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Merchants, Markets and Commercial Taxes: State Institutions and Local Practices in Late Imperial and Modern China

The late 19th century Chinese state, like other late-developing states, faced many challenges. One of the chief challenges was how to pay for a modernizing agenda that included building a modern military and industrial base, constructing new transportation and communication networks and modernizing the educational system. In the Chinese case traditional sources of state revenue which included taxes on land, domestic trade and a small number of special commodities were insufficient to meet the new demands. At the same time, taxes on rapidly growing international trade were pledged to repayment of foreign debt and loans. Under these circumstances, the late-Qing and Republican states set ambitious policy agendas, while transferring responsibility for raising revenue and implementing the agenda to provincial and sub-provincial government units.

Our session looks at the roles of institutional legacies and challenges in meeting the demand for increased revenue. We begin with an examination of the Qing system of commercial taxes and their impact on markets and the circulation of goods, and then turn to a critical exploration of late-Qing early Republic local efforts to raise revenue within the context of the larger political economy. Our papers are based on previously unexplored sources—including records of the Qing dynasty domestic customs stations, records of national government revenue bureaus, steles from merchant associations, county fiscal archives, and 20th century social surveys. Using these sources we provide estimates of quantitative changes in tax revenue, show the impact of commercial taxes on the circulation of commodities, and explore the new institutions—part public, part private—that were created by provincial and county governments to collect a rapidly expanding variety of commercial taxes in local and regional markets.

Our studies, which focus on links between market systems, the circulation of goods, assessment of commercial taxes, and the roles of merchants and other state and non-state agents in the collection of taxes, provide new approaches to understanding the development of the modern Chinese fiscal state and legacies that continue to shape fiscal practice in contemporary China.

Organizer(s)

  • Linda Grove Sophia University grovelinda88@gmail.com Japan
  • Wei Zhang Nankai University cheungwei529@yahoo.com PRC

Session members

  • Tan Xu, Nankai University
  • Limin Zhang, Tianjin Academy of Social Sciences
  • Jinzheng Li, Nankai University
  • Fumei Gao, Beijing Academy of Social Sciences
  • Zhiyuan Wu, Zhengzhou University
  • Feng Xu, Shanghai University of Finance and Economics
  • Guolou An, Zhengzhou University

Discussant(s)

  • R.Bin Wong UCLA rbwong@international.ucla.edu
  • Toru Kubo Shinshu University kubot@shinshu-u.ac.jp

Papers

Panel abstract

The late imperial Chinese state struggled to fund its modernizing agenda. Traditional sources of revenue (taxes on land, salt, domestic trade) were insufficient to meet demand and new taxes on international trade were pledged to repayment of foreign indemnities and loans. The late imperial and Republican states set ambitious policy agendas while transferring responsibility for raising revenue to provincial and sub-provincial government units. Our session begins with an examination of the Qing system of commercial taxes and their impact on markets and the circulation of goods and then turns to efforts to find new sources of revenue. We provide data on changes in tax revenue, trace the impact of commercial taxes on the circulation of commodities and explore the new tax-collection institutions. Our papers provide new approaches to understanding the development of the modern Chinese fiscal state and the legacies that continue to shape fiscal practice in contemporary China.

1st half

Introduction to the Session

Linda GROVE

The Introduction to the session will provide a brief discussion of how the Chinese tax system operated during the late imperial period, particularly during the 18th and first half of the 19th century, and an outline of the various measures taken after the mid-19th century to meet the demands for increased revenue. This overview will include basic data on the overall increase in tax revenues and the increasing weight of commercial taxes in government revenue. The second part of the introduction will focus on major institutional changes in tax collection and the efforts to balance the roles of national, provincial and sub-provincial government bodies in tax collection.

The Introduction to the session will provide a brief discussion of how the Chinese tax system operated during the late imperial period, particularly during the 18th and first half of the 19th century, and an outline of the various measures taken after the mid-19th century to meet the demands for increased revenue. This overview will include basic data on the overall increase in tax revenues and the increasing weight of commercial taxes in government revenue. The second part of the introduction will focus on major institutional changes in tax collection and the efforts to balance the roles of national, provincial and sub-provincial government bodies in tax collection.

