The Political Economy of Chinese Rural Industry and Commerce in Historical Perspective

Études rurales 161-162 | 2002

Le retour du marchand dans la Chine rurale

The Political Economy of Chinese Rural Industry And Commerce in Historical Perspective

R. Bin Wong

Electronic version URL: http://journals.openedition.org/etudesrurales/7946 DOI: 10.4000/etudesrurales.7946 ISSN: 1777-537X

Publisher Éditions de l’EHESS

Printed version Date of publication: 1 January 2002 Number of pages: 153-164

Electronic reference R. Bin Wong, « The Political Economy of Chinese Rural Industry And Commerce in Historical Perspective », Études rurales [Online], 161-162 | 2002, Online since 01 January 2004, connection on 01 May 2019. URL : http://journals.openedition.org/etudesrurales/7946 ; DOI : 10.4000/ etudesrurales.7946

The Political Economy of Chinese Rural Industry And Commerce in Historical Perspective par R. Bin WONG

| Éditions de l’EHESS | Ét udes rurales

2002/1-2 - N° 161-162 ISSN 0014-2182 | ISBN 2-7132-1427-0 | pages 153 à 164

Pour citer cet article : — Wong R., The Political Economy of Chinese Rural Industry And Commerce in Historical Perspective, Études rurales 2002/ 1-2, N° 161-162, p. 153-164.

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HISTORICAL PERSPECTIVE the ways in which the creation of TVE (town- ship and village enterprises) has drawn upon a repertoire of possibilities shaped by earlier practices.1 For economic factors, I will stress gains to be achieved from reducing transaction costs. In particular, I will look at the ways in which transaction costs can be reduced by both formal and informal mechanisms. For political and social factors, I will consider the changing characteris- tics of agrarian political economy across three periods before 1978, the high Qing (18th century), the late Qing and Republican period (late HE DRAMATIC GROWTH of small-scale 19th-mid-20th century), and the post-1949 de- industries and commerce in China during cades before the reform era. The article aims to Tthe past two decades has been a develop- identify a combination of ways in which prac- ment that scholars most typically locate within tices in each period built upon earlier ones and one of two explanatory frameworks. Some ob- shaped the possibilities for subsequent times. servers evaluate these changes according to economic principles, seeking to show how these The high Qing economic expansion enterprises respond effectively to market oppor- China’s population, territory and economy all tunities in an expanding commercial economy. grew during the eighteenth century. Eighteenth- Alternatively, analysts place these changes at century economic expansion built on a com- the intersection of government policy changes mercial base formulated in the Song dynasty and local conditions. Both perspectives help (960-1279) and elaborated upon during the to explain the dynamics and impacts of these Ming dynasty (1368-1643). Between 1500 and important changes. One highlights the general 1800 an increase in commercialized production principles of production and exchange that took place over much of China. By 1600 peas- flourish in market settings; the other focuses ants and artisans in the Jiangnan region had ex- more intensively on the particular patterns pro- panded their production of silk and cotton duced by the interactions between the Chinese textiles to supply much of the empire with government’s many levels and local social net- better quality fabrics. By 1750 the continued works and organizations. In either case, recent expansion of textiles and other production de- Chinese changes are conceived with at most pended on the growing imports of grain from modest historical depth reaching back to the late 1950s. This article offers a longer historical per- 1. I sketch some linkages between recent rural industria- spective. It examines economic, political and so- lization and late imperial economic patterns in Wong cial factors responsible for rural industries and [1997: 184-187]. This article fills in the rough outlines commerce in earlier times in order to consider provided therein.

