R A W S ’ A N I G N CH I L G G U M S N O
ing of k a M e nd th a , e f i L 1965 mic – o 2 n 4 o 8 c 1 E L a w, St a t e , n r e d o the M
I A H T P I L PHI
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N E EVE NI NG I N late September 1934, a search party of twelve Chinese customs agents set off from a station near the port of Xiamen. Its mission was to investigate a smuggling ring operating from the village of Beidang, off the Fujian coast. With a nearby harbor offering cover from prying eyes, the village was an active node in a trafficking pipeline between the Chinese mainland and the Japanese colony of Taiwan. Upon arrival, the agents found Beidang quiet, its twenty large warehouses under lock and key. When the few villagers present refused to cooperate, the agents broke into the warehouses and discovered caches of smuggled goods: rayon, matches, and sugar. But as the search unfolded, other villagers (“more than one hundred armed men”) arrived and opened fire. A fierce firefight erupted before the search party withdrew, shaken but unhurt. Agents returned several times in the following days to negotiate a surrender of all the illicit goods but found the villagers only willing to hand over a nominal amount. Exasperated by the delays, they finally returned to Beidang in force and burned to the ground all warehouses where traces of the smuggled goods were still found.1 The clash at Beidang was more than just a regrettable instance of a routine raid gone awry. It was a small skirmish within a larger, longer contest over the proper role of the state in the economy. Authorities have long
INTRODUCTION
campaigned against smuggling on the China coast to secure revenues and manage trade. The Qing dynasty (1644–1911), in particular, maintained and enforced monopolies over select commodities deemed fiscally and strategically important. But starting from the early twentieth century, the fight against smuggling acquired new urgency, becoming implicated in the most important questions of modern statecraft, legal authority, and economic control. Under Nationalist rule (1927–1949), a determined regime sought to modernize the nation with an ambitious agenda undergirded by heavy taxes and strict regulations on foreign trade. New, assertive policies created asymmetrical benefits and unintended consequences. For the government, such policies formed the pillars of a stronger central state and propelled the modernization of the Chinese economy. But for everyone else, new policies dramatically raised prices for everything from luxury goods to daily necessities and restricted the freedom to truck, barter, and exchange. This clash of interests between state and individuals sparked a smuggling epidemic and at the same time invited a counter-smuggling campaign that was as intrusive as it was violent. Up and down the coast, state agents raided homes and businesses, intercepted vessels on land and seas, battled armed gangs, and subjected travelers to invasive searches—all in the name of fighting illicit trade. This intractable conflict proved remarkably durable through war, revolution, and even reform: under Communist rule (1949– present), a new regime waged its own campaigns against smuggling by appropriating the policies and institutions of its predecessor. It faced similar challenges, promulgating and enforcing policies from above that were continually negotiated and resisted from below. If Frederic Wakeman is correct that the rise of the police state is a defining characteristic of modern China, then the fight against smuggling must figure prominently in this history of expanding state power.2 Yet how exactly did smuggling, and official efforts to suppress it, progressively amplify state power? Three domains come to the fore. In terms of state capacity, bold economic interventions and coercive measures reshaped the developmental trajectory of the Chinese state by projecting official reach more widely and deeply. In terms of legal authority, fighting smuggling reified the prerogative of the Chinese state to define and enforce
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“legal” and “illegal” modes of behavior. And in terms of government control over the economy, creeping regulatory encroachment remade everyday life for countless individuals, merchants, and communities by steadily constraining their patterns of consumption and movement. Considering these intertwined issues, this book chronicles the vicissitudes of smuggling and its suppression on the China coast from the last decades of the Qing dynasty through the first years of the People’s Republic. In doing so, it argues that the fight against smuggling was not simply a minor law enforcement issue but a transformative agent in expanding state capacity, centralizing legal authority, and increasing government reach over economic life. As successive regimes established and enforced policies in these domains to fight smuggling, state power grew and solidified—even as those policies encountered widespread, vehement resistance. Exploring the intimate link between coastal smuggling and the amplification of state power brings disparate research agendas into conversation, thereby highlighting an overlooked avenue in understanding the making of the modern Chinese state. Previous accounts examining the growth of the modern Chinese state have generally focused more on traditional paths of state-building, including the development of bureaucracies or the extension of official reach in the countryside. 