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Chinese Business in the Twentieth Century
Organizer: Juanjuan Peng, Johns Hopkins University
Chair: William Kirby, Harvard University
Discussants: William Kirby, Harvard University and Thomas G. Rawski, University of Pittsburgh
While economists are amazed by China’s recent rapid growth, historians haven’t yet completely abandoned their tired questions about “China’s tardy industrialization.” This is partly the result of a divided field: while economists focus their search for China’s modern development on the post-1979 period, historians tend to end their studies on the eve of the Japanese invasion. For a rounded picture of twentieth-century Chinese business, the gap in between needs to be filled. What continued and what did not between the 1920s and 1980s? How were Chinese enterprises and the Chinese market affected by the political changes of 1949? To what extent was China’s recent economic success based on its historical heritage? Guided by a new set of questions, this panel seeks to bridge this gap.
Faure examines continuities in the history of accounting in twentieth-century China, suggesting that repeated revisions in company law shaped accounting as both a business practice and a business profession. Mickey compares the independent movement of China’s early twentieth-century reformist bankers with current attempts to deregulate China’s centralized banking system, revealing long-lasting tensions between state and business. Peng focuses on a textile company during the transition period in the 1940s and 1950s, arguing that the wartime legacy shaped China’s post-1949 economy. By exploring continuities in three major fields of business---accounting, banking and modern industry---the panelists hope to present a more integrated picture of Chinese business in the twentieth century than what the existing scholarship offers.
Accounting and Accountants in Twentieth-century China: Law, Business Practice and the Establishment of a Profession
David W. Faure, Chinese University of Hong Kong, Hong Kong
This paper examines continuities in the history of accounting in China from the early 1900s to the 1980s. It begins with the Company Law of 1904, which requires the maintenance of company accounts, and relates that to the Hong Kong Companies Ordinance of 1865, and the rise of accounting as a profession in China. Its general hypothesis is that the generation nurtured by the Company Law of 1904 did not come into maturity until the 1920s, and it was the next generation which survived into the 1940s and 1950s. Nationalisation in the 1950s essentially removed the fundamentals of accounting for profit, so that the principles of tax accounting came to predominate. Even then, accounting practices allowed the profession to remain fairly intact until the late 1960s. The gap between the 1960s and the 1990s, however, was too wide to bridge. The revival of accounting as a profession from the 1990s, which can again be related to the revival of Company Law (1993 etc.), allowed the introduction of considerable amount of new practices from outside China.
Chinese Banking Reforms: Old Issues in New Guises
Georgia A. Mickey, California State Polytechnic University Pomona
The opposition of Bank of China shareholders and staff in 1916 to the Chinese government’s Bank Moratorium regulations resonates with current debates on decentralizing the People’s Republic of China’s banking system in order to facilitate continued economic growth. Chinese bankers, whose 1916-17 campaign succeeded in reforming the Bank of China’s governance, took as their theme the independence (duli) of the four-year old bank from the state. They sought to release the bank—which had been founded in 1912 as the fledgling Chinese republic’s central bank—from the debilitating cyclicality of Beiyang era (1912-1927) governments and to protect against officials who wanted to use the bank for political ends. This view that the cental bank—and by extension, private banks as well—should be independent from the state became the standard against which China’s modern banking sector during the Republican period was judged. Bank of China’s supporters in the early twentieth century, however, never considered whether national financial institutions could be independent from the state when China needed to modernize. Ironically, they also ignored that their success in reducing the Ministry of Finance’s control was due to strategies that mobilized political party alliances and exploited national political events, which their reformist rhetoric of independence condemned. Although problems confronting China’s banking system today are vastly different from those of early twentieth-century China, issues of state control, governance, Party interference, and official malfeasance that arise in current debates are reminiscent of the concerns that China’s earlier reformist bankers articulated and also subverted.
Crossing the 1949 “Divide:” Continuity and Change in a Chinese Textile Company
Juanjuan Peng, Johns Hopkins University
The year 1949 is often said to have severed a new China from its semi-colonial and semi-feudal past. It also conventionally divides the China field into the pre-1949 period, assigned to historians, and the post-1949 period, dominated by political scientists, sociologists, and economists. However, when the twentieth century ended with a revival of private business and the return of Chinese capitalists, new changes compelled a revisit to the 1949 revolution. To shed light on continuities between the first and the second half of the twentieth century, this research focuses on a textile company during the transition period in the 1940s and 1950s. First, it confirms that, in the 1950s, Chinese businesses experienced many fundamental changes, which were part of the shift to a planned economy that dominated China for the next three decades. On the other hand, the paper also suggests some of the major changes that took place right after “Liberation” actually had their roots during the decade before “Liberation.” A new management-labor relationship that favored the workers’ interests can be traced back to the wartime shortage of experienced workers. A controlled market had already been tested as part of the Nationalists’ wartime policy. The new textile industry administrative bureau, to some degree, mirrored the central office in “big businesses” that emerged in the 1940s. In short, the wartime legacy shaped China’s post-1949 economy in ways that foreshadowed changes in the ideological and political spheres.