Études rurales, janvier-juin 2002, 161-162 : 153-164 R. Bin Wong

...... 154 the areas upstream along the Yangzi River. In of differing spatial scales developed as com- addition Jiangnan also imported raw cotton in mercial production increased. In some cases the the first half of the eighteenth century, causing special crops and handicrafts of a particular area Yin Huiyi, Henan Governor from 1737 to 1739, found a very wide ranging market; examples to lament the failure of Henan peasants to pro- include Fujian teas, Foshan ironware, or duce cotton cloth locally, thereby contributing Jingdezhen pottery. But in more numerous to the livelihoods of poorer peasants [1821]. cases the development of cash crops and textiles Over time, peasants in Henan, as well as other was destined for commercial circulation within provinces began to weave lower grades of cot- more limited spatial settings; this was especially ton cloth. Jiangnan continued to sell higher true for the most important commercial com- grades of cloth on a broad scale, while other re- modities in terms of value and volume – grains gional economies began to produce more of and textiles. On China’s peripheries, the gov- their own lower grades of cloth. In certain in- ernment played a more direct role by transfer- stances it is quite clear that officials promoted ring resources to promote production and the spread of handicraft and crop technologies. exchange. This comes out clearly in the case of Governor Chen Hongmou, for instance, pro- granaries, which stocked more grain per capita moted sericulture in mid-eighteenth century in peripheral areas than in cores [Will and Wong Shaanxi by establishing silkworm bureaus 1991: 295-319]. (canguan) in the provincial capital and a num- Officials promoted the spread of best tech- ber of prefectural seats; he brought in weavers nologies at the same time as they stressed grain to demonstrate silk weaving techniques [1821a, production for subsistence security. While 1821b, 1821c]. With and without active official the two priorities might seem contradictory promotion, best technologies tended to spread – increasing cash crops and handicrafts can from advanced centers with the result that other reduce the labor spent on grain production – areas began to develop a diverse range of prod- they had a common result. Both tended to ex- ucts. China’s most economically advanced pand production and commercial circulation eighteenth-century regions, Jiangnan and the within different portions of the empire rather Pearl River delta, remained more productive than than across the empire as a whole. Officials cer- many other regions, but the spread of crops and tainly recognized the importance of particular technologies meant that they distanced them- very long-distance marketing networks, espe- selves only so far economically from other parts cially that of the grain trade along the Yangzi of the empire. River, stretching from Sichuan to Jiangsu with On paddy lands of Jiangnan and Guangdong further transhipments from Suzhou to areas complex regimes of rice and mulberry and fish along the southeast coast. The most successful ponds were established [Li 1998; Marks 1998]. merchant groups from Huizhou and Shanxi On hill lands of different provinces there was established commercial networks with financial increased planting of various cash crops – teas, and production connections across many tobaccos, indigo [Zheng 1989: 327-374]. Trade provinces. These developments were joined to a The political economy of Chinese rural industry and commerce in historical perspective

...... more general opening of new land and the spread Beyond these occupational functions, native 155 of technologies to exploit resources more fully. place associations were information nodes for Local officials were expected to achieve these new immigrants. They could offer them help in goals without being able to use any local expan- making the transition to a new environment and sion of wealth or trade to become the basis for thus made possible migrations that would other- their own power growing. For this reason com- wise be far more difficult. For present purposes, mercial taxes were kept light because their col- the most relevant activities of native place asso- lection could have ended up lining the pockets of ciations were those related to economic activ- local officials. ities, to production, trade, and to finding work.2 In the Qing dynasty, whenever some com- Dealing with kinsmen and people from the mercial venture came to require more than just a same native place helped reduce risk in many few people, individuals often turned to relatives commercial transactions, but merchants in the outside the immediate family to find additional Qing empire, like those in other places, still personnel. Kinship networks provided a consi- found it necessary to deal with people who were derable pool of people for whom social bases of neither relatives nor members of the same native accountability existed quite separately from place associations. In these situations especially those of state law. Kin could be trusted with they faced the problems of assuring performance commodities in long-distance trade because they by others as written in contracts. Usually were tied to each other by more than the specific contracts stipulated a middleman, often from the transactions themselves and thus would have same guild or native place association, who fewer incentives to cheat than people without guaranteed a person’s meeting contractual obli- such ties would have. But kinship networks gations. Beyond these kinds of guarantees, a could not on their own create a large enough merchant could reduce the likelihood of con- pool of people within which a merchant and his tractual problems by dealing with merchants relatives might find people with whom to do with reputations for honesty. Not surprisingly business. To increase the numbers of commer- therefore, merchants were counseled by writers cial relations that could be entered into with a of merchant handbooks to develop good reputa- higher degree of trust than would otherwise exist tions. Being known as honest, fair, and trustwor- in the absence of effective formal state institu- thy was a sound strategy for increasing business tions, Chinese relied upon native place associa- [Lufrano 1997]. What is striking about the gen- tions. These associations, located in different eral range of mechanisms employed by Chinese cities where people from the same locale could expect to make contacts with people from their 2. One of the striking features of Chinese native place home areas, performed a variety of social as well associations was the degree to which they represented as economic functions. In some cases there was different spatial scales of native, in general the further away the migrant place or the smaller its size, the larger an overlap between occupation and native place the spatial catchment area of the native place association. association; sometimes a native place associa- This suggests some effort to create networks of some tion might include several discrete occupations. minimal size in order to be useful. R. Bin Wong

