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Cakes and Oil: Technology Transfer and Chinese Soybean Processing, 1860–1895

Published online by Cambridge University Press:  03 June 2009

Shannon R. Brown
Affiliation:
University of Maryland, Baltimore County

Extract

Economists have increasingly recognized that one of the main sources of economic development is technological change. Since it is much easier to borrow than to invent new technology, an important source of technological change has been the diffusion of new technology from its place of origin to subsequent users. When such diffusion involves movement between two countries, it is usually referred to as technology transfer.

Type
The Transfer of Technology
Copyright
Copyright © Society for the Comparative Study of Society and History 1981

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References

1 For a survey of economists' knowledge of technological change see Kennedy, C. and Thirlwall, A. P., “Surveys in Applied Economics: Technical Progress,” Economic Journal, 82 (03 1972), 1172CrossRefGoogle Scholar; and Heertje, Arnold, Economics and Technical Change (London, 1977).Google Scholar

2 See, for example, Henderson, W. O., Britain and Industrial Europe, 1750–1870 (Liverpool, 1954)Google Scholar; Cameron, Rondo, France and the Economic Development of Europe, 1800–1914 (1961; reprint ed., New York, 1975)Google Scholar; McKay, John P., Pioneers for Profit: Foreign Entrepreneurship and Russian Industrialization, 18851913 (Chicago, 1970).Google Scholar

3 Good examples of such studies are Temin, Peter, “A New Look at Hunter's Hypothesis about the Antebellum Iron Industry,” American Economic Review, 54 (1964), 344–51Google Scholar; Ames, Edward and Rosenberg, Nathan, “The Enfield Arsenal in Theory and History,” Economic Journal, 78 (1968), 827–42CrossRefGoogle Scholar; Saxonhouse, Gary, “A Tale of Japanese Technological Diffusion in the Meiji Period,” Journal ofEconomic History, 34(1974), 149–65.Google Scholar For a general survey of the literature, mostly on the American experience, see Uselding, Paul, “Studies of Technology in Economic History” in Recent Developments in the Study of Business and Economic History: Essays in Honor of Herman E. Krooss, Gallman, Robert E., ed. (Greenwich, Conn., 1977), 159219.Google Scholar

4 In several as yet unpublished papers, Mancur Olson has explored the effect of institutions upon economic activity. See, for example, “The Political Economy of Comparative Growth Rates,” unpublished, 1978.Google Scholar

5 For a more complete treatment of this subject, see Brown, Shannon R., “Technology Transfer and Economic Systems: The Case of China in the Nineteenth Century,” ACES Bulletin, forthcoming, 1981.Google Scholar

6 Lu, Chuan-ting, “The Evolution of the Chinese Tariff Schedule 1840–1910,” in Modern Chinese Economic History, Hou, Chi-ming and Yu, Tzong-shian, eds. (Taipei, Taiwan, 1979), 643.Google Scholar

7 For a fuller discussion, see Brown, Shannon R., “The Partially Opened Door: Limitations on Economic Change in China in the 1860s,” Modern Asian Studies, 12 (1978), 177–92.CrossRefGoogle Scholar

8 For a general survey of the soybean industry, see Imperial Maritime Customs (hereafter IMC), The Soya Beans of Manchuria, Special Series, no. 31 (Shanghai, 1911).Google Scholar On Chinese efforts to keep foreigners out of the trade, see Dean, Britten, China and Great Britain: The Diplomacy of Commercial Relations, 1860–1864 (Cambridge, Mass., 1974), ch. 4.CrossRefGoogle Scholar

9 This description of the indigenous technology is based on Hosie, Alexander, Manchuria: Its People, Resources, and Recent History (London, 1901), 218–33.Google Scholar Additional description, but for a later era, can be found in Hommel, Rudolph P., China at Work (Cambridge, Mass., 1969), 133–42.Google Scholar

10 The actual values in Newchwang taels per 100 catties were: beans. 97; oil 3.43; and bean cake. 70 (assuming a weight of 53 catties each). Assuming the 9 percent yield rate for oil and the increase in weight due to steaming mentioned in the previous paragraph, this results in a value added by manufacturing of 6.3 percent. Hosie, , Manchuria, 223.Google Scholar

11 In the period 1 January 1869 to 22 March 1870, for example, a catty of oil cost from 3.4 to 3.9 times as much as a catty of beans, while a catty of bean cakes cost from 0.64 to 0.71 times as much as a catty of beans.

