱ™˜›œǰȱśǰȱŚŗǯȱSee also Company Code of 1904; Company Law of 1929; Company Ordinance of 1914; reform movements; Shanghai Mixed Court legal system in China: agents of change at the legislative level, ŘřǰȱŗŞŜȮŗŞŝDzȱ•ŽŠ•ȱ›Š–Ž ˜›”ȱ’—ȱ treaty ports, 11; legislative process in late imperial China, 191–192; and limited liability, 12, 172–173;

Shanghai Mixed Court system compared with, 41–42. See also limited liability (gufen yuxian gongsiǼDzȱ‘Š—‘Š’ȱ’¡Žȱ˜ž› •ŽŠ•ȱœ¢œŽ–ȱ’—ȱ ˜—ȱ ˜—DZȱŠ—ȱ limited liability, 12; and the tong, ŗŝŚȮŗŝś ’ȱžŠ—ǰȱŗŝŜȮŗŝŝǰȱŗŝŞǰȱŗŝş Liang Qichao: and corporate law reform, 199, 201; Company Code of 1904 criticized by, 189, 192; and the corporation, 23, 188, 189; and poverty elimination, 188 lilongȱǻŠ••Ž¢ Š¢ȱ Ž••’—œǼDZȱ ’—›˜žŒŽǰȱśřDzȱ›Ž—Š•ȱ’—Œ˜–Žǰȱ ŜŘȮŜř limited liability (gufen yuxian gongsiǼDZȱ 1914 Ordinance inducement of new companies incorporated as, ŘŖŘDzȱŠ—ȱŒ˜–™Š—¢ȱ•Š ȱ’—ȱ ˜—ȱ

˜—ǰȱŗŝŜǰȱŗŝŝDzȱŠ—ȱ’—œž›Š—ŒŽȱ ‹žœ’—Žœœȱ›Ž’œ›Š’˜—ȱ’—ȱ ˜—ȱ

˜—ǰȱŗŝŜDzȱŠ—ȱ‘Žȱ•ŽŠ•ȱœ¢œŽ–ȱ’—ȱ China from 1904, 12; and the legal œ¢œŽ–ȱ’—ȱ ˜—ȱ ˜—ȱ›˜–ȱŗŞŜśǰȱ ŗŘDzȱ’–’Žȱ’Š‹’•’¢ȱŒȱǻŗŞśśǼǰȱ 172–173; and negligence, 200; and the practice of interlocking shares, 177 lineage, and property holdings, 147 •’šž’’¢DZȱŠ—ȱ˜›Ž’—ȱœŽĴ•Ž–Ž—ȱ•Š—ǰȱ ŜŜDzȱŠ—ȱ–˜›ŠŽŽȱ›’‘œǰȱŜş—ŗŚǰȱ 72 Lower Yangzi: industrial growth, 37–38; industrial growth of Wuxi, 129–131; and nonfarm employment introduced, 128–129; population size, 38 Ma Yinchu, 204, 207–208 Šȱ’—‹’Š˜ǰȱŗŝŜȮŗŝŝ manufacturing sector growth: compared to treaty port economy ›˜ ‘ǰȱŜȮŝDzȱ’—ȱ ’Š—Ȭ‘Žȱǻ ’Š—œžȱ Š—ȱ‘Ž“’Š—ǼǰȱřŝȮřŞDzȱ’—ȱ‘Š—‘Š’ȱ ŗŞŝŞȮŗşŗřǰȱśśȮśŜǯȱSee also factories market development, and equity

Index implications, 121 market economy: and antitraditionalism, 13–14; of the Œ˜Ĵ˜—ȱŽ¡’•Žȱ’—žœ›¢ȱ’—ȱ‘Žȱ Ž’ȱ˜ž—¢ȱ›Ž’˜—ǰȱşŜȮŗŗŞDzȱ•ŠŽȱ imperial China’s contribution to, ŘŜDzȱ–Ž›Œ‘Š—Ȭ™ŽŠœŠ—ȱŒ˜—›ŠŒžŠ•ȱ relations, 104–109, 112; and the Northian framework, 9–11; and ‘Žȱ™˜•’’ŒŠ•ȱŽŒ˜—˜–¢ǰȱŘŜDzȱŠ—ȱ‘Žȱ Shanghai real estate market, 71; and transportation infrastructure, şŜǰȱşşǰȱŗŖŖǰȱŗŖŚDzȱŠ—ȱ‘Žȱ›ŽŠ¢ȱ port system, 3, 18–19. See also real estate market merchant capital: and the textile ’—žœ›¢ȱ™žĴ’—Ȭ˜žȱœ¢œŽ–ǰȱ ŗŖşȮŗŗŘǰȱŗŗśȮŗŗŜDzȱŠ—ȱŽ’ȱ˜ž—¢ȱ commercialization, 104, 109–117 migration: of Chinese into œŽĴ•Ž–Ž—œǰȱřŞǰȱŚŞǰȱśŗȮśŚǰȱśŝDzȱ and income and consumption –ŽŠœž›ŽœǰȱŗřŜ—ŘŖǰȱŗřŞǰȱŗřşDzȱŠ—ȱ œŽ›’Œž•ž›Žȱ’—Œ˜–ŽȱŒ˜–™Š›ŽǰȱŗřśȮ ŗřŜDzȱŠ—ȱœž›™•žœȱ›ž›Š•ȱ•Š‹˜›Ž›œȱ’—ȱ Jiangnan, 128–129, 141 mihao or mihangȱǻ›’ŒŽȱŽŠ•Ž›œȱǼǰȱŞśȮŞŝ modernization. See economic modernization; economic modernization in Japan; institutional change; technological change; technology transfer –˜›ŠŽœDZȱŒ˜–™•Ž’˜—ȱ˜ǰȱŜşDzȱŠ—ȱ credit securing by Shanghai Ž—›Ž™›Ž—Žž›œǰȱŜŝǰȱŝŘDzȱdian ǻ–˜›ŠŽDzȱ›ŽŽŽ–Š‹•ŽȱœŠ•ŽǼǰȱŠ—ȱ huomaiȱǻŒ˜—’’˜—Š•ȱœŠ•ŽǼǰȱŗśŗȮŗśŘǰȱ ŗśřDzȱdian (mortgage; redeemable œŠ•ŽǼȱŠ—ȱmaiȱǻœŠ•ŽǼǰȱŗśŗǰȱŗśŘDzȱ and duanmaiȱǻ™Ž›™ŽžŠ•ȱœŠ•ŽœǼǰȱ ŗŜŗDzȱŠŒ˜›¢ȱœ’ŽœȱŠ—ȱŽšž’™–Ž—ȱ (changqi yakuan or ħ’ŽšžŠ—ȱ hetongǼǰȱŜŝȮŝŖDzȱŠ—ȱ•’šž’’¢ǰȱŜŜǰȱ Ŝş—ŗŚǰȱŝŘDzȱ’—ȬŽ›Šȱ•’–’Š’˜—œȱ to selling and mortgaging land, ŗśŘȮŗśŚǰȱŗŜśȮŗŜŝǰȱŗŝŖȮŗŝŗDzȱ and quanbingdan entrustment

