China during the Great Depression: Market, State, and the World Economy, 1929–1937 (review)

China during the Great Depression: Market, State, and the World Economy, 1929–1937 (review) 104 ChinaReviewInternational:Vol.18,No.1,2011 TomokoShiroyama.China during the Great Depression: Market, State, and the World Economy, 1929­1937. Cambridge,MA:HarvardUniversityAsia Center,2008.ix,325pp.Hardcover$45.00,isbn978-0-674-02831-9. Paperback$24.95,isbn978-0-674-03617-8. Thestockmarketcrashof1929usheredinaprotractedperiodofeconomicdecline inmuchofEurope,NorthAmerica,andAsia,andledmanystatestoestablish greaterregulatorycontrolovercapitalistenterprise.Thisevocativestudyby TomokoShiroyamaseekstointegrateChina'shistoricalexperienceduringthe GreatDepressionintothebroaderglobalnarrativeandto"offercriticalinsighton state-marketrelations"intheearlydecadesofthetwentiethcentury(p.11).In1927, theauthorcontends,thenewNationalistregimeadoptedtheexistingcurrency systemwithlittlemodification,continuingtoadheretothesilverstandardinan erawhentheUnitedStates,Europe,andJapanreliedongoldtobacktheirlegal tender.HigherdemandforsilverensuredthatsignificantquantitiesofthispreciousmetalflowedintoChinaduringtheseyears,andanincreaseinthemoney supplysustainedamildinflationarytrendincommodityprices.Theauthorasserts thatbanksnegotiatedloancontractswithbusinessenterprisesontheassumption thatthevalueoftheircollateralwouldremainsteadyorincreaseovertime,andthe cottonandsilkindustriesinparticulartookadvantageofeasycredittoexpand theiroperationsinregionslikethelowerYangzidelta.Yetthecentralgovernment lackedtheinstitutionalinfrastructuretoregulatethevalueofitscurrency,and changesintheinternationalpriceofsilverwouldsoonendangertheeconomic growthChinahadenjoyedinthe1920s. DuringthefirsttwoyearsoftheDepression,Shiroyamaargues,China escapedthedeflationarypressuresthatbesettheworld'smajorindustrialeconomies,butbeginninginlate1931,statessuchasGreatBritain,Japan,andthe United Statesabandonedthegoldstandard.Astheinternationalvalueofsilver rose,Chineseproductssuchassilklosttheircompetitiveedge,anddeclining priceswithinChinaleftruralproducerswithoutmarketsforrawmaterialsand industrialenterprisesunabletorepaybankloans.Theeconomyplungedinto a severerecession,forcingtheNationalistregimein1935tojettisonthesilver standardandestablishanewmonetarysystemthatrequiredclosesupervision by technocraticelites.Theauthormaintainsthatthisunprecedentedcrisis prompted a shiftfromthelaissez-faireattitudesembracedinearlierperiodstoa policyofcommittedgovernmentalintervention,achangethat"politicizedthe entireChineseeconomy"(p.2).MuchastheNewDealredefinedtherelationship betweenstateandmarketintheUnitedStates,thechallengesofcurrencyreform resultedinagrowingofficialpresenceinthecommandingheightsoftheChinese economy. Inthiswell-writtenmonograph,Shiroyamachallengesearlierunderstandings ofChina'sexperienceduringtheGreatDepressionandcontributestodebatesover © 2012 by University of Hawai`i Press Reviews 105 therelativeseverityofthedownturnandthelevelofeconomicintegrationin RepublicanChina.ThomasRawski'spioneeringworkonprewarChinaidentified theyearsfrom1914to1936asaperiodofcontinuedeconomicgrowth,asserting thatdeflationarypressuresafter1929hadalimitedimpactonpricesinChina.1The printingofadditionalpapercurrencyamelioratedthedrainofsilverfromthe country,andastablemonetarysupplyhelpedtoinsulateproducersandconsumers fromtheworsteffectsoftheDepression.Marie-ClaireBergere'sclassicstudyofthe Chinesebourgeoisiealsoarguedforamildrecession,althoughtheauthorrooted heranalysisinthestructuralcharacteristicsoftheRepublicaneconomy.2Inher view,theindustrialeconomyofChina'scoastalregionsmaintainedweaktiestothe agrariansector,andthenation'sruralheartlandfacedfewadverserepercussions fromtheglobalcollapse.Incontrast,Shiroyamaconvincinglydemonstratesthata sharpdeclineinpricesunderminedcreditinstitutionsinthecountryside,deprived primaryproducersofmarketsforcommoditiessuchasrawsilkandcotton,and