This book explains how the socialist system was deployed in Shanghai. Before 1949, the city was the main industrial hub of China and the most important location for Chinese and foreign private business groups. Against a backdrop of hyperinflation caused by a long period of war, the arrival of the communist regime had an initial impact on the distribution of goods: private industrial companies received processing orders and were encouraged to produce while keeping the ownership and former management. However, the Korean War and the trade embargo accelerated the transition to socialism; private companies were gradually seized by the regional government, and they formally became public-private joint ownerships, while in practice they were all taken into public control. Thus, the Shanghai Municipal Government emerged in the mid-1950s as a relevant economic actor, despite being excluded from the major investment projects designed by the central government.

The book is an important contribution to the study of socialist transition and how market conditions are substituted by a complex system of resource allocation. The author claims that while officially committed to a planned economy, the central government outsourced the resolution of supply-demand gaps caused by its own industrial policy to local administrations. After a historical introduction to the role of Shanghai in the economic history of China, the book analyzes the fiscal system of the People’s Republic of China, especially considering the fiscal balance and the role of enterprise revenue in the city of Shanghai, compared to other regions. Based on data taken from local gazettes (an important source for Chinese economic historians), the book offers a comprehensive analysis of interregional public finances. The third part of the book deals with economic sectors and how their preexisting conditions (assets prior to 1949, trade dependence, interregional networks) adapted to the new policies of central planning, regional governance, and the official priority given to heavy industry.

This sectoral analysis highlights the special position of Shanghai in contrast with the rest of China. From the textile and machinery industries to rubber-processing manufacturing, cement production, and the public utilities, the historical industrial leadership of Shanghai was shaped by a strong network of international and interregional private firms. However, this economic system had to adapt to the new conditions of China’s socialist system and the restrictions on both international and interregional trade that came in the first years of Maoism. In the mid-1950s, the Shanghai Municipal Government had to manage this inherited industrial complex in a situation of a “shortage economy,” driven by central planning and the different ways this policy was implemented in every sector and region.

The book delves into the complexities of the central and local state agencies and bureaus that were created in the early years of Maoism to deal with the supply and demand of goods. From the Central Planning Commission that set the national economic guidelines and had the formal control over strategic materials (such as cement, iron, coal, gasoline, cotton yarn and cloth, and electricity) to the Shanghai Municipal Bureau of Material Distribution or the Shanghai Municipal Bureau of Industry and Commerce, this web of administrative units and bureaus tried to match the demand and supply realities with the vertical structures of planning design. The book engages with relevant policy documents that were produced in the early Maoist period by socialist economists from both the central government (Chen Yun, Li Fuchun, Bo Yibo) and Shanghai (Xu Dixin or Gu Zhun). This is particularly interesting as it is possible to envisage an early Shanghainese vision of the socialist system that would, afterward, become more influential, especially in the reform and opening up period.

The integration of extensive quantitative data and qualitative evidence lends significant rigor to the book’s arguments. This rich array of primary sources extracted from the local gazettes, compilations of official documents, and the Shanghai Municipal Archives can only be the result of many years of research on the ground. Furthermore, the effort of the author to illustrate his findings with tables, graphs, and figures is outstanding and will be useful for many classes and lectures about Chinese socialism and the importance of Shanghai in the country’s economic and business history. In this regard, the book is an example of the excellence of the Japanese sinology, which has often been sidelined in both the Chinese and the Anglophone academic milieus. The book draws primarily from Chinese and Japanese scholarship, with English-language references forming a smaller portion of the bibliography. While some may note the absence of certain English sources, the author provides access to a wealth of literature in Chinese and Japanese that is frequently overlooked in mainstream Western literature. The growing accessibility of AI-assisted translation—exemplified by this English edition of the 2018 Japanese original—enables a broader re-evaluation of what constitutes “relevant literature” and bridges the gap between regional scholarship and global debates.

This book provides a key contribution to our understanding of how China’s socialist central planning adapted to preexisting conditions, turning local governments, like the Shanghai Municipal Government, into pivotal economic entities. As the conclusion shows, this state of affairs, described as “central control in principle and de facto local autonomy,” had profound implications in the Reform and Opening-up period and the fundamental process of China’s integration into the global economy (p. 280). Ultimately, this work is a significant addition not only to the study of Maoism and socialist economic history but also to the broader understanding of the Chinese economy since 1949.