Involvement in New Technological and Institutional Reform Projects

During the 1870s Shanghai huiguan leaders, the commercial elite of the city, became active exponents, investors and participants in innovative technological- and institutional-reform projects connected with the self-strengthening (ziqiang ) and westernization (yangwu ) movements. The Guangdong leaders Tang Jingxing, Xu Run and Zheng Guanying, because of their early compradorial experience, their exposure to western technology and the patronage of Li Hongzhang, were particularly active during the 1870s and 1880s. In the last decades of the

[45] NCH, March 14, 1878.

century the Ningbo leaders Yen Xinhou, Ye Chengzhong and Yu Xiaqing joined them in influence as modernizing community leaders.

The social arrangements through which new technologies were pioneered in late-nineteenth-century Shanghai make clear the ambiguities of this important aspect of the process we refer to as "modernization." The prospects of new technological implants depended on their successful grafting onto specific native-place networks. Because of powerful competition from highly capitalized foreign firms which enjoyed the benefits of the unequal treaties and, frequently, because of a lack of support from the Chinese state, Chinese merchants could only succeed in expensive new ventures if they organized themselves into close, mutually supporting native-place networks. Important new communication and transportation technologies were spearheaded by specific native-place groups, often in competition with each other. For example, the technology of print lithography was first introduced into China through the Dianshi Studio, owned by the Englishman Frederick Major. Shortly afterward, Chinese entrepreneurs created two competing Chinese lithographic ventures, the Baishi Shanfang and the Tongwen Shuju. The Baishi enterprise belonged to the Ningbo bang ; the Tongwen printing shop belonged to the Guangdong bang .^[46] The stories of several outstanding Chinese experiments with new technologies bear telling because of the native-place meanings embedded in what might otherwise be imagined to be more socially neutral "modernization" processes.

The China Merchants' Steam Navigation Company . During the 1860s the steamship trade among the treaty ports was developed and dominated by the U.S. firm Russell and Company. Because traditional forms of investment provided less return, Chinese comprador-merchants with large amounts of capital were quick to invest in profitable foreign enterprises. More than one-third of the capital for Russell's joint-stock concern, the Shanghai Steam Navigation Company, was Chinese.^[47]

[46] Chen Boxi, Shanghai yishi daguan , vol. 2, 19-20. The Tongwen Shuju was established by the brothers Xu Run and Xu Hongfu. See Christopher Reed, "Steam Whistles and Fire-Wheels: Lithographic Printing and the Origins of Shanghai's Printing Factory System, 1876-1898" (paper presented at conference on Urban Progress, Business Development and Modernization in China, Shanghai, August 17-20, 1993), 16.

[47] On the early history of steam shipping in China, see Kwang-ching Liu, Anglo-American Steamship Rivalry in China (Cambridge, Mass., 1962); Kwang-ching Liu, "British-Chinese Steamship Rivalry in China, 1873-85," in The Economic Development of China and Japan , ed. C. D. Cowan (London, 1964), 49-50. On compradorial investments in steam shipping, see Hao, Comprador , 120-21.

Viewing with dismay both foreign control over much of Shanghai's economic life in the early 1860s and Chinese investment in foreign enterprises, the reformist Shanghai Daotai Ding Richang, together with Li Hongzhang, began to consider ways to recover Chinese control over the economy by promoting Chinese ventures. In 1863 Ding attempted to make Chinese shipping more competitive by lowering taxes on Chinese junks. The next year he proposed to Li Hongzhang that the government encourage Chinese merchants to purchase and construct steamships. In 1868 Yung Wing (Rong Hong, a Yale-educated reformist entrepreneur from Guangdong), with the support of the Zongli Yamen, attempted to create a Chinese joint-stock steamship company but failed for lack of capital. Finally a joint stock company was set up under the aegis of Li Hongzhang, who viewed the enterprise as a fundamental element in a commercial war (shangzhan ) with western companies. Li's advocacy of mercantile nationalism was shared by the vocal reformer Zheng Guanying and his Guangdong fellow-provincial compradors Tang Jingxing and Xu Run, both of whom were important investors in steam shipping. Tang, Xu and Zheng would all be participants in the China Merchants' Steam Navigation Company (CMSNC), the first attempt on the part of Chinese officials to take action to compete with western enterprise.^[48]

Aware of the need for merchant investment as well as merchants' hesitancy to become involved without official patronage, financial support and security against burdensome official meddling, Li developed the idea of guandu shangban (merchant undertaking under official supervision) as the organizational principle of the endeavor. After an initial unproductive start, Li made Tang Jingxing commissioner in charge of the CMSNC. In 1873 Tang resigned as Jardine's comprador and brought in Xu Run to help restructure the business. The reorganized company quickly became a highly successful competitor of western shipping firms.^[49]

[48] Yen-p'ing Hao, "Changing Chinese Views of Western Relations, 1840-95," in Cambridge History of China , 190-92; Liu, "British-Chinese Steamship Rivalry in China," 53. The Chinese name of the company was the lunchuan zhaoshangju (literally, Bureau for Inviting Merchants to Operate Steamships).