interruptedthecirculationoffundsfromlargecitiestotowns,villages,andhamlets.Atthesametime,afinancialcrisisstruckthebankingcenterofShanghaiin 1934­1935,andpricedisruptionsaffectedevenperipheralregionssuchasYunnan andGuizhou.3Insum,theprofounddislocationcausedbytheDepressionnotonly suggestsahighdegreeofmarketintegrationwithinChinabutreflectsthedepthof thecountry'stiestotheglobaleconomyintheearlytwentiethcentury. YettheworkofscholarssuchasMargheritaZanasiandWilliamKirbycasts doubtonShiroyama'sclaimthatthecreationofanewmonetarysystemservedas theprimarycatalystintransformingstate-marketrelationsinRepublicanChina.4 Anovelpatternofgovernmentalintrusionintheeconomyhademergedasearlyas 1927,facilitatedbythepassageofalargecorpusoflegislationregulatinginsurance, maritimetradeandnavigation,creditinstruments,patentsandcopyright,and corporategovernance.AstheNationalistregimeattemptedtoexpanditsrevenue base,authoritiesimposedanumberofnewtaxesonprivatebusinessesandcreated theadministrativeinfrastructurenecessarytomonitorcomplianceandpunish infractions.Inaddition,thelate1920smarkedtheadventofcentralizedeconomic planning,andnewbureaucraticorganssuchastheNationalEconomicCouncil, theNationalResourcesCommission,andtheNationalReconstructionCommissionsoughttorealizeasweepingvisionofeconomicmodernityinChina.Elites believedthateconomicgrowthwouldencouragepoliticalintegrationandenable Chinatotherecoversovereignrightsithadforfeitedundertheunequaltreaty system.Duringthelate1910sand1920s,theNationalistpartylinkedthisdevelopmentalistideologytotheprojectofnationalsalvation,arguingfortheneedto combinepopularunityandmaterialpowerinthestruggleagainstforeignimperialism.Inshort,themonetaryreformsof1935acceleratedongoingchangesinthe relationshipbetweenstateandmarketinChina,butthecentralgovernmenthad chosentoassumeagreatermanagerialroleintheeconomypriortotheonsetof theDepression. 106 ChinaReviewInternational:Vol.18,No.1,2011 Nevertheless,Shiroyamapresentsherargumentwithadmirableclarityand drawsonabroadrangeofarchivalmaterialstodocumenttheevolutionofChina's currencysystemintheearlytwentiethcentury.Usefultables,charts,andmaps appearthroughoutthevolume,andsheexplainstechnicalissuesrelatedtothe operationofexchangeratemechanismswithskill.Hertransnationalframework reflectsagrowingmethodologicaltrendinthefieldofmodernChinesehistory andensuresthatthisbookwillappealnotonlytoaspecializedsinologicalaudiencebutalsotoscholarsworkingincomparativeeconomichistoryanddevelopmentstudies.ReaderswilldiscoverinShiroyama'shistoricalnarrativeresonances oflaterdebatesaboutthevulnerabilityofThirdWorldstatestoforeignexchange crisesaswellasongoingdisputeswiththePRCaboutthemanipulationofits currency,therenminbi.Inpartbecauseofthecontinuingrelevanceofthethemes itexplores,Shiroyama'smonographwillserveasthedefinitivetreatmentofChina's experienceduringtheGreatDepressionformanyyearstocome. StephenR.Halsey Stephen R. Halsey is an assistant professor at the University of Miami and specializes in modern China, global and comparative history, colonialism, and economic history. NOTES 1. ThomasRawski,Economic Growth in Prewar China(Berkeley:UniversityofCalifornia Press,1989). 2. Marie-ClaireBergere,The Golden Age of the Chinese Bourgeoisie, 1911­1937(NewYork: CambridgeUniversityPress,1989). 3. TimWright,"DistantThunder:TheRegionalEconomiesofSouthwestChinaandthe ImpactoftheGreatDepression,"Modern Asian Studies34,no.3(2000):697­738. 4. MargheritaZanasi,Saving the Nation: Economic Modernity in Republican China(Chicago:UniversityofChicagoPress,2006);WilliamC.Kirby,"EngineeringChina:Birthofthe DevelopmentalState,1928­1937,"inBecoming Chinese: Passages to Modernity and Beyond,ed.Yeh Wen-hsin(Berkeley:UniversityofCaliforniaPress,2000),pp.137­160. EricTagliacozzoandWen-ChinChang,editors.Chinese Circulations: Capital, Commodities, and Networks in Southeast Asia.Durham,NC:Duke UniversityPress,2011.552pp.Hardcover$99.00,isbn978-0-8223-4881-8. © 2012 by University http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png China Review International University of Hawai'I Press

