Introduction
In late May 1949, the victorious People's Liberation Army, the military wing of the Chinese Communist Party, marched triumphantly into China's largest and most economically important city, Shanghai. It was in Shanghai that the Party would face some of its most serious challenges as it sought to establish itself as the government of a ‘New China’. The eyes of the rest of China and of observers across the world were upon the Party, waiting to see whether these rural guerrilla fighters, who had so recently been living in troglodytic circumstances in their remote stronghold in Yan'an, could govern this modern metropolis. The Party were well aware that seizing power was one challenge, but that ruling the country was quite another. As such, Shanghai was approached with a considerable degree of temerity. Success was by no means guaranteed: this was a city in turmoil. Since the end of the Second Sino-Japanese War in 1945 the city had seen strikes and civil unrest, compounded by severe inflation that had undermined the legitimacy of their predecessors.
The Chinese Communist Party knew that Shanghai was a symbolic city and that governing it effectively was essential to ensuring the future of the new national government of the People's Republic of China, founded on 1 October 1949. The new state needed, amongst other things, political stability, economic recovery and the creation of a new national narrative of revolutionary success. The elimination of ‘imperialist’ influences and the refashioning of society were crucial to this narrative. This was especially the case in China's most foreign-influenced city, so the Party sought to create a ‘New Shanghai’.Footnote 1 In recent years, the early 1950s have become an exciting area of research as new sources have allowed a greater understanding of complex historical realities. Much remains to be done, however, to understand exactly how the Communists consolidated their power, laid the foundations of their new state and began to shape their new society.Footnote 2 The challenge of reforming Shanghai was not taken lightly. The problem was not necessarily the fact that Shanghai was a large city. Christian Hess has demonstrated that the Communists were quick to promote industrial Dalian in the northeast as the vision for a new Chinese modernity, despite the fact that it had been developed under the Japanese colonial enterprise and had been under Soviet control from 1945 to 1950. The speed at which Dalian's colonial past was forgotten was partly explained by the fact that it had been developed into a ‘city as a production system’ under the Japanese and so it could become ‘socialist’ more easily. Bourgeois Shanghai would require much more thorough reforms since the legacies of ‘semi-colonialism’ and rampant commercialism remained strong there. Thorough reforms would also be needed because the city's distinctive form of ‘Shanghai modernity’ offered a competing vision to ‘socialist modernity’.Footnote 3 This paper examines the ways in which the Chinese Communist Party took over and transformed two British-owned businesses to explore the ground-level processes at work during this transition period.
The best general survey of the foreign withdrawal is Beverley Hooper's China Stands Up; Ending the Western Presence, 1948–1950 (1986). Hooper's work examines the experiences of various foreign groups, including businessmen, missionaries and diplomats. For Hooper, two main goals drove the Chinese Communist Party's policy making: the assertion of Chinese nationalism in the face of imperialism and the recasting of Chinese society along Marxist-Leninist lines. This remodelling would, out of necessity, preclude the survival of Western business interests.Footnote 4 One of the first studies dedicated to exploring the fate of commercial interests was Thomas N. Thompson's occasional paper, China's Nationalization of Foreign Firms: the Politics of Hostage Capitalism, 1949–57 (1979). Thompson coined the term ‘hostage capitalism’ to explain the Party's practice of keeping foreign firms in China whilst squeezing them to gain control of their assets.Footnote 5 Whereas the term ‘hostage capitalism’ provides a useful label, it does not explain how or why the Party did this. Since Thompson's account was published, several other scholars have discussed this topic, largely focusing on diplomatic history and international relations issues from a British perspective.Footnote 6 In China, Britain and Businessmen: Political and Commercial Relations, 1949–57 (1991), Wenguang Shao offers an interpretation of the Party's policies on foreign business that challenges Thompson's hypothesis. Shao argues that the Party did not set out to nationalize or expropriate foreign firms following the founding of the People's Republic of China. Instead, he suggested, the Communists went to great lengths to prevent foreign capital, equipment and personnel from leaving. The Party's first priority was to revitalize the economy; an impossible situation was created for British businesses, however, by the slow rate at which policy concerning them was decided, central government control over trade and foreign exchange, deflation and labour unrest. These factors encouraged foreign firms to leave China and international trade sanctions related to the Korean War sealed the decision. The Party's desire to prevent economic disruption meant that it sought to prolong this process for as long as possible. In short, it was acting in a cautious and pragmatic way, rather than simply pursuing ideological ends.Footnote 7 It could be argued, however, that international relations studies posit an overly narrow definition of Sino-British relations. There were always two spheres of interaction, and whilst one took place at the level of nations, treaties, trade and diplomacy, the other occurred at a physical level within China itself.Footnote 8
A sizeable body of literature exists on the Chinese Communist Party's urban policy in the early years of Communist China (see the exemplary works on the takeover of Tianjin by Lieberthal and Guangdong by Vogel).Footnote 9 It is only relatively recently, however, that Western historians have had access to the kinds of Chinese archival sources that allow for the writing of multi-layered accounts, starting at the factory or street level, and using this as the foundation for building a local, national and international history.Footnote 10 This paper contributes to an on-going re-conceptualization of Chinese Communist Party rule in the early People's Republic of China as being largely defined by the need to balance ideology and pragmatism. The case studies presented here are intended to inform this characterization of Party rule through an exploration of policy formulation and execution. Such an approach allows further insights into the processes of state-building at the local level and into the nature of the Chinese Communist Party's power and rule. It also allows historians to step away slightly from more dramatic and tragic events (such as political campaigns), which have dominated a considerable amount of the literature on the early People's Republic of China.Footnote 11 Sources from the factory floor provide a certain degree of access to explore how the Communist takeover was experienced by ordinary workers. This being said, historians should, of course, be aware that such reports only represent the reality as perceived by cadres as they wished to present it to their superiors. Fragments of workers’ opinions are presented within the context of the message the cadres were trying to convey, and were usually employed as examples to illustrate broader political truths. One must be wary of issues such as the formulaic nature of report-writing, a general proclivity towards presenting allegory as fact, and the selective inclusion of information. Within this context, the Communist habit of self-criticism in report-writing has proven a boon to careful historians.
