Spring 2006, Volume 16, Number 1

The Exploring Sources on the Rise of China's Province-Run
Enterprises: A Research Note

Morris L. Bian
Auburn University

         It is well-known that a distinctive pattern of China's economic development during the twentieth-century is China's reliance on state-owned enterprises. Yet until recently few scholars have examined the pre-1949 origins of China's state enterprise system. In a recent study I argued that the basic institutional arrangement of China's state-owned enterprises�bureaucratic governance, distinctive management and incentive mechanisms, and the provision of social services and welfare�took shape in China during the Sino-Japanese War (1935-1945) and was not derived from the Soviet model as is conventionally believed (The Making of the State Enterprise System in Modern China: The Dynamics of Institutional Change, 2005).

         Not so well-known is the rise of China's province-run enterprises. If a new state enterprise system took shape during the Sino-Japanese War, a new institutional pattern of province-run enterprises also took its basic form during the war. The war witnessed the

Also on this issue A Treasury for the Study of Chinese business history--The Microfilming Project for the Shanghai Business Archives (reprint) Kobo Toru: Cultural Background and Technology Transfer in Chinese Business Activities: Bibliography of Chinese Business History Qiao Zhaohong, Chinese Economic History Program at Shanghai Academy of Social Sciences Linsun Cheng: Zhang Fuyun and the Reform of Chinese Customs Administration

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         These enterprises were typically massive conglomerates. The Guizhou Enterprise Corporation (1939-1949), for example, had an initial capitalization of Ch$ 6,000,000 with investment from Guizhou provincial government, the central government, and three state-run banks. The Guizhou Enterprise Corporation's governance structure consisted of shareholders and a board of directors, with routine management responsibility delegated to a standing board of directors and a team of managers. At the peak of its development, the corporation controlled twenty-nine enterprises, with sixteen in industry, three in mining, two in agriculture and forestry, two in transportation and communications, two in finance, two in commerce, and two in research and development. With the expansion of business activities to early 1943, the corporation's capitalization increased to Ch$58,500.000.

         To date, few scholars have explored the rise of China's province-run enterprise corporations. In order to understand why and how province-run enterprise corporations emerged during the Sino-Japanese War, I spent several months in Chinese archives and libraries in 2005, including Fujian Provincial Archives, Chongqing Municipal Archives, Guizhou Provincial Archives, Guiyang Municipal Archives, the Archives of the Guangxi Autonomous Region, Guangdong Provincial Archives, and Sun-Yat Sen Library of Guangdong Province. My work in these archives and libraries yielded substantial amount of valuable materials. In what follows, I offer a brief description of a fragment of archival sources and publications concerning enterprise corporations deposited in or published by the Guizhou Provincial Archives, the Sichuan Provincial Archives, and the Guangdong Provincial Archives and Sun-Yat Sen Library of Guangdong Province.

         The Guizhou Provincial Archives has extensive records of the Guizhou Enterprise Corporation (GEC). These records include the GEC's bylaws, annual reports, rules and regulations, administration and management, and publications. The records also contain materials concerning the corporation's wholly owned, partially owned, and sponsored enterprises. Especially valuable are the meeting records of the GEC's standing board of directors from 1939 to 1949. Some of these records were recently published as Guizhou qiye gufen youxian gongsi (Archival materials of the Guizhou Enterprise Limited Liability Corporation) in two volumes (2003). Of immediate relevance to studying the GEC were the annual reports found in the corporation's archives and in Guizhou qiye jikan (Guizhou Enterprise Corporation Quarterly).

         In addition to company records, the holdings of the Guizhou Provincial Archives include contemporary publications dealing with various aspects of economic reconstruction in Guizhou province. Of primary importance were Guizhou jinji

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         Although few Chinese scholars made extensive use of the available archives, there is a substantial Chinese-language literature in the form of recollections by former GEC employee and scholarly articles. To date the most comprehensive study of the GEC is Kangzhan shiqi Guizhou qiye gufen youxian gongsi (The Guizhou Enterprise Limited Liability Corporation during the Sino-Japanese War) by He Changfeng (2005), a professor emeritus at Guizhou Normal University.

         Like the Guizhou Provincial Archives, the Sichuan Provincial Archives also holds material for province-run enterprises. I spent several months in the Sichuan Provincial Archives in the late 1990s where I found a substantial collection of materials on Sichuan economic development. The archives' holdings on province-run enterprise corporations are especially strong, including, among other things, detailed records of the Industrial Development Corporation of Sichuan and Xikang Provinces (IDCSX) and Sichuan Silk Corporation (SSC). The records of the IDCSX, for example, contain the corporation's bylaws, annual reports, rules and regulations, administration and management, as well as its meeting record of the standing board of directors. In addition to records of enterprise corporations, files of the Department of Reconstruction offer valuable insights into the process of industrial development in Sichuan province.

