Roots of the problem
Trade associations were widely established as new industrial and commercial organizations in modern China, particularly during the Republican era, and quickly began receiving close attention from contemporary economists.Footnote 1 In the wake of the socialist transformation and the establishment of a planned economy following the founding of the People's Republic, trade associations disappeared from the scene, and the study of them accordingly entered a period of dormancy.
Beginning in the 1990s in Chinese academic circles, a large number of famous scholars, such as Zhu Ying, Ma Min, Yu Heping, Xu Dingxin, Peng Zeyi, Wang Xiang and Song Zuanyou, began to direct their research efforts towards trade associations. They published a number of influential papers and monographs.Footnote 2 Their research basically centred on the following topics: the relationship between trade associations and traditional native place associations and guilds, the relationship between trade associations and the government, the relationship between trade associations and chambers of commerce and trade union industrial management and social functions.
The current research on trade associations has, without a doubt, produced brilliant results. Yet, at the same time, it cannot be denied that the research so far suffers from generalizing and homogenizing tendencies. The essential cause of this lies in the fact that the breadth and depth of efforts to delve into historical case materials have fallen far short of what is needed. To take the spatial dimension as an example, existing studies are primarily concentrated on major cities such as Shanghai, Suzhou and Chengdu. Insufficient attention has been paid to the situation of trade associations in relatively remote regions, such as in the vast number of small and medium-sized cities and townships. Temporally, the studies are concentrated on the period between the fall of the Qing and the onset of the Anti-Japanese War of Resistance. There is a dearth of research on the roles and characteristics of trade associations both during the war against Japan and in the subsequent period extending into the completion of the socialist transformation. The studies are primarily concentrated on those trade associations that resulted from reorganizations, splits or mergers of old guild organizations in a few industries, such as insurance, textiles and banking. There has been a lack of research, however, on newly emerging trade associations based on the social division of labour and technological specialization. Trade associations in modern China were characterized by enormous spatial, temporal and industrial differences and generalizing, one-sided studies are therefore very unlikely to lead to a truthful, precise historical understanding of these associations. We urgently need to supplement and deepen case-studies on trade associations if we are to attain a comprehensive understanding of trade associations in modern China.
Scholars in China are already to some extent conscious of this issue and have reacted to it. In these first years of the twenty-first century, new works and new viewpoints on the study of Chinese trade associations have continued to appear, and trade associations are now a hot research field in Chinese economic history. The modern Chinese trade association case-studies collected so far by this writer very clearly reflect the various efforts by Chinese scholars to innovate and achieve breakthroughs.Footnote 3 Although large cities like Shanghai and Suzhou remain places of strategic research important for current case-studies, a smattering of discussion papers centring on the study of trade associations in Xiaguan, Yunnan have also appeared. The period under investigation has been extended to include the war against the Japanese and the Communist Revolution. Progress has also been made with respect to industries. As research into the main industries such as insurance, textile and banking, that have an impact on the national economy and the people's livelihood, deepens, the scope of research has broadened considerably: dancing, electrically powered weaving, the pharmaceutical industry (western medicine), confectionaries, lumber, finance, lawyers, ships and even the manure industry have been included within the scope of research, and studies on emergent industry trade associations have begun to appear.
The national bicycle industry of modern China is representative of emergent Chinese modern industries. It was repeatedly damaged by the war while it lacked protection from government authorities. It regularly suffered from shortages of funds, raw materials, technology and employees. Yet, in the midst of such adversity, the industry also sought growth, and trade organizations performed a critical role in its efforts to that end. By focusing on the bicycle industry trade associations, this article seeks to answer the following questions. As trade organizations for an emergent industry, can the trade organizations associated with the bicycle industry in modern Shanghai embody a unique urban modernity? Do they differ somehow from those trade associations that resulted from reorganizations, splits or mergers of old merchant trade organizations (native place associations or guilds)? Do they display characteristics of modernity that differ from previous understandings of modernization?
Bicycle trade organizations in modern Shanghai
The Chinese national bicycle industry comprises three main sectors: repair and rentals, commerce and manufacturing. The path of its development from repairs and rentals to commerce and finally to manufacturing is crystal clear. In Shanghai alone, we find the following five bicycle-related trade associations: Shanghai Bicycle Sale and Production Trade Association (later changed to Shanghai Bicycle Commercial Trade Association), Shanghai Repair and Rental Bicycle Trade Association (later changed to Shanghai Repair and Rental Bicycle Commercial Trade Association), Shanghai Three-Wheeled Cab Rental Commercial Trade Association, Shanghai Rubber Tyre Trade Association and Shanghai Bicycle Industrial Manufacturing Trade Association. The associations with the largest impact on the industry were the Shanghai Bicycle Commercial Trade Association and the Shanghai Bicycle Industrial Manufacturing Trade Association.