This paper begins by establishing the context for the takeover of British companies by introducing the challenges the Chinese Communist Party faced when taking over Shanghai. It then moves on to outline the position of British businesses in ‘New Shanghai’ and the Communists’ plans for dealing with them. Two case studies then explore the processes surrounding the takeover of British firms. These are the expropriation of the Shanghai Electric Construction Company (hereafter called by its more commonly used name, the British Tram Company) and the ‘transfer’ (zhuanrang) of the assets of the Orient Paint, Colour and Varnish Company, a factory managed by the large commercial ‘hong’ Butterfield and Swire. This paper asks: how did the Chinese Communist Party prepare to take over British companies? How did they attempt to transform these companies and how did foreign managers and Chinese workers respond? These two case studies have been chosen because they are illustrative of broader trends. They were also both particularly well-documented in a range of sources produced by different historical actors which are preserved in the Shanghai Municipal Archives, the National Archives at Kew and in the case of Orient Paint, in Butterfield and Swire's company archive in London. The Communist cadres’ reports give the most comprehensive view of how events played out in the workplace. The nature of these two enterprises also makes them interesting case studies: both were relatively large and had substantial Chinese workforces, in contrast to financial or commercial enterprises, which tended to have a smaller workforce. These case studies allow a way of accessing the Chinese Communist Party's attempts to win over, or assert control over, Chinese workers within British businesses, rather than simply offering a record of the takeover of the institutional structures. Chinese firms were taken over following broadly similar patterns, but the fact that these two businesses were foreign introduces the complicating factor of anti-imperialism into the revolution/pragmatism balance. Financial institutions (such as HSBC) had acted quickly to minimize their remaining operations and the stories of the protracted negotiations that led to their departure have been largely told elsewhere.Footnote 12
To paraphrase the economist Alexander Eckstein, the Communists attempted to rebuild along ideological lines, but they were constrained by scarcity and by the state of the economy they inherited, which was near the bottom of every measurable scale of development.Footnote 13 In Shanghai during the early years, stability and unity were deemed more important than revolutionary change. We can see in the two case studies that whilst revolutionary and anti-imperialist rhetoric was widely employed to garner support and legitimacy, in practice, pragmatism was prioritized.
Chinese accounts of the fate of foreign businesses are strongly conditioned by the time period in which they were produced. Today's Chinese Communist Party is keen to draw legitimacy in support of its current policy of encouraging capitalist development from the co-existence of capitalism and communism during the ‘New Democratic’ period (1949 to 1954) (with the argument being that New Democracy was ended too soon). In the Cultural Revolution, however, the takeovers of foreign companies were portrayed very differently.Footnote 14 The language used in one 1966 report on the history of the Orient Paint, Colour and Varnish Company, one of the two case studies examined below, is telling: the British managers, it said, had ‘cruelly oppressed the Chinese’ (Yingguoren canku de boxue Zhongguoren). The report paints a colourful picture of the hardships the workers had faced at the hands of the imperialists. It says, for example, that the workers were demeaned by being forced to walk through the smaller of two doors into the factory, where they were then frisked and bullied by notoriously violent Sikh guards. Furthermore, the report said, the workers had been deprived of their freedom. By this the writers meant two things: firstly, that the workers were denied personal freedoms in the workplace, such as being allowed to talk or smoke whilst working (the ban on smoking was perhaps understandable in a factory that used flammable chemicals); and secondly, that the workers had been oppressed in a more abstract sense as their labour was being exploited by capitalist imperialists. They worked, the report states, without a guaranteed livelihood, for unequal pay and for long hours whilst the British and their Chinese ‘running dogs’ made sure they remained ignorant by communicating in English when it came to technical matters. The report then goes on to describe the elation with which the company's proud, militant workers welcomed their true ‘liberation’ when the factory was taken into Chinese hands in 1953. ‘On that day’ the report said:
. . . all the factory workers warmly welcomed the takeover representatives, full of joy, happy and excited, with a great clamour of drums and firecrackers, and celebrated becoming the true owners of the factory.Footnote 15
The report served the needs of the Cultural Revolution, providing the factory with its own story of ‘liberation’ from the oppressive forces of British imperialism. As was the case with most good propaganda, the great struggle on the world stage was projected onto daily life and factory affairs. Small issues, such as the smoking ban in the factory, were linked to the wider conflict between the forces of socialist good and imperialist evil.Footnote 16 As we shall see, however, contemporary sources from 1953 and 1954 suggest a more nuanced and less ideologically-satisfying reality in which the workers, in the Orient Paint, Colour and Varnish Company and elsewhere, were apathetic, disorganized and distrustful. The workers cared far more about the material rather than the political consequences of the takeover. Rather than emphasizing anti-imperialist themes, cadres were careful to prevent discord and instability, with one eye on the wider economic situation and the other on the workers’ ambivalent attitudes. They emphasized the need for unity and stability, saying that the most important priority was to secure production. Cadres struggled to achieve transformative goals because they lacked knowledge, manpower, resources and skills. At a wider level, the Chinese Communist Party's desire to make Shanghai anew was constrained by the necessity of dealing with the material, human and psychological legacies of the past. The wider historical context must first be explored before moving on to discuss the takeovers in more detail.
Britain in Shanghai on the eve of the Communist takeover
The Communist takeover was preceded by over a century of war and instability.Footnote 17 After opening as a treaty port in 1843, Shanghai had grown to become the largest city in Asia. Known as the ‘Paris of the East’, it was the locus of British endeavour on the Chinese coast, closely linked to global networks of economics, population movement and culture.Footnote 18 It was never a part of the British Empire, but its International Settlement (which formed part of a triumvirate, along with the French Concession and the ‘Chinese city’) was administered by the British-dominated Shanghai Municipal Council.Footnote 19 Its tall buildings became the most visible mark of foreign imperialism in China and it was widely recognized as the birthplace of a particular kind of Chinese ‘modernity’.Footnote 20 Depending on the observer's ideological standpoint, Shanghai's modernity and commercialism were either signs of enlightened progress or sinister imperialism. One Shanghai Foreign Affairs Department cadre summed up the Communists’ prevailing attitude to Shanghai succinctly in 1950, saying that this was the ‘largest of all the cities founded and developed according to the will of the imperialists using the blood and sweat of the Chinese people’.Footnote 21