         Sichuan's strategic position during the Sino-Japanese War contributed to the publication of a huge number of journal articles on economic reconstruction in that province. A significant number of these articles were published in Xin jingji (The new economy, 1938-1945), Sichuan jingji yuekan (Sichuan economy monthly, 1934-?), and Sichuan jingji jikan (Sichuan economy quarterly, 1943-?). The journal Xinan shiye tongxun (Correspondence of southwestern industry, 1940-?) is essential to understanding the process of industrial development as it contains reconstruction plans, statistics on economic reconstruction, as well as expert analyses of economic reconstruction. Some of the most important articles on economic reconstruction in China's interior were included in Kanzhan shiqi da houfang jingji kaifa wenxian ziliao xuanbian (Collection of primary materials on economic development in the interior during the Sino-Japanese War) edited by Tang Runming (2005).

         Guangdong is another province that witnessed the rise of province-run enterprises during the 1930s and 1940s. The provincial government had established a number of industrial enterprises before the Sino-Japanese War erupted in 1937. During the Sino-Japanese War some of these enterprises were reorganized and placed under the jurisdiction of Guangdong Industrial Development Corporation (GIDC). The Guangdong

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         I also found numerous contemporary publications regarding province-run enterprises deposited in the Sun-Yat Sen Library of Guangdong Province. I made photocopies of roughly forty-five books and journals, including Zhanqian guangdong zhi gongye (Prewar industry in Guangdong province) by Fu Zechu (1947); Guangdong gongye (Guangdong industry) by Wu Wanli (1947), and Linian guangdongsheng jingji jianshe tongji (Statistics on Guangdong economic reconstruction) by Guangdongshe jiansheting (1948). To date, the most authoritative scholarly study of wartime Guangdong economy is Minguo shiqi guangdong shehui jingjishi (A social and economic history of Guangdong province during the Nationalist period) by Zhang Xiaohui (2005).

         To summarize: the Sino-Japanese War witnessed substantial development of province-run enterprises in Guizhou, Sichuan, and Guangdong provinces. What is more, much of the relevant archival materials is available, a fact that contributes to the viability of a scholarly study of the rise of China's province-run enterprises.

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A Treasury for Study of Chinese business history-The Microfilming Project for the Shanghai Business Archives

Linsun Cheng
University of Massachusetts-Dartmouth

         A project for preserving & providing access to Shanghai Business Archives has been successfully accomplished at the Center for Research on Chinese Business History (CRCBS) of Shanghai Academy of Social Sciences (SASS).

         Over the past several decades, SASS collected many original documents left by large private companies, such as Rong family enterprises, Liu Hongsheng family enterprises, and other business documents collected by Institute of Chinese Economic Statistics during the 1930s and 1940s. The collection is an unusually rich source for studying of Chinese business history. Take Liu Hongsheng (who is called China's "King of Enterprises") enterprise files, which were donated by Liu's family, as an example. It includes Liu's personal letters with his immediate families and relatives, his correspondences with many business owners and government leaders, minutes of board meetings and contracts of his company from the 1920s to 1950s. As Professor McElderry comments, "the collection is all the more valuable because since companies usually maintain control over their records (regardless of the country they are in), such business records are rarely readily available to scholars. Hence this collection represents a valuable resource for business history in general and not just for the study of Chinese business."

         For studies of Chinese business history, Chinese economic history as well as Chinese society, the value of this project cannot be overestimated. Not only will business historians benefit from these documents, those scholars who work on more contemporary

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         Unfortunately, most of the Center's holdings are highly fragile since many of them were handwritten on low quality paper more than half a century ago. Some of them have already been damaged by high humidity, extreme temperature, insects, water and even floods. Many scholars have witnessed and used documents that have been frayed at the edges, stuck together as a result of water damage. Some of them are so fragile that they have begun to disintegrate. This alone would have given them a short shelf life as historical sources, had they remained on the shelves.

         To make things worse, these documents have been in heavy use since the CRCS opened in 1992. Many scholars and graduate students stayed there for months to study and made intensive use of these documents. Obviously the more these documents are used and handled, the greater the danger that they will disintegrate.