[49] See Liu, "British-Chinese Steamship Rivalry in China," 53, for a discussion of this principle. The CMSNC was not the only government-sponsored enterprise which involved Guangdong merchants. In 1877 Li created the Kaiping Mining Company, which would be directed by Tang Jingxing and two other Guangdong merchants, Xu Run and Wu Zhichang (Hao, "Changing Chinese Views," 423). The successful management of the CMSNC is detailed in Chi-kong Lai, "Lunchuan zhaoshangju guoyou wenti, 1878-1881" (Nationalization problems of the China Merchants' Steam Navigation Company), Jindaishi yanjiusuo jikan 17 (1988):15-40; Chi-kong Lai, "Lunchuan zhaoshangju jingying guanli wend, 1872-1901" (Management problems of the China Merchants' Steam Navigation Company), Jindaishi yanjiusuo jikan 19 (1990):67-108; Chi-kong Lai, "The Qing State and Merchant Enterprise: Officials, Merchants and Resource Allocation in the China Merchants' Company, 1872-1902" (paper presented at the Symposium on Qing Imperial State and the Economy, University of Akron, February 22-23, 1991).

The early success of the Chinese steamship company depended on both official patronage and subsidies and Guangdong native-place networks. Tang raised investments in the company through his close ties to Xu Run and other like-minded Guangdong merchants, who participated together in the leadership of the Guang-Zhao Gongsuo. Although Tang hired foreign experts to serve as marine superintendent, as ship captains and as engineers, he relied on sojourning Guangdong merchants as managers and to handle the freighting business. Liu Shaozong (Seating), a Hankou-based Guangdong merchant, took charge of the Hankou office. The freight-brokerage system of the Chinese company was based on the connections of the Guang-Zhao Gongsuo in other treaty ports, reinforced by generous commissions. This extended multiport native-place merchant network ensured a regular clientele for company shipping. As company business became Guangdong business, it stimulated greater coordination and communication between the Shanghai Guang-Zhao Gongsuo and the Hankou Lingnan Huiguan.^[50]

Non-Guangdong merchants were not pleased by the Guangdong hold over the CMSNC. When the CMSNC published an appeal in 1875 asking all Chinese merchants to ship their cargo on CMSNC boats to support a Chinese, rather than a foreign-owned, enterprise, merchants from other areas bridled at the officially supported Guangdong monopoly:

[As a native of a central province], I have resided many years in Shanghai, as a shipper to Yangtze and northern ports. Cheap freights and attention to the convenience and interests of the shipper are important to the trader. Now the China Merchants Steam Navigation Company is entirely under

[50] Xu Run had invested four hundred eighty thousand taels in the enterprise by 1882, when paid stock amounted to two million taels. His relatives and friends subscribed an additional five to six hundred thousand taels. Liu was Hankou comprador for Augustine, Heard and Company (Hao, Comprador , 123). Government support included generous payments for carrying government "tribute rice" as well as tax relief (Kwang-ching Liu, "Steamship Enterprise in Nineteenth-Century China," Journal of Asian Studies 18 [August 1959]:443-44; Liu, "British-Chinese Steamship Rivalry, 55). See Xia Dongyuan, Zheng Guanying ji , vol. 2, 917, for a communication between Zheng Guanying and the Guang-Zhao Gongsuo regarding Hankou business.

the charge of Cantonese—no other province man being in management. Although there are able and honorable men among them, it is to be feared they are not very experienced in the conduct of foreign steamer shipping [seeing that they employ foreign captains].... When the Cantonese appeal to us to ship all of our cargo by their steamers, I reply and ask why should we, the merchants of other provinces do this? ... Supposing that the China Merchants Steam Navigation Company, depending on their rice conveyance profits, were really able to run off foreign vessels? We would see but one Steam Navigation Company, managed by Cantonese and controlled by the mandarins ..., with no guarantee that the interest of the shipper would be attended to.^[51]

Ningbo merchants took the opportunity offered by collisions between CMSNC steamers and other boats to criticize the company and its Guangdong management. During 1874 and 1875, along with reports of various collisions, Shenbao articles attacked the excessive government subsidies, the company's use of a foreign steamer to ship tribute rice and its faulty navigational skills. A legal case arising after a collision with a Ningbo junk led to conflict between the Guangdong managers of the CMSNC and the Shenbao , which published articles sympathetic to the Ningbo junk owners. The North China Herald reported that the company threatened a libel suit against the newspaper for alleging that the CMSNC had extorted statements from the Ningbo crew, forcing them to take responsibility for the accident.^[52]

Although the company was not uncontroversial and was dearly perceived as a Guangdong, as opposed to a truly national, enterprise, there is no question that it was highly successful between 1872 and 1884, while it was under merchant management. It declined in the 1885-1902 period, when, as Chi-kong Lai details, it reverted to bureaucratic management.^[53]

Ningbo merchants not only complained about the CMSNC but wanted their own Ningbo shipping line. In 1882 the influential Ningbo merchant Ye Chengzhong petitioned the court requesting permission to establish a shipping company which would run steamers in competition with the CMSNC.^[54] Ye's petition was not granted, but Ningbo

[51] NCH, April 24, 1875, 395, translation of a letter appearing in the Shenbao .