In the decades leading up to 1949, British hegemony in Shanghai had come under attack from Chinese nationalism, Japanese imperialism and American competition.Footnote 22 The International Settlement was returned to Chinese rule in 1943.Footnote 23 After 1945, British firms remained dominant in certain sectors of the city's economy, but occupied a much weaker position than the one previously held. At that time, it had appeared to all concerned as if the Guomindang government would re-establish itself, defeat the Communists and lead China into a new post-war period of prosperity, but this promised stability never came.Footnote 24 By mid-1948, the Guomindang were in a state of collapse as the corruption, inefficiency and factionalism that had always been present in the movement finally spun out of control. Shanghai was the centre of the storm: inflationary spirals with their roots in the Pacific War triggered hunger, mass protests and growing disillusionment.Footnote 25 As the situation worsened, the Guomindang increasingly came to resemble the corrupt, inefficient and repressive reactionaries they had long been portrayed as in Communist propaganda. Inflation, and their inability to control it, cost the Guomindang first their legitimacy and later the war.Footnote 26 In early 1949, the Guomindang's best units were destroyed and defeat was now almost certain. Communist armies swept south and in May 1949 they occupied Shanghai.Footnote 27
To the Communists, Shanghai was ‘a model consumerist city that serve[d] the bureaucrat, comprador, landlord and imperialist’.Footnote 28 Making Shanghai's status as an independent Chinese city clear to all was now imperative. In line with Marxist orthodoxy, the Communists believed that China's political and cultural superstructure were defined by the economic relations that underpinned them. The economy, therefore, needed fundamental reform to secure political independence.Footnote 29 The Party's overriding emphasis was on stability because it feared the continuation of the economic crises that had brought down the Guomindang. They were acutely conscious that the most prominent Chinese capitalists had fled to the safe havens of Taiwan and Hong Kong and that those who remained were reluctant to risk making long-term plans.Footnote 30 In March 1949, Mao announced that the focus of the Party's work would shift into the cities and that a pragmatic, urban policy of moderation would be adopted. In April, Mao's deputy, Liu Shaoqi, travelled to Tianjin to make a series of now-famous speeches on labour-capital cooperation and avoiding the problems of leftism.Footnote 31 The Communists’ new state would be a ‘New Democracy’ in which a more moderate policy would unite the populace behind a broad set of state-building goals.Footnote 32
New Democracy was not just a political vision, it was a practical necessity. The Chinese Communist Party's rapid successes left it with a real shortage of trained cadres and resources.Footnote 33 The Party was faced with the challenge of administering enormous new territories. There were administrative organs to establish, supplies to find, and ‘counter-revolutionaries’ to eliminate. The sheer scale of this task was enormous. In December 1948, Shanghai had a population of 5,440,000 people. Its 12,500 factories (including 45 per cent of the nation's textile companies) employed about 420,000 industrial workers. In 1946, 85 per cent of China's total imports and 62 per cent of its exports moved through Shanghai.Footnote 34
The city was home to about 32,000 foreigners in June 1949 and nearly 12,000 of these remained in December 1950.Footnote 35 British nationals made up a substantial number of the remaining population (3,228 of 28,683 in November 1949). There were also significant numbers of American, French and Russian (both Soviet and ‘White’) nationals, and stateless refugees.Footnote 36 The majority were there for commercial reasons as there were 1,104 foreign enterprises across China.Footnote 37 Shanghai was the focus of foreign investment and foreign firms dominated important sectors of the city's economy, including shipping, banking, insurance, wharves and warehouses, real estate and public utilities.Footnote 38 In June 1950, 685 foreign businesses remained in Shanghai, belonging to proprietors of 34 different nationalities. Of these, 185 (27 per cent) were British. These British firms were closely tied into the Chinese economy, not least because they employed almost 30,000 Chinese workers.Footnote 39
Foreign firms were well integrated with the Chinese economy and the products they sold had become commonplace in the daily lives of millions of Chinese people. Shanghai consumers travelled in British trams, gambled at the French-owned canidrome and used American electricity. In 1949 the American-owned (formerly British) Shanghai Power Company produced 89 per cent of the city's electricity.Footnote 40 Foreign companies also supplied 83 per cent of Shanghai's gas supply and 71 per cent of its water. The city's public transportation system was dominated by the two large tram companies (one British and one French), and the telephone network was almost completely managed by the American-owned Shanghai Telephone Company. In light manufacturing, companies such as British American Tobacco had created extensive networks of raw material sourcing, industrial processing and distribution, and their easily recognizable ‘Pirate’ and ‘Ruby Queen’ cigarettes were known as far away as Tibet and Xinjiang.Footnote 41
British business in Communist Shanghai
The Chinese Communist Party was keen to demonstrate that Shanghai had changed as swiftly as possible, but whilst it moved quickly to eradicate the foreign cultural presence, a number of factors led it to take a more long-term approach towards businesses.Footnote 42 The civil war was yet to be won and the economy was still in chaos. Party priorities in Shanghai were to rein in inflation, to prevent further unemployment, and to establish control over the city and its population.Footnote 43 Under the New Democratic economy, the government's policy was to cooperate with both Chinese and foreign capitalists as long as they acted in accordance with the ‘interests of the people’.Footnote 44
An unusual situation developed, therefore, in which foreign enterprises from capitalist countries were allowed and even encouraged to remain in ‘New China’. They were guaranteed protection and profits in exchange for resuming production.Footnote 45 Their continued existence was vital to the Chinese economy, at least for the time being. This encouraged optimism amongst some British businessmen who believed, as did Shanghai Consul General Robert Urquhart, that if the Communists kicked them out:
We will suffer, certainly; but China will suffer more. If any damage ensues to the industries of Shanghai, we will suffer, yes! But our loss will be a fraction of the loss to China—to the great area which these industries serve. These things are so fundamental—so grounded in reason and common sense that their logic must surely prevail.Footnote 46
Others took a more pessimistic view: the Communists may have been making encouraging noises, but their actions had so far been contradictory at best, sometimes supporting businesses with contracts and loans and at other times enacting punitive and seemingly discriminatory policy. Whilst the Party centre may have intended moderation, local leaders found that labour had to be appeased and taxes had to be extracted.Footnote 47 Aside from these pragmatic concerns, the centre also struggled to control the behaviour of local cadres across China who tended towards radical leftism.Footnote 48
Britain's policy from 1949 to 1952 had been to keep ‘a foot in the door’, to wait out the revolutionary storm and to try to establish a working relationship with the Communists.Footnote 49 At first, Britain sought to improve relations with China out of concern for the security of Hong Kong and in order to preserve assets in Shanghai. Eventually, this policy was compromised because Britain's alliance with America was the key to its post-war foreign policy, overriding regional concerns.Footnote 50 In 1950, America withdrew its civilians and diplomats. In December of that year, all Chinese assets in America were frozen. As Sino-American relations worsened and were then severed, Britain's ‘foot in the door’ (its assets in Shanghai) became trapped. Britain continued to talk about improving relations, but also joined the American-led United Nations forces in fighting the Korean War and participated in a strategic embargo against China. The Chinese, for their part, were unimpressed by Britain's ‘unfriendly attitude’.Footnote 51 The animosity between Britain and China never quite came to a head, however, as both sought to avoid conflict beyond the Korean sphere. The Chinese also sought to ‘attack America and draw in Britain’ (da Mei la Ying) in order to play on their conflicting interests.Footnote 52
