How Crisis Shapes Change: New Perspectives on China's Political Economy during the Sino-Japanese War, 1937–1945

Abstract

This article surveys the recent literature on China's political economy during the Sino-Japanese War (1937–45). This literature reveals that the war-triggered sustained systemic crisis brought about the most intensive Nationalist state-building efforts, the danwei designation of political, economic, and administrative organizations, the expansion of state-owned industries and the decline of the private sector, the creation of a state enterprise system, and the formation of an ideology of developmental state. This literature suggests that the elements of post-1949 institutional and structural arrangements and ideological systems developed well before 1949. Therefore, the critical issue is no longer that of establishing institutional, structural, and ideological continuity between the Nationalist and Communist eras; instead, it rests in understanding why and how the Chinese Communists kept intact, built on, and expanded existing institutions, structures, and ideologies in certain key areas of political, economic, and administrative life.