This book by Parks Coble, one of the West's most thoughtful and productive historians of modern China, builds on insights from his two previous books, The Shanghai Capitalists and the Nationalist Government of China, 1927–1937 (Cambridge, MA: Harvard East Asian Monographs, 1986) and Facing Japan: Chinese Politics and Japanese Imperialism, 1931–1937 (Cambridge, MA: Harvard East Asian Monographs, 1991), and examines the fate of China's capitalists under Japanese occupation during the war. It is in two parts. First, three chapters deal chronologically with Japanese policy towards Chinese industry and capital. Then a series of illuminating case studies analyze the experience of China's most important capitalist family, the Rongs, of other textile and consumer-goods capitalists, and of those involved in the chemical and rubber industries.

Throughout the book, Coble develops two major themes. First he asks how far China's capitalists during the war conformed to the model of “patriotic capitalists,” which is now the dominant narrative in China, or whether they rather should be seen as collaborators. He finds little evidence that nationalism was the dominant motivation for their actions. Where they did act patriotically, he interprets this as showing a lack of alternatives: those who best fitted the “patriotic capitalists” model were those in the chemical industry, which was at greater risk of Japanese control and expropriation. On the other hand, he questions (pp. 208–09) the trope of collaboration, arguing that its negative connotations originate largely in the active and ideological complicity of the Vichy regime in the holocaust. Although the dichotomy between collaboration and resistance is as strong in much Chinese nationalist writing as it is in Europe, he argues that the driving force of the capitalists was not ideology—whether of nationalism or of fascist collaboration—but rather the imperative to preserve their businesses. Where collaboration aided that end (as it tended to do towards the end of the war) then that was the path chosen. The reason that capitalists on the whole were reluctant to collaborate was the poor offer made to them by the Japanese, especially earlier in the war. On the other hand, cooperation with the Nationalists could also threaten their businesses, as the “bureaucratic capitalists,” particularly the Song family, increasingly encroached on independent capitalist enterprises.

Coble's second concern (which will probably be of particular interest to readers of this Journal) is to ask how the business culture of Chinese capitalism influenced the fate of the capitalists during the war and how the war in turn influenced that business culture. He identifies (p. 107) two key features of Chinese business culture: the dominance of the family firm and the widespread use of personal and informal networks rather than formal structures. The book focuses mainly on the family firm and shows convincingly how this influenced the response of Chinese capitalists to the Japanese invasion. For example, the family organization of most firms allowed a flexible strategic response to a complex and changing situation. Economically it facilitated the transfer of funds between different parts of an enterprise group, though this sometimes allowed over expansion of the group with insufficient account taken of the real cost of capital. In the sphere of politics, it allowed families to hedge their bets: Liu Hongsheng, China's “match king” himself eventually joined the Nationalists in Chongqing, but left a brother behind to work with the Japanese in Shanghai, while a son took care of the family enterprises in Hong Kong. However, the family firm in China, as elsewhere, was vulnerable to drift and internal division after the death of the founder or dominant figure: the clearest example was the weakening of the Rong group after Rong Zongjing's death in 1938.

The use of personal connections resulted from the need for protection against a predatory or ineffective state, such as was the case in different ways under the warlords, the Nationalists, the Japanese, the Communists, and even the British in Hong Kong. During the war, China's leading chemical industrialist had to play on his political connections in an attempt to revive his enterprises in Western China.

The book is less successful in arguing that the war strengthened these features of Chinese capitalism and influenced the way Chinese capitalists operated after the war, both in Hong Kong and overseas. The author's hypotheses in this regard must inevitably remain largely speculation. Confirming or refuting them would require a much wider study of Chinese capitalism outside China since the Second World War, and that is not the focus of this book.

In all, this book is an important study of major issues in modern Chinese history. It will probably be of more interest to political than to economic historians, but it will be required reading for anyone working on mid-twentieth-century China.