Between 1949 and 1952 the Chinese Communist Party did not have a definite policy for nationalizing or closing foreign businesses. Foreign businesses were, in principle, to be treated the same as their Chinese counterparts.Footnote 53 The difficulties faced by most foreign companies in the early years largely resulted not from deliberate plans to close them down, but rather from the wider economic crisis. The outbreak of the Korean War meant that the Party had to expedite the changes and take more definite steps. The war did not cause a major change in policy towards foreign businesses, however it did hasten their demise.Footnote 54
Reflecting in 1955 on the experience of their company since 1949, Butterfield and Swire identified three distinct periods in the life of British businesses in Communist Shanghai that illustrate the experience of the majority. The first of these, from May 1949 to the end of 1952, was termed ‘the period of consolidation’.Footnote 55 In this period, the biggest problem facing the British business community, aside from the blockade that the deafeated Guomindang imposed on Shanghai, was that Shanghai's labouring class had been ‘given its head and encouraged, in recompense for its support of the People's Government to extract all it could from capitalist employers by making as much of a nuisance of itself as it could’.Footnote 56
The end of 1952 to the autumn of 1953 saw what Butterfield and Swire termed the ‘period of control’ as the Communists were then firmly established in Shanghai ‘and thereafter labour ceased to be king’. Labour discipline, even in foreign firms, was much improved. In these months, the biggest problem for foreign businesses was the ‘squeeze’ put on them by the government. Butterfield and Swire termed the third and final period ‘the period of impatience’ and it lasted from the government's announcement of its plan for the economic ‘transition to socialism’ in autumn 1953, to the surrender of Swire's assets at the end of 1954. By this time the Chinese Communist Party had consolidated its control and ‘could hardly wait to acquire’ foreign businesses.Footnote 57
The ‘policy of squeeze’ (ji de fangzhen) referred to above was developed by the Party in 1950. Economic means were used to apply pressure, extracting capital and assets whilst increasing the liabilities of foreign businesses and forcing them to transfer funds from abroad to cover their losses. It was estimated that by October 1952 British firms had remitted a total of over £6 million just to be able to continue in the short term.Footnote 58 These firms had increasingly begun to despair of their prospects and the majority were considering withdrawal, but they were not allowed to close or retrench until they were given permission to do so by the government. That permission was not forthcoming until the Communists believed the timing to be advantageous to them. Managers were held personally responsible, and refusing to pay wages or closing pre-emptively could have resulted in heavy fines or even imprisonment. Exit visas were withheld from managers until their firms were formally closed, which prevented them from simply abandoning assets.Footnote 59 At a meeting of Party leaders in Beijing in May 1952, Guan Datong, head of the Central Government's Foreign Capital Enterprises Supervisory Bureau, explained that the policy had, so far, been to prevent foreign businesses closing so that their capital and assets remained within China. Some would now be allowed to leave; others would be detained according to the government's needs. For Guan, policy regarding foreign businesses came second to addressing wider issues, such as preventing unemployment, avoiding economic instability and extracting tax revenue.Footnote 60
By 1952, the majority of British businesses remaining in Shanghai were keen to cut their losses. Pressure was also building from the Chinese side, with the central government keen to see the Shanghai authorities speed up the processes of elimination.Footnote 61 In the first half of 1953, Zhou Enlai established a new taskforce at the Ministry of Foreign Affairs. This task force was charged with completing the elimination of foreign economic interests. Two documents were drawn up to be discussed at a conference in June 1953: the Plan for furthering the fundamental purging of the economic privileges of imperialism from China in 1953 to 1954 and the Outline of dealing with the property of imperialism in China over the last three years.Footnote 62 These documents stated that, because the Party were about to embark on the ‘transition to socialism’, they needed to remove remaining imperialist economic influences. This had to be done, it was stressed, in a stable and managed way and on a case-by-case basis. The preferred method would be through the transfer of assets for liabilities, in which companies were ‘squeezed’ until they had no choice but to transfer their assets to the Chinese. In this way, the Communists were steadily able to take over valuable assets at little cost. Manufacturing concerns were the prime targets for early elimination, whilst trading organizations which provided a vital conduit for imports such as Jardine Matheson, Butterfield and Swire and Imperial Chemical Industries (China), would be encouraged to do limited business.Footnote 63 The ‘policy of squeeze’ evolved into an effective means of pressuring foreign businesses into closing down and surrendering their assets ‘voluntarily’. George Ecklund defined this process as ‘protracted expropriation’. The Communists took their time to take over foreign enterprises, playing on their particular weaknesses and seizing them only when the time was right.Footnote 64
At the end of 1949, there were 376 British firms in Shanghai and their numbers reduced drastically over the following five years. The most significant declines came in the early period of the Communist takeover (1949–1951), when many smaller concerns closed, and in 1952, when many of the larger firms finally gave up hope. By the end of 1952, a total of 236 British businesses had closed or had their assets transferred.Footnote 65 By this time, the Chinese had taken control of what they saw as the most strategically important and previously most foreign-dominated sectors of the economy, encompassing mining, oil, public utilities and ‘monopolistic’ light industries.Footnote 66 Amongst those firms that remained were the major players, including Butterfield and Swire, Jardine, Matheson and Co. and HSBC. Most of these large firms had their assets transferred in 1954–1955, some leaving small offices behind to help establish a new pattern of trade with China via Hong Kong.Footnote 67 By August 1956, only 66 foreign companies remained in China, 16 of which were located in Shanghai. The last British firm to close was Patons and Baldwins in 1959.Footnote 68
Takeover: the British Tram Company
As already described, the majority of British businesses were not expropriated, instead they were either closed or their assets were transferred. There were a few exceptions, however, and the British Tram Company was one. In the second half of 1952, the Privy Council of the British Government controversially settled a long-running dispute over the ownership of 71 commercial aeroplanes in Hong Kong. The British awarded the aeroplanes to an American claimant, despite there being strong grounds for awarding them to China. This was a wholly political move as the American Government had threatened to withdraw Marshall Aid from Britain if the desired result was not forthcoming.Footnote 69 The aeroplanes were dealt with in two separate cases, settled in July and October, with roughly half being dealt with on each occasion. Retaliating against the July decision, the Chinese requisitioned two British dockyards.Footnote 70 On 20 November 1952, in response to the October decision, the Chinese expropriated three large British-owned public utility companies. These were the Shanghai Waterworks Company, the Shanghai Gas Company and the British Tram Company.Footnote 71 Mackenzie and Company, a company specializing in managing warehouses and press-packing, was also expropriated.Footnote 72