Řśş ™›ŠŒ’ŒŽœǰȱŜŖǰȱŜş most-favored-nation clause, and the treaty port system, 3 Municipal Council (Shanghai —Ž›—Š’˜—Š•ȱŽĴ•Ž–Ž—ǼDZȱŠ—ȱ ‘’—ŽœŽȱ›Ž™›ŽœŽ—Š’˜—ǰȱŚŚǰȱŚśDzȱ introduced, 38–39; investigations into land registration in foreign œŽĴ•Ž–Ž—œǰȱśşDzȱŠ—ȱ•Š—ȱŠ¡Š’˜—ǰȱ śŚ—ŜǰȱśŞDzȱ›Ž™˜›œȱ˜ǰȱśŘǰȱśřǰȱśŚ—Ŝǰȱ śŞ—ŞǰȱśşDzȱ‘Š—‘Š’ȱ’¢ȱ˜ž—Œ’•ȱ imitation of, 39–40 Murphey, Rhoads, on treaty ports and China’s modernization, 7 Š–ȱŠ”ȱ ˜—ȱœœ˜Œ’Š’˜—ȱǻŠ–ȱ Pak-hong Kung-so, Nanbei hang ˜—œž˜ǼǰȱŗŝśȮŗŝŜ Nam Pak-hong Kung-so (Nanbei ‘Š—ȱ˜—œž˜ǰȱŠ–ȱŠ”ȱ ˜—ȱ œœ˜Œ’Š’˜—ǼǰȱŗŝśȮŗŝŜ Š—“’—ǰȱ•Š—ȱŸŠ•žŽœǰȱŚŝǰȱśŖ Nanyang Brothers’ Tobacco Company, 202 “narrow cloth” (zhaibuǼǰȱşş Š’˜—Š•’œȱǻ ž˜–’—Š—Dzȱ ǼDZȱ Legislative Yuan (Legislative ˜ž—Œ’•ǼǰȱŘŖŚDzȱœŠŽȱŽ—Ž›™›’œŽȱ projects, 208; taxation practices, ŚśDzȱŠ—ȱ›ŽŠ¢ȱ™˜›ȱœ’–Š’£Š’˜—ǰȱ 3. See also Company Law of 1929; nationalism nationalism: institutional change promoted by, 17–18; treaty ports as symbol of national humiliation, 3, 18, 43n13. See also Nationalist ǻ ž˜–’—Š—Dzȱ Ǽ Naughton, Barry, on the Chinese ›Š’’˜—Š•ȱŽŒ˜—˜–¢ǰȱŘŜ “new handloom cloth” (xinshouzhibuǼǰȱ and the emergence of new ‘Š—’Œ›ŠĞȱŒŽ—Ž›œǰȱşŝ nominee shareholding: 1914 Ordinance introduction of, 201; 1929 Company Law limits on ž——Š–Žȱ—˜–’—ŽŽȱœ˜Œ”œǰȱŘŖśǰȱŘŖŜ North, Douglass C., institutional

ŘŜŖ

The Treaty Port Economy in Modern China

framework, 1, 9–11 Northian framework: formal institutions, 11–13; informal ’—œ’ž’˜—œǰȱŗřȮŗśDzȱ’—œ’ž’˜—Š•ȱ Œ‘Š—ŽǰȱŗŜȮŗŞDzȱ’—›˜žŒŽǰȱŗǰȱşȮŗŗǯȱ See also economic performance Opium War, and Western business •Š œȱ’—ȱ ˜—ȱ ˜—ǰȱŘǰȱŘŜǰȱŗŜŞ “organization” and “institution” distinguished, 9 Palmer, Michael, on yitian liangzhu ǻ’Ÿ’Žȱ˜ —Ž›œ‘’™Ǽǰȱŗśś pawning out land: and distress land sales, 139, 140; and economic rationality, 139, 140; and household demographics, ŗřŘǰȱŗřřȮŗřśDzȱŠ—ȱ’—Œ˜–ŽȱŠ—ȱ consumption measures, 138, 139; and land rental compared, ŗŘśȮŗŘŜǰȱŗřřǰȱŗřśȮŗřŜDzȱŠ—ȱ–Š•Žȱ labor availability, 132; “young Ž™Ž—Ž—œȄȱ›˜•Žȱ’—ǰȱŗřřǰȱŗřśǯȱSee also rural livelihoods ™ŽĴ¢ȱ›ŠŽDZȱŠ—ȱ’—Œ˜–ŽȱŠ—ȱ Œ˜—œž–™’˜—ȱ–ŽŠœž›ŽœǰȱŗřŜ—ŘŖǰȱ 138, 139, 140–141; and rural households, 130 political economy: and economic ŽŸŽ•˜™–Ž—ǰȱŗşǰȱŘŜǰȱřŚȮřśǰȱŗŝŘǰȱ ŗŝŜȮŗŝŞǰȱŗŞŖȮŗŞŗDzȱŠ—ȱ•Š—ȱ›’‘œǰȱ ŗśŜȮŗśŝǰȱŗŞŖDzȱ™˜•’’ŒŠ••¢ȱ’—œŠ‹’•’¢ȱ Š—ȱ’—œ’ž’˜—Š•ȱŒ‘Š—ŽǰȱřŚȮřśǰȱ ŚŚȮŚśǰȱŗŝŘǰȱŗŝşȮŗŞŖǰȱŗŞřȮŗŞŚǰȱŗŞśDzȱ and the structuring of the New Ž››’˜›’ŽœǰȱŗŜŝȮŗŜş ˜–Ž›Š—£ǰȱ Ž——Ž‘ǰȱŘŜ population growth: and China’s economic growth, 118; and the handloom weaving industry in Wei, 102, 104; in Shanghai, Řş—ŗŜǰȱřŜǰȱśŗȮśŘǰȱśŝǰȱŗŘşDzȱŠ—ȱ‘Žȱ ‘Š—‘Š’ȱ Š™Š—ŽœŽȱŽĴ•Ž–Ž—ǰȱśŜDzȱ ’—ȱ›ŽŠ¢ȱ™˜›ȱŒ’’Žœǰȱśŝ—ŝ professionals: and income and consumption measures, 138, 139;

and rural households, 129, 130 ™›˜ęȱ–Š¡’–’£Š’˜—DZȱŠ—ȱŠ•›ž’œ–ǰȱ 17–18, 209; and capital management by corporations, 190; as a new business ethos, 19, ŘśDzȱŠ—ȱ‘Žȱ˜›‘’Š—ȱ›Š–Ž ˜›”ǰȱ ŗŖDzȱŠ—ȱ‘Žȱ™žĴ’—Ȭ˜žȱœ¢œŽ–ǰȱ ŗŗśȮŗŗŜDzȱŠ—ȱœ˜Œ’Š•ȱŠ› ’—’œ–ǰȱ ŗřȮŗŚǰȱŗŜ ™›˜™Ž›¢ȱ›’‘œDZȱŒ˜—ęœŒŠŽȱ™›˜™Ž›¢ȱ ’—ȱ ˜—ȱ ˜—ǰȱŘŘǰȱŗŝşǰȱŗŞŖǰȱ 182–183; confusion regarding piȱǻŽŒ’Žȱ˜—Ǽǰȱzhaoȱǻ’—Ÿ’ŽǼǰȱŠ—ȱ dianȱǻŽ—Š—Œ¢ǼǰȱŗŜŘȮŗŜřDzȱŠ—ȱdaoqi ǻ•Š—Ȭ•ŽŠœŽȱŒŽ›’ęŒŠŽœǼǰȱŚŘ—ŗŗǰȱ śŝȮŜŖǰȱŜşDzȱdianduan (mortgage ˜›ȱ™Ž›™Žž’¢ǼǰȱŗŜŖǰȱŗŜŗDzȱdiantian ǻ™Ž›™ŽžŠ••¢ȱ›Š—œŽ››ŽǼȱ•Š—ǰȱ ŗŜŖȮŗŜŗDzȱŠ—ȱŽ¡›ŠŽ››’˜›’Š•’¢ǰȱśŞǰȱ śşDzȱŠ—ȱ‘Žȱ–˜›Š’—ȱ˜ȱŠŒ˜›¢ȱ sites and equipment (changqi yakuan or ħ’ŽšžŠ—ȱ‘Ž˜—ǼǰȱŜŝȮŜŞDzȱ and Guangdong Province land policy changes, 22, 180, 182–184; Š—ȱ•Š—ȱŠ¡ȱ›Ž˜›–ǰȱŗŗşǰȱŗśŚDzȱ and land values in Shanghai, 42; market driven land transactions, ŘŗDzȱ’—ȱ’—ȱ‘’—ŠǰȱŘŗȮŘŘǰȱŗśŖȮŗśŚǰȱ ŗŜśȮŗŜŝǰȱŗŝŖȮŗŝŗDzȱŠ—ȱœŽŒž›’¢ǰȱ řśǰȱŚŘǰȱŚŜǰȱŜŖDzȱž—Ž›ȱ‘’›Ȭ™Š›¢ȱ legal system, 11; and the tongju gongcaiȱǻ‘˜žœŽ‘˜•ȱ›˜ž™ǼǰȱŗŚŞDzȱ associated with traditional tongs, 174; and yitian liangzhu (divided ˜ —Ž›œ‘’™ǼǰȱŗśŚDzȱŠ—ȱzhunzhe ǻ•Š—ȱŠœȱœŽŒž›’¢Ǽȱ™›˜‘’‹’’˜—œǰȱ ŗśřǰȱŗŜŞȮŗŜşǯȱSee also land rights; yitian liangzhu (divided ˜ —Ž›œ‘’™Ǽ ™ž‹•’Œȱ˜›Ž›ǰȱřśǰȱŚŜǰȱŚŞ ™žĴ’—Ȭ˜žȱœ¢œŽ–ǰȱŘŖǰȱŗŖşȮŗŗŘǰȱ ŗŗśȮŗŗŜ Qing company code, Japanese company code compared with, 193 Qingdao: Japanese textile consortia