China during the Great Depression: Market, State, and the World Economy, 1929–1937 (review)

China Review International, Volume 18 (1) – Aug 9, 2011

Loading next page...
 
/lp/university-of-hawai-i-press/china-during-the-great-depression-market-state-and-the-world-economy-bTQW9S0IIb
Publisher
University of Hawai'I Press
Copyright
Copyright © University of Hawai'i Press.
ISSN
1527-9367
Publisher site
See Article on Publisher Site

Abstract

104 ChinaReviewInternational:Vol.18,No.1,2011 TomokoShiroyama.China during the Great Depression: Market, State, and the World Economy, 1929­1937. Cambridge,MA:HarvardUniversityAsia Center,2008.ix,325pp.Hardcover$45.00,isbn978-0-674-02831-9. Paperback$24.95,isbn978-0-674-03617-8. Thestockmarketcrashof1929usheredinaprotractedperiodofeconomicdecline inmuchofEurope,NorthAmerica,andAsia,andledmanystatestoestablish greaterregulatorycontrolovercapitalistenterprise.Thisevocativestudyby TomokoShiroyamaseekstointegrateChina'shistoricalexperienceduringthe GreatDepressionintothebroaderglobalnarrativeandto"offercriticalinsighton state-marketrelations"intheearlydecadesofthetwentiethcentury(p.11).In1927, theauthorcontends,thenewNationalistregimeadoptedtheexistingcurrency systemwithlittlemodification,continuingtoadheretothesilverstandardinan erawhentheUnitedStates,Europe,andJapanreliedongoldtobacktheirlegal tender.HigherdemandforsilverensuredthatsignificantquantitiesofthispreciousmetalflowedintoChinaduringtheseyears,andanincreaseinthemoney supplysustainedamildinflationarytrendincommodityprices.Theauthorasserts thatbanksnegotiatedloancontractswithbusinessenterprisesontheassumption thatthevalueoftheircollateralwouldremainsteadyorincreaseovertime,andthe cottonandsilkindustriesinparticulartookadvantageofeasycredittoexpand theiroperationsinregionslikethelowerYangzidelta.Yetthecentralgovernment lackedtheinstitutionalinfrastructuretoregulatethevalueofitscurrency,and changesintheinternationalpriceofsilverwouldsoonendangertheeconomic growthChinahadenjoyedinthe1920s. DuringthefirsttwoyearsoftheDepression,Shiroyamaargues,China escapedthedeflationarypressuresthatbesettheworld'smajorindustrialeconomies,butbeginninginlate1931,statessuchasGreatBritain,Japan,andthe United Statesabandonedthegoldstandard.Astheinternationalvalueofsilver rose,Chineseproductssuchassilklosttheircompetitiveedge,anddeclining priceswithinChinaleftruralproducerswithoutmarketsforrawmaterialsand industrialenterprisesunabletorepaybankloans.Theeconomyplungedinto a severerecession,forcingtheNationalistregimein1935tojettisonthesilver standardandestablishanewmonetarysystemthatrequiredclosesupervision by technocraticelites.Theauthormaintainsthatthisunprecedentedcrisis prompted a shiftfromthelaissez-faireattitudesembracedinearlierperiodstoa policyofcommittedgovernmentalintervention,achangethat"politicizedthe entireChineseeconomy"(p.2).MuchastheNewDealredefinedtherelationship betweenstateandmarketintheUnitedStates,thechallengesofcurrencyreform resultedinagrowingofficialpresenceinthecommandingheightsoftheChinese economy. Inthiswell-writtenmonograph,Shiroyamachallengesearlierunderstandings ofChina'sexperienceduringtheGreatDepressionandcontributestodebatesover © 