The Communist leadership considered it crucial to secure control of the city's six foreign-owned public utility companies (three of which were British, two were American and one was French). As one British Foreign Office official noted: ‘Foreign public utility companies are not popular anywhere, and no doubt they are particularly unpopular in Communist countries’.Footnote 73 The smooth running of these companies, which had been established under the city's foreign municipal administrations, was essential to the city's economy. The British Tram Company, for example, carried 40 per cent of Shanghai's total passengers and employed 3,500 Chinese workers. The Gas Company was Shanghai's largest gas provider, with over 17,000 customers, and the 3,213 workers of the Shanghai Waterworks provided more than half the city's water supply.Footnote 74
Before exploring the takeover of the British Tram Company, it is worth examining the company's situation before November 1952. When the Communists seized Shanghai in May 1949, they immediately placed both foreign and Chinese public utility companies under close supervision.Footnote 75 This was a top-down seizure: the old systems, ownership and personnel were retained. The foreign-owned public utility companies were promised protection as long as they followed government instructions. Military liaison officers were sent to each company to ‘assist’ and supervise their management. Military representatives like these were deployed across the country to oversee strategic enterprises and institutions.Footnote 76 In Shanghai's public utilities, liaison officers were tasked with ‘educating and uniting with the workers and winning over the engineers’ (jiaoyu he tuanjie zhigong, zhengqu gongcheng shi).Footnote 77 Communist Party and Youth League organizations were strengthened in each enterprise and unions were brought firmly under control.Footnote 78 Foreign public utility companies were provided with loans and other arrangements to keep them running. The price was increased ‘supervision’.Footnote 79 For the British Tram Company, these loans were a mixed blessing. Although they enabled the company to continue in the short term, as inflation was brought under control and the currency depreciated, the loans were not simultaneously written down. This meant that they became long-term burdens.Footnote 80
As part of the Chinese response to the freezing of assets by the American Government in December 1950, the two American public utility companies in Shanghai, the Shanghai Power Company and Shanghai Telephone Company, were placed under the control of the authorities. The American and British staff soon departed and the Chinese successors they had appointed were quickly undermined.Footnote 81 The three Chinese managers left in charge of the Power Company were investigated on espionage charges because of their links to imperialists and the Guomindang.Footnote 82 Both companies operated effectively as state-run enterprises under military control, before being officially nationalized in 1954.Footnote 83
Having witnessed the fate of the Americans, the three British-owned companies still in Shanghai prepared to be in the best possible negotiating position when the takeover came. They adopted an attitude of cooperation mixed with passivity, which involved avoiding taking on any new burdens whilst also not giving the Chinese an excuse to take the companies over without some form of compensation. All were reliant on remittances from abroad for survival. The status quo suited the Chinese, who faced a plethora of other, more pressing, issues. Contrary to expectations, the Communists' attitude towards foreign staff was not necessarily hostile. For example, on hearing that G. Pollock, traffic manager of the British Tram Company, was planning to return home in 1950, cadres from the Shanghai Foreign Affairs Department approached him four times to persuade him to stay on.Footnote 84 The Party sought to benefit from the technical expertise of the companies’ foreign staff by asking them to train their eventual successors. The managers accepted that providing such training would accelerate the takeover, but a quick settlement of the situation was welcome.Footnote 85 At the national level, China's urgent need for technical and administrative knowledge was partly ameliorated by the arrival in Shanghai of large numbers of Soviet experts. Their arrival was anxiously observed by foreign intelligence agencies.Footnote 86 Whilst they clearly had an important role to play in China's new government ministries, national defence (especially implementing anti-aircraft measures during the Korean War) and the development of heavy industry, no evidence so far suggests that Soviet advisors were directly involved with the elimination of foreign businesses.Footnote 87
On the morning of 20 November 1952, the military representatives charged with taking over the three utility companies met at the Shanghai Foreign Affairs Department where the expropriations were announced.Footnote 88 The British Tram Company's workers were informed of the news through the union's loudspeakers. According to the Chinese Communist Party's English-language newspaper, The Shanghai News, younger workers then requested music be played so that they might dance in celebration.Footnote 89 Extensive preparations had been made: it was crucial to ensure a stable takeover because the mismanagement of public utilities could affect the whole city and damage Party prestige.Footnote 90
The plan for the week following the takeover was to capitalize on this moment of transition by politically mobilizing the British Tram Company's workers. On the morning of the takeover, a union meeting to explain the government's policies was called. That evening, another meeting was held for all the workers to welcome Gu Kaiji, the military representative.Footnote 91 Gu was an experienced underground activist who had worked in Shanghai's public utility companies throughout the Sino-Japanese War.Footnote 92 After ‘liberation’ he had established the Party cell in the British Tram Company. The company was, he proclaimed at the meeting, a physical manifestation of imperialist aggression. In ‘New China’, he continued:
. . . we cannot allow this transportation enterprise which is so important to the national livelihood to continue as a monopoly, we have to expropriate it, take it over, so that it can be managed by the Chinese people themselves.Footnote 93
As he continued with his speech, Gu began to project the global struggle against imperialism into the British Tram Company's internal affairs. Since 1949 the workers had been the masters of the nation, he argued, but they had only now become the masters of their own company. They should feel a ‘sense of ownership’ (zhurenweng sixiang) he said:
This so-called ‘takeover’ is in fact a seizure by force of the British capitalists’ right to manage and lead, taking it for us all to manage, it is not that I will take over and everyone else will be taken over, in one phrase, this is in reality a workers’ takeover.Footnote 94
Gu was keen to stress that the change in the company's ownership must not affect production as unity amongst the staff was crucial.Footnote 95 In the first week, the new owners moved quickly to consolidate their positions and to better understand the internal workings of the company. At the end of the week, the cadres told the workers that ‘the British boss is gone and will never return’ (Yingguo laoban shi yiqu bu fufan le).Footnote 96 The company's foreign employees were dealt with in the second week. The majority of foreign managers and those employed on ‘home’ contracts (who had been engaged in Britain or elsewhere on relatively high wages) had already signalled their desire to leave China. They were dismissed on 12 December and told to leave Shanghai as soon as possible. The manager, Pollock, was amongst them. On being interviewed by British intelligence agents in Hong Kong, Pollock reported that he had been made to dismiss half the company's conductors before the takeover so that the Chinese could avoid the ‘odium’ of sacking them.Footnote 97 Locally-recruited foreign staff (mostly White Russians, Eurasians and working class Britons) would be permitted to stay on at the company only if they were willing to work for the same, significantly lower, wages as their Chinese counterparts. If not, they would be given travel money to go to Hong Kong, where they could be pensioned off using the company's overseas reserves.Footnote 98