...... 156 merchants to reduce risks in commercial trans- the long run could contribute to economic diffi- actions is the absence of state adjudication and culties. The case of southern Shaanxi in North enforcement. China is instructive. After immigration in the Many of the key mechanisms facilitating the late seventeenth and early eighteenth centuries commercial expansion of the eighteenth century replenished populations that had been reduced were largely informal, in the nature of social by the warfare attending the transition from the practices generated by people seeking to find Ming to the Qing dynasty, the area began to grow means to reduce uncertainty and expand their beyond its Ming levels in both population and profits. The general reduction of uncertainty in economic production. New food crops on hill long-distance trade meant that the transaction lands, such as corn and sweet potatoes, joined costs were lower and this in turn meant that wheat and millet to feed a population that in- more trade could take place. Our contemporary cluded people engaged in the timber trade, paper expectations derived from the new institutional making and iron works. By the mid-nineteenth economics identify the state’s efforts to specify century the resource base of the area had been and protect property rights as the basic way in significantly depleted and crops and crafts that which transaction costs are reduced. While there had previously flourished were in decline [Chen is an empirical basis for making such an argu- and Zuo 1988; Fang 1979; Tan 1986; Xiao ment from European historical data, the same 1988]. Such difficulties became more prevalent principles seem less able to account for the Qing in the nineteenth century. The collapse or reduc- commercial expansion. It is informal social tion of various government operations, such as practices rather than formal government rules the granary system, exacerbated the likelihood that clearly mattered more. of economic difficulties in the peripheries Through the eighteenth century, China’s [Pomeranz 1993: 153-211; Will and Wong op. commercial economy expanded dramatically. cit.: 75-92, 295-310]. As a result, the gap be- Where per capita incomes rose, the basic eco- tween wealthier and poorer regions of the empire nomic logic enabling these developments was a very likely began to grow by the early nineteenth market-based division of labor that promoted century. specialization and the efficient use of resource endowments. Peasants in some wealthier parts From Empire to Republic of the country, including those in the richest The relationship between merchants and gov- region of Jiangnan, likely increased their house- ernment began to change during the second half hold incomes as they exploited market oppor- of the nineteenth century. As the state increas- tunities for crops and handicrafts. But peasants ingly relied on commercial sources of revenue, in poorer regions of the empire were already new forms of taxation became necessary. These beginning by the late eighteenth century to ex- in turn increased the need officials experienced haust their local ecologies. Government poli- to have merchants be well organized in order to cies to encourage the development of poorer make communications and negotiations with peripheries were in the short run helpful, but in them more efficient. Merchants generally agreed The political economy of Chinese rural industry and commerce in historical perspective