Index in, 102; size and geographical location of, 47n1, 97; as source of foreign yarn for inland centers, 97; ›ŽŠ¢Ȭ™˜›ȱŽœŠ‹•’œ‘–Ž—ȱǻŗŞşŞǼǰȱ şŜǰȱşş ’—Š˜Ȭ ’—Š—ȱŠ’• Š¢ȱǻ ’Š˜“’ȱ’Ž•žǼǰȱ Wei County textile industry and, şŜȮşŝǰȱşş quanbingdan entrustment practices: Chinese purposes for adopting, śŞǰȱŜŖDzȱ˜›–Šȱ˜ǰȱŝŚDzȱ’—›˜žŒŽǰȱ śŝǰȱśŞǰȱśşDzȱ•ŽŠ•ȱœž™™˜›ȱ˜›ǰȱ ŜşDzȱŠ—ȱ–˜›ŠŽœǰȱŜŖǰȱŜşDzȱŠœȱŠȱ ‘Š—‘Š’Ȭ˜—•¢ȱ™›ŠŒ’ŒŽǰȱŜŖ—şǯȱSee also real estate transactions railways: disputes over nationalization, 179; Jiaoji tielu ǻ’—Š˜Ȭ ’—Š—ȱŠ’• Š¢ǼǰȱşŜDzȱ ’—Ȭ žȱ’Ž•žȱǻ’Š—“’—Ȭž”˜žȱŠ’• Š¢Ǽǰȱ 100; mileage built during the warlord period, 34; and the ˜–™Š—¢ȱ˜Žȱ˜ȱŗşŖŚǰȱŗşŜDzȱ Toishan merchant investment in, 178 Rawski, Thomas: on GDP growth ’—ȱ‘’—Šȱ›˜–ȱŗşŗŗȮŗşřŜǰȱřŚDzȱ˜—ȱ manufacturing growth of treaty ™˜›ȱŽŒ˜—˜–¢ǰȱŜ real estate market: Cheng Jinxuan, ŜŚȮŜśDzȱŠ—ȱŒ˜—ęœŒŠŽȱ™›˜™Ž›¢ȱ ’—ȱ ˜—ȱ ˜—ǰȱŘŖǰȱŗŞŖǰȱŗŞŘȮŗŞřDzȱ Š—ȱ‘Žȱꗊ—Œ’Š•ȱ–Š›”Žǰȱ ŚŞǰȱŜśȮŜŝǰȱŝŖȮŝŘDzȱ’—Ž›Š’˜—ȱ with industrialization and Œ˜––Ž›Œ’Š•’£Š’˜—ǰȱŜřȮŜŚǰȱŜśǰȱŝŖȮ ŝŗDzȱ™›˜ęŠ‹’•’¢ȱ˜ȱ‘Š—‘Š’ȱlilong ‘˜žœŽœǰȱŜŘDzȱŠ—ȱ™›˜™Ž›¢ȱ›’‘œȱ Š˜™’˜—ȱ’—ȱ‘ŽȱœŽĴ•Ž–Ž—œǰȱŚŘDzȱ rental income as a major source of ™›˜ęȱ’—ȱ‘ŽȱŗşŘŖœǰȱŜŘȮŜřǰȱŜŘȮŜřDzȱ Š—ȱ‘ŽȱŠœœ˜˜—œǰȱŜŗȮŜřǰȱŜŚǯȱSee also market economy ›ŽŠ•ȱŽœŠŽȱ›Š—œŠŒ’˜—œDZȱŝŘǰȱŜŜǰȱŜş—ŗŚDzȱ and daoqi (foreign concession •Š—ȱŒŽ›’ęŒŠŽœǼǰȱŚŘ—ŗŗǰȱśŝȮŜŖǰȱ ŜşDzȱŠ—ȱŽŒ˜—˜–’ŒȱŽ¡™Š—œ’˜—ǰȱŚŞDzȱ

ŘŜŗ ’—ȱ‘Žȱ˜›Ž’—ȱœŽĴ•Ž–Ž—œǰȱśŝȮśŞǰȱ ŜŜǰȱŜşDzȱ˜›Š—’£Š’˜—œȱ˜›ǰȱśşȮŜŖDzȱ zudizaowu building and leasing ™›ŠŒ’ŒŽœǰȱŜśǯȱSee also quanbingdan entrustment practices reform movements: late-Qing constitutional reform, 33, 39; SelfStrengthening Movement, 8, 33, 188, 192. See also legal reform Remer, C. F., 34, 178 resilience and failure. See failure and resilience ›’ŒŽȱ’—žœ›¢DZȱ̘ž›ȱ’—žœ›¢ȱ Œ˜–™Š›Žȱ ’‘ǰȱŗşȮŘŖǰȱŝŜǰȱŞŖǰȱŞŚǰȱ şŗȮşŘǰȱşŚǰȱşśDzȱŠ—ȱ˜›Ž’—ȱœ˜ž›ŒŽȱ –Š›”ŽœǰȱşŗDzȱ›˜ ‘ȱ˜ǰȱŝŜȮŞŖǰȱŞřǰȱ ŞŜȮŞŞDzȱ–’••’—ȱŠœȱŠž¡’•’Š›¢ȱœŽŒ˜›ȱ ’—ǰȱŞŜǰȱŞŝȮŞŞǰȱşŘDzȱ™›˜•’Ž›Š’˜—ȱ˜ȱ ŠŽ—œȱ’—ǰȱŞŚȮŞŞǰȱşŗȮşŘǰȱşŚǰȱşśDzȱ›’ŒŽȱ Œ•Šœœ’ęŒŠ’˜—ȱ‹¢ȱ•˜ŒŠ•ŽǰȱşŘǰȱşŚǰȱşś rice milling: as an auxiliary sector ’—ȱ‘Žȱ›’ŒŽȱ›ŠŽǰȱŞŜǰȱŞŝȮŞŞǰȱşŘDzȱ and foreign competition, 81–82; ’—Ž›Š’˜—ȱ˜ǰȱ ’‘ȱ̘ž›ȱ–’••’—ȱ in Shanghai, 80–81; mechanization ˜ǰȱŞŖȮŞŚǰȱŞŜ ˜—ȱ‹›˜‘Ž›œDZȱ̘ž›ȱ–’••œȱ˜›Š—’£Žȱ by, 89–91; incorporation by, 202 Rong Desheng, 89–91 rule of law: and the Court of Consuls ˜ȱ‘Žȱ—Ž›—Š’˜—Š•ȱŽĴ•Ž–Ž—ǰȱřşDzȱ ’—ȱŽŠ›•¢ȱ Ž—’Ž‘ȬŒŽ—ž›¢ȱŽħ’—ǰȱ śDzȱŠ—ȱ’–™Ž›œ˜—Š•ȱ’—ŸŽœ–Ž—ǰȱ 10; and transaction costs, 10, 11; and the treaty port economy legal system compared, 12 rural economic system: and cash payment, 107, 109; and family business, 129, 130, 134, 137, 138, 139, 140; and farm capital ’—ŸŽœ–Ž—ǰȱŗřŜǰȱŗřŝDzȱŠ›–ȱ household demographics, 122– 123, 132, 133–134; fragmented landholdings, 103; impact of modern transportation upon, şŜȮşŝǰȱşşǰȱŗŖŖǰȱŗŖŚDzȱ’—Œ˜–Žȱ and consumption measures,