Early reports suggest that the takeover caught many of the Chinese workers by surprise. Pollock told British intelligence that the staff had not welcomed the new owners because the British had always paid ‘rather high wages’.Footnote 99 The incoming cadres also found the workers ambivalent. Many workers, it was reported, had a longstanding dislike of imperialism, but they also feared change. One was quoted as saying, ‘in my heart I am happy, but in my mind I still have worries’ (xinli shi kaixin, naozi haiyou yixie guji). In particular, becoming the ‘owners’ of the company had them concerned, it was noted, because previously when the company had struggled, the foreign capitalists had borne responsibility. Now the workers were responsible.Footnote 100 In similar companies, Party cadres reported that the workers had a long list of worries about the changes in their working situation that being state-owned might cause, including wage reductions, unemployment, being arbitrarily reallocated to other workplaces, stronger labour discipline and mandatory propaganda study. Aware of these fears, the Party cadres adopted a conciliatory attitude at first. Customary annual bonuses were, for example, paid as usual when companies were first taken over, but were later cancelled.Footnote 101
As well as these more general concerns, some employees of the British Tram Company worried about their own personal livelihoods and career prospects. Cadres reported that higher-level administrators feared a reduction in their wages and had the feeling that ‘office workers who were disliked should scram’ (kan bu guan de zhiyuan yinggai gundan) before becoming targets of ‘struggle’.Footnote 102 Younger workers across Shanghai, it seems, were generally more enthusiastic about takeovers. Older workers in the British Tram Company worried about their bonuses and whether their warm woollen coats would be replaced with the thin cotton coats worn by the workers of state-run public transport companies. These sorts of concerns were addressed through small group meetings called zuotanhui (‘sitting and talking meetings’).Footnote 103 The Chinese Communist Party used study groups to change individuals’ thoughts and behaviour through social pressure.Footnote 104 Interminable meetings were a distinctive feature of Party rule, their aim being to bring politics into daily life and to shape people into political beings through participation and discussion. William Hinton recorded a popular rhyming joke that had circulated in north China a few years before: ‘Guomindang shui duo, Gongchandang hui duo’ (‘Under the Guomindang too many taxes, under the Chinese Communist Party too many meetings’).Footnote 105 Each individual was encouraged to discuss their current thinking and past actions. ‘Backwards’ individuals were isolated and criticized.Footnote 106 Workers also signed ‘patriotic compacts’, encouraging them to feel personal responsibility for production, promising do their part towards building the new society and supporting the war in Korea.Footnote 107
The final stages of the takeover were to change the external appearance of the British Tram Company, including the signs, uniforms and so on, and to further strengthen the cadres’ control.Footnote 108 As the company was of the highest strategic importance and because it had already effectively been under Chinese Communist Party control since May 1949, less consolidation was needed compared with smaller private enterprises where the Party had not yet established a presence (such as in the Orient Paint, Colour and Varnish Company, discussed below).Footnote 109 Various types of propaganda were employed to repeatedly convey the all-important messages of ‘ownership’, stability and unity. These media included ‘blackboard newspapers’, pamphlets, and radio broadcasts.Footnote 110 The cadres began their propaganda offensive by emphasizing the gains their activists had already made since 1949, such as the introduction of a welfare system, a canteen and an after-hours school.Footnote 111 The British Tram Company was already considered to be a ‘progressive’ workplace: the majority of nation and city-wide political campaigns had already been carried out there, just as they had in the state-run enterprises, and the workers had been educated in what it meant to be citizens of ‘New China’.Footnote 112 The Communist cadres, therefore, felt confident enough to discuss the Communist future, a theme that was avoided at first in enterprises where the Party had weaker representation (like the Orient Paint, Colour and Varnish Company). The utopian vision put forward was grounded in the promise of material improvements: for example, cadres told the workers that their counterparts in the Soviet Union had sofas in their homes and ate meat every day. This kind of life was out of reach for the time being, the cadres cautioned, especially as the British had left behind an old and decrepit company. The nation's Communist future, the future of the company and the workers’ own roles in building a ‘New Shanghai’ were all explicitly linked in propaganda, with the workers being told: ‘we want to establish a city on top of this heap of ruins’ (women jiu yao zai zheyang yi dui feixu shang jianli ge chengshi qilai).Footnote 113
Despite the relatively smooth transfer of authority into Chinese hands, the cadres faced numerous problems. The issues faced were symptomatic of wider challenges encountered across Shanghai, as was the approach of the cadres to solving them. They approached problems pragmatically, not pushing for immediate change but biding their time and doing their utmost to ensure a smooth transition. In January 1953, a year after the takeover of the three British public utility companies, the Party Committee at the Public Utility Bureau reported successes in three key areas: the politicization of production (or ‘reforming work on political lines’); the enlargement, strengthening and ideological rectification of the Party's apparatus in each of the companies; and improving production. With these successes came the admission of certain limitations and failures: changes in production and management were not as thoroughgoing as the Committee would have liked; the workers were apathetic towards politics; the poorly-trained cadres had not carried out political campaigns effectively; and there were continuing problems with production.Footnote 114 Whilst it seems that many workers were indeed happy to see the back of the British, their embrace of the new authorities was not unconditional, their chief concern being the material consequences of the takeover. Many measures, such as the cancellation of the workers’ annual bonuses and pension schemes in favour of a comprehensive labour insurance-based welfare scheme, were not well received.Footnote 115
Takeover: the Orient Paint, Colour and Varnish Company
Having examined the Chinese Communist Party's takeover of the British Tram Company, a large, strategically important business which had been infiltrated before 1949 and which the Party had made extensive plans for taking over, it is perhaps wise then to also examine the takeover of a less strategically important enterprise. In spring 1953, Butterfield and Swire's Shanghai office reported that there had been ‘an unusual amount of interest in the Orient Paint, Colour and Varnish Company factory, and a more than normal indoctrination of staff’. Appeals made over the last two years to sell, lease or close the factory (which they managed as agents) had not been answered.Footnote 116 Over 600,000 Hong Kong Dollars had been remitted into Shanghai to allow the company to meet its ever-growing tax and labour liabilities. The last foreign staff member had departed in 1951, leaving the factory to be run by a Chinese manager ‘under the eye’ of Butterfield and Swire.Footnote 117 Built in 1934, the factory was modern and in good condition. It employed 21 office workers and 59 manual workers.Footnote 118 In March 1953, the Chinese authorities felt that the company had been sufficiently ‘squeezed’ and they made clear their intent to take it over by presenting a £6,000 bill for additional income tax. At the same time, the factory's largest customers cancelled their standing monthly orders en masse. As the factory was not permitted to sell stocks of raw materials or raise loans to meet these demands, Butterfield and Swire had little option but to offer the factory's assets to the government ‘voluntarily’ in exchange for its liabilities on the familiar pattern.Footnote 119