3 While yielding important insights on the evolution of formal state authority and institutions, such accounts have paid less attention to other forms of state-building that projected state reach in more quotidian but also more fundamental ways. This book thus addresses a scholarly lacuna by focusing on the expanded use of coercive policies and policing to discipline consumption, production, and exchange—the very imperatives that drove the fight against smuggling. Tracing the vicissitudes of smuggling and its suppression enables us to see more clearly the dual agency in the encounter between state and society, revealing the tortuous and negotiated extension of state control. Meanwhile, previous studies of underground economies in modern China have generally focused more on issues of criminality or the trafficking of a handful of commodities like narcotics. They are accordingly less concerned with exploring the broader connections between smuggling and the economy, particularly ways state fiat affected everyday life by
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continually transforming scores of ordinary commodities into profitable contraband.4 By contrast, this book embeds smuggling—its practice, its meanings, and its suppression—at the heart of its analysis in charting both the expansion of state power and the conditioning of the modern Chinese political economy. Specifically, it explores the central contradiction embodied by smuggling, which threatened state authority while simultaneously inviting repression that reified and strengthened said authority. Cycles of lawmaking and lawbreaking, this study shows, helped ensure that the central government’s imperatives were met, its authority recognized, and its coffers filled. Uneven and fitful though this transformation of state power was, it still produced important, durable consequences for governance and economy that reverberate to this day. Smuggling might well have operated on the margins of the law, but it was far from marginal in the history of modern China. This study of smuggling on the China coast is thus framed within the dynamic interplay between two developments in modern China: the gradual extension of state authority into the economy and the unceasing resistance to such official intrusions. Its long chronological arc is analyzed not exclusively through the conventional lens of government but also through the perspectives of assorted actors preventing or engaging in smuggling over time. Authorities from the late nineteenth through the late twentieth centuries were especially impelled by geopolitical competition with foreign powers to exercise greater control over coastal trade. But they were also driven by other considerations, particularly fears that trafficking undermined governance by siphoning critical revenues, importing dangerous contraband, and menacing public order. More importantly, they feared the ways uncontrolled trade militated against modern (and later high modern) visions of a unified national economy, where a strong central state could employ policy levers to mediate the impact of unpredictable global currents on the domestic economy. Such concerns over smuggling spanned different regimes. As the Ministry of Finance in Nationalist China complained: “The sale of smuggled goods [leads to] low-priced competition, which cheats legitimate merchants to their detriment. A more flagrant instance of robbing the state and injuring commerce has yet to be found.”5
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An official bulletin from the early years of Communist China echoed such sentiments: “This kind of rampant smuggling activity has already brought about tremendous harm to the country’s economy and governance. . . . The consequences of cheap imports flooding the market are not limited to attacking sales for similar domestic goods. It also severely damages the country’s trade management, throws markets into disorder, and affects tax receipts.” 6 Other nationalistic elites—from late Qing literati, to Republican intellectuals, to Communist cadres—joined the chorus expounding the necessity of suppressing illegal trade. In this official and elite imagination, smuggling was an unambiguous threat to governance, economy, and society in all sorts of ways. Meanwhile, efforts at fighting smuggling also stirred widespread resentment, if not outright defiance. Individuals and businesses up and down the coast did not uniformly subscribe to official visions of a strong central state disciplining consumption and production for the imagined community of the Chinese nation. Foreigners, not surprisingly, demonstrated little commitment in contributing to the Chinese state-building project, and some flouted official strictures to purchase smuggled goods and even engage in trafficking themselves. But the same held true for many Chinese, whatever the degree of their nationalistic sentiments. Indeed, as the ubiquitous consumption of lower-priced smuggled goods testifies, many Chinese fully participated in an activity ostensibly harmful to their country, their government, and their industries. Forced to bear the brunt of increasingly higher taxes and tighter strictures imposed by a distant, impersonal central government, they proved understandably reluctant to subordinate real self-interest to abstract collective welfare. While some grudgingly complied with new regulations and paid required taxes, many others did not. The ranks of “smugglers” were thus a heterogeneous lot, as diverse as the goods they trafficked. Some sought to make a quick profit: petty runners employing sophisticated “hides” on steamships to conceal smuggled cargos, merchants submitting fraudulent invoices, and organized traffickers attempting to systematically circumvent regulations. Some were inadvertently made smugglers by tightening state strictures that impinged on everyday activities: junkmen sailing along traditional routes suddenly