ŘŜŘ

The Treaty Port Economy in Modern China

ŗřŜ—ŘŖǰȱŗřŝǰȱŗřŞǰȱŗřşDzȱ’—’’Š’ŸŽœȱ to develop rice-surplus areas, ŝŜȮŝŝDzȱ’—Ž›Š’˜—ȱ ’‘ȱ›ŽŠ¢ȱ™˜›ȱ œ¢œŽ–ǰȱśǰȱŘŖǰȱşŜȮşŝǰȱşşDzȱ™Ž›’˜’Œȱ –Š›”ŽȱŠ’›œǰȱŗŖśȮŗŖŞDzȱ‘Žȱ™žĴ’—Ȭ ˜žȱœ¢œŽ–ǰȱŘŖǰȱŗŗŗȮŗŗŘǰȱŗŗśȮŗŗŜǯȱ See also household property; œ™’••˜ŸŽ›ȱŽěŽŒœ rural livelihoods: farm labor hiring ™›ŠŒ’ŒŽœǰȱŗŘŜȮŗŘŞǰȱŗřŜDzȱ’–™ŠŒȱ of machine spinning on, 98–99; and income and consumption measures, 138, 139; and overpopulation, 103; structure of Wuxi’s nonfarm economy, 130; œž™™•Ž–Ž—Š›¢ȱ˜ěȬŠ›–ȱ•Š‹˜›ǰȱ 102–103, 128–131. See also pawning out land Sassoon family: and Cheng Jinxuan, ŜŚDzȱ’—›˜žŒŽǰȱŜŖȮŜŗDzȱ•Š—ȱ ™ž›Œ‘Šœ’—ȱœ›ŠŽ’Žœȱ˜ǰȱŜŗȮŜŘDzȱ lucrative leasing of lilong workers’ ‘˜žœŽœȱ‹¢ǰȱŜŘȮŜřǯȱSee also family businesses œŒ’Ž—’ęŒȱœŽŽœȱŠ—ȱ™›ŠŒ’ŒŽœǰȱřŝ Second World War, and the decline of the Treaty Port System, 2 security: comprador assets used as, śŞDzȱ™Ž›œ˜—Š•ȱœŽŒž›’¢ȱŽ—“˜¢Žȱ’—ȱ œŽĴ•Ž–Ž—œǰȱŚŞDzȱŠ—ȱ™›˜™Ž›¢ȱ ›’‘œǰȱřśǰȱŚŜǰȱŜŜǰȱŚŘ—ŗŗDzȱ›ŽŠ•ȱ ŽœŠŽȱŸŠ•žŽœȱ’—ȱ‘Š—‘Š’ǰȱŜśȮŜŝDzȱ for yangshang guahao real estate ›Š—œŠŒ’˜—œǰȱśş self-dealing rules, 200 Self-Strengthening Movement, 4, 8, 33, 188, 192 sericulture: decline of, 129, 130; female labor in, 118, 120, 128, 134, ŗřśDzȱŠ—ȱ’—Œ˜–ŽȱŠ—ȱŒ˜—œž–™’˜—ȱ –ŽŠœž›ŽœǰȱŗřŜ—ŘŖǰȱŗřŝǰȱŗřŞǰȱŗřşǰȱ ŗŚŖǰȱŗŚŗDzȱŠ—ȱ•Š—˜ —Ž›œ‘’™ǰȱŗřśǰȱ ŗŚŖDzȱŠ—ȱ•Š—ȱ™Š —’—ǰȱŗŘŜDzȱŠ—ȱ migrant work income compared, ŗřśȮŗřŜDzȱŠ—ȱ›Š—œ˜›–Š’ŸŽȱ growth of the Wuxi agrarian

economy, 21 SEZs. See special economic zones ‘Š—‘Š’ǰȱśŘǰȱśŚȮśŝDzȱ‹žœ’—Žœœȱ establishment distribution within, 42–43; challenges posed to governance of, 44; Chinese ™˜™ž•Š’˜—ȱ’—ȱ˜›Ž’—ȱœŽĴ•Ž–Ž—œǰȱ ŚŚǰȱśŗȮśŘǰȱśŝǰȱśşDzȱȃŒ’¢ȬœŠŽȄȱ –˜Ž•ȱŠœȱœ’–ŠǰȱŚŜDzȱȃŒ’¢ȬœŠŽȄȱ ›’œŽȱ˜ȱŽœŽ›—ȱ‘Š—‘Š’ǰȱřśǰȱ 38–40; distribution of business establishments in, 42; distribution of factories in, 47; exodus of ŒŠ™’Š•’œȱ™›˜Žœœ’˜—Š•œȱ›˜–ǰȱŚśDzȱ and foreign direct investment, řŚǰȱřŜDzȱ˜›Ž’—ȱœŽĴ•Ž–Ž—ȱ population, 47–48; indigenous entrepreneurship in, 43; and Š™Š—ŽœŽȱ’–™Ž›’Š•’œ–ǰȱŚŚǰȱŚśDzȱ•ŽŠ•ȱ system, 2, 11, 41–42; migration of ‘’—ŽœŽȱ’—˜ȱ˜›Ž’—ȱœŽĴ•Ž–Ž—œȱ ˜ǰȱřŞǰȱŚŞǰȱśŗȮśŘǰȱśŝDzȱ–’›Š’˜—ȱ of rural laborers to, 37, 129–130; modern industrial growth in, řŜȮřŞDzȱž—’Œ’™Š•ȱ˜ž—Œ’•ǰȱřŞȮřşǰȱ ŚŚǰȱśŚ—ŜǰȱśŞDzȱ™˜•’’Œ’£Š’˜—ȱ˜ǰȱŚŚDzȱ ™˜™ž•Š’˜—ȱ›˜ ‘ȱ˜ǰȱŘş—ŗŜǰȱřŜǰȱ śŘǰȱśŝDzȱ›’ŒŽȱ›ŠŽǰȱŞŜȮŞŞDzȱ‘Š—‘Š’ȱ City Council, 39–40; strategic •˜ŒŠ’˜—ȱ˜ǰȱřśDzȱ›Š—œ™˜›Š’˜—ȱ ’—›Šœ›žŒž›ŽȱŒ‘Š••Ž—ŽœǰȱśŘȮśř Shanghai land values: in the foreign œŽĴ•Ž–Ž—œǰȱŚŘȮŚřǰȱŚŞǰȱśŖȮśŝDzȱŠ—ȱ modern property rights, 42; and ›ŽŠ•ȱŽœŠŽȱŠ—ȱꗊ—Œ’Š•ȱ–Š›”Žȱ linkage, 72 ‘Š—‘Š’ȱ’¡Žȱ˜ž›DZȱŗşŗŗȮŗşŘśȱ transformation of, 40–43; courts in early twentieth-century Shanghai compared with, 40–41; and foreign diplomatic community interference, 12, 39, 40; traditional Chinese legal system compared with, 41–42. See also legal system in China Shanghai Steam Flour Mill, established by foreigners, 80

