Emily Hill's book, Smokeless Sugar, is a welcome addition to the growing body of literature focused on the importance of economic reform to the Nationalist Party's (GMD) nation-building efforts during the Nanjing Decade, debunking the idea that one of the GMD's main failures was its lack of engagement in developmental policies. In this meticulously researched and carefully argued book, Hill not only confirms that the GMD strove to use economic reforms to further its nationalist goals, but also provides us with a new understanding of the complex networks of economic and political issues involved.
Hill's book focuses on the career of Feng Rui, Director of the Guangdong Bureau of Agriculture and Forestry from 1931 to 1936. In this capacity, Feng was also directly responsible for the Sugar Industry Revival Program, an import-substitution program that developed at the turbulent intersection of national and provincial interests, economic-nationalist rhetoric, and long-standing regional economic practices and networks. Hill argues that it is exactly because this program developed at such a contentious crossroads, and because Feng played a difficult role as broker and mediator between contrasting forces, that Feng ultimately met his demise in 1936. At this time, in the wake of the fall from power of Chen Jitang—the provincial warlord and Feng's patron—and the resulting transfer of direct control over Guangdong to Jiang Jieshi, Feng was arrested and executed.
The Sugar Industry Revival Program stood at the “external edges of the Chinese economy” (p. 236). It took full advantage of Guangdong's unusual fiscal autonomy from Nanjing, allowing the local government to launch reforms that, although inspired by the same rhetoric of economic nationalism supported by Nanjing, tended to create regional self-sufficiency at the expense of the central authorities. The Program, although nationalist and localist by design, was also global in nature, obtaining the essential support of foreign firms (including the Honolulu Iron Works) and reflecting those firms' business interests. In addition, defeating its ostensive self-sufficiency goals, it continued to rely on long-standing economic ties with the Southeast Asian region, into which Guangdong had long been integrated. Finally, the Program stood at the border between legal and illegal economic practices. It relied heavily on refined sugar smuggled from Southeast Asia into Guangdong, sugar that was then sold as a product of local refineries. In this shady operation, the Program depended on “official smuggling” (pp. 160–163). Foreign sugar was brought into Guangdong on government ships, with the goal of avoiding the tariffs and taxes due to Nanjing, keeping the price of Guangdong's sugar low and enhancing its competitive power on the national market.
In addition to regional self-sufficiency, the Program also sought to develop both rural and industrial economies by expanding the local production of sugar cane and integrating it into the growing demand of the modern sugar refinery. The reality, however, fell short of the intended objectives. Refineries such as Five Rams ended up owing their success to imported, already refined, products. Although the Five-Rams-brand “smokeless sugar” (never refined in China) sold well nationally, it revealed the gap between nationalist rhetoric of economic nationalism and the conditions on the ground. The Sugar Industry Revival Program, in fact, rested on such common but not entirely accurate notions that reorganization would miraculously solve China's rural crisis (hence the popularity of Cooperative Societies) or that widespread “idleness” among the peasants contributed to low production levels. These notions obscured the fact that Guangdong lacked the necessary conditions for producing enough sugar cane to sustain a large modern sugar industry.
As Hill rightly concludes, the Sugar Industry Revival Program's lack of success was not a major factor in Feng Rui's unusually severe punishment in 1936. The Program had indeed created discontent among some peasants and business circles. The sugar monopoly it established effectively displaced local merchants and smugglers. Peasants were forced to sell their products to the new modern refineries at low prices. Rumors of economic exploitation of “the Guangdong people” tarnished the image of both the Program and Feng. It was, however, the Program's contribution to the realization of Guangdong's autonomous and self-sufficient regional economy in opposition to Nanjing's efforts of national integration that, Hill argues, ultimately doomed Feng. As Chen Jitang left Guangdong and the Nanjing Government tightened its grip over the local administration, Feng came to be identified as a key force of opposition to Nanjing's economic unification.
Despite some repetition and overly detailed passages which, while highly informative, risk obscuring the book's main narrative, Emily Hill has successfully woven an intricate tale of significant trends and events, revealing complex layers of conflicting interests and proving the necessity of exploring the intellectual and political dimensions of economic reforms. In doing so, Hill has also opened up new perspectives on the study of the “edges of the Chinese economy,” from the interaction among national, provincial, and regional economies to the role of shady practices such as smuggling in achieving political and economic goals.
