China developed industries with complex technologies and elements of modern business organization more than a millennium ago, but we still have only a relatively small number of studies in depth of most of these industries, and many of these studies are of industries that developed in connection with the opening of China to investment from Japan and the West at the end of the nineteenth and the beginning of the twentieth centuries. Exceptions to this focus on industries developed in response to the Western impact include major works on silk, sugar, and iron and steel that cover periods going back as early as the Tang and Sung Dynasties, but the number of such studies is not sufficient to give us a very complete picture of the nature and sophistication of premodern Chinese industry. This study by Madeleine Zelin of the Zigong salt industry, therefore, is a major contribution to the development of a more complete understanding of China's premodern industry and Chinese business practices more generally.

Zelin's study of the Zigong salt industry focuses on the development of the industry in the nineteenth and twentieth centuries when the Western impact of China was well underway, but Zigong was in Sichuan in the western part of China that was little influenced at least in the nineteenth century by modern technology and modern business practices then being established in China's coastal cities. The technologies and business organization and practices used by this Sichuan branch of the salt industry thus were developed independently of Western influences for the most part. This book, therefore, is a study of how a Chinese industry developed in a traditional environment not unlike earlier periods in Chinese history when Western influences played no role at all.

Another feature of the Zigong salt industry that makes this study so valuable is that the salt industry in Sichuan was based on deep wells (some as deep as 3,000 feet) and the conversion of brine into salt was done with the aid of natural gas that was present near the wells. Given the well drilling technology available at that time and place, drilling a deep well could take years with no guarantee of success and thus considerable amounts of capital were involved. Once the salt was produced, it then had to be shipped long distances to where it was consumed. Acquiring the capital needed particularly in the early stages of the industry necessitated the development of new forms of business organization and enforceable contracts. Over time these business organizations evolved in many cases into large vertically integrated firms with more than 1,000 employees. Zelin describes the evolution of business organization, premodern financial institutions, and other related institutions in rich detail.

Because taxes on salt were also a major source of revenue for the government, this study is also a valuable source of material on government business relations in both the Qing Dynasty and Republican periods. As the book makes clear, the government's interests was almost exclusively focused on ensuring as large a flow of revenue as possible, but this objective could lead to licensing interventions that on occasion had a major influence on the way the private business of salt manufacture and distribution was organized.

While the greatest value of this study is what it tells us about the way premodern business in China was organized and evolved, the book also has interesting chapters on how the situation facing the Zigong salt merchants changed in the twentieth century. In part the change was brought about by new technology (steam-powered pumps), but politics also played a major role in the decline of the salt business in the 1910s and 1920s. The book describes in some detail how warlord operations in Sichuan in this period forced the salt firms into heavy borrowing to meet repeated warlord demands for funds and how salt merchants attempted to deal with the situation by establishing ties with one military figure or another.

Any book that deals with such a complex subject inevitably does not answer all of the questions about this industry that a reader might have. In my case I would have liked to see more about how contracts were actually enforced. Zelin makes it clear that they were enforced and by some kind of legal process, but it is not entirely clear what the nature of that process was and who the judges were that handed down the rulings. Given the importance of this topic in understanding Chinese economic history, more detail on this topic would be justified. That said, this review has not even mentioned some of the topics that are covered that are also of considerable interest to economic historians. There is, for example, a chapter on labor conditions, on the way labor was organized, and the history and outcome of major strikes.

Zelin's study, therefore, is a major contribution to our understanding of Chinese business and industrial development both in the premodern period and in the first half of the twentieth century. It is also an important contribution to comparative economic history because Zelin regularly relates the experience of the Zigong salt merchants to early industrial development and business organization in the Western world. As she points out, there were as many similarities between the institutions of premodern China and those of the West at a comparable stage of development as there were differences.