         Sponsored by Henry Luce Foundation, University of Massachusetts-Dartmouth coordinated the project starting from 1999. An international advisory committee was organized to supervise the work. Chaired by Sherman Cochran, the committee includes Chinese business historians, librarians and microfilm experts from America (Linsun Cheng, William Kirby, Andrea McElderry, Diane Perushek, Kathlin Smith), Australia (Lai Chi-kong), China (Huang Hanmin, Qin Zhengfu, Sun Zuwei), France (Wang Ju) and Japan (Hamashita Takeshi).

         Cooperating with University of Massachusetts-Dartmouth and Fudan University, CRCBH began to repair and microfilm these documents in early 2000. All documents have been carefully repaired and reorganized. From them, the Advisory Committee and CRCBH selected 4,000 files to microfilm. After more than two years of hard work, CRCBH now has finished all 300,000 frames of microfilm. These microfilms, made by Fudan University library microfilm laboratory following the strict international standard, were in very high quality. As Mr. Julio Borrios, the former head of microfilm division at the Library of Congress, highly praised that the quality of these microfilms are "above the minimum international standards. In fact, it exceeds them by far. The resolution and the density of the film � the quality of the processing of the film is excellent." Storing in a new temperature and humidity controlled storage box, these documents will be available to international scholars today just as they will be five hundred years from now when it is doubtful that the originals will still exist.

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         To provide better access to Chinese and foreign scholars, a catalogue was carefully compiled. In addition, Prof. Huang Hanmin and other Chinese scholars reviewed all microfilmed documents and wrote a brief introduction (in Chinese) for each of 4,000 files. The introduction includes collection name, title, author, date of the file and a brief introduction, which describe major contents of this document. CRCBH has printed all catalogue and introduction in a 685-page book with the title of Contents and Brief Introductions to Chinese Business History Microfilm Material (zhongguo qiyeshi suwei ziliao mulu yu jianjie). The book provided scholars with a tremendous convenient way to use these valuable documents. The book is available for purchase by contacting Prof. Lu Xinglong, the new director of CRCBH). It can now be viewed online at www.umassd.edu/cas/history/cbh/

         Sherman Cochran's new book, Encountering Chinese Network�Western, Japanese and Chinese Corporations in China, 1880-1937, has intensively utilized the documents in Liu Hongsheng file, which is stored at CRCBH. As part of the project, the book has been translated and published in August 2002 by Shanghai Academy of Social Sciences Press. To celebrate the accomplishment of this project, Institute of Economics at SASS held an international conference to discuss various issues of Chinese business history.

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Cultural Background and Technology Transfer in Chinese Business Activities
Bibliography of Chinese Business History

Kobo Toru
Shinshu University, Japan

         We, Japanese scholars majoring in Chinese business history recently started a newresearch project, Cultural Background and Technology Transfer in Chinese Business Activities--Bibliography of Chinese Business History. The purpose of this project is to edit a multi volume catalogue of books and articles on Chinese business history. Funded by Japan Society for the Promotion of Science, five scholars are working on this project, including Professors Kanemaru, Yuichi; Tomizawa, Yoshiya; Okumura, Satoshi; Hagiwara, Mitsuru and Toru, Kobo. Started in April 2004, the project is scheduled to finish by March 2008.

         In August 2005, we held an workshop, "Cultural Background and Technical Transfer in Chinese Business History." About 20 scholars from mainland China, Hong Kong, Taiwan and Japan have participated in this workshop and presented the following reporters:

         Lee, PuiTak (University of Hong Kong), "'Bao(Contract), Bao(Protect), Bao (Response) and Guandu Shangban Enterprise : Case Studies on Hanyang Ironworks, China Railway Company and China Commercial Bank managed by Sheng Xuanhuai in Late Qing."

         Chen, Ciyu (Academia Sinica, Taiwan),"Salt Industry and Soda Industry in Modern China: A Case Study on Technical Innovation and Industrial Transformation."

         Mine, Takeshi (Graduate Student, Tokyo University), "Rise of Chemical Industry in East Asia during the Inter-War Period."

         Feng Xiaocai (Fudan University, Shanghai), "Technology, Relationship and Times: Destiny of Cai Shengbai and Meiya Group, 1920-1950."

         Chen Jiyao (Donghai University), "Introduction of Modern Accounting System into Chinese Company in Shanghai during the Republican Era: A Case Study on China Coal Ball Company, 1926-1936."

