China and Capitalism

China and Capitalism: A History of Business Enterprise in Modern China

David Faure
Copyright Date: 2006
Pages: 136
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  • Book Info
    China and Capitalism
    Book Description:

    Written by one of the most distinguished experts on China's economic and business history, China and Capitalism provides a highly original and at the same time clear and readable approach to understanding the development of business in China from 1500 to the 1990s. David Faure then uses the picture he has assembled to shed new light on the strengths and weaknesses of Chinese business today. The book is written to be accessible to people with little background in China or Chinese business practice. Dr Faure describes three phases in the development of Chinese business from the sixteenth to the twentieth century. In the traditional phase, from the sixteenth to the eighteenth century, Chinese business relied on contracts as well as on ritual propriety. In the modernizing phase, from the second half of the nineteenth century to the first half of the twentieth century, Chinese business had to adapt to the introduction of company law and legal standards of accounting. In the contemporary phase, from the middle of the twentieth century to the present day, China emerged from a control economy to a vibrant market by embracing once again the changes introduced in the modernizing phase. General readers, including students and teachers in courses touching on but not primarily devoted to the Chinese experience, will find in this book the most comprehensive account of China's business development in the last five centuries and many insights into the workings of China's modern business scene. Specialist readers will find a highly original approach to the history of business in China.

    eISBN: 978-988-220-383-9
    Subjects: Economics

Table of Contents

  1. Front Matter
    (pp. i-iv)
  2. Table of Contents
    (pp. v-vi)
  3. Acknowledgements
    (pp. vii-viii)
    David Faure
  4. 1 Introduction
    (pp. 1-10)

    Towards the end of 1978 when the Chinese leadership decided to re-open the country to foreign trade and investment, the implications of the policy turn-around were neither as clearly set out nor necessarily as destined to succeed as it is sometimes now thought. Yet, overnight, it became clearly established that the aspiration towards modernization was to be fostered through China’s taking its part in the international economy. Overnight, a generation in the writing of Chinese history was overthrown: gone was the foreign impact as a decided detriment on China’s fortune and in its place was capital investment as a contribution...

  5. 2 The Sprouts of Capitalism
    (pp. 11-26)

    Every now and then, it becomes an issue among historians what endemic features in Chinese society had held back the country’s economic development in the nineteenth century. In the latest round, they have been driven to focus their minds, by Andre Gunther Frank, on the impact made on late imperial China by the inflow of silver, and by Kenneth Pomeranz, on institutional and technological similarities between Europe and China. Eighteenth-century China was wealthy, technologically sound, highly literate by pre-modern standards and adept in business.¹ Why should China not have undergone the coal-and-iron industrial transformation of the nineteenth century as smoothly...

  6. 3 Why Did the Chinese Economy Lag Behind?
    (pp. 27-44)

    The Chinese economy is said to have lagged behind in the nineteenth century for many reasons, not all of which are justified. Until the newspapers of Shanghai reported them in detail, inland famines were distant affairs for the coastal observer in China. Until then, Malthus might have speculated that population checks operated in China as they did in Britain, but they were not brought within the public view with any vividness or urgency.¹ If China appeared destitute in the second half of the nineteenth century, as compared to the perceived prosperity of the eighteenth, a large part of that appearance...

  7. 4 Company Law and the Emergence of the Modern Firm
    (pp. 45-64)

    The modern firm came about in China via one of three routes: it was sometimes the result of the privatization of central government enterprises; it was sometimes built upon the family firm; and in a few cases, it came about as an exertion of coordinated regional development.¹ It is possible to collapse these three routes to modernity into two, for regional development was in practice the privatisation of regional government enterprises combined with the evolution of regional family businesses into full corporations. Nevertheless, local government was essentially founded on principles very different from the centre, and the difference has to...

  8. 5 The Responsibility System and Enterprise Reform
    (pp. 65-92)

    Economic growth from the 1870s continued until the early 1930s. By then, the World Depression caught up with China; production slumped and the monetary system came under attack. Had this book been concerned with the economic record rather than the narrower theme of the institutional structure which underpinned the economy, it would be necessary to examine the role of Chinese banks in the monetary reforms to follow and the tightening of government control in the last years of the 1930s. The shock of economic collapse, however, was rapidly superseded by the outbreak of war with Japan (1937 to 1945), and...

  9. 6 Conclusion
    (pp. 93-98)

    This broad sweep of the business history of China highlights the following aspects of traditional Chinese business institutions:

    Written contracts relating to land were commonly employed.

    Chinese corporations emerged from a ritual context.

    Patronage took paramount importance in all businesses, and political patronage in businesses of scale.

    Traditional Chinese accounting lacked the means to calculate capital.

    The transformation of Chinese institutions from the nineteenth to the twentieth century required the adaptation of business to commercial law.

    Traditional business was limited to knowledge of capital within the group, and the legal basis for business institutionalized transparency in corporate governance.

    This is...

  10. Notes
    (pp. 99-120)
  11. A Note on Further Reading for the Non-Chinese Reader
    (pp. 121-124)
  12. Index
    (pp. 125-128)