‘Big trade associations’ and ‘small trade associations’
There is no longer any record of when the first bicycle entered China. Yet it is certain that by 1868 at the latest bicycles had entered Shanghai.Footnote 4 There were very few bicycles at the time, and they were used primarily for pleasure rather than for commercial activities. According to the statistical records of foreign goods imported through Chinese customs, ‘Bicycles and parts thereof’ were not imported into Shanghai under the category of ‘Hardware and general merchandise’ until 1885. Foreign merchants such as Jardine Matheson (Great Britain), Siemssen & Co. (Germany) and Li Kang (France) imported and sold bicycles, but the quantities were small.Footnote 5 In the late nineteenth and early twentieth centuries, as England and Germany began industrial production of bicycles and improved their quality, it was noted in the contemporary press that ‘bicycles recently have become all the rage in Shanghai, and many competent Chinese riders are seen daily. Light, nimble, and convenient, these bicycles travel like the wind.’Footnote 6 ‘Bicycles have come, and there are more of them every day!’Footnote 7 The Chinese market had enormous potential, and foreign merchants recruited Chinese distributors in order to expand sales. In 1897, Zhu Tongsheng, who had a roadside shop for repairing horse carriages and rickshaws, established the Dong Chong Cycle & Motor Co. at 604 Nanjing Road. This was China's first commercial firm for bicycles. Bicycle firms, which required little capital, did a brisk business and made substantial profits, and they grew rapidly. By 1900, there were already six or seven firms, including Hui Min and Cao Shuntai that sold rickshaw, horse carriage and bicycle parts, and used such sales to grow their repair services. Their products sold quickly, and they thrived. By 1915, Shanghai had nearly 20 bicycle shops.Footnote 8 However, bicycle retail sales, repair and rental services occupied a downstream position in the bicycle industry. Without the support of an indigenous industry, the fate of all the major bicycle firms in Shanghai depended on the availability of unobstructed channels for foreign imports. They were inevitably subject to monopolistic pressures from Europe and the United States, which dominated bicycle manufacturing. Thus, profits became thin and growth stagnated.
Following 30-plus years of development, bicycle-related commerce in Shanghai had developed into a medium-sized sector. The time was ripe for the establishment of a bicycle trade association that would more effectively uphold the interests of the trade, cure business ills in the industry and promote collaborative development among tradesmen. In January 1931, 17 of the more powerful bicycle firms (Dong Chong, De Li and Da Xing among them) organized and established the Shanghai Bicycle Sale and Production Trade Association. The numerous small shops that focused on repairs and parts while also engaging in retail sales as a sideline were not included. Because of this, 240-odd small and medium-sized repair and parts shops, led by Wang Xinye, joined forces and in April 1933 themselves organized the Shanghai Repair and Rental Bicycle Trade Association. This marked the formal separation of the bicycle repair and rental industry from the bicycle sales and production industry and its establishment as an independent industry – a development which stands in contrast to the clothing industry, clock manufacture, the spectacles industry, hardware and electrical appliances, where repairs, on the whole, retained an ancillary role within shops that dealt in these products.
Following their establishment, both of the two bicycle trade associations participated in the Shanghai Chamber of Commerce. The large bicycle firms that took part in the Bicycle Sale and Production Trade Association were wholesalers, which controlled nearly all sources of the goods. Some were franchise distributors, and others ordered wholesale from foreign merchants. There was also a minority of bicycle firms that placed orders directly with factories in foreign countries such as England or Germany. They sold to Shanghai and to locations throughout China. Since it occupied the leading position in the bicycle industry chain at the time, the Bicycle Sale and Production Trade Association was also called the ‘Big Trade Association’. In contrast, the bicycle firms that participated in the Repair and Rental Bicycle Trade Association were smaller, and they had to purchase their products from wholesalers. Moreover, their business was limited to the Shanghai area. Therefore, the Repair and Rental Bicycle Trade Association was also called the ‘Small Trade Association’.Footnote 9 By 1937, the two main bicycle trade associations had grown considerably. The Bicycle Sale and Production Trade Association had developed from an initial 17 firms to more than 30 firms, and the Repair and Rental Bicycle Trade Association had developed from 240-odd shops to more than 400 shops.Footnote 10
Shanghai Bicycle Commercial Trade Association
The harm that the war did to commerce is beyond dispute. The first military actions were taken to resist the Japanese, Shanghai fell and the Concession became an isolated island. The indigenous bicycle industry was squeezed by dumping perpetrated by the Japanese bicycle industry and it lacked the strength to compete with the Japanese. Bicycle shops and firms shut down in quick succession. While the Chinese bicycle industry was on the verge of death, the Shanghai Bicycle Sale and Production Trade Association spared no effort in organizing the shipment of several lots of bicycles to the front to meet the needs of the Anti-Japanese War of Resistance.Footnote 11 After the Pacific War broke out, the Concession was occupied by the Japanese and only then were the affairs of the Shanghai Bicycle Sale and Production Trade Association and the Repair and Rental Bicycle Trade Association put on hold.