Index œ‘Š›Ž‘˜•Ž›œȂȱŽ—Ž›Š•ȱ–ŽŽ’—ȱǻ ǼDZȱ auditors (chazhangrenǼȱœŽ•ŽŒŽȱ ‹¢ǰȱŗşŚDzȱŠž‘˜›’¢ȱ˜ǰȱŗşŖǰȱŗşřȮŗşśǰȱ 199; and the issuing of new capital stock, 200; and speculative investing, 207–208 œ‘Š›Ž‘˜•Ž›œȱ›’‘œǰȱŗşŖǰȱŗşřȮŗşśǰȱ ŗşşȮŘŖŗǰȱŘŖŜ shareholding: company bond issuance, 201; interlocking of, 177; ž——Š–Žȱœ˜Œ”œǰȱŘŖŗǰȱŘŖśǰȱŘŖŜ Shenxin fangzhichang (Sung Sing Œ˜Ĵ˜—ȱ–’••ǼǰȱŜŝȮŜŞǰȱŜşǰȱŞş ‘Ž—£‘Ž—ȱǰȱŽœŠ‹•’œ‘–Ž—ȱ˜ǰȱŘś Sheridan, James, on the warlord era in China, 34 Shiga Shuzo, 148 Shimonoseki, Treaty of, 33, 81, 102 œ‘ç”ç’ (Mand. shangxingwei; Œ˜––Ž›Œ’Š•ȱ‹Ž‘ŠŸ’˜›ǼǰȱŗşřǰȱŗşŞ siheyuanȱǻ›Š’’˜—Š•ȱ‘’—ŽœŽȱ‘˜žœŽǼȱ and lilongȱǻŠ••Ž¢ Š¢ȱ Ž••’—œǼǰȱśř œ’•ŸŽ›DZȱ•Š—ȱ›’ŒŽȱœ’•ŸŽ›ǰȱŗśşǰȱŗŜŖDzȱ ˜žĚ˜ ȱ’—žŒŽȱ‹¢ȱ‘Žȱǯǯȱ’•ŸŽ›ȱ ž›Œ‘ŠœŽȱŒȱ˜ǰȱŗşřŚDzȱ˜žĚ˜ ȱ˜ȱ during the Great Depression, 7, ŚŞ—śDzȱœžœ™Ž—œ’˜—ȱ˜ȱ™Š™Ž›ȱ—˜Žȱ conversion to, 41 –Š••ȱ ˜›ȱŽ‹Ž••’˜—ǰȱśřǰȱśŞ social change: and acceptance of the Corporation Model, 209; and Chinese nationalism, 3, 17–18; and newcomers to the New Territories, ŗŜŝȮŗŜşǰȱŗŝŝDzȱŠ—ȱ‘Žȱ›ŽŠ¢ȱ™˜›ȱ ŽŒ˜—˜–¢ȱ–’—ȬœŽǰȱŗśȮŗŜ œ˜Œ’Š•ȱŠ› ’—’œ–ǰȱŗřȮŗŚǰȱŗŜ social networks: and ancestral ™›˜™Ž›¢ȱ‘˜•’—ǰȱŗŚŞȮŗśŖDzȱŠ—ȱ bao (trust, clientage-patronage, ›ŽŒ’™›˜Œ’¢ǼǰȱŗŗŘDzȱŒ•’šžŽœȱǻbangǼȱ of rice merchants, 94; importance for Chinese businesses, 8–9, 22; local community involvement ’—ȱ•Š—˜ —Ž›œ‘’™ǰȱŗŚŝǰȱŗśŘȮŗśŝǰȱ ŗŜŚȮŗŜśǰȱŗŜŞȮŗŜşDzȱŠ—ȱ–’›Š—Ȭ returnees, 17, 22; and property ›’‘œȱ›Š—œŠŒ’˜—œǰȱŘŗȮŘŘǰȱŜŖǰȱŗŚŝDzȱ

ŘŜř and surface-subsoil ownership, ŘŗȮŘŘǰȱŗśŚȮŗśśǰȱŗŜřDzȱŠ—ȱŽ››’˜›’Š•ȱ ’ŽœǰȱŗŚŞDzȱ˜’œ‘Š—ȱ–Ž›Œ‘Š—œǰȱŗŝŜǰȱ 178. See also business networks Social Science Research Institute ǻǼǰȱŠ›–ȱœž›ŸŽ¢ȱŠŠȱ introduced, 122–123 œ˜ŸŽ›Ž’—¢ȱǻ‘’—ŽœŽǼDZȱŠ—ȱ ˜—ȱ

˜—ǰȱŜDzȱŠ—ȱœǰȱŘśDzȱ ŽŠ”Ž—Žȱ ‹¢ȱ›ŽŠ¢ȱ™˜›ȱŽ¡™Š—œ’˜—ǰȱřśǰȱ Śř—ŗřǰȱŚŜ œ™ŽŒ’Š•ȱŽŒ˜—˜–’Œȱ£˜—ŽœȱǻœǼǰȱŠ—ȱ ’—œ’ž’˜—Š•ȱŒ‘Š—ŽǰȱŘśȮŘŜ œ™’••˜ŸŽ›ȱŽěŽŒœDZȱŠ—ȱ‘Š—‘Š’Ȭ‹ŠœŽȱ ’—žœ›’Š•’£Š’˜—ǰȱŘŗǰȱřśǰȱřŝȮřŞǯȱSee also rural economic system œŠ—Š›’£Š’˜—DZȱŠ—ȱ̘ž›ȱ–’••’—ȱ œŠ—Š›’£Š’˜—ǰȱşŚȮşśDzȱŠ—ȱ‘Žȱ ™žĴ’—Ȭ˜žȱœ¢œŽ–ǰȱŗŗŖȮŗŗŗ Stephens, Thomas: on Shanghai governance, 41; Shanghai Mixed Court and traditional Chinese legal system compared by, 11, 41–42 stock (gufenǼǰȱŸœǯȱ Š™Š—ŽœŽȱ•ŽŠ•ȱŽ›–ȱ kabushiki, 193 stock markets in China, development of, 12 stockholders. See shareholding; shareholders’ rights ž—ȱ‘ž—œ‘Ž—ǰȱŜŚȮŜś Sun Ke, 182 Sun Yat-sen, 203 supervisor (jiancharenǼǰȱ ȱ appointment of, 200 ž™›Ž–Žȱ˜ž›ȱǻŠ•’¢žŠ—Ǽǰȱ•’’Š’˜—œȱ concerning Corporation (1914 and ŗşŘřǼǰȱŘŖŘ surface-subsoil form of ownership: ’—ȱ ˜—ȱ ˜—ǰȱŗśŚȮŗśśǰȱŗŜŗȮŗŜřDzȱ Š—ȱ•Š—ȱ›’‘œǰȱŘŗȮŘŘǰȱŗśŚǰȱŗśśDzȱ and the mortgaging of factory sites and equipment, 70; and yitian liangzhuȱǻ’Ÿ’Žȱ˜ —Ž›œ‘’™Ǽǰȱ ŗśŚȮŗśŝǰȱŗŜŗȮŗŜŘ ž£‘˜žȱǻ˜˜Œ‘˜ ǼDZȱ̘ž›ȱ–Š›”ŽǰȱŝŞǰȱ 89; rice trade, 77, 94n30

ŘŜŚ

The Treaty Port Economy in Modern China

“taipan oligarchy”: introduced, 44; and the treaty port system, 2. See also compradors Taiping Rebellion: and Chinese –’›Š’˜—ȱ’—˜ȱ˜›Ž’—ȱœŽĴ•Ž–Ž—œǰȱ řŞǰȱśŗǰȱśřǰȱśŞDzȱŠ—ȱ‘Žȱ›˜ ‘ȱ˜ȱ

˜—ȱ ˜—ȱ‹žœ’—ŽœœǰȱŗŝŜDzȱŠ—ȱ›’ŒŽȱ Ž¡™˜›œǰȱŝŜ Taishan huiguan (Toishan Regional œœ˜Œ’Š’˜—Ǽǰȱ˜›–Š’˜—ȱ˜ǰȱŗŞř Š’ Š—DZȱŒžœ˜–Š›¢ȱ•Š—ȱ•Š ȱ’—ǰȱŗśŖDzȱ indigenous entrepreneurship in Shanghai compared with, 43; industrialization in the Lower Yangzi compare with, 38; and Shanghai capitalist professionals, ŚśDzȱ›Š’’˜—Š•ȱŠ›’Œž•ž›Žȱ ›Š—œ˜›–Žȱ‹¢ȱœŠŽȱ™˜•’Œ’Žœǰȱşśǰȱ 119 tax reform, Zhang Jian’s encouragement of, 198 taxation: and quanbingdan Ž—›žœ–Ž—ȱ™›ŠŒ’ŒŽœǰȱśŞDzȱŠ—ȱ Chinese entrepreneurs in the —Ž›—Š’˜—Š•ȱŽĴ•Ž–Ž—ǰȱŚŚDzȱ incentives to develop rice-surplus Š›ŽŠœǰȱŝŜȮŝŝDzȱŠ—ȱ•Š—ȱ˜ —Ž›œ‘’™ǰȱ ŗśŘDzȱ•Š—ȱŠ¡ȱ™Š¢–Ž—ǰȱŗŝŖDzȱ•Š—ȱ Š¡Š’˜—ǰȱśŚ—ŜǰȱŗŗşǰȱŗśŘǰȱŗŜŖǰȱŗŜŘDzȱ Š’˜—Š•’œȱǻ ž˜–’—Š—Dzȱ Ǽȱ ™›ŠŒ’ŒŽœǰȱŚśDzȱŠ—ȱ™›˜™Ž›¢ȱ›’‘œǰȱ ŗŗşǰȱŗśŘDzȱ™›˜ŽŒ’˜—ȱ›˜–ȱ’••ŽŠ•ȱ ’–™˜œ’’˜—ȱ˜ǰȱřśǰȱŚŖȮŚŗǰȱŚŜDzȱŠ—ȱ rising land values in Shanghai, ŚŘȮŚřǰȱśŚDzȱ‘Š—‘Š’ȱ’¢ȱ˜ž—Œ’•ȱ standardizing of, 39–40; tax evasion and yitian liangzu, ŗśśDzȱŠ¡ȱ farming (baolanǼǰȱŚŖǰȱŗśśDzȱŠ—ȱ‘Žȱ tong system, 174 ŽŒ‘—˜•˜’ŒŠ•ȱŒ‘Š—ŽDZȱŠ—ȱ̘ž›ȱ milling, 80, 83–84; and foreign community assets, 80, 83; handloom weaving innovations, 20, 97–99, 100–101; and rice –’••’—ǰȱŞŖǰȱŞřȮŞŚǰȱŞŜǰȱŞŞDzȱŠ—ȱ Shanghai-based industrialization, 37; spinning technology, 97–99;