...... to expanded fiscal roles and some took on more together, seeing a union of the two responsible 157 urban social responsibilities as well. More for promoting prosperity in a manner similar to controversial were the new forms of political what had existed in late imperial times. These participation to which merchants aspired. Mer- concerns were framed within a more systematic chants expected, through their chambers of view of rural reform necessary to expand pro- commerce and other new forms of association, duction, but the elements of concern themselves to have a clearer voice in policy matters affect- built upon earlier aspirations to promote the ing them directly as well as other issues of state spread of technologies and to improve the con- that they considered to be of broader social sig- ditions upon which peasants could make their nificance. Officials were reluctant to acknowl- livings [Jiangsusheng changgongzhu di se ke edge these expectations, preferring instead to 1919]. There were also at least two important reaffirm and circumscribe economic and social changes. First, new technologies became avail- roles for merchants. able; these required more capital and access to Regarding rural industry more specifically, new sources and kinds of knowledge. Second, a late nineteenth and early twentieth-century offi- primary vehicle for gaining this knowledge and cials made surveys and formulated proposals to supplying the capital came from a new merchant increase various kinds of craft and cash crop elite pushing for a broad spectrum of economic production. The principal motivation was one of and political changes. Some of them, like Zhang improving the people’s livelihoods. A book pub- Jian, even became officials and were thus able to lished in 1907, Zhili gongyizhi chubian (An ini- more closely tie government to certain aspects tial study of the industrial arts in Zhili), explains of rural industrial development. In the early how industrial arts bureaus were established twentieth century, rural industry’s development along with schools to organize and promote in- was shaped in new ways by the ties formed be- dustrial production. Much of the production was tween officials and entrepreneurs, despite the small-scale and included both urban and rural government’s desire to limit the ways in which locations; officials gathered information on both these closer relations might compromise its industrial production, such as iron and paper fac- power and authority. tories, as well as on local handicrafts and cash Distinct from developments in the country- crops. An effort was made to coordinate data side, early twentieth-century officials elaborated collection, systematize knowledge and imple- upon the aspirations of an earlier generation ment increasing numbers of small factories in as of self-strengtheners to make plans to develop many parts of the province as seemed possible. heavy industry. The purpose of these plans was In an example from 1919, officials across to strengthen the state, by providing the indus- Jiangsu went into their counties to assemble in- trial base to build armaments, such a process al- formation on industry and agriculture; much of lowed the country to defend itself militarily and the industry was either located in small work- the government to consolidate its power and shops or in rural households. Officials jointly as- extend its authority. Relatively little of the sessed agricultural and industrial conditions Nationalist government’s plans actively came to R. Bin Wong

...... 158 fruition. The plans were significant, neverthe- benefits. Rural residents lacked access to bene- less, for two reasons. First, they continued a fits and services of these kinds. sharp division between heavy industrialization By the mid-1950s the principal division of conceived as a state guided process for political the economy into a sector of state owned enter- purposes and light industrialization as a private prises and collective enterprises largely corre- and more narrowly economic phenomenon, part sponded to an economic division between of which remained based in rural areas. Second, industry and agriculture and a social division the plans formed a part of the heritage taken over between urban and rural settings. Leaders by the Communists when they came to power. could agree on the goals of increasing eco- The Communists did not initially see much fu- nomic output and assuring material security for ture for rural industry in the early 1950s, be- all people, but the most important methods lieving as did all other policy makers and used to pursue these goals were not agreed analysts within and beyond the socialist bloc upon. For commerce, Dorothy Solinger has that industrialization took place outside the effectively shown three tendencies among pol- agrarian sector. This perspective was reinforced icy makers, those favoring bureaucratic plans, by a political interest in removing all petty and markets, and a escape from both plans and not-so-petty entrepreneurs who could be easily markets [1984]. Promoters of centralized plan- labeled as capitalist vestiges and thus deserving ning aimed to control bureaucratically the eradication in a socialist system. At the same allocation of resources and distribution of prod- time, however, the Communists built their offi- ucts; until roughly 1980, they usually viewed cial presence in the countryside on the basis of heavily regulated exchange as the norm for the expanded efforts initially made by late Qing commercial activity. Those more openly favor- and Republican officials to organize and direct able to market exchange have believed supply economic development. The Communists too and demand conditions to be desirable indica- believed, in fact perhaps even more than their tors of what to produce and where to sell prod- predecessors, that they were responsible for ucts; these tendencies have become far more people’s livelihoods. visible in the past two decades. Finally, those critical of both markets and centralized bureau- Rural industry and commerce under cratic planning generally sought ways to make socialism, 1949-1978 local areas more autonomous from both, be- The socialist planning process in the 1950s lieving that production and consumption were divided industry and agriculture into bureau- best conceived as community-based activities; cratically separate spheres. This economic sepa- while labeled by many analysts as radicals, ration was expressed socially by barriers to proponents of an anti-plan and anti-market vi- migration between urban and rural areas. The sion of production and exchange were harken- state owned enterprises in cities offered lifetime ing back to a somewhat fictive period in which employment, heavily subsidized housing, and neither markets nor government influenced access to other social services and economic economic life very greatly. The political economy of Chinese rural industry and commerce in historical perspective