2012 by University of Hawai`i Press Reviews 105 therelativeseverityofthedownturnandthelevelofeconomicintegrationin RepublicanChina.ThomasRawski'spioneeringworkonprewarChinaidentified theyearsfrom1914to1936asaperiodofcontinuedeconomicgrowth,asserting thatdeflationarypressuresafter1929hadalimitedimpactonpricesinChina.1The printingofadditionalpapercurrencyamelioratedthedrainofsilverfromthe country,andastablemonetarysupplyhelpedtoinsulateproducersandconsumers fromtheworsteffectsoftheDepression.Marie-ClaireBergere'sclassicstudyofthe Chinesebourgeoisiealsoarguedforamildrecession,althoughtheauthorrooted heranalysisinthestructuralcharacteristicsoftheRepublicaneconomy.2Inher view,theindustrialeconomyofChina'scoastalregionsmaintainedweaktiestothe agrariansector,andthenation'sruralheartlandfacedfewadverserepercussions fromtheglobalcollapse.Incontrast,Shiroyamaconvincinglydemonstratesthata sharpdeclineinpricesunderminedcreditinstitutionsinthecountryside,deprived primaryproducersofmarketsforcommoditiessuchasrawsilkandcotton,and interruptedthecirculationoffundsfromlargecitiestotowns,villages,andhamlets.Atthesametime,afinancialcrisisstruckthebankingcenterofShanghaiin 1934­1935,andpricedisruptionsaffectedevenperipheralregionssuchasYunnan andGuizhou.3Insum,theprofounddislocationcausedbytheDepressionnotonly suggestsahighdegreeofmarketintegrationwithinChinabutreflectsthedepthof thecountry'stiestotheglobaleconomyintheearlytwentiethcentury. YettheworkofscholarssuchasMargheritaZanasiandWilliamKirbycasts doubtonShiroyama'sclaimthatthecreationofanewmonetarysystemservedas theprimarycatalystintransformingstate-marketrelationsinRepublicanChina.4 Anovelpatternofgovernmentalintrusionintheeconomyhademergedasearlyas 1927,facilitatedbythepassageofalargecorpusoflegislationregulatinginsurance, maritimetradeandnavigation,creditinstruments,patentsandcopyright,and corporategovernance.AstheNationalistregimeattemptedtoexpanditsrevenue base,authoritiesimposedanumberofnewtaxesonprivatebusinessesandcreated theadministrativeinfrastructurenecessarytomonitorcomplianceandpunish infractions.Inaddition,thelate1920smarkedtheadventofcentralizedeconomic planning,andnewbureaucraticorganssuchastheNationalEconomicCouncil, theNationalResourcesCommission,andtheNationalReconstructionCommissionsoughttorealizeasweepingvisionofeconomicmodernityinChina.Elites believedthateconomicgrowthwouldencouragepoliticalintegrationandenable Chinatotherecoversovereignrightsithadforfeitedundertheunequaltreaty system.Duringthelate1910sand1920s,theNationalistpartylinkedthisdevelopmentalistideologytotheprojectofnationalsalvation,arguingfortheneedto combinepopularunityandmaterialpowerinthestruggleagainstforeignimperialism.Inshort,themonetaryreformsof1935acceleratedongoingchangesinthe relationshipbetweenstateandmarketinChina,butthecentralgovernmenthad chosentoassumeagreatermanagerialroleintheeconomypriortotheonsetof theDepression. 