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made illegal by faraway authorities and travelers becoming the focus of heightened scrutiny and the target of more invasive searches. Others exploited their legal privileges as shields against state authority: foreign sojourners enjoying the right of extraterritoriality and Overseas Chinese benefiting from their ambiguous national status. But whatever its underlying motivations, smuggling was a blanket category encompassing different types of activities: a deliberate transgression, a reaction to unwanted official intrusion, and a by-product of expansive state policies. Lawmaking and lawbreaking were thus two sides of the same coin, sharing a symbiotic— and ultimately inseparable—relationship that was as complementary as it was antagonistic. This book explores the broader intersections between commodities smuggling, state power, and the economy. It is less concerned with examining other illicit activities like human trafficking and coastal piracy that are often conflated with smuggling generally but exhibit their own distinctive practices and logic.7 This book is also less concerned with treating the efficacy of official policies—whether they succeeded or failed— as the sole barometer of historical significance. Indeed, as historians of crime have warned, measuring the efficacy of anti-crime enforcement may be a nearly impossible task.8 Did the rise in recorded instances of smuggling truly reflect a concomitant rise in illicit activities? Or was it driven by increasing official enforcement and growing public awareness? That is, is the phenomenon under examination driven by crime waves or enforcement waves? And does more smuggling truly signify state failure or instead reflect how regulations were effective enough to encourage evasion in the first place? Putting aside such epistemological problems with identifying the directions of causality, this book is ultimately concerned with charting more fundamental historical changes: the scope of state power, patterns of enforcement, degrees of compliance, and the extent of resistance over time. All, according to the historian Alan Karras, offer insights into shifting state imperatives as well as “the ways in which those who lived under a particular government, whether individually or collectively, understood that regime’s role in their daily lives.”9 How we understand the long campaign against smuggling, then, is also of utmost importance to how we
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understand the ways official efforts to police commerce and individual responses to those very efforts together came to define the scope of state power in modern China.
THE COAST IN MODERN CHINESE HISTORY Nowhere was the practice of smuggling more pervasive, the imperative to control trade more urgent, and the challenges to state authority more acute than along the vast Chinese littoral. Stretching nine thousand miles from the Bohai Gulf in the north down to the Tonkin Gulf in the south, the Chinese seaboard steadily emerged as the principal site of modern Chinese statecraft and economic development. This had not always been the case. As an Inner Asian dynasty keenly aware of the military threat posed by nomadic tribesmen, the Qing during its first two centuries was more strategically preoccupied with its continental—rather than maritime— frontier. While the court maintained strict controls over the movement of many commodities and occasionally campaigned against coastal pirates and rebels, it levied light taxes and imposed few regulations on maritime commerce.10 The China coast was thus an important but not paramount area of imperial concern. Starting with the disastrous defeat of the First Opium War (1839–1842), however, official attention shifted steadily from west to east. The coast became the primary junction of engagement— diplomatic, commercial, and cultural—between China and ascendant Western powers, pockmarked by the most politically compromised but also the most economically developed treaty ports. As private trade under the new treaty system steadily eclipsed managed trade under the centuries-old tributary system, the Qing redoubled efforts to introduce mercantilist policies and exercise control over the Chinese littoral even as it labored under the pressures of foreign imperialism. Meanwhile, coastal trade also became a critical source of state revenues, with tariffs on imports supplanting taxes on land and salt as the most reliable—and eventually the largest—revenue stream to the central government.