After victory over the Japanese, the Committee for Arranging the Affairs of the Shanghai Sale and Production Bicycle Trade Association (sic) was established on 20 October 1945 in accordance with Order No. 342 of the Shanghai Bureau of Social Affairs for the purpose of arranging the affairs of and restoring the association. This committee, wholly abiding by the ‘General Provisional Rules for Arranging the Affairs of Trade Associations in Various Industries in Shanghai’, elected Xi Shengyuan, manager of Tai Chang Bicycle Company, Hu Weiyuan, manager of Dong Chong Cycle, and Lu Xinyou, manager of Wei Chang Bicycle Company, as standing committee members. On 13 February 1946, this committee formally submitted a draft of the new articles of association to the Shanghai Bureau of Social Affairs and received its approval. On 28 February, the Shanghai Bicycle Commercial Trade Association (formerly the Shanghai Bicycle Sale and Production Trade Association) officially convened its founding meeting in the assembly hall of the Shanghai Chamber of Commerce at the end of the Tianhou Palace Bridge on Suzhou Street. A total of 104 member firms registered, and there were 76 member representatives in attendance. The Shanghai Bureau of Social Affairs was represented by He Chengji, who served as the elections monitor. Those present elected Xu Wenyuan, manager of De Li Bicycle Company, as the chairman of the board and Xi Shengyuan, Chen Zhigen, manager of Da Xing Bicycle Company, Xu Weiguan, of Yuan Da Bicycle Company, and Hu Weiyuan as members of the standing committee. At the same time, they specified the following:
The trade association is established at No. 5, Lane 70, Avenue Foch, Shanghai for the purpose of upholding and promoting shared interests, curing business ills, providing employee education, and other matters of public welfare . . . Monthly dues are 20,000 guobi for Class A members, 12,000 guobi for Class B members, and 6,000 guobi for Class C members. Revenues and expenditures as budgeted for the entire year are: 19,920,000 guobi in revenues and 19,900,000 guobi in expenditures, the principle being to balance revenues and expenditures.
On 24 June, the Shanghai Bicycle Commercial Trade Association was registered at the Shanghai Bureau of Social Affairs under the code She-Zu-Shang-Zi No. 92. The Shanghai Repair and Rental Bicycle Trade Association also announced that it was resuming business. It changed its name to Shanghai Repair and Rental Bicycle Commercial Trade Association. It included a total of 453 member shops, of which 104 were large or medium-sized and 349 were small repair and rental shops.Footnote 12
Shanghai Bicycle Industrial Manufacturing Trade Association
China's bicycle manufacturing industry had begun by imitation. In spite of suffering the devastation of war on many occasions, it grew stronger under the continual pull of emerging market demand and ultimately gave rise to a powerful manufacturing trade organization. In 1947, it was noted that ‘An investigation into the availability of domestically produced bicycle parts in Shanghai reveals that they first appeared in 1920. Examples are book bag frames, footrests and mud flaps, which are produced manually and quite easily. By 1927, products such as bicycle frames and steel wires had become available.’Footnote 13 Two major bicycle firms, Da Xing Bicycle Company and Run Da Bicycle Company, were founded in 1920. To combat foreign goods, Da Xing Bicycle Company hired two Japanese technicians in 1926, purchased imported steel tubes and connectors and joined, welded and painted bicycle frames, which, when combined with some imported parts and components, were assembled to make Red Horse and White Horse brand bicycles for sale on the market. These were the first domestically produced bicycles and served to mark the birth of the indigenous bicycle manufacturing industry.