         Tomizawa, Yoshiya (Shimane University), "Legacy of Japanese-owned Cotton Mills in China: Establishment of China Textile Machinery and Nishikawa, Akiji"

         Now, we are planning another workshop for compiling the catalogue in August 2006. We are very glad to receive cordial cooperation from our friends and scholars around the world.

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Zhang Fuyun and the Reform of Chinese Customs Administration
(Abstract of a working paper)

Linsun Cheng
University of Massachusetts-Dartmouth

         Having fought for more than eighty years, China finally recovered its tariff autonomy under the Nationalist government. Since the administration of Chinese Customs was run by a foreign Inspector-General and was immune from any Chinese government supervision for so many years, however, it was not easy for China to regain the control of customs administration immediately. Desperately expecting for more revenue the Nationalist Government dared not to disturb the normal operation of the Customs Services that provided so large portion of government income.

         It was the mission of newly established Shuiwushu (the Office of Customs Administration) of the Nationalist Government to regain the control of Chinese customs administration from foreigners without disturbing its normal operation so that the customs would provide maximum revenue through newly introduced tariff rate. Even though his name has been seldom mentioned in most Chinese books that describing the history of China's Customs, Zhang Fuyun, the first Director-General of the Guanwushu, contributed a lot to restoring Chinese tariff autonomy and regaining Chinese customs administration Based on the original documents reserved in China and America, this paper will focus on the following three aspects to show Zhang Fuyun's efforts in recovering customs administration for China.

         He skillfully fought with Edwardes, the acting IG, who insisted on continuing the traditional ways in running the Chinese Customs. Having forced Edwardes resigned from his office Zhang successfully replaced him with F. Maze who was more sympathizing with Chinese nationalism and more willing to cooperate with Chinese government. Therefore, he made the Inspectorate General of the Customs truly subordinating to the guanwu shu (the Customs Administration) of the Nanjing Government, while keeping the office operating as effectively as it was before.

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         He organized a Committee of Improving Customs Administration to re-design management system in the Customs. By approving twelve guidelines on personnel in the Customs (which was recognized as the Magna Carta of the Chinese Customs) and other changes suggested by the committee, he set the jurisdiction foundation for taking over the administration of the Customs.

         He initiated a program to promote Chinese staff to higher lever administration positions, which were long monopolized by foreign employees in the Chinese Customs. By training and sending qualified Chinese staff abroad to study customs administration, he prepared human resources necessary for replacing all foreign administrators in the future.

         Many Chinese books in describing the modern history of Chinese Customs Services claims that China's Customs Services was totally controlled by the foreign Inspector General who represented the interest of foreign powers, from its establishment in 1853 until 1949 when the Chinese Communists took over China. My study shows that this conclusion is not accurate. In reality the Inspector General of Customs Services was clearly subordinated to the Guanwushu under Nationalist government since 1929. Zhang Fuyun, the first Director General of Guanwushu contributed the most to the regaining the control of customs administration, one of the sacred Chinese sovereignties. After several years of hard work, Zhang Fuyun's efforts successfully transformed the Chinese Customs from "a state within state" into a Chinese official institution largely subjecting to the will of the Nationalist government.

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Economic History Program
Institute of Economics, Shanghai Academy of Social Sciences

Qiao Zhaohong

         Chinese Economic History Program at the Institute of Economics is a major program in Shanghai Academy of Social Sciences. Established in 1956 and led by those prominent scholars such as Huang Yifeng, Zhang Zhongli, Ding Richu, Ma Bohuang and Zheng Youkuai, the Program has accomplished many pioneering works in Chinese economic history research. The researchers have made great efforts in searching and collecting numerous original documents recording the history of many large Chinese enterprises before 1949. Extremely valuable among them are those business contracts, private correspondence between business owners, minutes of companies' board meetings and resolutions. Based on these materials, the program has published more than ten books of historical material collections. Most of them, such as Historical Materials on South Ocean Brother's Tobacco Inc., Historic Materials on the Rong Family Enterprises, Historic Materials on Liu Hongsheng Enterprises, The Origin, Development and Reform of Heng Feng Cotton Mill, The Origin, Development and Reform of Dalong Machinery Plant and the Origin, Development and Reform of Shanghai Yongan Company are well known in the study of Chinese economic history. These books provided unusually rich sources for studying Chinese business history and many research programs, books and papers have been done in China as well as in the world are based on these collections.

