Big Business in China: Sino-Foreign Rivalry in the Cigarette Industry, 1890-1930

350 Pages·1980·6.132 MB·English

by  Sherman Cochran

Harvard Studies in Business History XXXIII
Edited by Alfred D. Chandler, Jr.
Isidor Straus Professor of Business History
Graduate School of Business Administration
George F. Baker Foundation
Harvard University

Big Business in China
Sino-Foreign Rivalry
in the Cigarette Industry,
1890-1930
SHERMAN COCHRAN
Harvard University Press
Cambridge, Massachusetts
and London, England 1980
Copyright © 1980 by the President and Fellows of Harvard College
All rights reserved
Printed in the United States of America
Library of Congress Cataloging in Publication Data
Cochran,v Sherman, 1940-
Big business in China.
(Harvard studies in business history; 33)
Bibliography: p.
Includes index.
1. Cigarette manufacture and trade—China—History.
2. China—Commerce. I. Title. II. Series.
HD9149.C42C63 381'.45'679730951 79-23907
ISBN 0-674-07262-6
To fan

Editor's Introduction
This history of the growth of and the competition between the British-
American Tobacco Company and the Nanyang Brothers Tobacco Com­
pany in China broadens the scope of the Harvard Studies in Business His­
tory. It is not only the first book in the series on Chinese business history,
it is the first on any Asian country. And it is more than just a pioneering
study in Asian business history, for it is an outstanding example of com­
parative business history. In this case the comparison is between the ac­
tivities of one of the oldest and most successful western multinational
enterprises and one of the largest indigenous Chinese firms competing for
the same potentially vast market.
His comparative approach and his extraordinarily rich source material
thus give Professor Cochran's findings a broader relevance than most
traditional business histories. The book provides new information on the
operations of large industrial enterprises in what remained essentially a
preindustrial commercial economy undergoing the initial political and
cultural, as well as economic, shocks of early modernization. In addition
Cochran provides new information and insights on the ways of duopolis-
tic competition. In analyzing the nature and role of entrepreneurship in
the Chinese cigarette industry, he helps to resolve the debate over the
impact of the absence or presence of entrepreneurial and organization
skills on the modernization of the Chinese economy. Further he examines
from a new perspective the fundamental issues of imperialistic exploita­
tion and economic nationalism. His evaluation of these issues casts light
on a central problem of economic development—the place of rivalry be­
tween indigenous enterprises and outside multinationals in the process of
growth and modernization. Professor Cochran has demonstrated most
successfully how a detailed, thorough study of business records can en­
large our understanding of institutional and economic change.
Alfred D. Chandler, Jr.
vii

Acknowledgments
This book is a study in Chinese business history, a new area of inquiry
that will develop into a full-fledged field only if scholars, archivists, busi­
ness executives, and others are willing to go beyond their usual concerns
and give their attention to it. Fortunately for me, many people, from a
variety of fields and disciplines, have been willing to take this step. Even
when their interests have seemed remote from mine, they have come to
my assistance, and I am especially grateful to them.
Among Chinese historians, there are four to whom my debt is greatest:
Arthur and Mary Wright, whose graduate seminars stimulated my inter­
est in the history of Sino-foreign interaction; Jonathan Spence, who
guided my work on this'topic from the beginning, generously sharing his
insights and encouraging me at every stage; and Andrew Hsieh, who
introduced me to sources and bibliography and showed me how to
search. Other Chinese historians, Beatrice Bartlett, Knight Biggerstaff,
Lloyd Eastman, Robert Kapp, Lillian Li, Susan Naquin, and Charles
Peterson, read all or parts of this book in manuscript form and saved me
from errors of fact and interpretation.
Among scholars in other fields who advised me, several also read all or
parts of this book and made useful suggestions for improving it: histo­
rians of American foreign relations Michael Hunt and Walter LaFeber;
economists Peter McClelland and Thomas Rawski; and historians of
American business Alfred Chandler and Mira Wilkins.
Among those -I consulted about business records, two people were
especially helpful: Parker Po-fei Huang, who answered my questions
about nuances in Chinese business records; and Mattie Russell, who wel­
comed me to the Manuscript Department, Perkins Library, Duke Univer­
sity, and gave me access to unpublished papers there.
Among those I contacted within the cigarette industry, several granted
X Acknowledgments
me extensive interviews about their, experiences in China: Y. L. Kan
(Chien Jih-lin) of the Nanyang Brothers Tobacco Company; C. C.
Kwong (Kuang Ch'ao-ch'i) formerly of the Nanyang Brothers Tobacco
Company; Dorothy Quincy Thomas, widow of James A. Thomas of the
British-American Tobacco Company; and John Ephgrave, Brian Heam-
shaw, and Brian Pearson of the British-American Tobacco Company.
I wish to thank all of these people and many others for reaching be­
yond their immediate concerns, taking an interest in Chinese business
history, and helping me.
Aboveáll, my thanks go to my wife, Jan, who has worked tirelessly on
this book, and, in her tough-minded and loving way, has convinced me
to do my part.