œŠ—Š›’£Š’˜—ȱ˜ȱ̘ž›ȱ–’••’—ǰȱşŚ technology transfer: and modern economic performance, 8; and sericulture, 21; and standardized output, 8. See also industrialization tenancy agreements: daoqi (land-lease ŒŽ›’ęŒŠŽœǼȱ‹Ž ŽŽ—ȱ‘’—ŽœŽȱ landowners and foreign tenants, ŗşǰȱśŝȮśŞDzȱȃ™Ž›–Š—Ž—ȄȱŽ—Š—Œ¢ȱ Ÿœǯȱœž›ŠŒŽȱ›’‘œǰȱŗśśȮŗśŜDzȱŠ—ȱ ‘Žȱœ’—ȱŠ—ȱ ž—ȱŒŠœŽǰȱŗŜřȮŗŜŚDzȱ and yezhuȱǻ˜ —Ž›œ‘’™ǼȱŠ—ȱ dianzhuȱǻ–˜›ŠŽŽǼȱ™˜œ’’˜—ǰȱŗśŘǰȱ ŗŜŘDzȱŠ—ȱyitian liangzhu, ŗśŚȮŗśśǰȱ ŗśŜȮŗśŝ textile industry: competition among ŒŽ—Ž›œȱ˜ǰȱşşȮŗŖŖDzȱŒ˜Ĵ˜—ȱŽ¡’•Žȱ ‘Š—’Œ›ŠĞȱŠ—ȱŠŒ˜›¢ȱ™›˜žŒ’˜—ȱ coexistence, 98–99; female labor in, 100, 102; and iron-gear looms (tiefangzhiǼǰȱşŝȮşşDzȱ•’–’Š’˜—œȱ˜ȱ wooden looms, 99; and merchant ŒŠ™’Š•’œœǰȱŗŗŗȮŗŗśDzȱŠ—ȱ–˜Ž›—ȱ spinning equipment, 97–99; and modern transport, 100; “narrow cloth” (zhaibuǼȱ™›˜žŒ’˜—ǰȱşşDzȱ‘Žȱ ™žĴ’—Ȭ˜žȱœ¢œŽ–ǰȱŘŖǰȱŗŖşȮŗŗŘǰȱ ŗŗśȮŗŗŜDzȱ‘Š—‘Š’ȱȱ™Ž›’˜ȱ ›˜ ‘ȱ˜ǰȱśśDzȱŽ’ȱ˜ž—¢ȱ Weaving Zone, 99–104. See also ŠŒ˜›’ŽœDzȱ‘Š—’Œ›ŠĞȱ’—žœ›¢DzȱŽ’ȱ County Tianjin: land leasing to foreign —Š’˜—Š•œǰȱśŝǰȱŜŖ—şDzȱ•Š—ȱŸŠ•žŽœǰȱ ŚŝǰȱŚşǰȱśŖǰȱśŝ—ŝDzȱ–ŠŒ‘’—ŽȬœ™ž—ȱ yarn factories in, 97, 100; strategic •˜ŒŠ’˜—ȱ˜ǰȱřśǯȱSee also treaty port cities; Wei County ’Š—“’—Ȭž”˜žȱŠ’• Š¢ȱǻ ’—Ȭžȱ’Ž•žǼǰȱ 100 tianminȱǻœž›ŠŒŽǼȱŠ—ȱtiangenȱǻœ˜’•Ǽǯȱ See surface-subsoil form of ownership tiefangzhi ǻ’›˜—ȬŽŠ›ȱ•˜˜–œǼDZȱ‘’—ŽœŽȱ adoption of, 97–99; Wei County cloth industry transformed by, 100–101

Index title deeds. See land title deeds To Ka-yi tso, and Tsing Wan Kun ǻŠ˜’œȱŽ–™•ŽǼǰȱŗśŞȮŗŜŚǰȱŗŜŝǰȱŗŜŞ Toishan merchants: homeland Œ˜——ŽŒ’˜—œȱ˜ǰȱŗŝŜȮŗŝŞǰȱŗŞŗǰȱ 184; investment in steamship transportation and railways, 178; “Toishan Regional Association” ǻŠ’œ‘Š—ȱ‘ž’žŠ—Ǽȱ˜›–Žȱ‹¢ǰȱ 183; tong considered joint-stock corporations by, 183–184. See also entrepreneurs “Toishan Regional Association” ǻŠ’œ‘Š—ȱ‘ž’žŠ—Ǽǰȱ˜›–Š’˜—ȱ˜ǰȱ 183 tong: as concurrently traditional and Western-style corporations, 183– ŗŞŚDzȱŒ˜—ęœŒŠ’˜—ȱ˜ǰȱ‹¢ȱ‘ŽȱŠ—˜—ȱ government, 180; legal ambiguity, ŗŝŚȮŗŝśDzȱ˜›’’—ȱ˜ȱ‘Žȱ’ŽŠȱ˜ǰȱŗŝŚDzȱ property rights practices of, 174 Tongji Restoration, 33 tongju gongcaiȱǻ‘˜žœŽ‘˜•ȱ›˜ž™Ǽǰȱ 148. See also households transaction costs: and economic ›˜ ‘ǰȱŗŖDzȱ˜›‘’Š—ȱŽę—’’˜—ȱ of, 10; and rule of law, 11; and the ›ŽŠ¢ȱ™˜›ȱŽŒ˜—˜–¢ǰȱŗŜ transportation: access to foreign and domestic factory goods facilitated ‹¢ǰȱşŜȮşŝDzȱŠ—’–Š•Ȭ›Š —ȱŒŠ›œǰȱ ŗŖřDzȱŽěŽŒȱ˜—ȱŽ¡’•Žȱ’—žœ›¢ǰȱŗŖŖǰȱ 104 transportation centers, rise of Wei ˜ž—¢ǰȱşŜȮşŝǰȱŗŖŚ ›ŽŠ’Žœȱǻ’—Ž›—Š’˜—Š•ǼDZȱ extraterritoriality granted by, 2; and foreign trade, 2–3; Treaty ˜ȱŠ—“’—ȱǻŗŞŚŘǼǰȱŘDzȱ›ŽŠ¢ȱ˜ȱ ‘’–˜—˜œŽ”’ȱǻŗŞşśǼǰȱřřǰȱŞŗǰȱŗŖŘ ›ŽŠ¢ȱ˜ȱŠ—“’—ȱǻŗŞŚŘǼǰȱŘ ›ŽŠ¢ȱ˜ȱ‘’–˜—˜œŽ”’ȱǻŗŞşśǼǰȱřřǰȱŞŗǰȱ 102 treaty port cities: foreign concessions in, 2; foreign garrisons associated with, 2; as industrial centers, 47; institutional features of, 2,