Butterfield and Swire met with the Chinese negotiator on 4 June 1953, who was introduced as the head of a private organization, but this camouflage soon broke down.Footnote 120 The cadre, who purported to represent the Yimin Industrial Company (Yimin Gongye Gongsi), was in fact an employee of the Shanghai Industrial Bureau (Shanghai Gongye Ju).Footnote 121 From the very start, Butterfield and Swire were aware that they was entering into a one-sided negotiation: they needed to shed their assets quickly, whilst the Chinese could afford to make them wait. The negotiations followed a pattern that was common to most companies, in an atmosphere of barely concealed hostility and with the Chinese refusing to accept any liabilities they might otherwise avoid. Negotiations stalled over which party should be liable for a debt owed by the Orient Paint, Colour and Varnish Company to Butterfield and Swire. Eventually, Butterfield and Swire's hand was forced as the union stirred up trouble and state enterprises refused to buy paint. Finally, the paint company's own salesmen were sent around Shanghai instructing customers not to buy anything, nor to pay for what they had already bought. ‘As you know’, wrote one Butterfield and Swire employee, ‘we have right from the beginning been aware that negotiations might not be conducted fairly, but we never really anticipated anything quite so dirty’.Footnote 122 The factory was transferred on 29 July with the Chinese taking over £200,000 of assets in exchange for £23,000 of liabilities.Footnote 123 A Butterfield and Swire employee later described this ‘transfer’ as ‘little more than forcible confiscation’.Footnote 124
The factory's physical assets were now in Communists hands, but the most difficult task still awaited them: managing the company's workforce. How would the cadres be received by the workers? The instructions given to the takeover team, which were typical of instructions given to cadres taking over all private firms at that time, were to ‘mobilise the masses, educate the masses, raise their political consciousness, rely on the masses, [and] take over smoothly’ (fadong qunzhong, jiaoyu qunzhong, tigao qi zhengzhi shuiping, yikao qunzhong, shunli de jieguan xia lai). On the day before the takeover, the takeover team reported on the state of ‘mass work’ to date in the factory. The workers, they reported, had ‘undergone relatively deep suffering’ (qunzhong shou de tongku bijiao shen) under the ‘oppression’ of the imperialists. As such, they already ‘possessed a degree of class consciousness’ (you yiding de jieji juewu).Footnote 125 Nevertheless, this remained ‘imperialism's factory’ (diguozhuyi de chang) and unlike the British Tram Company, nationwide and city-wide political campaigns had ‘been restricted or blocked’ here (shoudao xie xianzhi he zu'ai). The workers and management were, therefore, considered to be ‘relatively conservative’. After a few months it was reported that they had ‘not taken well to the new order of things’ (jieshou xin shiwu bijiao cha).Footnote 126 One reason for political education there lagging behind, cadres noted, was the fact that the higher-level unions had not exercised effective control over the paint company's union.Footnote 127 In fact, the factory's union had only been formed in March 1949 and its members were thought by the cadres to be ‘quite weak’.Footnote 128 Another reason for this political backwardness was that even four years after ‘liberation’ there was still no Party or Youth League organization in the paint company's factory.Footnote 129
Cadres entered the factory on the day that the contract was signed.Footnote 130 The takeover team consisted of six cadres and was led by Li Hongzhi, the head of the state-run Kailin paint factory. The other cadres all had experience of either industrial or political work.Footnote 131 That afternoon, a meeting was called for the union committee, to which two or three ‘old workers’ and the manager, Yao Jialang, were invited.Footnote 132 Yao's specialized knowledge and his cooperation were seen as crucial to the continued operation of the factory.Footnote 133 The point of this meeting was to bring the senior workers and management onside. Again, the cadres aimed to instil a new sense of collective ownership and responsibility, by telling the workers that ‘the factory is now already ours’ (xianzai yi chengwei women ziji de chang le).Footnote 134
The next day, the whole workforce was asked to attend a welcome meeting to listen to speeches that emphasized the familiar slogans on coming together, maintaining production and preventing the wrecking of machinery. Over the next week, these themes were repeated in small group meetings lasting for an hour after work every day. The workers were also encouraged to talk about their ‘past sufferings’ with the aim of getting the workers talking and thinking, to help them to ‘begin to draw the lines of class division’ (chubu huaqing jieji jiexian) and to make them realize that this was ‘finally true liberation’ (cai suan chedi jiefang).Footnote 135
Production meetings were held to address specific issues. At these meetings, the workers were also expected to answer both practical and political questions, such as ‘how can we finally carry out our own production well?’ (zenme cai neng gaohao ziji de shengchan?) and ‘which problems has imperialism left for us?’ (diguozhuyi gei women liuxia shenme kunnan?). Workers were encouraged to relate personal accounts of ‘oppression by the foreign devils’ (yangguizi de boxue) and to emulate model colleagues.Footnote 136
The takeover group identified its three main tasks for the next few weeks as ‘calming the mood’ of the masses, maintaining production and ensuring a smooth and stable takeover.Footnote 137 The cadres stressed the importance of ‘uniting with and educating’ all the workers, especially the ‘backwards [workers] and the most important members of the [native place] factions’ (luohou ji ge bangpai de shouyao fenzi).Footnote 138 Unlike in the British Tram Company, very little was mentioned of the long-term changes to come under communism.Footnote 139 Cadres were warned that, in the short term, even anti-British slogans were largely to be avoided.Footnote 140
The takeover of Jardine Matheson's EWO Brewery Ltd followed a remarkably similar process. Reportedly, the most difficult thing about this takeover was ensuring that the cadres understood the technical processes of brewing to avoid disrupting production. High-level Chinese staff were encouraged to stay on to ensure stability. As in the case of the Orient Paint, Colour and Varnish Company, a series of large meetings were held after the takeover, followed by daily informal meetings in small groups (pengtou hui, ‘bump-head meetings’ and zuotanhui). The Brewery was a larger and more politically significant enterprise than the paint company and it had been thoroughly infiltrated before May 1949. By the time of the takeover in 1953, a member of the underground Chinese Communist Party had already become head of the company's very militant union. Despite strong rhetoric that included descriptions of the takeover as a ‘real and concrete struggle against the imperialists, and class struggle’ (shi shiji de juti de fan di douzheng he jieji douzheng), the takeover team's emphasis here was again on stability, instilling a sense of collective responsibility and the need to maintain production.Footnote 141 Three months after the takeover, wages at the brewery were cut and working hours lengthened.Footnote 142
On 18 June 1952, a transfer of assets was completed from the Lever Brothers subsidiary, the China Soap Company, to the Shanghai Yimin Industrial Company.Footnote 143 China Soap had been in severe financial difficulties, and was one of the first firms to hand over its assets.Footnote 144 After they took over the company, one way in which the Communists tried to instil feelings of ‘ownership’ amongst the workers was through a campaign for safety and hygiene awareness. Cadres said that the imperialists had placed machines over men and production over human life. The workers were then responsible for both safety and production, and they were encouraged to take responsibility for solving health and safety problems themselves. This was achieved through both ‘top-down’ and ‘bottom-up’ means, with Party members first holding meetings to ensure unity of thought and purpose before presenting the campaign at a mass meeting. In small groups the workers would then discuss the ‘pain suffered during the imperialist era’ (gongren pubian sushuo le guoqu zai diguozhuyi shidai suo chi de tongku) and the ‘differences since liberation’. Following this, representatives were selected from each small group to address another mass meeting. They told of the horrorific deaths and injuries of the past and of the indifference of the imperialists and the Guomindang authorities towards them, to give the workers a ‘profound class-education’.Footnote 145
