"War and the Co-creation of State–Market Relations: The Collapse of China's Tea Industry during the Second World War"

As one of the critical fronts of the Second World War (1939-1945), China’s War of Resistance Against Japan (1937-1945) profoundly reshaped the nation’s political economy and social fabric. This paper takes the collapse of China’s tea industry as a lens to examine how total war both disrupted and reconfigured state-market relations, revealing the coercive processes through which new economic orders were co-created. Once a globally dominant commodity, Chinese tea had already entered a long decline by the early twentieth century, yet it remained a crucial export on the eve of the Second World War, sustaining millions of rural livelihoods and contributing significantly to state revenue. The Japanese occupation of major producing regions such as Fujian, Anhui, Hunan and Yunnan, together with the fall of vital export hubs including Hong Kong and Singapore, destroyed trade networks and intensified the industry’s crisis.In response, the Nationalist government sought to impose centralised control through export monopolies, price regulation and barter trade agreements with the Soviet Union. These measures, however, were undermined not only by corruption and logistical breakdowns but also by the persistence of informal and shadow practices. Tea farmers and merchants frequently resisted or circumvented state monopolies, turning instead to black markets, smuggling routes and localised exchange networks to survive. Such practices both reflected and reinforced the limits of state capacity, producing an improvised wartime economy that was co-created by the conflicting actions of officials, traders and rural producers.By situating this collapse within both a long-term trajectory (from nineteenth-century dominance to twentieth-century decline) and a global wartime context, the paper demonstrates how the Second World War co-created new, coercive and often dysfunctional forms of state-market relations. The tea industry thus provides a revealing case study of how total war reshaped commodity chains, state capacity and rural economies, while exposing the structural fragilities of the Nationalist regime.Keywords: China’s Tea Industry; World War II; Nationalist Government; Wartime Economy; Co-creation