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The metamorphosis of maritime China from what John Fairbank called a “minor tradition” in Chinese history to the linchpin of Chinese statecraft continued apace even after the collapse of the Qing.11 Under Nationalist rule, policy makers prioritized asserting sovereignty, fighting smuggling, and modernizing the economy along the Chinese seaboard. During this period, the central government came to rely even more on revenues from foreign trade and demonstrate greater jealousy in enforcing the tariff. Later, under Communist rule, leaders prioritized the “socialist transformation” of the interior and the countryside, but they still had to contend with pervasive coastal trafficking that ostensibly threatened to derail state control over the economy. Waging its own war on smuggling throughout the Maoist era, the People’s Republic intensified efforts to stamp out trafficking during the reform era (ca. 1978–present), when tighter links to the global economy reinvigorated coastal cross-border flows both legal and illegal. This study’s focus on trafficking and its suppression on the China coast, then, does not deny the significance or prevalence of trafficking on China’s continental frontiers. Rather, it mirrors the region’s importance to modern Chinese statecraft. It looks to the coast because that is where successive modern Chinese regimes looked too. Considering the China coast as a whole, as this study does, complements the plethora of research looking at individual treaty ports and coastal regions.12 It also uncovers the many underground networks, commercial circuits, and official campaigns that crisscrossed and encompassed different localities. To be sure, with the steady decline of central authority and the growing pressures of foreign imperialism, the Chinese littoral from the late nineteenth century onward fragmented politically into an assortment of treaty ports, foreign spheres of influence, and warlord regimes. But at the same time, the China coast also coalesced into a more integrated, more coherent economic entity under the inexorable pull of global capitalism and technological transformations.13 People, goods, and ideas circulated among different ports and their respective hinterlands. Such circulations—legal and illegal—traversed different political divides and brought many coastal regions into more intimate contact. And with later efforts by Nationalist China to assert sovereignty and official control
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along the entire coastline, these political divisions were themselves steadily erased. A focus on individual ports or regions might well miss such connections even as it accurately captures local specificities. This book thus seeks to strike a balance. It recognizes ways local actors, local conditions, and local knowledge shaped smuggling and its suppression. Yet it also illustrates how the practice of smuggling exhibited similar dynamics while its suppression confronted similar challenges up and down the coast. A broad geographical perspective thus highlights the tortuous, relentless expansion of state power and the wider consequences of official campaigns against smuggling.
S M U G G L I N G A N D PAT H WAY S T O E N H A N C E D S TAT E P O W E R E X PA N S I O N O F S TAT E C A PA C I T Y
The war on smuggling was constitutive of the modern Chinese statebuilding experience, not only suppressing unsanctioned trade but also expanding central state capacity in multiple ways. It helped ensure that tariffs were collected, thereby providing the central government with a reliable, critical fiscal resource. It promoted mercantilist policies to better calibrate imports and exports, thereby achieving a more favorable balance of payments and realizing visions of state-led development. It brought state agents into more intimate contact with individuals, thereby projecting official reach more deeply in everyday life.14 From the perspective of the state, coercive measures were necessary to overcome the inescapable problem of collective action embedded at the heart of smuggling. The benefits of unregulated trade for individuals—lower prices, wider choices, and more freedom of action—were tangible and immediate. By comparison, the benefits of regulated trade for society—revenue for the provision of public goods and fair trade for the enhancement of collective welfare— were abstract and indirect. Taxes, after all, had to be paid for an array of
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governmental services and functions that were not always seen, appreciated, or even wanted. Individuals thus always had an incentive to purchase, sell, and transport smuggled goods instead of complying with state strictures. New institutional economists have argued that the structure of markets and the nature of political institutions are key determinants in the costliness of transactions. Tools of coercion—financial penalties, penal servitude, rigorous enforcement, and even threat of violence—were aimed at ensuring that the transaction costs of unregulated trade always exceeded the transaction costs of regulated trade, thereby lowering the incentives for individuals to smuggle.15 Seen in this light, fighting smuggling certainly belongs in the constellation of state-building endeavors such as taxation and conscription that Charles Tilly posits were “difficult, costly, and often unwanted by large parts of the population [but] essential to the creation of strong states.”16 Indeed, the pivotal role of curbing smuggling in modern Chinese statebuilding mirrored state-building processes scholars have traced for other states around the world. In China and elsewhere, activities like smuggling undermined governance in countless ways. Tightening global connections from the nineteenth century onward lubricated the flow of people and goods like never before, affirming Karl Marx’s axiom that capital invariably overcomes any barriers to its circulation.17 Yet official repression of smuggling helped reinforce state authority and harden national borders. Even as unprecedented mobility and flows made their endeavors more difficult, states and state agents invested considerable effort in enforcing regulations, collecting taxes, mapping boundaries, and policing trade.18 And besides being impelled by new prerogatives to exercise greater control, these modern regimes also enjoyed distinct advantages over their early modern counterparts by employing new technologies in transportation, communication, and warfare to project their authority across vast distances within shorter times. Modern states harnessed these technologies to translate their despotic powers (“the capacity to make autonomous decisions”) into infrastructural power (“the capacity to penetrate and influence society and implement decisions”), thereby bringing stronger regulatory authority to the margins.19 Admittedly, full and uncontested