Some workers in the Orient Paint, Colour and Varnish Company had welcomed the takeover, it was reported, especially as many feared that, otherwise, the factory might have had to close. State ownership seemed to guarantee job security. A good portion, the cadres noted, were indifferent to the takeover, as long as they were paid. The remainder were said to fear the consequences of the takeover and were ‘afraid to talk about political questions’ (tamen pa tan zhengzhi wenti).Footnote 146
As well as the workers’ material concerns, which broadly echoed those of to the British Tram Company's workers, cadres reported other problems within the paint company. The problems they reported were symptomatic of the legacies of the old order that shaped and constrained the Chinese Communist Party's attempts to build its new society. As mentioned above, younger people were portrayed as being more enthusiastic about takeovers, but the paiint company workers were an older and more conservative group (only 6.5 per cent were under the age of 25). Several had been members of ‘reactionary’ political organizations, such as the Guomindang or the factory union during the Japanese occupation, and they came under immediate suspicion.Footnote 147 The workers were also deeply divided along native-place lines, with Shandong, Anhui and Shanghai natives forming distinct factions.Footnote 148 This division led to constant infighting in the union with those from Shandong and Anhui aligning against those from Shanghai.Footnote 149
The policy of accommodation and moderation lasted for about a year in the Orient Paint, Colour and Varnish Company. In 1954, the new owners felt more firmly in control, so their rhetoric became more radical. Yao Jialang, the Chinese manager, was no longer seen as a useful ally but instead was criticized for having been a ‘running dog’ of the imperialists. He had, it was said, a ‘grave case of pro-foreign worship, especially pro-British’ (yanzhong de chong wai gainian, tebie shi chong Ying). As they had feared, the high-level office workers, including Yao, were urged to confess and to repent their previous mistakes and were subjected to a long and arduous process of ‘education’ through criticism and self-criticism.Footnote 150
As increasing control was asserted over the factory's workers, certain changes were implemented to improve working conditions. A 1954 report noted that, under the British, the workers had only cared for themselves as individuals. Now they were working for one another, in a democratically run factory. Not only was production said to have increased, but tools were better looked-after and morale was higher. Historians need to be wary of buying into these rosy images of life after ‘liberation’, but details given in some reports suggest that there were concrete improvements. One example of this was that, in the past, workers had been obliged to either bring food from home and eat it cold, or spend part of their wages buying food outside the gates. After the takeover, a canteen was established and fitted with electric fans to provide healthy food in a pleasant environment. Improved washing facilities were also provided.Footnote 151 These improvements were not solely felt in the paint company: most Chinese industrial workers experienced genuine improvements in working conditions during the 1950s as they benefitted from increased job security, improved wages and labour insurance-based welfare schemes.Footnote 152
Other reports suggested, however, that all was not well in the factory. Avoidable accidents had become increasingly frequent in the year following the takeover. The factory's Party Committee reported in December 1954 that the workers had, rather disappointingly, not taken on the responsibilities involved with being the owners of the means of production: ‘The responsible attitude of socialism is lacking’, wrote one cadre, ‘and this has led to the occurrence of very many accidents’ (shehuizhuyi de fuze taidu hen cha, yinci zaocheng henduo de shigu fasheng). According to the cadre's statistics, there were 90 accidents between July and the end of November in 1954, only two of which were deemed to be ‘natural’. One was the result of machine failure and the rest were said to be caused by a lack of responsibility. The workers were ‘complacent’, it was said: they cared much about material things but little about the quality of the paint. Complaints had been received about 15 of the 16 brands: ‘This is a huge blow to us politically’, the cadre reported, ‘it will make the imperialists laugh at us’ (zhe shi zai zhengzhi shang hen da de daji, geng hui shi diguozhuyi kan women de xiaohua). Production targets had to be lowered in order to ensure that at least some quantity of good quality paint was produced.Footnote 153
Conclusion
Shanghai was a large and complex city and we therefore need to develop approaches to its history that take into account the variety it contained and the great challenges it posed. Shifting focus from the tragedy of political campaigns and other such highly visible drama to the everyday workings of the early attempts to consolidate control allows a more cohesive picture of life in Shanghai as the foundations of the Communists’ state-building efforts were being negotiated. The processes by which British firms were taken over and transformed shed a great deal of light on the ground-level processes of the changes that occurred more widely in Shanghai as the Communists struggled to balance ideology and pragmatism. Both the workers and the cadres in the Orient Paint, and Varnish Company were, in reality, very different to how they were later described in the triumphant propaganda of the radical Cultural Revolution era, as introduced at the beginning of this paper. The workers in both companies, who had experienced decades of war, economic unrest and political infighting, were often apathetic towards the Communists’ revolutionary goals and were, perhaps understandably, preoccupied with living standards and working conditions. Their counterparts in this drama, the cadres, were also often ill-trained, inexperienced and ineffective. In the short-term, cadres adopted conciliatory attitudes and moderated their policies to make sure that takeovers were conducted in a staged and stable manner so as not to affect production.
Only when the Communists felt themselves to be firmly in control did they really begin to embark on more radical plans designed to transform this decadent but decrepit city into a new, socialist utopia. Even when more radical policies were pursued, local cadres struggled with implementation. The issue of how to deal with the material and human legacies of the past was perhaps the greatest obstacle facing the Communists in the construction of ‘New Shanghai’. Further research is required to fully explore the impacts of the enduring legacies of the pre-1949 era and the complexity of the challenges the Party faced at both national and city-wide levels, with regard to a broader range of circumstances (for example, in Chinese companies, institutions and residential areas). It is also, perhaps, in this initial period of consolidation and negotiation after the 1949 takeover that we find the roots of the turmoil that later engulfed China in the 1960s and 1970s. Society was only partly made anew and this was a compromise that the utopians within the Party would come to find unsatisfactory. Further revolutions, further attempts to remake society were deemed to be needed, with tragic consequences.
Despite the rupture caused by the Cultural Revolution, the mixture of pragmatism and shrewdness employed in Shanghai after 1949 may also be characteristic of the way that the Chinese Communist Party has conducted itself in the reform era as foreign businesses have flooded back into China. The Chinese have made use of these companies when it has suited them, whilst restricting their activities when needed.