106 ChinaReviewInternational:Vol.18,No.1,2011 Nevertheless,Shiroyamapresentsherargumentwithadmirableclarityand drawsonabroadrangeofarchivalmaterialstodocumenttheevolutionofChina's currencysystemintheearlytwentiethcentury.Usefultables,charts,andmaps appearthroughoutthevolume,andsheexplainstechnicalissuesrelatedtothe operationofexchangeratemechanismswithskill.Hertransnationalframework reflectsagrowingmethodologicaltrendinthefieldofmodernChinesehistory andensuresthatthisbookwillappealnotonlytoaspecializedsinologicalaudiencebutalsotoscholarsworkingincomparativeeconomichistoryanddevelopmentstudies.ReaderswilldiscoverinShiroyama'shistoricalnarrativeresonances oflaterdebatesaboutthevulnerabilityofThirdWorldstatestoforeignexchange crisesaswellasongoingdisputeswiththePRCaboutthemanipulationofits currency,therenminbi.Inpartbecauseofthecontinuingrelevanceofthethemes itexplores,Shiroyama'smonographwillserveasthedefinitivetreatmentofChina's experienceduringtheGreatDepressionformanyyearstocome. StephenR.Halsey Stephen R. Halsey is an assistant professor at the University of Miami and specializes in modern China, global and comparative history, colonialism, and economic history. NOTES 1. ThomasRawski,Economic Growth in Prewar China(Berkeley:UniversityofCalifornia Press,1989). 2. Marie-ClaireBergere,The Golden Age of the Chinese Bourgeoisie, 1911­1937(NewYork: CambridgeUniversityPress,1989). 3. TimWright,"DistantThunder:TheRegionalEconomiesofSouthwestChinaandthe ImpactoftheGreatDepression,"Modern Asian Studies34,no.3(2000):697­738. 4. MargheritaZanasi,Saving the Nation: Economic Modernity in Republican China(Chicago:UniversityofChicagoPress,2006);WilliamC.Kirby,"EngineeringChina:Birthofthe DevelopmentalState,1928­1937,"inBecoming Chinese: Passages to Modernity and Beyond,ed.Yeh Wen-hsin(Berkeley:UniversityofCaliforniaPress,2000),pp.137­160. EricTagliacozzoandWen-ChinChang,editors.Chinese Circulations: Capital, Commodities, and Networks in Southeast Asia.Durham,NC:Duke UniversityPress,2011.552pp.Hardcover$99.00,isbn978-0-8223-4881-8. © 2012 by University

Journal

China Review InternationalUniversity of Hawai'I Press

Published: Aug 9, 2011

There are no references for this article.

You’re reading a free preview. Subscribe to read the entire article.


DeepDyve is your
personal research library

It’s your single place to instantly
discover and read the research
that matters to you.

Enjoy affordable access to
over 18 million articles from more than
15,000 peer-reviewed journals.

All for just $49/month

Explore the DeepDyve Library

Search

Query the DeepDyve database, plus search all of PubMed and Google Scholar seamlessly

Organize

Save any article or search result from DeepDyve, PubMed, and Google Scholar... all in one place.

Access

Get unlimited, online access to over 18 million full-text articles from more than 15,000 scientific journals.

Your journals are on DeepDyve

Read from thousands of the leading scholarly journals from SpringerNature, Elsevier, Wiley-Blackwell, Oxford University Press and more.

All the latest content is available, no embargo periods.

See the journals in your area

DeepDyve

Freelancer

DeepDyve

Pro

Price

FREE

$49/month
$360/year

Save searches from
Google Scholar,
PubMed

Create folders to
organize your research

Export folders, citations

Read DeepDyve articles

Abstract access only

Unlimited access to over
18 million full-text articles

Print

20 pages / month

PDF Discount

20% off