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state control within well-defined territorial boundaries remained elusive, if not impossible. But official efforts at coercion through suppressing smuggling ultimately satisfied aspirations modern states have long sought to realize, however imperfectly—tighter control of borders, greater uniformity in regulations, and better protection of revenues.20 This study demonstrates that what was true elsewhere was also true for modern China: states certainly made smuggling, but smuggling also remade states. 21 The fight against smuggling and concomitant efforts at carving out a more intrusive, more coercive role for the state were part and parcel of other late Qing and early Republican state-building initiatives forged in the torturous transition from an agrarian empire to a nation-state. This transition, in turn, was shaped by two countervailing developments. The first was the steady devolution of central authority to both foreign powers and local elites. Beginning with the Treaty of Nanjing (1842), the successive “unequal treaties” ratified after military defeats forced the Qing dynasty to cede treaty ports, grant extraterritorial privileges, and surrender its tariff autonomy to foreign powers. Meanwhile, pressures to quell domestic unrest like the Taiping Rebellion (1850–1864) forced the court to relinquish more authority to local governments. As a result, an increasing number of tax farmers assumed more important revenue collection responsibilities, thereby inadvertently strengthening provincial and local leaders who were permitted to collect and retain taxes on domestic trade to the detriment of the central government. The inability of the central government to raise sufficient revenues persisted well after the end of imperial rule. As R. Bin Wong notes, the late imperial Chinese state had been unitary, but “the collapse of the dynasty brought a halt to central control over finances and personnel decisions.”22 Through the early years of the Republic, regional military leaders across the country—commonly and pejoratively known as “warlords”—retained virtually all revenues collected in their localities and exerted de facto independence from the nominal national government in Beijing. The Nationalists’ victory over rival warlords during the Northern Expedition (1926–1928) and their subsequent recovery of China’s tariff autonomy, however, halted this deterioration of central authority. In the following decades, the new regime launched its own state-building
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programs, seeking to translate de jure authority as China’s national government into de facto authority beyond its base in the lower Yangzi region. Its efforts partially succeeded until the Communist Revolution of 1949, when a newly inaugurated regime finally eliminated vestigial domestic resistance to central authority. But during the same period that central authority came under tremendous stress, officials still embarked on successive attempts to refashion the Chinese state to meet foreign and domestic challenges. Qing officials and their Republican successors directed resources to, among other things, creating a modern army along Western lines, promoting strategic industries, and investing in economically vital locales. 23 These efforts—escalated under Nationalist rule and continued under Communist rule—were aimed at centralizing authority, eliminating domestic rivals, asserting Chinese sovereignty on the international stage, and realizing the vision of a unified nation-state. They epitomized what legal historian Nicholas Parrillo terms “alien impositions”: directives enforced by a sovereign external to local communities to protect the interests of the former rather than those of the latter.24 Although alien impositions have always been a key feature of governance everywhere, their proliferation from the late Qing onward marked a decisive break from traditional Chinese statecraft. Motivated by an eclectic mix of Confucian precepts and legalist traditions, the Qing court during its first two hundred years maintained relatively light taxes and refrained from making too many direct market interventions. And constrained by the inherent limits of premodern bureaucratic control, it also relied on assorted local elites—gentry, merchants, and community leaders— to help magistrates assure public order, collect taxes, and carry out the functions of imperial governance.25 But the drive to secure funds and fend off challenges in an increasingly unforgiving geopolitical environment impelled the late Qing and its successors to arrogate to themselves all sorts of new powers, from levying new taxes to remaking local economies. Such alien impositions sundered the old social order by creating more direct, less mediated links between state and individual. This reconfiguration of central authority proved undoubtedly disruptive but also surprisingly enduring, laying the foundations for a modern state—strict controls over
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trade and institutions curbing smuggling—that survived the eventual tumult of war and revolution.
