Shanghai_industries_under_Japanese_occup

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Unformatted text preview: Chapter 1 Shanghai Industries under Japanese Occupation Bombs, Boom, and Bust (193 7—1945) CHRISTIAN HENRIOT The fate of Shanghai industries during the war is a central issue.1 The city repre— sented the main industrial center of the country, with the highest concentration of firms and urban proletariat. It had experienced a tremendous transformation since its opening to foreign trade in 1842 and the development of modern indus- tries after the Shimonoseki treaty of 1895. Although Manchuria also underwent a similar process of development, it did not lead to the same level of concentra— tion and, above all, it became so as a Japanese semi-colony. During and after World War I, Shanghai’s booming economy literally took off thanks to a process of substitution that saw the multiplication of a wide array of industrial firms, most notably textile and flour mills. Although less well known, the manufacture of machinery also reached a very high level during the 19305.2 Shanghai had become the vanguard of China’s economic modernization. By 1937, Shanghai was also the major commercial and financial hub of the country on which the Nationalist regime depended to a large extent for its revenue. The city drained huge amounts of resources from the hinterland, it served as a transformation and redistribution center, and it attracted tens of thousands of job seekers from the surrounding provinces. In spite of the criti- cisms Rhoads Murphey has addressed to his own work on the role of Shanghai, the city was not a world unto itself. Its development did have linkage effects on the regional economy and the prosperity of its industries had a direct reso- nance on the life of millions of peasants.3 Therefore, the bombing of the city, I This essay is based on documentary research conducted in association with Feng Yi, junior research fellow at the lnstitut d’Asie Orientale. 2 Rawski, Thomas, “The Growth of Producer Industries, 1900—1971," in Willmott, W. E. (Ed.), and Perkins, Dwight H. (Ed.), China’s Economy in Historical Perspective, Stanford, Stanford ‘»University Press, 1975, pp. 203—233. 3 Murphey, Rhoads, Shanghai: Key to Modern China, Cambridge, Harvard University Press, 1953; Treaty Ports and China 's Modernization: What Went Wrong? Michigan Papers in Chinese Studies 17 Christian Henriof its occupation by the Japanese army, its progressive sealing off from the rest ofthe country, and the institution of monopolies by the Japanese authorities on vital raw materials all altered the role and the influence of Shanghai in a fun- damental way. As Robert Barnett once wrote: “Shanghai became a hostage to politics.”4 The evolution of Shanghai industries under Japanese occupation therefore requires a careful examination of the general political and economic context in China and more specifically in Central China. It cannot be fully understood without studying the monopolistic policies implemented by the Japanese army in order to take control of the agricultural, mineral, and industrial resources of the Lower Yangzi area.5 Although this essay will focus primarily on the situation in Shanghai, it will show that the city was not the “lone island” so often referred to in contemporary accounts, and not just in economic terms. Changes in its hinterland had a direct and often negative impact on many sectors of the economy. Yet it is only after Pearl Harbor and the occupation of the International Settlement that the city was more effectively cut off from its hinterland and overseas markets. Three sets of questions will be addressed in this chapter. The first looks at the extent of the damage suffered by Shanghai industries during the conflict that swept the city from August 13 to the end ofNovember 1937. The second line of inquiry is about the nature of the recovery of the local economy after the cessa- tion of hostilities. I shall examine how far and how fast industrial firms managed to resume production and which factors presided over these changes. Finally, my attention will focus on the creeping paralysis that enveloped the city’s eco— nomic system during the second part of the war, as well as on the changes induced by wartime conditions and the policies introduced by the Japanese and Chinese authorities in the industrial structure. Throughout this study, there will be a concern as to what extent the Japanese were able to muster local resources, especially Shanghai industries, to serve their military ambitions in China. no. 7, Ann Arbor, University of Michigan, 197 l; The Outsiders: The Western Experience in India and China, Ann Arbor, University ofMichigan Press, 1977. 4 Barnett, Robert W., Economic Shanghai: Hostage t0 Politics. 193 7—194], New York, institute for Pacific Relations, l94l. 5 The issue of Japanese policies and their consequences in Central China have been addressed in ' Henriot, Christian, “War and Economics: The Control of Material Resources in the Lower Yangzi and the Shanghai Area Between l937 and 1945,” paper at the international conference, “The Role of the Republican Period in Twentieth Century China: Reflections and Reconsiderations,” Venice, 30 June—3 July l999. 