As the indigenous bicycle industry began to develop, it was affected by the economic crisis of the Great Depression of the 1930s. The Japanese bicycle industry started squeezing the Shanghai industry by means of unrestrained dumping, as already noted, which occurred in two ways. First, bicycles were exported to the Chinese market (as shown in Figure 1) on a large scale, using a low-price strategy; a total of 2,318 Japanese bicycles were imported into China in 1942, 82 per cent of the total quantity imported into China. Secondly, Japanese companies made use of local materials, taking advantage of China's low-cost labour force to establish factories directly in China's major cities such as Shanghai, Shenyang and Tianjin.
Quantities of bicycles imported by China from Great Britain, Germany and Japan (1923–48)
The war, which allowed Japanese bicycles to monopolize the Chinese market for a time, dealt a heavy blow to the fledgling Chinese national bicycle industry.Footnote 14 By 1937, every factory of Shanghai's indigenous bicycle industry had either been destroyed by artillery or looted. Only eight firms remained. These relocated to the isolated International Settlement where they reorganized and resumed operations in a last gasp effort to survive.
In a paradoxical twist of history, it was the war that landed the Chinese indigenous bicycle industry in dire straits, yet it was also the war that extricated the industry from danger. The sustained consumption necessitated by long-term war was precisely the reason that Japanese bicycle enterprises had no choice but to switch entirely to military production directly. Furthermore, the lack of petroleum and the limits on automobiles led to the rebirth of the Shanghai indigenous bicycle industry and provided it with a vast market. In the 1940s, the Shanghai Bicycle Commercial Trade Association argued that
nothing is better suited to solving traffic problems under current conditions in China than the bicycle. Bicycles are light and easy to control. They can bear heavy loads over long distances. Inexpensive, they are well adapted to the environment of the hinterland, and they are especially compatible with the national economy. They are really needed by contemporary society, having become, without a doubt, an essential means of transportation.Footnote 15
After the end of World War II, British and Japanese bicycles either withdrew or were kicked out of the Shanghai market. Shanghai bicycle manufacturers sprang up like bamboo shoots after a spring rain, and China's indigenous bicycle industry grew by leaps and bounds. As Xia Zhichao, general manager of the Li Kang manufacturing plant and a founder of the Shanghai Bicycle Industrial Manufacturing Trade Association, said: ‘As of the present (31 July 1947), all of the main parts of the bicycles are entirely self-supplied. Our industry already deserves the title of “new manufacturing industry”.’ According to statistics from the Shanghai Public Utilities Bureau, Shanghai alone had 108,226 bicycles in 1946 and 191,907 in 1947.Footnote 16 In just one year, Shanghai witnessed a net increase of 83,681 bicycles. Per capita bicycle ownership had reached one bicycle per 25 persons in 1947.
On 9 October 1947, at three in the afternoon, members met in the Shanghai Chamber of Commerce regular conference room at the end of the Tianhou Palace Bridge on Suzhou Street to convene a founding meeting of the trade association. In attendance and providing guidance were He Chengji, representing the Shanghai Bureau of Social Affairs, Zhou Lianze, of the Party Department of the Kuomintang, and Wu Jichun, representing the Chamber of Commerce. During the period of initial exploration and preparation, the association had 59 registered member firms. On that day, seven firms joined, bringing the total membership to 66. All 66 member representatives attended the meeting, and a total of 66 votes were cast in the course of the meeting. Xia Zhichao, general manager of the Li Kang manufacturing plant, Zhu Zhongmin, assistant manager of the Xin Xing factory, and Zhang Yueqing, manager of the Yong Chang factory, were elected members of the standing committee with 63 votes, 62 votes and 56 votes, respectively. Xia Zhichao filled the position of president of the Shanghai Bicycle Industrial Manufacturing Trade Association. The following was specified at the meeting:
The address of the association is No. 5 Lane 44, Great Western Road . . . All members are classified as follows: Level 1, 12 firms, dues: 1.5 yuan; level 2, 18 firms, dues: 3 yuan; level 3, 15 firms, dues: 4.5 yuan; level 4, 16 firms, dues: 6 yuan; level 5, 3 firms, dues: 7.5 yuan; level 6, 1 firm, dues: 9 yuan; level 7, 2 firms, dues: 10.5 yuan. Total dues: 288 yuan.Footnote 17
Of the 66 member firms in the Manufacturing Industry Trade Association, 23 were primarily ‘industrial’ firms. The establishment of the Shanghai Bicycle Industrial Manufacturing Trade Association was a natural result of the strength of the Shanghai bicycle industry. Former members of the commercial trade association that were primarily ‘production’ firms switched to the manufacturing trade association. These shifts marked a separation between manufacturing industry and commerce and between selling and production in the Chinese national bicycle industry.Footnote 18
Focusing the discussion on the ‘Campaign to Keep Japanese Goods Out of China’
Research on trade associations inevitably touches upon the crucial issue of the relationship between the trade associations and the government. An assessment of this relationship involves an assessment of the nature of the trade associations themselves. Basically, they acted as intermediary organizations between the government and enterprises, but opinions vary widely as to whether the government–trade association relationship was primarily characterized by dependence or by independence. In the view of this writer, emerging industry trade associations, though they were nominally the same as the trade associations that resulted from reorganizations, splits or mergers of old merchant trade organizations (native place associations or guilds), differed in substance. As representatives of an emerging industry, Shanghai's two large bicycle trade associations stressed different aspects of their relationship with the government authorities at different periods, roughly divided by the Anti-Japanese War of Resistance. Prior to the war, Shanghai's bicycle trade association organizations were more reliant on the government than independent. Subsequently, the opposite characterization was true. Overall, they exhibited a gradual trend from co-operation to antagonism.Footnote 19 Current research is replete with discussions on the dependence of trade associations on the government, but offers less detail on the topic of trade association independence. What follows is a detailed discussion centring on the ‘Campaign to Keep Japanese Goods Out of China.’
