This is the story of Gaoyang, a rural district in south-central Hebei that became a major center of textile production in the early Republic and has become one again after 1978. As told by Linda Grove, Gaoyang's growth is particularly interesting because much of its production in both periods has come from firms that, at first glance, seem too small to be competitive. Moreover, while Gaoyang industry has for a long time recruited most of its workers from households that also farm, it has not relied on paying unusually low wages to these workers to compete with urban firms—which some scholars assume is rural industry's main advantage. On the contrary, Gaoyang wages have often exceeded those in the large textile mills of Tianjin—though benefits are another story (pp. 93–95, 246). Instead, Gaoyang firms have thrived in part by pooling their efforts to train workers, acquire new technologies, and influence government policies, even while remaining fiercely competitive with each other in many other ways, and by adjusting more quickly to new marketing opportunities than large firms typically can. Consequently, this is both a story about Chinese economic history and a contribution to a large literature on “industrial districts” and “flexible production” in many countries.
Grove's argument is simultaneously very ambitious and very local. While many scholars have speculatively linked China's recent industrial growth to some aspect of prerevolutionary society, Grove provides a carefully researched example, drawing on both archives and fieldwork to span the twentieth century. But at the same time, she insists that the connecting thread she has found is a Gaoyang entrepreneurial tradition, not a local example of more general Chinese predispositions (pp. 43–44).
One key to Gaoyang's entrepreneurial success has been remarkably energetic marketing. Sometimes this has involved general ideological appeals, such as efforts to promote domestic cloth as the choice of patriotic consumers during the Republic (pp. 115–18); but even more important has been utilization of networks of personal connection built up over many years. Sales agents for Gaoyang firms, for instance, often became leading figures in the chambers of commerce in the towns where they were stationed (p. 105). Another advantage, which helped make good use of these networks, has been the ability to produce small batches of a particular style of cloth on relatively short notice, or to meet the needs of particular niche markets.
That flexibility, in turn, required weavers, dyers, and others who were skilled enough to adjust quickly to changing demands. And though this region had a reservoir of indigenous skills in textile production, adaptability amid mechanized production required new kinds of training. Here Gaoyang's chamber of commerce played a leading role, spearheading the creation of schools for both technical and commercial education (pp. 127–31), investments that individual firms could not possibly have financed and that the Chinese state was also not providing in the first half of the twentieth century. The native-place ties that helped build (and reproduce) these kinds of communal institutions also came in handy for rebuilding Gaoyang's skilled labor force later. When the People's Republic decided to concentrate textile production in cities in the 1950s, many of Gaoyang's workers were relocated to the new urban factories, and the rural industry shut down for more than twenty years; but when possibilities for rural industry were revived, Gaoyang was able to bring back many of these workers, who trained a new generation (pp. 202–4).
Various kinds of local cooperation have thus been critical for Gaoyang's success, both past and present. But the institutional settings for that cooperation have obviously changed fundamentally, making explanation difficult. Grove notes that even today, few of the entrepreneurs involved in these firms would call themselves capitalists, and most of them—like their ancestors a hundred years ago—see their efforts as part of striving for “national salvation,” not just personal profit (p. 245). The firms' efforts to assist the area's agriculture (which also reduces the amount of time their workers have to spend as individuals helping out their relatives), the relatively low level of managers' nominal salaries (though many also earn money as shareholders in the enterprises), and their frequent participation in production all promote an appearance of relative equality that no doubt both draws upon and reinforces ideas of striving for communal good (pp. 246–48). In an earlier era, a different kind of relative equality also helped create solidarity. Grove argues that the Gaoyang Chamber of Commerce was so dynamic, in part, because—unlike its counterparts in larger cities—it had no “gentry-merchants,” and its members were overwhelmingly concentrated in a single sector; therefore, they found it relatively easy to focus on a shared agenda (pp. 123–27).
By themselves, these features cannot explain what has happened in Gaoyang, nor does Grove say they can. At more than one point, I wished she had taken advantage of the exceptionally rich material here to speculate a bit more about the reasons and to engage at greater length with general models of “flexible production” and the “East Asian development path.” But one cannot have everything in a single volume, and what is here provides ample food for thought about both local and larger-scale issues.