18 WmamwmwwmwwW/m v) We ‘ 3, The flow ofrefugees crossing Garden Bridge into the International Settlement. Source: Unknown. 19 Christian Henriot WAR DAMAGES AND LOSSES A complete assessment of the losses and damages incurred by Shanghai in- dustries during the war is probably an insoluble question. Three different con— straints prevent us from reaching a definite and fully reliable image. First, the assessment of war damages became at once a political issue. Nationalistic con- siderations on the Chinese side led to an inflation ofthe figures, as in 1932.6 Both government and entrepreneurs had an interest in raising the stakes from the perspective of postwar indemnities.7 Second, most of the damage took place in areas that were occupied by the Japanese army. Therefore, the collection of data was uneven. In the International Settlement, the SMC did a fairly reliable survey. In the Chinese municipality, however, the legitimate government col- lapsed and the puppet authorities were certainly not in a position to undertake any serious study. Most of the assessments published were produced by profes- sional organizations or private bodies whose methodology we cannot control.8 In other words, we have to make do with incomplete data. Third, apart from the plants that were fully destroyed, the data rarely indicate the extent of “damage” in great detail. Furthermore, there were also transfers of machinery and other equipment by the Japanese army during the period of hostilities. Such moves are not easy to distinguish from real destruction. Finally, available figures tend to be contradictory. When war broke out, economic life collapsed. The conflict started in the eastern and northern districts (Yangshupu, Zhabei, and Hongkou) and progres- sively engulfed the whole city, even if actual fighting took place only in the Chinese municipality. The territory of the settlements were by and large im- mune from fighting, although heavy bombing and shelling sometimes caused 6 On the first Sine-Japanese conflict and its conSequences, see Henriot, Christian, Shanghai 1927— 93 7. Municipal power: locality and modernization, Berkeley, University of California Press, 1993, chap. 3. 7 The Nationalist government established a special committee for war indemnities, but it was a late initiative and it was concerned with retrieving and summarizing data at the national level. In a study of the history of this committee, the name of Shanghai appears only three times. Qi Jingde, Zhongguo dui ri kangzhan sunshi diaocha (A historical account of the surveys of China’s losses during the war with Japan), Taipei, Guoshiguan, 1987. Han Qitong, a member ofthe Academia Sinica, made an independent survey after the war. Although it has been hailed as the best scientific study of China’s war losses, it suffers from the same limitations referred to above. All the figures have been computed at the national level, and the damages have been expressed in monetary terms. In spite of its usefulness, there is no way to retrieve any data related to Shanghai. Han Qitong, Zhongguo duiri zhanshi sunshi zhi guji 193 7—1945 (An estimate ofChina‘s losses in the war against Japan, 1937—1943), Shanghai, Zhonghua shuju, 1946. The Shanghai General Chamber of Commerce collected claims from its members, but this was a fairly late initiative and the available records look very incomplete. 20 WWaW/rmfiflsflmtt‘wflwmMewawwmnnrrMa/wwanwzr/v/ffiiifiwnzsf Shanghai Industries under Japanese Occupation collateral damage in the settlements. There was an exception, however. The eastern industrial district of Yangshupu became the focus of considerable fight- ing between Chinese and Japanese troops. This was the area where the largest factories were located. According to a report by the French commercial attaché, approximately 60 percent of the larger industrial plants were to be found in the eastern district. The rest was concentrated in the western part of the city.9 The distribution of small plants was slightly different. Whereas 60 percent of them were located in the eastern district, IO percent had their seat in the northern district, 20 percent in the western district, and 10 percent in the central district.10 The above figures are crude indications, but they show that certain sectors of industry were heavily concentrated in the northern districts. Zhabei housed hundreds of workshops, which were bombed and burned to the ground. Hongkou, the area where the Japanese population had its quarters, was also massively destroyed. It was said that 35 percent of the plants located in Zhabei as well as 20 percent of those in Nanshi and Pudong were destroyed.1 l One-half of the Zhabei flour mills were turned into ashes.12 In a book published in 1938, I-Isii Shuhsi indicated that 905 plants had been fully destroyed and a