Abstract

"Arsenal, Cotton Mill, and Railways: Modern Industrial Enterprises and The Regional State in Warlord Northeast China, 1921-1931"

Mingke Ma, University of Oxford (mingke.ma@sant.ox.ac.uk)

This study examines how the Fengtian Clique’s regional state in Northeast China shaped the development of regional modern industrial enterprises. Since 1921, the regional state had invested in several industrial projects endowed by abundant state finance and bank credit expansion. This study chooses the Three Eastern Provinces Arsenal, the Mukden Cotton Mill, and the Fengtian-Hailong-Jilin Railways as case studies. In the interwar period, the sectors of ordnance, textile, and railways represented the technological and organisational strength of the economy and the prospects for substantial industrial transformations. This study argues that the regional state in Northeast China had performed embedded autonomy in stimulating productivity increase for sustained industrialisation. The regional state’s relatively higher level of autonomy from redistributions and speculations allowed the allocation of state finance and factors of production into the sectors with high set-up costs. The regional state institutionalised market connectedness by delegating enterprise governance to the professional-managerial elites with the most heightened market perceptions. The Arsenal was administered by the military elites of the state whose acute demand for the mass production of advanced weapons against rival warlords and imperial forces empowered the engineers within the enterprise on leading innovation. The Arsenal established in-house Research and Development institutions to serve as the platform of knowledge-sharing in design, production, and quality evaluation to realise hybrid product development to incorporate various foreign designs to produce weapons matching the conditions on the Chinese battlefield. In the Cotton Mill and the Railways, the state purposedly retreated from the governance of these ventures to empower the professional managers, either merchants or engineers, to make market-informed managerial decisions driven by profit creation. The state was responsive to the mangers’ recommendations on coordinating factors of production and demands of products when its methods of infant industry protection was restricted due to the unequal treaties.