...... For rural commerce more specifically, the reaucrats and market advocates both placed 159 marketing infrastructure built up over the late more stress on growth than radicals appear to imperial period declined in scale and impor- have [op. cit.: 74]. tance. Some 45,000 rural markets operating in Within the stream of policy debates pitting 1953 were reduced to roughly 37,000 by 1965 different visions of political economy against and only 33,300 by 1978, a twenty-five year each other, rural industry was pushed in the late period during which population increased from 1950s as part of a radical mobilization plan in- some 507 million to 775 million [Skinner 1985: tended to increase production dramatically. The 405]. The numbers and autonomy of merchants Great Leap Forward is famous for the folly of were both reduced in the 1950s as commercial its backyard steel furnaces, but it also began the exchange in the countryside increasingly be- more successful production of chemical fertil- came subordinated to bureaucratic structures of izers. It also created a basis for industry in the redistribution. The remarkably well-integrated countryside that fitted within the bureaucratic late imperial commercial system built by itiner- division of the industrial and agrarian sectors. ant peddlers, traveling merchants, wholesalers By being outside the industrial plan, these rural and retail shops spanning peasant markets and collectives allowed radicals an initiative that urban commercial centers was dismantled. Bu- was consistent with bureaucratic preferences reaucratic control was strongest in urban centers for retaining a centralized plan for the vast bulk and relatively prosperous rural areas. In contrast of industrial output. These collectives also re- to the eighteenth-century political economy of sembled partially the industrial developments of agrarian empire in which official intervention the 1920s and 1930s in the Chinese countryside. was greater in less developed areas and market In both cases local leaders were seeking to im- forces given freer rein in economically advanced prove standards of living by expanding rural areas, a strong centralized regime in the 1950s production beyond the agricultural base typical chose to exert its bureaucratic control over weal- of both periods through the application of tech- thier areas. nologies that the people themselves would have Policy debates over commerce generally been unable to mount on their own. What distin- were never simply disagreements between guished the two cases most deeply was the mar- those in favor of bureaucratic planning and ket orientation of the Republican era changes those seeking greater market autonomy. The from the non-commercial framework for rural three tendencies identified by Solinger yield industry in the 1950s and 1960s. This would multiple mixes of coalitions of two against the begin to change in the 1970s. third – bureaucrats and radicals favored admin- istratively prices versus market advocates’pref- Reform era rural industry and commerce in erence for commercially defined prices; radicals historical perspective joined forces with market advocates to push for The rapid expansion of rural industries in the decentralization against the bureaucrats’ prefer- 1980s powered much of the early reform era ence for centralized decision making; and bu- industrial growth. At the base of rural industrial R. Bin Wong

...... 160 expansion was a freeing up of commercial rela- preneurs who, like those in reform era China, tions in the countryside from efforts at close combine production and distribution by the bureaucratic regulation. But contrary to neo- same enterprises. Other network linkages have classical economic theory that anticipates a connected local officials to entrepreneurs. En- natural success for market principles when eco- trepreneurs desired these vertical linkages be- nomic actors become unfettered by political cause officials in the 1980s and 1990s could constraints, the expansion of TVE depended facilitate access to raw materials and outlets for upon the forging of expanded ties among eco- their products. For their part, officials formed nomic agents. The new institutional economics connections to entrepreneurs as part of a larger suggests that market-based economic expansion spectrum of role they played in promoting rural takes place when governments supply the legal industry and commerce. Here the linkages infrastructure necessary to secure property rights parallel to at least some modest degree those and thus reduce transaction costs. But China’s sometimes formed among entrepreneurs and reform era commercial expansion did not bene- officials during the Republican era. The many fit from such a set of changes. Instead, com- small-scale cadre-entrepreneurs based within merce increased in large measure because rural their townships are in at least some sense mul- enterprises were able to forge networks of trust tiple miniatures of early twentieth century en- with other enterprises that allowed them to en- trepreneur-officials like Zhang Jian [Walker gage in repeated exchanges without facing the 1999: 101-129]. Thus, developments that we challenges of insecure property rights and within conventionally locate within a post-1949 Chi- a minimal legal framework that possessed at nese context can be related to larger stretches of most modest capacities for enforcement. These history. Seeing current developments as emerg- practices built upon the relations forged among ing out of historically created and conditioned firms during the collective era when barter possibilities may help us better account for arrangements made up a salient part of socialist likely futures through specifying more closely commerce. Before the 1980s, the use of informal what kinds of changes are taking place. contracting arrangements appeared as a comple- The economic reforms have made possible a ment, perhaps even a necessary one, to the for- far larger role for market forces and in many mal socialist institutional structures; without the ways reduced the direct participation of party informal mechanisms used to complement the cadres and government officials in firm-level limitations of the formal system, exchanges of economic decision making. The most important any kinds were very limited.3 exception to this general trend has been the In the 1980s, enterprises in China developed networks; some of the linkages were horizontal ones between enterprises. These resemble the 3. The relationship is an example of what J.C. Scott has seen in a broad variety of situations in which state efforts kinds of horizontal networks forged by mer- at creating state-controlled order are not viable without chants in the late imperial period and even more socially generated practices that fill in the spaces left so those created by some Republican era entre- empty by state efforts at control [1998]. The political economy of Chinese rural industry and commerce in historical perspective