thousand more had been partially damaged or destroyed. ‘3 These figures were drawn from the report published by the industrial section of the SMC in May 1938.14 This list included only the plants located in the International Settlement. Before the war, there were 3,801 registered plants in the settlement (this figure does not include the western external road area). The destroyed plants represented around one-fifth of Shanghai’s industrial po- tential. They employed more than 30,000 workers. Table 1.1 lists the number of destroyed plants by sector. Machine and textile factories were severely hit. Together, they represented one—half of the total. They formed, with flour mills, the core of Shanghai industry. The textile industry was made up of a small group of large plants, mainly cotton mills, and a large group of smaller ventures, especially in 9 Bulletin d information: économiques, 1 October 1937, p. 3, Consulat général de Shanghai, Archives diplomatiques de Nantes, box 45 (série noire). On the distribution of Shanghai in- dustries, see Alain Roux’s work, Le Shanghai ouvrier des années trente: Coolies, gangsters et syndicalistes, Paris, L’Harmattan, I993. ‘0 Bulletin d'in/brmations économiques, 1 October 1937, p. 3, Consulat general de Shanghai, Archives diplomatiques de Nantes, box 45 (série noire). '1 Huang Wenzhong, Zhongguo zhanshijing/‘i teji, Shanghai, Zhongwai chubanshe, 1940, p. 146. '3 Shanghai zhi gongshangye (Shanghai’s commerce and industry), [Shanghai], Zhongwai chubanshe, 1941, p. 21. I: Hsi‘t, Shuhsi, Japan and Shanghai, prepared under the auspices of the Council of International Affairs, Shanghai, Kelly & Walsh, 1938, p. 42. 14 The Municipal Gazette, vol. 31, 1938, p. 3. 21 Christian Henriot Table 1.1 The SMC survey ofdestroyedfactories in the International Settlement Machinery and metal products 410 Woodworking 23 Textiles l 36 Other 21 Printing, paper 75 Leather, rubber 19 Metal industry 72 Bricks, glass 8 Chemicals 49 Vehicles 3 Clothing 44 Scientific and musical instruments 3 Food, drinks, tobacco 40 Furniture 2 Source: The Municipal Gazette. vol. 31. 1938, p. 3. the silk industry.‘5 Machine manufacturing and repair comprised around 200 small workshops located mostly in Hongkou (80%).16 From the SMC report, it appears that around 90 dyeing plants, 15 knitting mills (out of 50), 51 silk reeling mills (out of 100), 118 silk weaving mills (out of400), 8 ofthe 48 largest tobacco plants, and 8 flour mills (out of 15) were wiped out.‘7 There were sixty—five cotton mills before the hostilities with 2,676,000 spin— dles and 30,000 looms.‘8 Only ten of them were located in war»free areas.” Only ten or eleven of the thirty Chinese-owned cotton mills (237,074 spindles, 8754 looms) in Shanghai were located in war-free areas, and seven of them managed to work throughout the hostilities. For the others, the damage was uneven, although only six were completely destroyed or seriously damaged.20 ‘5 On the development of the textile industry in Shanghai. see Berger-e. Marie-Claire, Capitalisme national et impérialisme: la crise desfilatures chinoises en 1923. Cahiers du Centre Chine 2, CRDCC, Paris, Ecole des Hautes Etudes en Sciences Sociales. 1980 and Bergere, Marie-Claire, The Golden age ofthe Chinese bourgeoisie, Cambridge, Cambridge University Press, 1989. '6 China Weekly Review, 3 August 1940, p. 347. '7 Bulletin mensuel, May 1938, p. 3. '8 There were 31 Chinese mills, 30 Japanese mills, and 4 British mills. They had respectively 1,114,408, 1,331,412, and 221,336 spindles. Wang Jishen. Zhanshi shanghai jing/‘i, vol.l, Shanghai jingji yanjiusuo, 1945, p. 191; Zhanhon shanghai zhi gangs/tang ge ye, Shanghai, Zhongguojingii yanjiuhui, Minyi shuju, 1940, p. 38. Bulletin d'in/brmations économiques, 1 October 1937, p. 3. Although the various sources 1 have consulted indicate a total of 21 damaged Chinese cotton mills, there is always one mill missing from their listing, while the total number of destroyed spindles is correct. Hopeless! A detailed summary of war damage tells the following: 2 fully destroyed (59,400 spindles). 6 seriously damaged (219,255 spindles), l3 moderately damaged (449,426 spindles), 1 1 untouched (385,932 spindles). It is therefore extremely difficult to recon— cile these figures and to estimate the real numberof spindles or looms that were actually destroyed. A postwar study states that only 130,000 spindles were transferred from the Yangshupu district to the International Settlement. But one can also imagine that the Japanese seized a large num- ber of spindles. Shou Bai, “Shanghai fangzhiye zhi jinxi,” Shangve yuebao, vol. 21, no. 1, January 1941, pp. 1—2; Li Shengbo, “Shi nian lai zhi mianfangzhi gongye.” in Tan Xihong I9 20 22 Shanghai Industries under Japanese Occupation The Japanese cotton mills also suffered. They lost 17 percent oftheir equip— ment during the conflict.2i Silk reeling mills were almost all located in Zhabei and Hongkou (97%). Thirty were entirely destroyed and three were severely damaged. Only ten or eleven