Ther to secure limited liability nor to attract

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ther to secure limited liability nor to attractoutside capital, but rather to obtain shelterfrom official predation rampant in the city ofCanton wracked by rebellion and revolutions(Chung 2010).Most Chinese entrepreneurs operatedoutside the formal sphere, drawing on longstanding traditions of private contractingand social networking to help resolve issuesof information asymmetry and contractualdisputes. Family firms and lineage or relation-based partnerships dominated (Zelin2009).57 The old patronage system remained57 Foreign-owned treaty port firms shared the Chinesepenchant for recruiting on the basis of family or regionallinks (Rawsla 1969, pp. 464-65).much in evidence. In Tianjin, "Guild bosses... opposed the efforts of some merchants tointroduce motor vehicles. . . . threatened tokill the general manager of the factory [thathad purchased trucks, so that] the factoryhad to turn control of transport back to theguild" (Hershatter 1986, p. 134).The establishment of the Kuomintang-ledNanjing government in 1927 marked a stepto recentralize state power. The regimemounted a vigorous effort to establish administrative structures that could formulate andimplement developmental policies. Straussfinds that these efforts "coalesced in a numberof important pockets of Republican government" (1997, p. 340). These state-buildingefforts drew on the model of ChinasWestern-controlled Maritime Customs andSalt Inspectorate, organizations that demonstrated the potential of efficient, honest,transparent, apolitical bureaucracies led byexpatriates but largely operated by Chinesepersonnel (Strauss 1998, chap. 3). TheMinistry of Finance, setting out to emulatethe Salt Inspectorate, which it absorbed in1927/28, hired "personnel who were experienced, competent, and hard-working," oftenturning to "open civil service examinationas the preferred method of recruitment" as"new departments and sections were created" during the 1930s (Strauss 1998, p. 187).The Nanjing government pursued genuine tax reforms. After restoring Chinas tariffautonomy in 1928 (KUBO Töru 2005), theregime sought to impose standard domestic taxes in place of the likin system, whichwas encrusted with tax farming, extralegalfees, and ad hoc imposts (Iwai 2004, pp.381-85). At the same time, CHIANG Kaishek [JIANG Jieshi], the Nanjing regimesstrongman, used traditional tactics to extractresources from urban businesses. CHIANGenlisted Shanghais criminal underworld topressure enterprises located in Shanghaisforeign-controlled concessions, leading toconfrontations with prominent ShanghaiThis content downloaded from 129.100.58.76 on Thu, 19 Dec 2019 21:39:22 UTCAll use subject to
Brandt, Ma, and Raivski: From Divergence to Convergence 89capitalists and eroding the rule of law withinthe treaty port (Coble 1986, p. xi).

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