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MAKING SENSE OF THE ‘BUSINESS GROUP’ IN MODERN CHINA: THE RONG BROTHERS' BUSINESSES, 1901–37

Authors

  • KAI YIU CHAN

    1. National Cheng Kung University
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    • Acknowledgement: This paper was first presented at the Conference on ‘New Paradigms of Chinese Business History: Conception and Case Studies’, organised by the Department of History, Fudan University, 24–5 August 2007. The author would like to thank Professors Mitsuru Hagiwara, Yuichi Kanemaru, and Stephen Morgan for their valuable comments, and Professor Bruce Lockhart for polishing the language.


Abstract

Some China scholars have suggested that ‘business groups’ in pre-Communist China adopted a ‘hierarchical’ structure of management. This perception is re-examined in a study of the inter-firm relationship among the firms in which the Rong brothers, prominent industrialists of the 1910–30s, invested. We find that equity control, marketing, purchasing, and financing of these firms show a high degree of individuality among the firms, while the Headquarters Company functioned as their coordinator. It suggests that the hierarchical-controlled ‘business group’ structure in pre-war China is either a phantom creation of historians or the projected image of later generations who created it during the nationalisation of firms in the 1950s.

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