Li: Redefining the Function of Government in the Development of Chemical Industrial Enterprises in Republic China, 1927-1937


The 1920s witnessed the emergence of a domestic chemical industry in China. Chief among the newly established firms was Yongli Soda Company, Ltd., known also as Pacific Alkali Co., Ltd. (reorganized and renamed as a division of Yongli Chemical Industries Co., Ltd in 1934). This paper, then, is a case study of the relationship between the Yongli Soda Company and formal state institutions in Republican China in the context of a fierce foreign competition in the domestic market.I argue that these state institutions support fostered the development of the Yongli Soda Company as the leading manufacturer of synthetic soda ash in China during the 1930s.

Given the large capital requirements of the modern chemical industry, the company sought capital infusion during the 1920s and 1930s. For example, the company sought
investment capital through collaboration with the China subsidiary of Imperial Chemical
Industries, a British multi-national conglomerate known as Buneimen in China. The company also sought infusion of state capital from Nanjing government. For its part, the government offered to invest in the company by purchasing company shares. The government also granted the company the privilege of manufacturing industrial acid. These government policies and actions contributed to making the Yongli Soda Company the leading Chinese chemical enterprise during this period.


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