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Entrepreneurs, Politicians and the Chinese Coal Industry, 1895—1937

Published online by Cambridge University Press:  28 November 2008

T. Wright
T. Wright
Affiliation:
Australian National University
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Extract

The emergence of new groups in society willing and able to supply capital and enterprise to modern industry is one of the crucial aspects of economic development. The sources of entrepreneurship in China and the relations of those entrepreneurs with the rest of society have been insufficiently studied. Previous writers have tended to focus on outstanding individuals such as Sheng Hsuan-huai and Chang Chien, and to pay insufficient attention to their more run-of-the-mill followers. This paper surveys the changing sources of entrepreneurship in the Chinese coal industry between 1895 and 1937 and suggests reasons for the prominence or otherwise of the various groups involved. The concept of entrepreneurship used here is one much wider than the classic Schumpeterian definition, and includes the followers and adaptors who, as Redlich points out, also make a vital contribution to industrialization. Thus we take into our view all those who made a contribution to the development of modern coal mining enterprises as entrepreneurs, as managers or as stockholders—in many cases these functions overlapped. The companies covered are those owned either wholly or partly by Chinese nationals. Such companies accounted for 50–60 per cent of China's coal output of about 30 million tons in the 1930s.

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Articles
Information
Modern Asian Studies , Volume 14 , Issue 4 , October 1980 , pp. 579 - 602
Copyright
Copyright © Cambridge University Press 1980

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References

1 The only general study of Chinese entrepreneurship is Levy, Marion J. and Kuo-heng, Shih, The Rise of the Modern Chinese Business Class (New York, 1949).Google Scholar A recent study of the earlier period is Chan, Wellington K., Merchants, Mandarins and Modern Enterprise in Late Ch'ing China (Cambridge, Mass., 1977).CrossRefGoogle Scholar The outstanding studies of individual industrial promoters are Feuerwerker's, A. excellent China's Early Industrialization (Cambridge, Mass., 1958),CrossRefGoogle Scholar and Chu, S. C., Reformer in Modern China (New York, 1965).Google Scholar

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15 A customs official and close aide of Li Hung-chang.Google Scholar

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18 ibid., pp. 870–3, lists 24, of which 6 were government mines, 2 were joint ventures and 16 were set up by private entrepreneurs. In the last group, where the identity of the leading entrepreneurs is known, 3 were merchants, and 7 were from the ranks of officialdom. The rest are unknown.

19 For instance, 200,000 taels were paid for the rights in Chiang-pei-t'ing in Szechwan, though work had not yet started; see Chia-jung, Hsieh and Min-chang, Chu, Wai-jen tsai-Hua K'uang-yeh chih T'ou-tzu (Foreign Investment in Chinese Mining) (Taipei reprint, 1972), p. 8;Google ScholarCollins, W. F., Mineral Enterprise in China (London, 1918) p. 57.Google Scholar

20 There was, however, also participation by the provincial government, as was the rule for the rights-recovery companies.

21 Li, Wan-Ch'ing, Ch. 4; Ch'üan Han-sheng, ‘Shan-hsi Mei-k'uang Tzu-yuan yü Chung-kuo Chin-tai Kung-yeh-hua ti Kuan-hsi’, (Shansi's Coal Resources and Modern China's Industrialization), in Han-sheng, Ch'üan, Chung-kuo Ching-chi-shih Lun-ts'ung (Essays on Chinese Economic History), 2 vols (Hong Kong, 1973), Vol. 2, pp. 745–66.Google Scholar

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27 A caveat should be entered here, however. Biographical information is readily available for bureaucrats, warlords and politicians—much less so for merchants. So the degree of predominance of the former groups is overstated because most of those in the category of unknowns are more likely to have been merchants. However, the data are sufficiently good for the major mines to allow meaningful generalizations.Google Scholar

28 Ekiken Tanden Chōsa Shiryō, p. 83;Google ScholarLang, Gu, Shih-ta K'uang-ch'ang, VIII, pp. 5–6, 83. Biographical information comes from the Ch'ing biographical collections or the Japanese Foreign Office dictionaries of Chinese biography of the twentieth century, and is not separately annotated. Detailed references can be found in T. Wright, ‘Shandong Mines’.Google Scholar

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31 K'uang-yeh Chou-pao (Mining Weekly), Nanking, 1928–1937 (hereafter, KYCP), 118:352;Google ScholarYūzō, Kuboyama, Shina Sekitan Chōsa Hōkokusho (Report on Chinese Coal) (Tokyo, 1940), p. 348;Google ScholarChi, M., ‘Bureaucratic Capitalists in Operation: Ts'ao Ju-lin and his New Communications Clique, 1916–1919’, Journal of Asian Studies, 34.3:675–88 (05 1975), p. 685.Google Scholar

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34 Ch'üan, , Han-yeh-p'ing, p. 283.Google Scholar