12 Jardine, , Matheson Archive, Cambridge University Library, Unbound Correspondence, Newchwang (hereafter JMA), 9 January 1869Google Scholar; 6 February 1869; 3 March 1869. Unless noted, all letters are from Charles E. Hill to F. B. Johnson or to Jardine, Matheson and Company (JM). On Chinese guilds, see Morse, Hosea Ballou, The Guilds of China (New York, 1909).Google Scholar

13 Public Records Office, London, FO 228/418, Meadows, T. T. to Alcock, R. G., 12 May 1866.Google Scholar It is interesting to note that this same form of opposition—increasing the price of a necessary input—though achieved by guild rather than official action, led to the demise of the first effort to introduce Western technology in silk-reeling. See Shannon Brown, R., “The Ewo Filature: A Study in the Transfer of Technology to China in the Nineteenth Century,” Technology and Culture, 20 (1979), 550–68.CrossRefGoogle Scholar

14 JMA, Account Books, Al/61, A2/42.

15 JMA, 25 March 1868.

16 JMA, 6 September 1869.

17 JMA, 17 June 1870.

18 JMA, Account Books, Al/62–63.

19 JMA, passim. The oil mill technology used in this mill was similar to that described in Samuelson, Alexander, “On Oil Mill Machinery,” Proceedings of the Institution of Mechanical Engineers (1858), 2743.Google Scholar

20 British Consular Report (hereafter BCR), Newchwang 1868Google Scholar. All British Consular Reports cited in this paper are reprinted in Irish University Press Area Study Series, British Parliamentary Papers: China, 42 vols. (Shannon, 1971).Google Scholar

21 JMA, 8 October 1869.

22 JMA, 6 February 1869; 3 June 1869.

23 JMA, 9 January 1869.

24 JMA, 3 March 1869.

26 JMA, 17 May 1869.

27 A 20 percent increase in output, achieved by such means, would have required a 20 percent increase in the input of soybeans. As soybeans constituted about two-thirds of total (variable and fixed) costs, a 20 percent increase in output would require a 13 percent increase in inputs.

28 JMA, 3 July 1869. Cakes were sold by weight and oil content.

29 JMA, 3 August 1869; 7 August 1869.

30 JMA, 7 August 1869. Having found the locally recruited labor intransigent, Hill had then brought in new men from Chefoo who had now gone on strike. Consequently, his bile is more understandable than his optimism when he wrote, “All this year's troubles can be avoided by getting Chinchew [South China, near Swatow] men who can be managed and work for the same wages. Men used to the work can be found and who will be entirely foreign to these dogs.” Ibid.

31 Mr. Kite full satisfied his Victorian employer, who in recommendation for Kite's further employment with Jardine said of him: Never drinks, never neglects his duty, always ready, and never impertinent. A combination hardly ever seen in one man of his profession.” JMA, 1 October 1870.Google Scholar

32 JMA, 8 January 1870.

33 JMA, 6 March 1870; 22 April 1870; 17 June 1870.

34 BCR, Newchwang 1873Google Scholar. This same source maintains, however, that the foreign mill experimented successfully with modifications but that “still the profit would not be large enough to tempt foreign speculators who have other outlets for their capital.”