escaped the hostilities untouched. The equipment of the destroyed plants represented 68 percent of the city’s potential.22 Fifteen out of fifty knitting plants were destroyed, though nine managed to move their machinery before the destruction of the buildings. Dyeing plants were legion in Shanghai. There were around 270 houses at the time of hostilities. More than one—half were located in Hongkou, Zhabei, and Nanshi. More than 190 concerns, large and small, were reported by the trade association to have been destroyed. The survivors moved en masse into the settlement at the end of the hostilities and twenty new ones were soon established.23 The tobacco industry was much less affected. Of the forty-eight tobacco plants, six were destroyed, three were seriously damaged, and eight suffered minor destruction. Twelve were located in safe areas. Nevertheless, eight of the eighteen large Chinese—owned plants were destroyed.24 Chinese rubber factories numbered thirty—four before the war. Five were reduced to ashes, while ten were severely damaged. Fifteen of them suffered mild destruction and four escaped trouble altogether.25 The Commercial Press (Shangwu yinshuguan) and 200 small printers were entirely destroyed.26 Of the fifteen flour mills, eight were destroyed, incurring losses estimated at 2 million yuan, while those of glass (Ed), Shi nian lai zhi zhongguojing/i (1937—1945) (China’s economy during the past ten years), Shanghai, Zhonghua shuju (coll. .lindai zhongguo shiliao congkan xuji), 1948, p. 79. Throughout China, only 19 of the 88 Chinese-owned cotton mills escaped destruction. Despatch, 31 July 1939, Consular trade report, E326, Box 1415, National Archives at College Park; Shanghai zhi gongshangye. p. 24. “ lnoue Kiyoshi, Nitchii senso‘ to Nitchti kankei (The Sine-Japanese war and Sine-Japanese rela- tions), Tokyo, Hara shobo, 1988, p. 338. The Japanese cotton mills suffered in the following way: 2 fully destroyed (50,656 spindles), 7 seriously damaged (349,924), 5 moderately damaged (409,084 spindles), and 16 untouched (553,392 spindles). Shou Bai, “Shanghai fangzhiye zhi jinxi,” Slzangyeyuebao, vol. 21, no. 1, Jan. 1941, pp. 1—2. There were 44 silk reeling mills in operation in Shanghai before the war. From a maximum of 1 12 in the early 1930s, the number of plants had undergone a severe reduction following the economic crisis of 1931—1935. “Shanhai ni okeru seishigyo no jokyo” (The situation of the silk industry in Shanghai). Shanhai (Shanghai), no. 1026, 1943, p. 97; Shanghai zhi gongshangye, p. 6; Zhou Qibang, “Zhongguo zhanshi gongye gaikuang" (General situation of China’s wartime industry), Zhongguo gongyeynekan (China lndustrial Monthly), vol. 1, no. 1, 1943, p. 37. Wang Jishen, Zhanshi shanghai jingii, p. 198; Shanghai zhi gongshangye, p. 21; An annual report ofShanghai commodity prices (from the annual report of the Industrial section of the Shanghai Municipal Council), Shanghai, National Tariff Commission, 1938, p. 27. Shanghai zhi gongshangye, p. 24. 25 Shanghai zhi gongshangye, p. 36; A n annual report of'Shanghai commodity prices, p. 27. 1" Bulletin (1 ‘in/ormations économiques, 17 April 1939, p. 2. 22 24 v) 23 Christian Henrior Table 1.2 Chinese-ownedfirms destroyed during the hostilities Wool 22 Cotton spinning 31 Silk reeling 112 Miscellaneous 83 Machines 103 Dyeing 6 Paper 14 Leather 8 Glass 31 Matches 6 Source: Huang Wenzhong, leongguo z/mnshi jinng teji, Shanghai, Zhongwai chubanshe. 1940, p. 146. factories — one—half were erased — were valued at 1—2 million yuan.27 Most of these factories, plants, and workshops were Chinese-owned. Except for textile mills, the available data do not provide a breakdown by ownership. There is no doubt that Chinese industrialists were the main losers. Table 1.2 gives an idea of the destruction. The total number of firms destroyed (416) is certainly below the reality. Imme— diately after the war, the Bureau of Social Affairs estimated that 2,270 Chinese- owned plants had been destroyed or damaged causing a total loss of 800 million yuan.28 In a later estimate, the same bureau indicated that 4,998 plants out of a total of 5,255 had suffered.” As indicated above, the SMC estimated that 905 firms had been completely destroyed while a thousand had suffered damages. An Osaka—based Japanese research center gave the figure of 1958 destroyed plants, valued at 500 million yuan, before the fall of Nanshi.30 It is clear that in order to emphasize the extent of the damage, official sources often did not distinguish between “fully destroyed” and “damaged.”3| in 1939, 27 Report, 26 July 1939, Consulartrade report, E326, Box 1415, National Archives at College Park; Chésabu, “Shanhai kégyo kai no gaikyé” (The situation of Shanghai industrialists), Shari/mi (Shanghai), no. 986, 1939, p. 91. 28 Bulletin (1 'in/brmtzlions économiques, 1 December 1937, p. 3. 29 Zhou Qibang, “Zhongguo Zhanshi gongye gaikuang,” p. 36. 3° Kangzhan zhong de zhongguojingii (The Chinese ec...
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