C E N T R A L I Z AT I O N O F L E G A L A U T H O R I T Y
At the same time that it dramatically expanded state capacity, the war on smuggling in China also helped centralize domestic legal authority and unbind the legal fetters imposed by foreign imperialism. The proliferation of laws and efforts to enforce them were essentially attempts by successive Chinese regimes to expand their claims to regulate, tax, and police trade within demarcated territorial bounds. If new measures were intended to combat trafficking, they nonetheless reaffirmed the legitimacy of the center and compelled compliance from a wide range of social and political actors. Such efforts also had their parallels elsewhere, mirroring the extension of legal authority and the transition from personal jurisdiction to territorial jurisdiction that scholars have shown to be intimately connected to projects of state-building—even if this assertion of sovereignty was not uniform and faced continual challenges. Surveying the history of Western European states, James Sheehan notes that law has been intricately bound with the making of sovereign claims.26 Indeed, the centralization of legal authority was a key feature of modern state formation throughout history, and this imperative to expand and deepen sovereign claims only became more urgent in the era of worldwide imperial competition. “By the late nineteenth century,” Charles Maier observes, “states possessed a degree of dedication to governance, of bureaucratic functionality, of at-oneness with fixed territorial space, of belief in their own competitive mission, that was unprecedented.”27 Similar to the monopolization of legitimate authority to wage violence by states that Max Weber traces, the monopolization of legitimate authority to regulate commerce and levy taxes was not “primordial but a product of evolution” enforced by a mix of law and coercion.28 This study demonstrates that the dialectical relationship between law, state-building, and smuggling also obtained in modern China. In the course of suppressing illicit trade, successive regimes enhanced their authority, capacity, and reach, thereby steadily departing from the precepts of
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Praise for
CHINA’S WAR ON SMUGGLING “Philip Thai skillfully explores how smuggling remade the Chinese state by enabling it to establish better protection of its borders and its revenues and by standardizing regulations; he also examines the ways that political and economic disruptions constantly challenged this process. Thai weaves together a creative combination of social, political, economic, and legal history, ranging from a sophisticated technical discussion of tariff autonomy to a clever explication of the visual representation of smuggling in the public imagination of 1930s China. The combination of a broad theme—illicit economic activities interacting with state power—with many smaller case studies of smuggling incidents brings the story alive.” —ELISABETH KÖLL, UNIVERSIT Y OF NOTRE DAME
“Breaking with chronological and geographic conventions, this important book places Nationalist-period state-building and the struggle for sovereignty in a framework of the long-term growth of infrastructural state power in China. By linking the rise of policing, legal regulation of production and consumption, and government intrusion in the economy with the operation of markets and economic life, Philip Thai accomplishes the remarkable feat of a fresh perspective on China from the bottom to top.” —BRETT SHEEHAN, UNIVERSIT Y OF SOUTHERN CALIFORNIA
STUDIES OF THE WEATHERHEAD EAST ASIAN INSTITUTE, COLUMBIA UNIVERSITY
COLUMBIA UNIVERSIT Y PRESS / NEW YORK cup.columbia.edu Printed in the U.S.A.