Over the last half a century or so, economic and business historians interested in China have been studying Chinese economic behaviour in relation to other parts of the world. From the rural to the urban sector, from silk, cotton-textiles, to sugar and banking, various case studies on individual industries or different regions have been put forward. However, only a few have attempted to test at the macro-level. Dr. Shiroyama's book is the most recent one.

Her story sets upon the question of how the Chinese economy came to the stage of “depression” under the impact of the “Great Depression”, and what role the Chinese (Nationalist) government played in reaction to the “depression”. It begins with the adoption of silver as a means of payment in China long before the nineteenth century. It goes on to discuss the development of bank credit through land mortgage in Shanghai to finance the blooming cotton-textiles and silk reeling industries in the Yangzi Delta during the late nineteenth and early twentieth centuries. All these developments are treated as a framework for understanding China's “depression” in the 1930s.

Chapters that follow delineate the process of the “great depression” in China. Firstly, the terms of trade between the rural economy and the urban sector worsened due to the sharp decline in exports of silk products and the cuts of credit among the rural population. Secondly, the urban, industrial sector, especially silk and cotton, slumped during the world's “Great Depression”, the abandonment of the international gold standard by gold-using countries, and the financial crisis in Shanghai caused by the American “Silver Purchase Act” and its impact on silver price fluctuations during 1934–1935. Lastly, the Nationalist government in Nanjing introduced currency and banking reforms in 1935 to rescue the collapsing financial system in Shanghai. The story ends at an assessment of the extent to which these reforms helped China out of the depression. In particular, China's new currency was devalued against the dollar and against sterling, stimulating exports of silk products again. The Nanjing government also injected money into its rural financial agencies in order to rehabilitate rural finance and to lessen the financial drought of the rural area.

The book seeks to delineate the inter-relationship between China's state, its market, and the world economy. It neatly puts forward an explanation for the structural cause of breakdown of the whole financial system in Shanghai and the Lower Yangzi region. Special attention was rightfully paid to real estate as the engine of the financial system for China's industrialization in the early twentieth century. Further, in discussing the “business slump” in the business sector and the financial crises in companies, this book surely has transcended our understanding of China's “great depression” from macro-economic data (such as price falling, closure of factories, and downfall of the GDP, and so on) to a level of discussion combining both micro- and macro-economic concerns.

The book's exclusive focus upon the Lower Yangzi region, however, especially Shanghai, may hamper its effectiveness by overly reducing its geographical scope. For example, although Shanghai was definitely the most important business, industrial, and financial centre of China during the republican period, the dynamic force of business activities was not dependent entirely upon the Shanghai system alone. It worked within a wide range of interlocking financial and trading networks in which Shanghai and the Lower Yangzi played an important role, together with other financial centres such as Tianjin and Canton (Guangzhou). Much of the story should be told about how life was affected in other provinces, in different degrees of economic development, by this business slump through the impact of the collapse of Shanghai's financial system. How did other cities along the coast interact with and respond to this “depression” era? Furthermore, this book's major concerns are cotton goods and silk products, leaving out of the picture all other varieties of products. One may wonder what happened during the depression to other industries and products such as coal, rubber, cigarettes, matches, cement, flour and rice. In order to make the claims of this book sound more reasonable, some degree of reservation on the scope of this study should also be included to qualify them. Otherwise, there is a risk of imposing a “Shanghainese view” on what was going on in other parts of China.

Moreover, the book builds its explanation of the cause of China's “great depression” on the monetary theory of the “silver standard”, the crediting of industrial finance through mortgaging, and business contraction during a period of serious silver outflow. Yet it does not substantiate whether the practice of using real estate to finance industrial enterprises survived the “depression”. Did the “depression” really alter the functioning mechanism of business financing in China during the early twentieth century? Silver was definitely gone, but did it solve the problem of generating bank credit through mortgaging real estate? If not, why not?

Another related aspect missing from this book is the story of banknotes. Although the author says that “banknotes had to be backed by hard currency; otherwise, they could not be circulated” (p. 35), there must be an expectation of redemption established among the ordinary people so that they can be confident about accepting banknotes in the first place. How such a process took place and how people responded to banknotes would certainly affect how they reacted when the government in 1935 introduced unredeemable banknotes. The extent of banknote circulation, one important factor in the money supply during the 1920s and early 1930s, is left untouched by the book. One may wonder how to solve this puzzle.

This book is, indeed, an ambitious attempt to tell us the story of the “great depression” in China, how both rural and urban ‘Chinas’ were affected, and how the government reacted. Yet many of these aspects already have been pinpointed or discussed (albeit briefly) by ex-officials such as Arthur Young and scholars such as Thomas Rawski. In this respect, Dr. Shiroyama might have done more to engage the conventional wisdom. Are we to conclude that existing scholarly explanations of the “great depression” in China are satisfactory? Or does this book help to point us in new directions for further research?