On 9 June 1947, the American-led Supreme Command of the Allied Powers in the Pacific (SCAP) announced, for reasons of self-interest, a limited reopening of Japan's foreign private trade. China's Kuomintang government, led by Chiang Kai-shek, initially expressed opposition to this in the belief that the question of reopening Japan's foreign private trade should be linked to the question of Japanese reparations to the victorious nations. ‘The resumption of Japanese private trade should be postponed until reparations are actually being allocated.’Footnote 20 However, the United States paying no heed to the opposition of its ally obstinately proceeded. It unilaterally declared the reopening of Japanese foreign trade, and Great Britain followed suit. The War of Liberation was already being fought at this time, and Chiang Kai-shek, who relied heavily on US war aid, thought it unwise to oppose the US decision on what was a relatively minor issue. For political reasons, the Chinese government quickly abandoned its original position and instead prepared to send business delegations to Japan. The government had, in fact, acquiesced to the US approach.
Japanese business leaders were overjoyed following the Allied Command's declaration of the reopening of foreign trade. The Japanese government quickly drafted a Sino-Japanese trade plan for the final months of 1947. A majority of the goods prepared for export to China were finished industrial products, such as bicycles, watches, movie cameras, artificial silk, ceramics, paper, lumber and glass bottles. All of the materials that were to be imported from China were raw materials such as salt, sugar, soybeans and coal, which were, moreover, apparently in short supply within China itself.Footnote 21
The news of the reopening of Japanese trade sent powerful shock waves through all sectors of Chinese society, and nowhere were they more powerful than in China's economic centre, Shanghai. First, on 11 June, Shanghai's Shen bao carried an editorial, ‘How can we again encourage Japan?’ It expressed the opinion that the opening of Japanese foreign trade prior to the convening of a Japanese peace conference or a resolution to the reparations issue ‘had to be considered premature’. The business community, whose vital interests were at stake, were in a constant state of anxiety and expressed vehement opposition. At this point, not even two years had elapsed since the ending of the war. The Chinese public was of the universal opinion that ‘the purpose of the bloody war of the past eight years was to oppose those eight big characters Gongye Riben Nongye Zhongguo (Industrial Japan, Agricultural China). The current opening of Japanese trade unavoidably restores the unreasonable pre-war state of affairs. So was it for nothing that we shed eight years of blood?’Footnote 22
The disappointment, dissatisfaction and disgust that all citizens felt for the Nanjing government finally and fully burst forth over a small matter – the decision by the state council to import 2,000 Japanese bicycles – and it did so within an industry that was not large: Shanghai's bicycle industry.
On 1 August 1947, the Kuomintang State Council approved three principles and decided to open trade with Japan. The Central Trust of China acquired 2,000 Japanese bicycles through a barter arrangement. These had already arrived in Shanghai. The Japan Trade Guidance Committee was also formally established at this time, and it organized a commercial delegation to Japan. According to Article 4-b of the Compendium of Enforcement Regulations, the ‘Means of transportation and transportation equipment’ category of imported goods should be cross-referenced with the ‘mechanical apparatuses’ category in the Japanese export plan, including a large number of bicycles and bicycle parts.Footnote 23 A single stone gave rise to a thousand waves. More than 20 bicycle enterprises, including Yong Chang Steel Rim, Xin Xing Machinery, Li Kang Manufacturing and Dong Chong Cycle, joined in waging a spirited opposition to the plan. They demanded that the authorities prohibit the importation of this batch of Japanese bicycles. The Shanghai Bicycle Industrial Manufacturing Trade Association was officially established in October in order to aggregate the forces of the industry.