...... expanded importance of village party secre- industrial activity makes sense in a society 161 taries in many locales. During the early 1980s, where much pre-industrial handicraft produc- the expansion of village enterprises took place tion remained rural for far longer than proved under the leadership and decision making of the case in those parts of Europe where indus- party secretaries and the groups of leaders they trialization took place. It was in fact a far more assembled locally. The commitment of local modest set of social changes to set up factories resources to new enterprises, the securing of in villages employing rural residents than to loans, the acquisition of the necessary techno- have migration to cities to work in urban fac- logies, and the creation of marketing channels tories. Some of the new TVE were even lo- could all depend on the local party secretary. cated in family courtyards and depended on Some scholars have viewed the TVE develop- family labor, appearing as an extension of ments of the 1980s in terms of local party household-based late imperial handicraft pro- secretaries and county and sub-county govern- duction. Other new enterprises were separated ments gaining power and resources at the ex- from the households themselves, but even these pense of higher levels of political authority [Oi caused less social dislocation than migration to 1999]. The complementary interests of local po- cities and their urban factories [Wong op. cit.: litical leaders in expanding their revenue bases 184-185]. and developing TVE alerts us to dimension of The political economy of TVE has pushed the political economy of rural industry and com- forward possibilities perceived in earlier times merce in the reform era. In a certain way, the as potential problems for a centrally integrated growing power local leaders have developed be- unitary imperial state. The development of cause of rural industry confirms the worries that locally based political strength based on fiscal Qing officials had about increasing government resources tied to industry and trade had been a taxation of commerce as a means by which worry for an earlier form of government. The lower level officials might develop resource often-cited blurring of public and private asso- bases that higher levels of government would be ciated with TVE development is also a blurring unable to control. In another way the expansion of political, economic and social bases of power of local industries and the often key roles played in local areas. What began in some areas as the by party secretaries and county officials elabo- expansion of local party power into new eco- rates upon developments taking place in some nomic arenas became the construction of new Republican era locales where promoting local sources of economic wealth for older social elites rural industry was envisioned as a way to create related to the party powerful but anchored more wealth and support local government. deeply in local society than the regime itself. This The industrial transformation of much of the has become more possible as the conditions Chinese countryside in the 1980s and 1990s favoring party secretary control over TVE be- has built upon earlier economic and political came less prevalent. dynamics. The initial logic of transforming an Several factors appear to influence the like- agricultural economy into one that has greater lihood of officials playing a major role in TVE R. Bin Wong

