The Merchants of Zigong

The Merchants of Zigong: Industrial Entrepreneurship In Early Modern China

Madeleine Zelin
https://www.jstor.org/stable/10.7312/zeli13596
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  • Book Info
    The Merchants of Zigong
    Book Description:

    At the periphery of the Chinese empire, a group of innovative entrepreneurs built companies that dominated the Chinese salt trade and created thousands of jobs in the Sichuan region. From its dramatic expansion in the early nineteenth century to its decline on the eve of the Sino-Japanese War in the late 1930s, salt production in Zigong was one of the largest and one of the only indigenous large-scale industries in China. Madeleine Zelin recounts the history of the salt industry to reveal a fascinating chapter in China's history and provide new insight into the forces and institutions that shaped Chinese economic and social development independent of Western or Japanese influence. Her book challenges long-held beliefs that social structure, state extraction, the absence of modern banking, and cultural bias against business precluded industrial development in China.

    Zelin details the novel ways in which Zigong merchants mobilized capital through financial-industrial networks. She describes how entrepreneurs spurred growth by developing new technologies, capturing markets, and building integrated business organizations. Without the state establishing and enforcing rules, Zigong businessmen were free to regulate themselves, utilize contracts, and shape their industry. However, this freedom came at a price, and ultimately the merchants suffered from the underdevelopment of a transportation infrastructure, the political instability of early-twentieth-century China, and the absence of a legislative forum to develop and codify business practices.

    Zelin's analysis of the political and economic contexts that allowed for the rise and fall of the salt industry also considers why its success did not contribute to "industrial takeoff" during that period in China. Based on extensive research, Zelin's work offers a comprehensive study of the growth of a major Chinese industry and resituates the history of Chinese business within the larger story of worldwide industrial development.

    eISBN: 978-0-231-50976-3
    Subjects: History, Economics

Table of Contents

  1. Front Matter
    (pp. i-vi)
  2. Table of Contents
    (pp. vii-viii)
  3. Tables, Figures, Maps, and Illustrations
    (pp. ix-x)
  4. Chinese Weights, Measurements, and Money
    (pp. xi-xii)
  5. Preface
    (pp. xiii-xxvi)
  6. 1 Salt Administration and Salt Technology
    (pp. 1-23)

    IN THE southern Sichuan city known today as Zigong, site of the Furong saltyards, there is an often-told story of a wealthy salt manufacturer and merchant named Wang Langyun, who resisted the efforts of the Qing state (1644–1912) to tax and control the Sichuan salt market. In one version of the story, Langyun, one of the most powerful merchants in the region, and a fellow merchant named Yan, of almost equal stature, plotted to thwart an 1863 plan to levy lijin taxes on salt brine producers and salt evaporators.¹ While Yan hastened to the provincial capital to influence provincial...

  7. 2 The Structure of Investment in Late Qing Furong
    (pp. 24-49)

    THE SIMULTANEOUS development of new technologies allowing the excavation of highly productive black-brine wells, the discovery of large deposits of natural gas at the Ziliujing yard, and the sudden expansion of Sichuan salt markets into Huguang during the early years of the Taiping Rebellion formed the background for a rapid “takeoff” in the well-salt industry in Furong. Salt output, based on taxable salt certificates filled by Sichuan as a whole, rose from an estimated 112 million pounds in 1850 to almost 390 million pounds a year during the late Guangxu reign (1871–1908).¹ When smuggled salt and salt sold by...

  8. 3 Fragmentation as a Business Strategy
    (pp. 50-73)

    THE SUCCESSFUL drilling of a gas or brine well was only the first step in the establishment of a business for the manufacture of well salt. Many partnerships formed for the excavation of a well continued as production units, pumping brine and disposing of the product by selling it. A smaller number set up their own furnaces to evaporate salt. However, as much as half of the brine and gas produced at Furong during the late Qing period was redistributed, largely through leases and subleases, to partnerships formed solely to operate finished wells and independent furnaces.¹

    The partnerships formed to...

  9. 4 Organization and Entrepreneurship in Qing Furong
    (pp. 74-115)

    FOR MOST of the investors who put their money into digging wells, pumping brine, and evaporating salt in the salt-producing areas of Fushun and Rong counties, purchase, rental, and redistribution of salt shares made up the salt business. Although the combined impact of their capital on the development of salt production in the region was great, the fragmented nature of their investment meant that as individuals they made only a small contribution to the form that development took. As important as the elaboration of a complex system of shareholding and partnership at the yard was the evolution of new, transitional...