ŘŜś 4; and the intrusion of Western ’—œ’ž’˜—œǰȱřřǰȱŚŜDzȱ•Š—ȱŸŠ•žŽœȱ ’—ǰȱŚşȮśŗDzȱ™›˜Žœœ’˜—Š•ȱœŠ—Š›œȱ of legal practice in, 11, 13, 42; ’—Š˜ǰȱşŜDzȱœ’–Š’£Š’˜—ȱ˜ǰȱ 3, 18, 43n13. See also concessions; žŠ—£‘˜žȱǻŠ—˜—ǼDzȱ Š—”˜žDzȱ Shanghai; Tianjin; Wuhan; Xiamen treaty port economy: and the 1929 Company Law on Chinese ˜›™˜›Š’˜—œǰȱŘŗŖDzȱŽħ’—ȱŠœǰȱ śȮŜDzȱ‘’—ŽœŽȱŽ—›Ž™›Ž—Žž›œȂȱ contribution to, 17, 22, 44; economic integration with ›ž›Š•ȱ›Ž’˜—œǰȱśǰȱŘŖDzȱŽŠž›Žœȱ˜ǰȱ 4; and foreign privileges, 24; institutional framework of, 1, ŗŜȮŗŞDzȱŠ—ȱ’—Ž›—Š’˜—Š•ȱ–Š›”Žȱ ̞ŒžŠ’˜—œǰȱŝǰȱŘŚDzȱ’—›˜žŒŽǰȱ ŗDzȱ•’—”ŠŽȱ‹Ž ŽŽ—ȱꗊ—Œ’Š•ȱŠ—ȱ ›ŽŠ•ȱŽœŠŽȱ–Š›”ŽœǰȱŚŞǰȱŜśȮŝŘDzȱŠ—ȱ modern economic performance, 8–9, 12; and modernization in China and Japan compared, 27; and nonrational human factors, 27; and Northian framework introduced, 10–11; rise of, 1; œ™Š’Š•ȱœŒ˜™Žȱ˜ǰȱŚȮśǰȱŘŖDzȱœ™ŽŒ’Š•ȱ ŽŒ˜—˜–’Œȱ£˜—ŽœȱǻœǼȱŒ˜–™Š›Žȱ  ’‘ǰȱŘśȮŘŜDzȱœ™’••˜ŸŽ›ȱŽěŽŒœǰȱŝȮŞǰȱ ŘŗǰȱřśǰȱřŝȮřŞDzȱœž™™•¢ȱŠ—ȱŽ–Š—ȱ factors, 10–11, 13; and transaction Œ˜œœǰȱŗŜDzȱŠ—ȱŸŽ›’ŒŠ•ȱ’—Ž›Š’˜—ȱ of businesses, 19–20; and village household economic rationality, 21; Western legal framework of, 11–13, 20, 23, 210. See also economic growth treaty port system: advent of, 2; and the most-favored-nation clause, 3. See also extraterritoriality treaty rights, and business established by foreigners without, 80 œ’—ȱŠ—ȱ ž—ȱǻŠ˜’œȱŽ–™•ŽǼǰȱŠ—ȱ the To Ka-yi tso, ŗśŞȮŗŜŗǰȱŗŜřȮŗŜŚǰȱ ŗŜŝǰȱŗŜŞ

ŘŜŜ

The Treaty Port Economy in Modern China

tso (Mand. zu; Š—ŒŽœ˜›Ǽǰȱ™›˜™Ž›¢ȱ held by, 148 United States Exclusion Treaty, 178 urbanization: cities in the West and traditional China compared by Weber, 33; six largest cities ’Ž—’ꮍǰȱŚŝ—ŗDzȱŠ—ȱ‘Žȱ›ŽŠ¢ȱ port system, 3. See also economic performance vertical integration: and capitalists Œ˜›™˜›Š’˜—œǰȱŘŜDzȱŠ—ȱ—Ž ȱ institutional frameworks in treaty ™˜›œǰȱŗşȮŘŖDzȱ˜ȱ‘Žȱ̘ž›ȱ›ŠŽǰȱŗşȮ ŘŖǰȱŝŜǰȱŞşȮşŘǰȱşśDzȱ›’ŒŽȱ–’••œȂȱŠ’•ž›Žȱ ˜ȱ’—’’ŠŽǰȱŝŜǰȱŞśǰȱŞŞǰȱşŘǰȱşŚǰȱşśǯȱSee also Corporation Model  Š›•˜›ȱŽ›ŠȱǻŗşŗŜȮŗşŘŞǼDZȱŽħ’—ȱ ž›’—ǰȱśȮŜDzȱŠ—ȱŠ—˜—ȱǻ ˜—ȱ

˜—ǼǰȱŗŝşȮŗŞŖDzȱŠ—ȱ‘Žȱȃ ›ŽŽ—ȱ Gang,” 44; industrialization of ‘Š—‘Š’ȱž›’—ǰȱŚŜDzȱ˜ŸŽ›Ÿ’Ž ȱ of, 34 Ž‹Ž›ǰȱŠ¡ǰȱřřǰȱŚś Wei County: favorable location of, 100, 104; population, 102, 103, 104; transportation networks connecting, 99, 100; Wei County Weaving Zone expansion, 101. See also textile industry; Tianjin Wei Tingsheng, 204 Western imperialism: Qing response to, 33; and the spread of corporation and company enterprises, 173; and economic ›˜ ‘ǰȱřŚȮřśDzȱŠ—ȱ‘Žȱ–’—ȬœŽœȱ of Western business communities, 13  ‘ŽŠȱ̘ž›ǯȱSeeȱ̘ž›ȱ›ŠŽDzȱ̘ž›ȱ –’••’—Dzȱ̘ž›ȱ–’••œ Wing On Group of the Kuo Family, 202  ˜–Ž—DZȱŠ—ȱ•Š—ȱ›Š—œŠŒ’˜—œǰȱŗśŗ—ŚDzȱ and local wage employment, ŗřśDzȱŠ—ȱ–’›Š—ȱ—˜—Š›–ȱ

 ˜›”ǰȱŗřśǰȱŗŚŖDzȱŠ—ȱ™›˜Žœœ’˜—Š•ȱ Ž–™•˜¢–Ž—ǰȱŗřŚǰȱŗřśDzȱŠ—ȱ œŽ›’Œž•ž›ŽǰȱŗŗŞǰȱŗŘŖǰȱŗŘŞǰȱŗřŚǰȱŗřśǰȱ 140; social constraints on, in the formal labor market, 118 workers. See laborers Wu Tingfang: and commercial law Œ˜ŽȱŽŸŽ•˜™–Ž—ǰȱŗşŗȮŗşřǰȱŗşŜDzȱ legal background of, 192; and the corporation, 23, 188–189 Wu Zhi, 102 ž‘Š—DZȱŠ—’–Š•Ȭ™˜ Ž›Žȱ̘ž›Ȭ milling workshops in, 83; strategic •˜ŒŠ’˜—ȱ˜ǰȱřśǯȱSee alsoȱ Š—”˜žDzȱ treaty port cities Wuxi, industrialization of, 37, 130– 131 Xiamen: land leasing to foreign —Š’˜—Š•œǰȱŜŖ—şDzȱ•Š—ȱŸŠ•žŽœǰȱŚŝǰȱ śŖDzȱ™›˜ŽŒ’˜—ȱ˜ȱŒ˜—ŒŽœœ’˜—œȱ within, 2. See also treaty port cities Xie Chunmin, 203, 204 xinshouzhibuȱǻ—Ž ȱ‘Š—•˜˜–ȱŒ•˜‘Ǽǰȱ and the emergence of new ‘Š—’Œ›ŠĞȱŒŽ—Ž›œǰȱşŝ žȱ’— žǰȱřŜȮřŝǰȱŚř Yan Zhongping, 102 Yang Liansheng, 112 Š—ȱ’—™žǰȱŜŜ yangshang gua hao (foreign merchant ›Ž’œ›Š’˜—Ǽǰȱśş Yeh, Wen-hsin, compradors and imperial entrepreneurs compared by, 43 yezhuȱǻ˜ —Ž›ǼDZȱŠ—ȱhuomaiȱǻ•’ŸŽȱœŠ•ŽǼǰȱ ŗśŖȮŗśŗDzȱŠ—ȱjuemai (absolute œŠ•ŽǼǰȱŗśŖǰȱŗśŗ yitian liangzhuȱǻ’Ÿ’Žȱ˜ —Ž›œ‘’™ǼDZȱ ’—ȱ ˜—ȱ ˜—ǰȱŗśŚȮŗśŝDzȱŠ—ȱ•Š—ȱ cultivation by surface holders, ŗśśȮŗśŜDzȱŠ—ȱ•˜ŒŠ•ȱŒ˜––ž—’¢ȱ ’—Ÿ˜•ŸŽ–Ž—ǰȱŗśŚȮŗśŝDzȱŠ—ȱ –˜Ž›—ȱ˜ —Ž›œ‘’™ȱ›’‘œǰȱŗśŚDzȱ and surface rights granted to ’––’›Š—ȱœŽĴ•Ž›œǰȱŗśśǰȱŗśŜDzȱ