It took the first step of separately petitioning the Nanjing Kuomintang Executive Yuan, the Ministry of Economic Affairs and the International Trading Company of the Ministry of Economic Affairs. It stated that, upon learning that China would import Japanese bicycles, ‘the people are appalled and will not rest until the situation is made right’. It continued:
The manufacture of domestic bicycles and the establishment of bicycle firms began long before 1928. Our bicycles were sold throughout China and even in Southeast Asia. In terms of product and price, they held their own against Japanese goods. The Japanese merchants, acting out of envy, crushed us with low prices, and we could not make further progress. During the Anti-Japanese War of Resistance our struggle was arduous. In eight years of striving, we perfected one after another all the main bicycle parts and achieved considerable success in respect of quality. We could, on our own, meet demand . . . Thus, this indigenous light industry which is still in an embryonic stage is relying on the guidance and aid of government power. It is planning for growth and will win a position in the international market and will thus contribute to the economic development of the country. If Japanese goods are allowed to come pouring in, we will face a powerful adversary and may await our ruin. The livelihood of tens of thousands of workers is tied up with the survival of this industry. The threat is substantial and we look to the future with trepidation. Thus, it is with urgency that we present our views.Footnote 24
Since the Shanghai Bicycle Industrial Manufacturing Trade Association was in the Shanghai jurisdiction and wished to avoid the appearance of skipping a level in the government hierarchy, it took the earliest opportunity to submit another version of the petition to the Shanghai Special Municipal Party Department, the Shanghai Municipal Government, the Shanghai City Council, the Shanghai Bureau of Social Affairs and the Shanghai Chamber of Commerce. The content of the petitions was largely identical. They differed only in that they stressed the section on Shanghai's interests:
We find that there are more than 60 bicycle manufacturers in this city and that they employ more than 4,000 persons. Hundreds of thousands directly or indirectly rely on the industry for their livelihood. If the industry is subject to the dumping of Japanese goods, and is deprived of room for growth, one can imagine what the consequences will be.Footnote 25
Faced with the request put forward by the Shanghai Bicycle Industrial Manufacturing Trade Association, the Shanghai Chamber of Commerce responded energetically, providing as much help as it could in every area. However, the Shanghai party departments concerned and the various government bureaus failed to declare support. Yet neither did they express opposition. As for the Nanjing Nationalist Government, it did not give the matter serious attention and failed to reply promptly. After several days had passed, the government, in the name of the Central Trust, did no more than state the following:
It has been decided that the Japanese bicycles which have already been shipped to China will be transferred to cities in the rear area that have an urgent need of them. As for the request to halt imports, there already exists a barter contract with Japan which probably cannot be modified. We will give the matter consideration.Footnote 26
The haughty attitude of the Nanjing Nationalist Government elicited an even more intense reaction from the Shanghai Bicycle Industrial Manufacturing Trade Association, which responded immediately: on the one hand, it convened and hosted a press conference, where it elaborated on the general situation of the industry and on the crisis it was facing. In an effort to expose the matter through the media, it sought the help of Zhao Zengqi and Tang Huimin of Shang bao. The main dailies, including Shang bao, Dagong bao and Xinwen bao, reported the story. On the other hand, it established the Temporary Office of the Coalition of Domestic Bicycle Manufacturers at No. 5 Lane 44, Great Western Road, the address of the Shanghai Bicycle Industrial Manufacturing Trade Association, and contacted the Tianjin Chamber of Commerce and the Qingdao Chamber of Commerce and asked them to instruct the bicycle manufacturing industries in their respective cities to press consistent claims and to proceed according to a joint strategy.Footnote 27 The association also officially organized the Petition Delegation of the Domestic Bicycle Manufacturers Coalition to go to Nanjing in order to present a petition to the Kuomintang government. To provide the funding needed to carry this out, members contributed 5 million guobi per member level.Footnote 28 The Petition Delegation of the Domestic Bicycle Manufacturers Coalition which went to Nanjing presented a petition that contained stern words of protest:
Because of insufficient domestic production, the Central Trust [of the Nationalist Government] is taking steps to remedy the imbalances between surplus and dearth. Nevertheless, as demand for bicycles has soared in all regions this year, and Japanese goods have vanished from the market, no shortages have appeared, which proves that we can be considered self-sufficient in domestic products. It is also claimed that the importation of large quantities of Japanese goods, which are low-priced, could level off the price of goods. However, an examination of price fluctuations reveals complex causes: they cannot be managed through a single industry or a single good. Under the current conditions of economic instability, the importation of Japanese goods alone, a strategy which would destroy domestic industry, would not be effective. Therefore, the first of the reasons stated above is at cross-purposes with reality; it runs counter to the facts. The second reason sacrifices substance for shadow and is, in its conception, tantamount to climbing a tree to catch a fish.