  10. 5 The Growth of an Urban Workforce
    (pp. 116-139)

    THE SALT industry was the single largest employer of labor outside of agriculture in early modern Sichuan. Toiling at its furnaces, drilling and pumping its wells, caring for its livestock, supplying it with construction materials and food, carrying brine, fresh water, and coal, shipping salt from furnace to customs point, and from port to port was an army of men whom writers from as early as the nineteenth century have estimated to number in the hundreds of thousands at Furong alone. As we have seen, during the nineteenth century, salt production in Sichuan as a whole increased by at least...

  11. 6 Official Transport and Merchant Sales
    (pp. 140-160)

    THE END of the Taiping Rebellion and the pacification of the numerous other challengers to Manchu rule during the second half of the nineteenth century precipitated efforts at reform and regeneration throughout China and at every level of the political hierarchy. Patterns of commerce and modes of doing business disrupted by the northern progress of insurgence were only partially restored to the status quo antebellum. Particularly in the regions of China hardest hit by anti-Qing violence both political and material reconstruction provided new opportunities for elite activism and new demands for revenue. Efforts to join “self-strengthening” to “restoration” ordained a...

  12. 7 Technological and Organizational Change, 1894–1930
    (pp. 161-183)

    BY THE turn of the twentieth century, the Furong saltyard was one of the most prosperous communities in China. Despite its remote inland location it was a major source of government revenue in the form of salt taxes and an important target of investment for both native and extraprovincial merchants. Despite the changes imposed on Furong salt producers by reform of the salt gabelle, the production and marketing of salt still promised enormous profits for those with the capital, the know-how, and the nerve to get involved in this often volatile industry. In the early 1890s, the four great families...

  13. 8 The Changing of the Guard at the Furong Saltyard
    (pp. 184-222)

    THE SCIONS of the old lineage-based salt fortunes continued to play a role in the economy and politics of Zigong well into the twentieth century. However, by the 1920s they were eclipsed by a new group of businessmen at the yard, some of whom we have already met as drillers of wide-diameter wells and investors in contract-pumping firms. In many respects the old guard were greater innovators than their successors. In the years when well drilling was the key to business success, the combination of local ties and ownership of land enabled the earlier generation of men of middling wealth...

  14. 9 Politics, Taxes, and Markets: The Fate of Zigong in the Early Twentieth Century
    (pp. 223-268)

    IT IS no accident that our discussion of merchant business practices during the Qing period made little reference to politics. The cultivation of political capital by eighteenth-and nineteenth-century Zigong businessmen was limited in both its geographic range and its institutionalization. Sponsorship of merchant militia and local academies provided an important context for the solidification of local elite ties. These same organizations served as the rubric for occasional and short-lived efforts to promote merchant interests with the salt administration. Extraprovincial merchants had their guildhalls, such as the Shaanxi guildhall, which still dominates the old part of the city (see illustration 9.1)....

  15. 10 Zigong: Industrial Center or Handicraft Enclave?
    (pp. 269-291)

    QIAO FU, the most prodigious contemporary chronicler of urban life at the Furong saltyard, called turn-of-the-century Zigong the source of Sichuan’s wealth, the manufacturer of its main product (salt), and a generator of more than 9 million yuan in taxes each year. During Ziliujing’s golden age

    from Badian street and up town, the salt companies, extravagantly decorated in brilliant colors and gold leaf, were packed together like the teeth of a comb. From the moment the sun went down in the west, [the singing girls] put on their makeup, took out their instruments and sang, the sound of their music...

  16. Epilogue The Furong Saltyard and Chinese Industrial Development
    (pp. 292-300)

    THE BUSINESS practices that emerged in Zigong during the mid-Qing followed patterns of organization and investment familiar to economic historians. Faced with similar opportunities and constraints, Zigong businessmen devised solutions that were not all that different from those of contemporary American entrepreneurs. To illustrate this point, let us briefly examine three aspects of the Furong salt industry in the nineteenth century.

    Classic studies of late-eighteenth- and early-nineteenth-century U.S. textile manufacturing focus on the role of new technology, new methods of business organization, and bank financing. All three have relevance to our study of Zigong. Whereas the technology for the development...

  17. Notes
    (pp. 301-366)
  18. Glossary of Selected Chinese Names and Terms
    (pp. 367-376)
  19. Bibliography
    (pp. 377-390)
  20. Index
    (pp. 391-404)
  21. Back Matter
    (pp. 405-406)