Enterprise & Society 6.3 (2005) 357-363
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Guest Editor's Introduction
Almost a quarter of a century has passed since a major business history journal has devoted a special issue to East Asia. In his introduction to that issue, Yen-p'ing Hao, one of the pioneers of Chinese business history, lamented the paucity of historical work on Chinese business compared to studies of China's political revolution.1 There is no question that the latest stage in the Chinese revolution has stimulated a new interest in the legacy of industrial and commercial development in China, and not simply because China is becoming an economic power whose business past takes on new relevance for a business present. Reform has created new opportunities for the historian, as well as for the entrepreneur. The opening of Chinese archives and the publication of company records compiled by Chinese researchers have resulted in a renaissance in empirically based Chinese business history.2 Moreover, the vigor with which China's industrial and commercial economy has responded to both internal and external opportunities has stimulated a reevaluation of the paradigms by which Chinese business has, until recently, been understood. [End Page 357]
The authors of the articles presented in this issue of Enterprise & Society have each benefited from this new research environment and represent different aspects of the revisionist turn in Chinese business history. All four articles were first presented as part of a panel on Chinese business networks at the annual meeting of the Association for Asian Studies in April 2004. Kwan and Chang's approach to Chinese business also received an earlier exploration on a panel at the Business History Conference in June 2003. It is therefore no accident that these articles all speak to common themes, in particular, the historical role of networks in Chinese business organization, financing, and competitive strategies. These articles also grow out of larger studies that combine what might be called thick description of particular enterprises and entrepreneurs with careful attention to the task of placing China within the larger literature on international business. As such, they contribute to both the methodological and empirical reframing of what might be called China's first trip down the capitalist road.3
Works on modern Chinese business history tend to take as their analytical starting point the dramatic moment when, having lost the Opium War (1839–1842), Chinese elites came face to face with the superior technological and economic power of the West. It is in the post–Opium War period that government officials joined forces with private merchants and members of the educated elite in what has come to be known as the "self-strengthening" movement. In addition to making efforts in the diplomatic and military realms, self-strengthening proponents helped found China's first mechanized industrial plants. The quasi-state enterprises that emerged during the late nineteenth century, the Jiangnan Arsenal, the Shanghai Cotton Cloth Mill, the Kaiping Mines, China Merchants Steam Navigation Company, and others, are known to all students of China's early modern history.
The need for collaboration between officialdom (personified by provincial governors like Li Hongzhang) and merchants (most often imagined by the state as men with accumulated capital and experience as compradors to foreign firms) is generally attributed to weak capital accumulation across the Chinese economy and the reluctance [End Page 358] of Chinese merchants to invest in new and risky business ventures.4 However, officials also recognized China's weak competitive position and saw their collaboration with the private sector as an opportunity to provide incentives that would overcome the disadvantages faced by Chinese firms.5
Measured in the numbers of new firms or the general growth of industrial production, self-strengthening was not a notable success. Albert Feuerwerker has estimated that between 1895 and 1913 Chinese investors founded approximately 549 manufacturing and mining enterprises. Many of these were small, with an estimated 116 Chinese-owned and 40 foreign-owned firms employing over 500 workers.6 By the end of the nineteenth century, the joint state-private venture had largely been discredited as a business strategy. At the...