The petition further stated:
The products of this industry have not been limited to this city, but have been sold for years in the Yangtze River region. As for the North, there are many dealers and manufacturers in such cities as Tianjin and Qingdao. Moreover, there are enemy factories that, with the acceptance of the National Resources Commission, are continuing production for the purpose of supply. Therefore, even if Japanese bicycles are shipped to cities in the rear area for sale, they will still be in Chinese territory, and Japanese goods will inevitably compete with domestic goods. The Central Trust has entered into a trade contract with Japan, and this contract in fact comprises a certain number of bicycles. We ask that you announce the true number and hope that you find a way to replace these finished products with useful raw materials.Footnote 29
The above two items were the most urgently felt and resolutely put forward wishes of the bicycle firms, for they had a direct bearing on the survival of the entire bicycle industry.
Meanwhile, the Shanghai Bicycle Commercial Trade Association did not remain aloof from these affairs; it was not playing the role of idle spectator. Rather, it was co-operating closely with the Manufacturing Industry Trade Association and was applying pressure by repeatedly submitting documents to the Nanjing Nationalist Government:
Whether a large quantity of bicycles are to be included among the products Japan is planning to export is a matter on which we definitely decline speculation. However, various newspapers have reported, and probably not without reason, that it is indeed a fact that 2,000 bicycles were sent to Shanghai in a barter exchange carried out by the Central Trust . . . As for those that need to use British or American goods of superior quality, the prices are higher, and those that need to apply for an import licence are few in number. Thus, there would be no effect on overall domestic industry. If Japanese goods of the same grade are imported, domestic factories will be squeezed; they will bear the brunt. They certainly will lack the strength to recover following this second blow. Moreover, it remains to be seen whether, following the war, Japanese products are superior and what kind of value they have. To summarize, given that domestic products can meet demand, the importation of Japanese goods is of no benefit to Chinese citizens for they will suddenly eat up foreign exchange and strike a blow against indigenous industries. We only desire that the government be far-sighted and that it emphasize actions for bringing prosperity to the country and benefits to the people.Footnote 30
On 1 July 1948, the Nanjing Nationalist Government, under powerful social pressures, finally cancelled the import of Japanese bicycles and used various means, including a telegram from the Republic of China Delegation in Japan, comments from the Ministry of Economic Affairs and meetings between Tang Jusheng, the Commissioner for Commercial Affairs in Japan, and representatives of the Shanghai Bicycle Industrial Manufacturing Trade Association, to inform the bicycle industry organizations concerned that Japanese bicycles would not be imported.Footnote 31 As soon as the news went out that the ‘Campaign to Keep Japanese Goods Out of China’ which was launched by the Shanghai Bicycle Industrial Manufacturing Trade Association had won a victory, all of the major dailies, including Zhonghua shibao, Dagong bao, Xinwen bao, Shen bao and Tie bao, reported the news. On that date, Zhonghua shibao reported:
Because Shanghai bicycle firms were upset over reports that Japanese bicycles would be imported and dumped in large quantities, Xia Zhichao and other representatives of the Shanghai Bicycle Industrial Manufacturing Trade Association arranged an interview yesterday with Tang Jusheng, China's Commissioner for Commercial Affairs in Japan, who had just returned from Japan. According to him: private traders who go to Japan to purchase any goods are subject to strict inspections by the Chinese commerce officers in charge; and the entire bicycle manufacturing industry has exhibited significant progress in production and quality this year to the point that it can meet the needs of China; therefore, there is absolutely no possibility of Japanese bicycles or bicycle parts being imported.Footnote 32
Acting in their own interests, the Shanghai bicycle trade associations opposed the government. With group feelings running high, they endured several setbacks in an effort that lasted nearly a year. Soon afterwards, faced with the Nationalist Government's 1948 ‘August 19’ policy to limit prices and exert comprehensive control over raw materials, the manufacturing trade associations tried to maximize the benefits for their industry. They continually negotiated with the Nationalist Government, reported industry difficulties, requested bank loans, supplies of raw materials and, seeking to avoid vicious internal competition, co-ordinated intra-industry competition and employee remuneration.Footnote 33 Clearly, the Shanghai bicycle trade associations exhibited much more independence than dependence.