35 BCR, Swatow 1882.Google Scholar

36 JMA, B7/42, Craig, Robert to JM, 8 October 1881Google Scholar; and C29/1, JM to Craig, Robert, 10 October 1881.Google Scholar

37 “Bean cake is used almost exclusively as a manure for sugar cane. …” BCR, Swatow, 1886.Google Scholar

38 BCR, Swatow 1882Google Scholar; Swatow 1883Google Scholar; IMC, Decennial Reports, 1882–91, 2 vols. (Shanghai, 1893), II, 537.Google Scholar

39 See note 36.

40 BCR, Swatow 1882.Google Scholar

41 In the late nineteenth and early twentieth centuries, many Chinese mills in Manchuria employed a Japanese-made hand-powered iron capstan press for extracting the oil from beans which were crushed and steamed by steam-powered machinery. Despite its seemingly primitive nature, such a press nevertheless required foreign technology since Chinese metallurgical techniques could not produce iron which could withstand such pressure. See IMC, Soya Beans of Manchuria, 13Google Scholar; and Hosie, , Manchuria, 223.Google Scholar

42 The tariff on oil was Tls. 50 per picul and that on soybeans Tls. 29. In 1870, for instance, oil cost Tls 3.80 per picul in Newchwang, which gave Swatow a Tls. 31, or 8 percent, cost advan tage, other things being equal. JMA, 10 March 1870.

43 According to one listing there were sixty foreign “industrial enterprises” established in the treaty ports before 1881. Yu-t'ang, Sun, Chung-kuo chin-tai kung-yeh shih tzu-liao, ti-i-chi [Materials on the history of modern industry in China, first collection] (Peking, 1957), 234–38.Google Scholar I have found no evidence of any official objection to the establishment of the Newchwang mill.

44 BCR, Amoy 1881.Google Scholar

45 For a general survey of this controversy, see Paulsen, G. E., “Machinery for the Mills of China: 1882–1896,” Monumenta Serica, 27 (1968), 320–42.CrossRefGoogle Scholar

46 Feuerwerker, Albert, China's Early Industrialization (Cambridge, Mass., 1958), 207–25.CrossRefGoogle Scholar BCR, Shanghai 1878.Google Scholar

47 Butterfield, and Archives, Swire, School of Oriental and African Studies, London, Letter-book, vol. 1179,Google ScholarSwire, John Samuel to Scott, J. H., 27 October 1893Google Scholar; 2 November 1893; 3 November 1893; 23 January 1894.

48 Ibid., 3 November 1893.

49 Ibid., 11 September 1895.

50 Ching-yu, Wang, Chung-kuo chin-tai kung-yeh shih tzu-liao, ti-erh-chi [Materials on the history of modern industry in China, second collection] (Peking, 1957), 234;Google Scholar IMC, Soya Beans of Manchuria, 19Google Scholar. By 1911, there were at least thirteen steam-or internal-combustion powered mills in Newchwang, of which seven were large mills owned by Chinese. Ibid., 21.

51 IMC, Decennial Reports, 1892–1901, 2 vols. (Shanghai, 1904), I, 22Google Scholar; Beresford, Lord Charles, The Break Up of China (London, 1899), 70.Google Scholar

52 IMC, Returns and Reports on Trade, Newchwang, 1899 (Shanghai, 1900), 4Google Scholar. Bean crushing by mechanical means does not appear to have changed greatly during these years, though incremental improvement undoubtedly took place. See Brace, Harold W., History of Seed Crush ing in Great Britain (London, 1960), 5779.Google Scholar

53 Schumpeter's classic description of the innovating entrepreneur can be found in his Theory of Economic Development (Cambridge, Mass., 1934), ch. 2, especially pp. 6667.Google ScholarPubMed For a more general discussion of foreign efforts to introduce new technology to China see Brown, Shannon R., “The Transfer of Technology to China in the Nineteenth Century: The Role of Direct Foreign Investment,” Journal of Economic History, 39 (1979), 181–97.CrossRefGoogle Scholar