Chair: Andrea McElderry, University of Louisville

Recent research on twentieth-century China has called for crossing conceptual and territorial boundaries and better integration of local histories with the national narrative. In direct response, this panel seeks to address the influence of state intervention on China’s economic development in the 1930s and 1940s through interregional (occupied, unoccupied China, and Manchukuo) as well as interdisciplinary (historical and economic) approaches. Two papers deal with state control on a macroeconomic level; one describes the policies of the National Resources Commission, a Nationalist government planning agency, and its legacy in postwar China; the other examines Japan’s control of the money market in Manchukuo and the simultaneous emergence of a Chinese-controlled black market. The two other contributions consider the issue of state intervention on a microeconomic level; both show how state agencies and their representatives gradually introduced managerial reforms and administrative restructuring in large industrial enterprises before and after 1945. By exploring the trajectory of various forms of state control in China’s wartime economies, all papers argue that the state’s involvement facilitated the centralization of the economy and the transformation of private into state enterprises after 1949.

The papers are based on recent archival research in China and Japan and present the work of four young scholars at the beginning of their academic careers. The group brings together two Chinese, one European, and one Japanese scholar teaching in the U.S. and Japan respectively who in their ongoing research combine Chinese business, economic, and social history.

Linsun Cheng, University of Massachusetts, Dartmouth

Until very recently, studies of China’s economic planning have all suggested that large-scale central economic planning was totally new to China in the early 1950s, initiated only after the People’s Republic imitated the Russian model in its first Five-Year economic plan. Disagreeing with this commonly accepted opinion, my paper will argue that the idea of state economic planning in modern China was initiated by Sun Yat-sen. Though Sun never had the opportunity to put his plan into practice, his idea of central state economic planning outlived him. My research shows that almost all Chinese political leaders (including those so-called "third political powers" who were neither Nationalists nor Communists) and scholars (economists, sociologists, philosophers, etc.) reached a consensus by the early 1930s that a state planned economy under a well-coordinated central economic plan was essential for China’s industrial development.

This consensus was clearly reflected in many industrial development plans presented by the National Resources Commission (NRC). I will discuss three NRC plans that were put into practice in 1936, 1939, and 1946, or prior to, during, and after the anti-Japanese war. By studying these plans, I will identify several characteristics such as centrally-controlled management structures, management hierarchies, the imperative nature of their annual plans, and the lack of concern for profits.

Finally, I will discuss the legacy of the NRC’s industrial planning and its implementation in mainland China and Taiwan after the NRC itself was dissolved in 1949. I believe that the history of the NRC’s industrial planning can help us to better understand these present-day economies.

Yasutomi Ayumu, University of Nagoya

Manchukuo faced serious wartime inflation after the eruption of the Marco Polo Bridge incident in 1937. The Five-Year Industrial Development Plan was drastically expanded to meet Japanese demand for Manchurian goods and, as a result, the Central Bank of Manchukuo started to expand its note issue. This fund was invested in the state-controlled heavy industries until the Special Manoeuvres of the Kwantung Army in the summer of 1941. For this mobilization and preparation for the war against Russia, huge amounts of Japanese yen funds were made available to the Kwantung Army. The Central Bank of Manchukuo was forced to suppress its supply of funds to domestic sectors in order to offset the overblown military funds. This effort was given up in 1943. The Central Bank then started exponential expansion of its bank note issue and invested the raised funds in the military, heavy industry, and agriculture.

In order to suppress the wartime inflation, the government gradually strengthened its control over the economy. At first it tried to stop the rise in prices by law. When realizing that this approach was not successful, the government tried to bring the distribution system under its control. However, the emergence of an ‘official’ distribution system simultaneously produced a black market, mainly operated by Chinese merchants and peasants. As this paper will show, the struggle between the Japanese-controlled ‘official’ distribution system and the Chinese-controlled black market accelerated as the war expanded and intensified.

Linan Bian, Auburn University

Contrary to established views and assumptions, the basic features of state enterprises in the post-1949 period already emerged during the Sino-Japanese War (1937–1945). These features include the bureaucratic organization of state enterprises, the substitution of administrative and ideological incentives for the profit motive, and the provision of social services and industrial welfare. Taken as a whole, these features constitute what I shall call "the administrative factory." In this paper I will illustrate the fundamental characteristics through a case study of the Dadukou Iron and Steel Works (DISW) located in Chongqing.

Placing the DISW in the context of the expansion of China’s wartime industry, this paper will first analyze the bureaucratic structure of the DISW. It will be shown that the DISW followed the organizational principle of a genuine government bureaucracy, especially in regard to the relationship between official rank and the level of compensation for factory officials. The paper will then describe the mechanisms by which production activities were organized in the factory, focusing on a major "Work emulation campaign" during the early 1940s. The work emulation campaign is used to illustrate the administrative and ideological incentives of state enterprises. Finally, the paper will delineate the development of institutions of social service and industrial welfare in the DISW. The facilities included a dormitory, a dining hall, a school, a hospital, a consumer’s cooperative, and a farm which gradually led to the formation of a factory-run community.

Elisabeth Koll, Case Western Reserve University

This paper explores the dramatic changes in the financial and managerial structure of large industrial enterprises in China’s textile industry during the late Republican period. In the context of the panel theme I will argue that these changes took place in three phases and ultimately led to the dominating influence of state agencies and their representatives in those enterprises after 1945.

As cases of the Yu Yuan mill (Tianjin), the Da Sheng mills (Nantong) or Shen Xin mills (Wuxi/Shanghai) show, the first major managerial restructuring came about in the late 1920s and 1930s when modern Chinese banks required changes in accounting and management practices as part of their loan contracts. The second change happened during occupation when Chinese companies were taken over by new Japanese owners or front men who pursued their own business agenda. When the Guomindang government exerted its control over companies by "regaining" and restructuring former enemy property after 1945, the third phase began. As in the case of the Da Sheng mills, appointed representatives of the government’s economics department confiscated raw material, required loans to the local party section and tried to manipulate the shareholders’ rights.