Restless Empire (27 page)

In terms of transport, railways were by the 1930s becoming almost as important for business as waterways. Some of the railways were developed by foreign companies or states, others by Chinese-foreign consortia, which often involved, on the Chinese side, private and provincial interests. The governments in China, both before and after 1927, were eager to stimulate railway development, and foreign interests were equally eager to buy the bonds or issue the loans that were needed. In spite of the Chinese government defaulting on its debts both in 1920 and 1929, and coming close in 1935, foreign banks and investors kept supplying credit. The flow of money continued because of high interest rates and because there were few other good options in a turbulent time for the world economy. There was also the hope that building infrastructure would stimulate the Chinese market, which stood at the center of foreign economic desires. It was the expectation that Chinese consumers in the future would start buying foreign products that was behind much of the extraordinary interest foreign capital showed for the country before World War II.

The largest foreign company in China before 1945 was the Japanese-owned Mantetsu, the South Manchuria Railway Company. Under its
founding president, Goto Shimpei, the former governor of Taiwan, the company set out to be the core element in the transformation of Northeast China under Japanese influence. Mantetsu was a private business concern with partial government ownership and strong connections to the Japanese state. It rebuilt the region’s railways using US-made equipment and then branched out into running coal mines, harbors, hotels, and warehouses. From the 1910s on, it built schools, libraries, hospitals, and public utilities to encourage Japanese and Korean settlement. Its academic wing made up the largest modern research enterprise ever undertaken in China, concentrating on agricultural research for industrial-scale farming. By the 1930s, Mantetsu was almost a separate state within Manchuria. Its subsidiaries produced steel, ceramics and glass, flour and cooking oil, electricity and chemical products. It had become not only the largest company in China, but also in Japan. Mantetsu is rightly seen as part of Japan’s colonization effort in China. But it was also Tokyo’s most important card in proving to the Western states that Japan, and Japanese business, contributed to the modernization of China that they all sought.

In the early 1900s, foreign merchants and companies transmitted knowledge about capitalism, markets, and management to the Chinese. But the form of development they stood for was always controversial. To many who lauded the virtues of Old China, merchants, investors, and business managers were suspect because they were driven by company profit rather than personal virtue. To young radicals, capitalism was a particular evil because it symbolized the form of exploitation that foreigners were trying to introduce into China. But first and foremost the role of business was problematic because so little of the products it traded in reached the peasant majority, except in the form of wares that many wanted but few could afford. It symbolized a new market economy that favored cities over countryside, and deepened the social dividing lines in rural areas as its elites moved to the urban centers. For many Chinese, foreign merchants and the merchandise they promoted
became divided symbols of a modernity they aspired to and a social organization they resented. But there was no denying the importance of foreigners and their products. Few peasants knew who Sun Yat-sen was, but most had heard of the British-American Tobacco Company through the cigarettes they produced.
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With the new economy came a new banking system. Banks have existed in China at least since the Song dynasty (960–1279), but from the late nineteenth century on, powerful Western-led banks became China’s main financial institutions. The Hongkong and Shanghai Banking Company was set up in Hong Kong in 1865. HSBC operated under a British charter with the intention of serving as a British bank in East Asia. But the Bank, as it became known in China, was much more than a British bank. In the subsequent decades it turned into the main banker for the Chinese government, for Chinese and foreign businesses in China, and for transactions among trading partners from Tokyo to Bangkok. It issued its own currency, introduced new banking and accounting practices, and trained bankers with knowledge of China, who later worked in Asia and around the world. Its founders had intended the HSBC as a tool for the exploitation of China, through organizing Chinese government loans that would go toward paying war reparations to the Western powers. But its mandate broadened, as it became an instrument for the industrialization of the country and the creation of a new financial sector.

From its inception, the British directors of the Hongkong Bank looked for new ways to maximize profits. To benefit from the country’s commercial development, they realized they would also have to lend through traditional Chinese banks. Despite the growing presence of the Bank, through branch offices in different parts of China, the native banks continued to serve as middlemen up to the mid-twentieth century, becoming a transmission line for knowledge going in both directions of the banking sector. Although the senior staff remained exclusively European, an increasing number of Chinese served the Bank at different
levels, enjoying the benefits of extraterritoriality (for their business, if not always for their person) that came with working for a foreign institution. The need to remain under British jurisdiction kept the Bank’s headquarters in Hong Kong, even if the main part of its business was linked to Shanghai after 1912.

By the first decade of the twentieth century, China was getting its own banks and finance institutions. They were, however, still mostly led by foreigners—including the central bank, known from 1912 as the Bank of China. The banks generally adopted the regulations of HSBC, and they grew very quickly, into all regions of the country. In spite of the absence of effective banking regulations (or, for that matter, the effective rule of law), the Chinese Western-style banks carved out territory for themselves well beyond what most observers had expected. Working closely with Chinese companies, they were often able to defend themselves against predatory government practices. By the 1930s the GMD government had realized that these banks served a crucial role in China’s development. They provided credit when foreign banks would not lend. They served as key intermediaries for China’s public finance as it tottered from crisis to crisis during the decade. The government and the elite classes might not have liked Western-style financial institutions, but by 1937 they had come to depend on them for many of their most cherished activities.

The trouble with capitalist finance in China may be seen best through its continous problems with private accounting practices. Up to the late nineteenth century, internal accounting in China had been based on a system of single bookkeeping with ample room for nonmonetary forms of value, including the value of friendship or the cooperation of local officials. Confucian ideals made documenting profit undesirable, and fear of government malfeasance made disclosing the books to anyone beside the owners almost inconceivable. After the first general accounting provision was introduced in 1918, most Chinese privately owned companies and native banks preferred their earlier methods over
Western-style double-entry bookkeeping, thereby creating a buffer that insulated them from capitalist methods of expansion. Even in Hong Kong and Singapore professional accounting only broke through in the 1960s, while in most of China the links between accounting and accountability are still vague and weak even today.