Although this was a period of political instability and soaring prices, the bicycle manufacturing industry, thanks to the continual efforts of the trade associations, continued to develop robustly. On the manufacturing front, the National Resources Commission of the Nationalist Government took over the management of the Showa Production Plant that had been set up by two Japanese companies, Kojima (Shoto) and Sanro, and changed its name to Manufacturing Plant No. 2 of the Shanghai Machine Factory of the National Resources Commission Central Machinery Co. Ltd. It had 180 employees and produced 3,600 bicycles annually. In addition, other privately operated bicycle factories quickly sprang up. According to statistics from the Shanghai Bicycle Industrial Manufacturing Trade Association, Shanghai had 199 bicycle and parts factories in the period immediately following Liberation. On the commercial front, the number of bicycle sellers, and especially repair, rental and parts shops, increased considerably during this period. By June 1949, there were 113 bicycle dealers, 555 bicycle repair and rental shops and 45 firms dealing in rubber materials for bicycles. If we further include the mom and pop shops and the repair booths run by sole proprietors, the total rises to above 1,100 firms, which employed more than 3,000 people.Footnote 34
Conclusion
Following the arrival of the Chinese Communist Party and the subsequent establishment in 1956 of joint state–private operations, the Shanghai bicycle trade associations were disbanded. However, during the relatively brief period in which they existed, the Shanghai bicycle trade associations present us with an urban modernity (and do so within Shanghai, the largest Chinese metropolis) that differs from that revealed by previous research.
First of all, the obstructing effects of the war on Chinese modernization have perhaps been exaggerated in scholarly treatments of this process. Paradoxically, history proves that, although the war caused enormous devastation, it also had a complex, stimulating effect on the modernization of China. The example of the bicycle industry illustrates that modernization in Shanghai did not stop in 1937, but continued throughout the 1940s.
Secondly, after 1927, the Nationalist Government in Nanjing established, through a process of reorganization, a framework for managing social organizations and groups that was closely wedded to the political tutelage system. This can be seen not only with the example of the bicycle trade associations, but also with the regulation of native place associations and prostitutes dealt with in other articles in this issue. Their development was different however. Subject to a newly promulgated legal code and administrative monitoring, the pre-war trade associations were truly within the system.Footnote 35 They maintained political co-operation of a kind with the central government and performed an important intermediary role for the government authorities. However, when the post-war central government, in a political trade-off, began repeatedly to neglect the fundamental interests of urban businessmen (particularly the businessmen who emerged and continually gained strength after the war), certain industries and certain industrial organizations in modern China were able to unite and, pursuing the interests of their industries, combined in social networks that encompassed entire cities and even multiple cities. Thus, they constituted a social force – an oppositional force that could lead the way in breaking through the constraints of the previous political system and score victories in the political games they played with the central government.
Lastly, the emergence, growth and maturation of modern media in Chinese cities formed a relatively independent space for public opinion, and the existence of such a space for the independent expression of public opinion has frequently been of critical importance. As demonstrated by the 1947 through 1948 ‘Campaign to Keep Japanese Goods Out of China’, which was launched by the Shanghai trade associations, if just one trade association had pursued its interests, or even if the entire business community had protested loudly, there would have been no guarantee that the central government would have changed its existing policy. In the trial of strength between social and commercial organizations on the one side and the government on the other, the major publications in Shanghai favoured the demands of the commercial and social organizations. They thereby subjected the government to the enormous pressure of public opinion. It is fair to say that the key to the entire turn of events lay in the fact that such a space for public opinion existed in the Shanghai metropolis.
In summary, as of 1949, Shanghai alone had 306 business trade associations, of which 86 were industrial organizations and 220 were commercial organizations.Footnote 36 The number and extent of modern Chinese trade associations and the speed at which they developed are truly amazing. The trade association case-studies that so far have been completed, and among which I include this clumsy effort, are a mere drop in the ocean – a single hair on nine ox hides – when compared to the vast and multifarious mass of trade associations in modern China. However, we cannot abandon our explorations of the multitudinous trade associations: the breadth of trade association case-studies directly determines the depth of modern Chinese trade association history. I hope that this article will inspire others to produce superior works, that is, that it will enable scholars not to begrudge their own efforts as small but to enrich and deepen the study of modern Chinese trade associations.