Index and surface-subsoil form of ˜ —Ž›œ‘’™ǰȱŗśŚȮŗśŝǰȱŗŜŗȮŗŜŘǯȱSee also ancestral property holding; property rights Yuan Shikai, 34, 40, 191, 192, 197, 198, 201 Ž•’—ǰȱŠŽ•Ž’—ŽǰȱŘŜǰȱŗŜśȮŗŜŜ zhaibuȱǻ—Š››˜ ȱŒ•˜‘Ǽǰȱşş Zhang Jian: and company law reform, 197–198, 201; and the corporation, 23; and Shanghai capital, 37 Zhang Zhongmin, 189, 202 Zhao Jin, Shanghai land values analyzed by, 42 zhaojiaȱǻœž™™•Ž–Ž—Š›¢ȱ™Š¢–Ž—œǼDZȱ disallowing of, 170; introduced, ŗŚŝǰȱŗśř Zhejiang manufacturing sector growth, 37–38 zhunzheȱǻ•Š—ȱŠœȱœŽŒž›’¢Ǽȱ ™›˜‘’‹’’˜—œǰȱŗśřǰȱŗŜŞȮŗŜşǯȱSee also juemaiȱǻŠ‹œ˜•žŽȱœŠ•ŽœǼ

ŘŜŝ

UNIVERSITY OF CALIFORNIA, BERKELEY INSTITUTE OF EAST ASIAN STUDIES The Institute of East Asian Studies was established at the University of California, Berkeley, in the fall of 1978 to promote research and teaching on the cultures and societies of China, Japan, and Korea. The institute unites several research centers and programs, including the Center for Buddhist Studies, the Center for Chinese Studies, the Center for Japanese Studies, the Center for Korean Studies, the Group in Asian Studies, the East Asia National Resource Center, and the InterUniversity Program for Chinese Language Studies. Director: Associate Director: Executive Committee:

Wen-hsin Yeh Martin Backstrom Martin Backstrom, Patricia Berger, John Efron, Thomas B. Gold, Jeffrey Hadler, Andrew Jones, John Lie, Kevin O’Brien, Kaiping Peng, Robert Sharf, Yuri Slezkine, Alan Tansman, Steven Vogel, Bonnie Wade, Wen-hsin Yeh

CENTER FOR BUDDHIST STUDIES Chair: Robert Sharf CENTER FOR CHINESE STUDIES Chair: Andrew Jones CENTER FOR JAPANESE STUDIES Chair: Steven Vogel CENTER FOR KOREAN STUDIES Chair: John Lie GROUP IN ASIAN STUDIES Chair: Bonnie Wade EAST ASIA NATIONAL RESOURCE CENTER Director: Wen-hsin Yeh INTER-UNIVERSITY PROGRAM FOR CHINESE LANGUAGE STUDIES Executive Director: Thomas B. Gold

KOREA RESEARCH MONOGRAPHS (KRM)

24. Lancaster, Lewis R., and Richard K. Payne, eds. Religion and Society in Contemporary Korea. 1997. 25. Shin, Jeong-Hyun. The Trap of History: Understanding Korean Short Stories. 1998. 26. Pai, Hyung Il, and Timothy R. Tangherlini, eds. Nationalism and the Construction of Korean Identity. 1998. 27. Hesselink, Nathan, ed. Contemporary Directions: Korean Folk Music Engaging the Twentieth Century and Beyond. 2001. 28. Choi, Byonghyon, trans. The Book of Corrections: Reections on the National Crisis during the Japanese Invasion of Korea, 1592–1598. 2002. 29. Dilling, Margaret Walker. Stories inside Stories: Music in the Making of Korean Olympic Ceremonies. 2007. 30. Kim, Hyuk-Rae, and Bok Song, eds. Modern Korean Society: Its Development and Prospect. 2007. 31. Park, Hun Joo. Diseased Dirigisme: The Political Sources of Financial Policy toward Small Business in Korea. 2007. 32. Finch, Michael, trans. Min Yŏnghwan: The Selected Writings of a Late Chosŏn Diplomat. 2008. 33. Pettid, Michael. Unyŏng-jŏn: A Love Affair at the Royal Palace of Chŏson Korea. 2009. 34. Park, Pori. Trial and Error in Modernist Reforms: Korean Buddhism under Colonial Rule. 2009. RESEARCH PAPERS AND POLICY STUDIES (RPPS)

40. Hao, Yufan. Dilemma and Decision: An Organizational Perspective on American China Policy Making. 1997. 41. Wakeman, Jr., Frederic, and Wang Xi, eds. China’s Quest for Modernization: A Historical Perspective. 1997. 42. West, Loraine A., and Yaohui Zhao, eds. Rural Labor Flows in China. 2000. 43. Sharma, Shalendra D., ed. The Asia-Pacic in the New Millennium: Geopolitics, Security, and Foreign Policy. 2000. 44. Arase, David, ed. The Challenge of Change: East Asia in the New Millennium. 2003. 45. Kang, Sungho, and Ramón Grosfoguel, eds. Geopolitics and Trajectories of Development: The Cases of Korea, Japan, Taiwan, and Puerto Rico. 2010. SPECIAL PUBLICATIONS

Han, Theodore, and John Li. Tiananmen Square Spring 1989: A Chronology of the Chinese Democracy Movement. 1992. Scalapino, Robert. From Leavenworth to Lhasa: Living in a Revolutionary Era. 2008. Thompson, Phyllis L., ed. Dear Alice: Letters Home from American Teachers Learning to Live in China. 1998. Zhan, Kaidi. The Strategies of Politeness in the Chinese Language. 1992. PUBLICATIONS WITH THE SOCIETY FOR THE STUDY OF EARLY CHINA

Loewe, Michael, ed. Early Chinese Texts: A Bibliographical Guide. 1993. Qiu, Xigui. Chinese Writing. Trans. Gilbert L. Mattos and Jerry Norman. 2000. von Falkenhausen, Lothar, ed. Japanese Scholarship on Early China, 1987–1991: Summaries from Shigaku zasshi. 2002. For a complete catalogue and current prices, see http://ieas.berkeley.edu/publications/catalogue.html

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“These studies of institutional changes in China’s treaty port economies introduce the challenges and potential payoffs of understanding how institutions affect economic performance. With rich and diverse empirical material, they provide perspective on more recent Chinese economic reforms and the ways in which economic growth need neither intend nor result in prosperity for all.” —R. Bin Wong, University of California, Los Angeles

The Treaty Port Economy in Modern China

“Where previous generations of researchers sought to account for China’s failures, we now face the novel problem of explaining massive success. This volume offers a timely reappraisal of circumstances in China’s treaty ports, one of many legacies underpinning today’s economic boom. The emphasis on institutions, a topic that recent studies tend to sidestep, adds to the value of the lively empirical studies in this new book.” —Thomas G. Rawski, University of Pittsburgh

The Treaty Port Economy in Modern China Empirical Studies of Institutional Change and Economic Performance

So and Myers

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8/3/2011 5:40:01 PM

CRM 65

CENTER FOR CHINESE STUDIES

INSTITUTE OF EAST ASIAN STUDIES

INSTITUTE OF EAST ASIAN STUDIES UNIVERSITY OF CALIFORNIA ● BERKELEY

Billy K. L. So Ramon H. Myers

CHINA RESEARCH MONOGRAPH 65

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8/10/11 4:24 PM