         Entering the 1990s, the Program has been much more actively engaging in various projects. Led by research professor Zhongmin Zhang, the center has at the moment total seven researchers, including Xinglong Lu, Weiguo Fan, Yixiang Li, Shuijin He, Ting Zu and Zhaohong Qiao. Combining together, the researchers in this Program have published 18 monographs, 60 books and over 400 articles with over 20 millions words. Many of these works have won national and local research awards. Currently, the researchers in this Program are focusing on the following four aspects.

         1. Institute history, especially the institute evolution of China's modern enterprises. Professor Zhang Zhongming's book, "Difficulty Development ---Enterprise's system of modern China," systematically analyzed the origin, evolvement of modern Chinese enterprises and their modules and characteristics at different historical stages. The book won an "excellent achievement" prize in 2002 awarded by Association of Philosophy and Social Science of Shanghai.

         2. Study of Shanghai economic history. Professor Zhang Zhongming studied Shanghai's economic history during the Ming and Qing dynasties from Shanghai first became an administrative city until it became a trade port after the Opium War. His book, "Shanghai: from the exploitation to the opening to the world, 1368~1842" published in 1990, is still recognized as one of the classics in the study of Shanghai's economic history during Ming and Qing period. Professor Fan Weiguo's book, "Activation and Growth-Some Analysis of the Rise of Shanghai's Modern Economy," published in 2003 and Zhang Zhongming's book, Historic Growth of Shanghai Economy, and Lu Xinglong's book, Economic Analysis of Shanghai's Modern Industrial Enterprises,

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         3. Chinese financial history. Applying modern financial theory, Professor Li Yixiang's book, The Relationship between bank and enterprise in modern China, published in Taiwan in 1990, analyzed the inter-dependence of China's modern enterprises and banks. Recently he has further published several articles analyzing "Shenhui" and "Shenhui market," a unique phenomenon in China's financial history. Currently he is working on a new project to study those bankrupted banks in modern China.

         4. Social economic development in modern Chinese cities. Based on various archives in Guangdong, Hunan, Hubei and Shanghai, Professor Qiao Zhaohong is working on a project exploring the origins and evolution of Chinese merchant movement in the 1920s and the Guomingtang government's policies in dealing with merchant organizations. Scrutinizing thousands documents of Shanghai commercial guilds preserved in Shanghai Archives, Professor Fan Weiguo is working on his book, Study on Shanghai Industrial guilds and the business environment of enterprises.

         The researchers of this Program have always enjoyed extensive exchanges with scholars from USA, Japan, Britain, France, Australia, Hong Kong and Taiwan. In addition to participating with numerous academic conferences, they have also convened in recent years two international symposiums, "the enterprises system � spirit of businessman � relationship of urban economy" and "From unequal treaty to WTO" in 2005 (cooperated with USA-Sino Education Trust).

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Chinese Business History
University of Massachusetts-Dartmouth
285 Old Westport Road
Dartmouth, MA 02747
USA

Chinese Business History is the bulletin of the Chinese Business History Research Group, an affiliate of the Association for Asian Studies.CBH News seeks to develop a more comprehensive understanding of Chinese business and economic history and related areas. We welcome submission of research notes, �thought� pieces, introduction of research materials, research institutes and conference reports.

Editorial Board
Linsun Cheng, Editor
History Department, University of Massachusetts-Dartmouth
285 Old Westport Road Dartmouth, MA 02747 USA
phone: 1-508-990-8300; fax: 1-508-910-6093
e-mail: lcheng@umassd.edu

Associate Editors:
Morris Bian, Aubum University
Robert Gardella, U.S. Merchant Marine Academy
Ch'i-kong Lai, University of Queensland
Elisabeth Koll, Case Western Reserve University
Brett Sheehan, University of Wisconsin at Madison

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Paper subscriptions are no longer available. There is no subscription fee needed for viewing this bulletin. But we do wish our readers provide brief information (names, affiliated institutes, major academic interests) to be listed on our Scholar Direct page. This page aims to become a directory of professional historians, businesspeople, independent researchers and \students interested in Chinese business history. The directory will allow visitors to the site to locate individuals throughout the world with interests and expertise in a variety of subjects related the history of business in China. We hope it will facilitate an easier and more expanded dialogue among scholars in the field.

To make suggestions or send articles to Chinese Business History online, please contact Linsun Cheng at
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www.umassd.edu/cas/history/cbh/

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Calligraphy by Yin Kit Chan, Louisville and New York. Masthead image from Qingming shanghetu (Spring Festival on the River), 19th century; gift of Drs. Lee and Connie Koppelman; courtesy of the Herbert F. Johnson Museum of Art, Cornell University