[52] SB, April 13, 1874, regarding details of the sinking of a Ningbo boat by the CMSNC on January 13, 1874; May 11, 1875; SB, August 2, 1875; NCH, July 24, 1875; NCH, August 7, 1875; NCH, August 21, 1875.

[53] Lai, "Lunchuan zhaoshangju guoyou wenti"; Lai, "Lunchuan zhaoshanghu jing-ying guanli wenti"; Lai, "Qing State and Merchant Enterprise."

[54] The circumstances surrounding Ye's 1882 petition are recounted in NCH, September 10, 1887.

discontents did not rest. Several decades later, under the initiative of Yu Xiaqing, Zhejiang merchants finally realized their ambitions by establishing the Ning-Shao Steamboat Company, which successfully competed with other companies along the Shanghai-Ningbo route. The majority of passengers along this route were Ningbo and Shaoxing people who had long been irritated by the high rates of passage charged by Jardine's, Russell's China Steam Navigation Company, and the CMSNC. To assert control over their own travel and to provide less expensive passage for their community, in 1909 the Shanghai Zhejiang community raised more than one million taels in stock to purchase steamboats and construct docks for the express purpose of transporting fellow-provincials. The success of this venture owed not to state sponsorship but to the loyal patronage of a large Ningbo clientele. Once the company was established, its shipping competitors engaged in a ruthless price war to wipe out the new competition. In response, more than one hundred major Ningbo merchants formed a Ning-Shao Shipping Protection Association, which raised money to support the line.^[55] Without this kind of community support, it is unlikely that the company could have survived the competitive environment.

The Birth of the Huibao. During the Yang Yuelou affair recounted in Chapter 3, the Guangdong people attempted to destroy the Shenbao (even reportedly threatening to burn down the office) in response to their poor treatment on its pages. Forced to abandon this approach because of the protection the Shenbao received through its foreign ownership, the leaders of the Guangdong community arrived at a more creative solution. As reported in the North China Herald , they announced that they would begin an opposition newspaper backed by the power and wealth of their huiguan . The result was the ambitious launching during 1874-75 of a wholly Chinese-owned and -organized daily newspaper, the Huibao .^[56]

The most powerful Guangdong leaders—including Yong Wing

[55] Similar tactics supported the founding of two Ningbo modern banks (Shangye Yinhang and Siming Yinhang) by the major Ningbo capitalists Yu Xiaqing, Zhou Jinzhen, Li Yunshu and Chen Ziqin. See SB, March 2, 1911; Chen Boxi, Shanghai yishi daguan , 172; Chen Laixin, Yu Xiaqing ni tsuite (Regarding Yu Xiaqing) (Kyoto, 1983).

[56] NCH, January 29, 1874; NCH, February 12, 1874. The Huibao appeared a year after the brief launching of the first Chinese-owned newspaper, the Zhaowen xinbao in Hankou. See Ge Gongzhen, Zhongguo baoxueshi (History of Chinese newspapers) (Hong Kong, 1964), 120; Roswell Britton, The Chinese Periodical Press, 1800-1912 (Shanghai, 1933), 71-2; Rowe, Hankow: Conflict and Community , 24.

(Rong Hong), Tang Jingxing, Rong Chunfu, and major Guangdong tea compradors—raised a fund of ten thousand taels and established the newspaper in a building adjoining the offices of the Guangdong-controlled China Merchants' Steam Navigation Company. The newspaper also received the support of Magistrate Ye Tingjuan. According to the North China Herald , the Huibao was initially distributed free of charge, in an attempt to crush the Shenbao .^[57]

The Huibao , celebrated as radical and progressive in Britton's history of the Chinese periodical press (and today in Chinese press histories) and as "conservative and antiforeign" by the contemporary North China Herald , did not survive 1876. As the North China Herald response indicates, the newspaper's critical stance toward the foreign presence in China irritated foreign authorities in the city. According to Ge Gong-zhen, the Huibao adopted a policy of "pen war" (bizhan ) with the foreign-owned Shenbao , stepping in whenever Huibao editors felt the foreign-owned newspaper had betrayed China's interests. Through its outspoken editorial policy the newspaper also incurred the disfavor of Chinese officials, and (after experiments with greater political discretion and an attempt to create an extraterritorial shield through a nominal British proprietor) the merchant backers gradually withdrew from the venture. It stands, nonetheless, as a bold and early creation of a privately owned and instigated Chinese newspaper, stimulated by native-place tensions in the city and organized by a single native-place group.^[58] The creation of the Huibao and the history of the Guangdong people's struggles with the Shenbao demonstrate that newspapers were not uncomplicated vehicles of a new urban identity. Shanghai newspapers, like enterprises in the city, bore native-place tags.