R
ELIGION IN
C
HINA
has rarely been much of an official preoccupation, except in cases when the government has wanted to regulate it or harness its power. Rather, it has been a means of survival for the poor and disposessed, giving meaning to their lives and hope for an after life. Buddhism, a Chinese import from India, served this role for centuries. Christianity, another foreign import, became a major religion in China in the nineteenth century. Until the renewed interest in religion over the past twenty years, the period between 1900 and the late 1920s stood out as China’s Christian decades. During that time two to three million Chinese converted to this foreign religion, which evolved from a missionary enterprise into a locally led phenomenon. But missionaries continued to have an impact in China, most notably through the schools and universities they set up. These institutions may not have produced a large number of Chinese Christians, as the missionaries had fervently hoped. But studying in such institutions influenced many of those who transformed China in the late twentieth century, even though in directions their missionary teachers would hardly recognize.

Traces of Christianity dating to the seventh century have been found in China. Jesuit missionaries tried to establish themselves in the sixteenth and seventeenth centuries, mostly from Macao and Japan. After the double disasters of the nineteenth century—the Christian-inspired Taiping movement and the anti-Christian Boxers—Catholicism in China began a careful rebuilding of its structure. In some areas Christian communities had survived from early evangelization, in a few cases from the early seventeenth century on. In others Catholic missionaries began a painstaking work of proselytizing, mostly led by Lazarist and
Jesuit priests. Many Catholic missionaries concentrated on working in the cities, setting up educational institutions, hospitals, and orphanages, such as the St. Ignatius School in Shanghai, and a number of superb European Catholic intellectuals spent many years in China; Pierre Teilhard de Chardin, the philosopher, paleontologist, and geologist, spent twenty years there. Still, Catholicism as a religious practice spread mostly in the countryside, and in areas where there were established Chinese Catholic communities and Chinese as well as foreign priests. These centers of Chinese Catholicism, most of which exist and are in some cases expanding today, can be found all over the country, with a particular influence among minority peoples in the south, in Fujian, Zhejiang, and parts of Hebei and the Northeast.

The form of Christianity that expanded most rapidly in the early twentieth century was Protestantism. Sun Yat-sen was a Christian, baptized by American Congregationalist missionaries when he was in his teens. Chiang Kai-shek converted to Christianity in 1930, and his Methodism remained a matter of great importance to him for the rest of his life (in spite of his critics sneering at yet another “Christian warlord”). The muscularity of Chiang’s Christianity was not in the least in conflict with how the Gospel was presented by many Protestant missionaries. One such was C. T. Studd, one of the Cambridge Seven, a group of Cambridge University graduates who spent their lives as missionaries in China. Christian life had to be a life of battle, Studd claimed. “Some want to live within the sound of church or chapel bell; I want to run a rescue shop within a yard of hell.”
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Like their nineteenth-century predecessors, Studd and his colleagues combined their Christian missions with a dedication to advancing knowledge in China. Henry W. Luce, the father of the founder of
Time
magazine, was a Presbytarian missionary. He spent three decades in China, mostly at Qilu University in Jinan, the capital of Shandong. With funding from the Rockefeller Foundation, Luce helped build Qilu into one of China’s premier universities. Its medical school, established in 1911, provided
full medical training for Chinese men and women. The most remarkable medical school in China was also a missionary enterprise: the Hackett Medical College for Women in Guangzhou, founded in 1901. Its graduates would influence the course of medicine in China right up to the present. Little wonder that some young Chinese women regarded Christianity as a way of breaking out of the confines of a patriarchical society.

Of the missionary universities one had a particular status, because it would develop into present-day China’s most famous institution of higher learning. Yanjing University, founded in 1919 through a merger of five Christian colleges in Beijing, was a liberal, high-level academic institution. It was led for much of its existence by a second-generation American Presbyterian missionary in China, John Leighton Stuart, born in Hangzhou in 1876. With help from American foundations and donors Stuart bought an old Qing pleasure garden north of Beijing, which he equipped as a modern university. Today it is the central campus of Peking University. Many of its graduates from the 1920s and 1930s became leading political figures in China, not least on the Communist side. When Leighton Stuart, in his tragic tenure as US ambassador to China, tried to negotiate with the Communists in 1949, he sat across from a former Yanjing student, Huang Hua, who had become a key CCP foreign affairs specialist and promoter of anti-US slogans.
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Just as the early part of the twentieth century was a high point for Christianity in China, it was also a high point of the indigenization of Christianity. Across the whole roster of religious movements Chinese priests and ministers were gradually replacing foreigners or working alongside them. Nothing contributed more to this trend than the Shandong revival of the late 1920s, in which existing Christian communities were exhorted to follow the Holy Spirit to an emotional and direct experience of God. The catalyst for this movement was the quasi-Pentecostalist Norwegian missionary Marie Monsen, but it soon branched out into new Chinese Christian communities, some of which began to incorporate transcendental themes from other Chinese religions, such as Buddhism
and Daoism. Among the Christian sects—with names such as The True Jesus Church, The Jesus Family, and The Little Flock—a remarkable group of native preachers emerged, some of whom had influence both inside and outside China. Ni Tuosheng (dubbed Watchman Nee), the founder of The Little Flock, became a revivalist leader in Asia and Europe. The communalist and nationalist strains of the “new” churches became a challenge to Chinese Christians and non-Christians alike. Preachers such as Ni were preoccupied with making Christianity native, because for them China was key to Christ’s second coming. Others had to respond to that message, whether they liked it or not.
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