...... 162 development. Much depends on the nature of or radically expanded practices have emerged is pre-1949 horizontal networks in an area and their hardly surprising. The more difficult issue is persistence as potential frameworks for mobiliz- how to explain these features in terms of the ing capital and moving commodities. Thus, parts kinds of changes that were likely to take place. of Zhejiang, most famously Wenzhou, as well as Here it seems that putting these developments coastal Fujian have seen much non-official de- in a longer historical perspective helps. velopment. Marketing systems can clearly build The Communist regime sought to destroy upon older ones as the Shen Yuan case in this much of the commercial infrastructure that had journal issue demonstrates. Official development been built up during the late imperial period and in contrast is, all other things being equal, more elaborated upon during the Republican era. They likely to be important where such networks don’t succeeded in subordinating commercial activity exist. We see examples in this journal issue of to the central state, leaving small amounts of very both melons and bicycle seat covers that fit local trade occasionally to remain within small this category. There is a third general category of administrative units. Yet the commercial expan- places, those in which the collective era be- sion since 1980 has depended on a range of fac- queaths a strong local bureaucratic presence; this tors that overlaps significantly with factors happened in wealthy areas as well as poorer ones present in earlier decades and even centuries. Re- [Kung 1999]. More product specific features liance on kinship and friendship networks and also appear to influence the likely roles of offi- the formation of informal bases of trust point to cials. In particular the capital requirements and the shared limits and minimal roles, at least to the kinds of access to knowledge that are re- date, of both late imperial and contemporary Chi- quired may tell us a lot about the roles of offi- nese government as effective guarantors of prop- cials, given the spatial taxonomy sketched erty rights for rural commercial exchanges. above. The differences between the melon and Over time, property rights will no doubt suitcase stories in this journal issue include the become more sharply defined, but whether or amounts of capital and sources of technology. not they come to closely resemble forms of Many of the changes taking place with the property typical in western industrial societies recent developments of rural industry and com- is by no means definite. Social networks will merce are certainly new. The particular organi- likely remain an important social source of in- zational and legal forms that rural enterprises are formal mechanisms substituting for more moral taking, for example, are certainly different from state-provided institutions. A more general con- those that existed before. The range of commo- sumer culture is being constructed in rural as dities and construction of a consumer culture is well as urban China. These changes, sometimes also quite a change from what ever existed pre- thought of as global are also recognized to be viously; within these developments many spe- locally situated. cific practices become ever more important, One way to span the spatial perspectives of such as trade mark identification, discussed in global and local is to take a long run historical one of this journal issue essays. That many new perspective. Consider one final example of such The political economy of Chinese rural industry and commerce in historical perspective

...... an historical perspective. A major challenge that promote greater inequalities. Industrial tech- 163 faced by both the political economy of agrarian nologies make larger economic gaps possible empire and the political economy of reform era because areas able to exploit the opportunities rural China is the role of higher levels of author- that these technologies create, can more easily ity in reducing regional inequalities. Basic to distance themselves from places where such op- eighteenth-century visions of agrarian stability portunities are fewer. TVE have exacerbated the were the efforts of officials to direct resources, gaps in regional wealth at a time when the cen- knowledge, and government efforts to the poor- tral government, as the main agent of resource er, more peripheral areas. Those efforts never redistribution, has had limited capacities to pro- could transcend the basic differences of resource mote the kinds of development more typical of endowments between rich and poor regions, but the coastal regions. How Chinese leaders face they fostered greater expansion than would these challenges in the future will tell us a lot likely have occurred without government inter- about the kind of political economy they create vention. The possibilities for their success de- to replace earlier kinds of production and pended in part on the absence of technologies exchange.

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Abstract Résumé R. Bin Wong, The political economy of Chinese rural in- R. Bin Wong, Mise en perspective historique de l’écono- dustry and commerce in historical perspective mie politique de l’industrie et du commerce dans la Chine The studies of Chinese reform era rural industry and com- rurale merce usually do not consider the political economy be- Les études sur l’industrie rurale et le commerce à l’ère des fore 1949. This article suggests several ways in which an réformes chinoises n’envisagent généralement pas l’éco- understanding of the political economy of Chinese handi- nomie politique d’avant 1949. Cet article suggère que l’a- craft industry and commerce in the eighteenth, late nine- nalyse de la politique tant artisanale qu’industrielle et teenth and early twentieth centuries as well as in the commerciale chinoise au XVIIIe, à la fin du XIXe et au period since 1949 can strengthen understanding of current début du XXe siècle, ainsi que depuis 1949, peut nous practices and future possibilities. It considers especially aider à mieux comprendre les pratiques actuelles et les op- the role of social networks in reducing transaction costs tions d’avenir. Il considère en particulier le rôle des ré- and the particular ways in which officials encouraged seaux sociaux dans la réduction des coûts de transaction et rural industry in different historical periods in order to les manières spécifiques dont les représentants de l’État highlight features of recent Chinese practices that may ont encouragé l’industrie rurale à différentes époques. make more sense when we recognize how they draw upon Cela permettra de souligner les particularités de récentes assumptions and sensibilities typical of earlier periods of pratiques et de voir comment elles s’inspirent d’idées Chinese political economy. reçues et de sensibilités caractéristiques de périodes plus anciennes de l’économie politique chinoise.