35 The four were Li Yuan-hung, Chang Huai-chih, Ni Ssu-ch'ung and Chang Hsun. The largest shareholder was the Chin-tsai-t'ang (probably a bank). The second largest individual shareholder was Chang Chung-p'ing, who is unidentified except in so far as he came from Hang-hsien. Chang Hsun's shareholdings were held by his family, as he himself had died before the compilation of the list, which dates from 1928; the same goes for Ni Ssu-ch'ung. These two had investments in other mines—Ni in Lieh-shan, Anhwei, Chang in Hua-pao, Shantung.Google Scholar

36 See Min-kuo Shih-chiu-nien Shan-tung K'uang-yeh Pao-kao (1930 Shantung Mining Report) (Tsinan, 1931), pp. 162–3;Google ScholarTi-wu-tz'u Shan-tung K'uang-yeh Pao-kao (Fifth Shantung Mining Report) (Tsinan, 1936), pp. 280–1.Google Scholar

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38 Shisen Hakusan Shōkyū Tanden Chōsa Shiryō (Materials on the Coalfields of Tzu; ch'uan, Po-shan and Chang-ch'iu), South Manchurian Railway Co. (1936), p. 458–Google ScholarBoorman, , Biographical Dictionary, Vol. 1, pp. 382–4;Google ScholarYen-shen, Chang, Jih-pen Li-yung Suo-wei ‘Ho-pan Shih-yeh’ Ch'in-Hua ti Li-shih (History of Japanese Penetration of China through the Use of the so-called ‘Joint Enterprises’) (Peking, 1958), p. 137;Google ScholarYoritoda, Mishina, Hoku-Shi Minzoku Kōgyō no Hattatsu (Development of Industry in North China) (Tokyo, 1942), p. 47;Google ScholarBuck, D. D., Urban Change in China (Wisconsin, 1978), pp. 103–5, 137–8.Google Scholar

39 Yutang, Lin, My Country and my People, revised edn (London, 1939), p. 173.Google Scholar Other estimates are even higher: see Yoshihiro, Hatano, Chūgoku Kindai Gunbatsu no Kenkyū (Studies on Modern Chinese Warlords) (Tokyo, 1973), p. 283.Google Scholar

40 Shisen Hakusan Shōkyū, p. 363.Google Scholar

41 KYCP 13:211. Chu Pao-san was also involved in the Liu-chiang mine along with Liu Hung-sheng, see Gaimushō, , Jōhōbu, , Gendai Shina Jimmeikan (Biographical Dictionary of Contemporary China), 1928 (Tokyo, 1928), p. 876.Google Scholar

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47 The lieutenant, Liu Hsi-ch'ing, had previously run the mine, but had absconded when dee in debt. These events took place on his return, see ‘Kuan-yü Mo-shou T'ai-an Hua-pao Mei-k'uang Ch'üan-chüan’ (On the Confiscation of the Hua-pao Mine), Shan-tung Nung-k'uang Kung-pao (Shantung Agriculture and Mining Gazette), 3:59–88 (12 1928).Google Scholar

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51 Our knowledge of the profitability of Chinese industry is limited by paucity of data, particularly on the amounts of capital invested. However, during the late 1910s and early1920s most of the larger mines were making substantial profits. See Chung-p'ing, Yen, Chung-kuo Chin-tai Ching-chi-shih T'ung-chi Tzu-liao Hsuan-chi (Statistical Materials on Modern Chinese Economic History) (Peking, 1955), p. 155;Google ScholarJung-ch'üan, Hu, Chung-kuo Mei-k'uang (Chinese Coal Mines) (Shanghai, 1935), pp. 235–6; Hsu, Chung-wai, pp. 184–5;Google ScholarManshū Kaihatsu Yonjūnen Shi (Forty Years of Manchurian Development) (Tokyo, 1964–1965), Vol. 1, p. 299.Google Scholar

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60 KYCP 9:139, 12:190.Google Scholar

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66 In the light of Lloyd Eastman's work (see his The Abortive Revolution (Cambridge, Mass., 1974), esp. pp. 226–39), one should perhaps not overstress this point. His conclusion is that the relationship of the Nanking government to Chinese industry was still basically exploitative: ‘Indeed it appears more probable that Nationalist policies on balance had a dampening effect on the productivity of Chinese-owned factories.’ However, at least in the case of the coal industry (which had suffered more than most from the warlords), the Nanking government certainly was a substantial improvement on what had gone before.Google Scholar

67 Paucity of data limits this statement to the management of the mines. What happened to ownership is less clear, though there are indications that it lagged behind the trend in management.

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78 KYCP 38:609–10, 96:758, 125:460–1. Huang-pao, 17 April 1928, in Gendai Sh'na no Kiroku, April 1928, pp. 210–2; Hsin-wen-pao, 30 April 1929, in ibid., April 1929, pp. 144–6; Pei-p'ing Chen-pao, 2 May 1931, in ibid., May 1931, pp. 26–7.

79 Ch'en, , III, pp. 783–4.Google Scholar

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82 This is not to suggest that after 1915 there was any great lack of railway capacity. However, during the 1920s disruption of the railways was by far the most serious problem facing the industry.Google Scholar