Medicinal Drug Markets in Ming-Qing Era North China--An Examination based on Stele Records

Tan XU

During the Ming-Qing period there was a very active trade in medicinal drugs in North China and the drug markets were very well developed. While conventional historical sources rarely mention the drug trade, the records found on stele provide us with a great deal of very detailed information. This paper uses such stele materials to undertake a detailed examination of the five major medicinal drug markets in Zhili and Henan. The paper will examine the following issues: 1) The rise and decline of the medicinal drug markets in Maozhou and Qizhou (Anguo) in Zhili and Hongshanmiao (Mixian) and Yuzhou in Henan; 2) Using the stele materials, the paper will discuss the size of the drug trade and the hinterlands served by the markets in Hongshanmiao, Yuzhou and Qizhou; 3) The activities of drug merchants from Huaiqing (Henan) in the various markets, and their activities in their home area.

During the Ming-Qing period there was a very active trade in medicinal drugs in North China and the drug markets were very well developed. While conventional historical sources rarely mention the drug trade, the records found on stele provide us with a great deal of very detailed information. This paper uses such stele materials to undertake a detailed examination of the five major medicinal drug markets in Zhili and Henan. The paper will examine the following issues: 1) The rise and decline of the medicinal drug markets in Maozhou and Qizhou (Anguo) in Zhili and Hongshanmiao (Mixian) and Yuzhou in Henan; 2) Using the stele materials, the paper will discuss the size of the drug trade and the hinterlands served by the markets in Hongshanmiao, Yuzhou and Qizhou; 3) The activities of drug merchants from Huaiqing (Henan) in the various markets, and their activities in their home area.

Consumption in Beijing--a study of Chongwen Men Customs during the Qing Dynasty

Fumei GAO

During the Qing dynasty, Beijing was regarded as the largest 'consumption center' in China. While this claim is based on the development of urban business activity, there has been little research on the quantity of specific consumer goods. This paper, which focuses on records of the collection of native customs taxes at the Chongwen Men customs station through which all goods destined for the capital had to pass, discusses the quantity and type of goods, where they came from, and market trading situations. From these records we can gain a great deal of specific information about formation and development of Beijing as a consumer center during the Qing dynasty.

During the Qing dynasty, Beijing was regarded as the largest 'consumption center' in China. While this claim is based on the development of urban business activity, there has been little research on the quantity of specific consumer goods. This paper, which focuses on records of the collection of native customs taxes at the Chongwen Men customs station through which all goods destined for the capital had to pass, discusses the quantity and type of goods, where they came from, and market trading situations. From these records we can gain a great deal of specific information about formation and development of Beijing as a consumer center during the Qing dynasty.

The Management of the Local Government between the Grass-roots Market and the Business Tax in Henan Province during the Qing Dynasty—Focusing on Lushan, Nanyang and other counties

Zhiyuan WU, Guolou AN

Management of business during the Qing Dynasty, especially in the grass-roots markets and through the use of the business tax, played a prominent role in local administration. This was reflected in the regulation of market transactions by local governments through the regulation of transaction intermediaries and trade practices, and the maintenance of market order. Although there were differences between management goals and actual results, the overall policies reflected the general ideas of the local government toward market management. Local governments primarily managed the grass-roots markets and business taxes through their efforts to control brokers (yahang) and middlemen in market transactions. Compared with the Ming Dynasty, the Henan provincial government strengthened the management of the brokers during the Qing Dynasty, and the supervision of taxation also tended to be strict. On the other hand, the actual role of the brokers had gradually expanded in market transactions.

Management of business during the Qing Dynasty, especially in the grass-roots markets and through the use of the business tax, played a prominent role in local administration. This was reflected in the regulation of market transactions by local governments through the regulation of transaction intermediaries and trade practices, and the maintenance of market order. Although there were differences between management goals and actual results, the overall policies reflected the general ideas of the local government toward market management. Local governments primarily managed the grass-roots markets and business taxes through their efforts to control brokers (yahang) and middlemen in market transactions. Compared with the Ming Dynasty, the Henan provincial government strengthened the management of the brokers during the Qing Dynasty, and the supervision of taxation also tended to be strict. On the other hand, the actual role of the brokers had gradually expanded in market transactions.

The Forbidden Forest:The Timber Tax and Illegal Deforestation in Gubeikou During the Mid-Qing Dynasty

Feng XU

Timber tax revenues in North China decreased from the mid-Qianlong period (1711-1796). The decline in tax revenue was one manifestation of the deterioration of the forest environment in the northern area. However, the tax station at Gubeikou was a special case, due to the influence of the imperial mausoleum system. The Eastern Qing Tombs, for the burial of members of the Qing imperial house, were in Zunhua, 125 kilometers northeast of Beijing, and the government designated a protected area around the tombs to preserve the geomantic power of the site. Overtime, the government enlarged the protected area and banned the felling of trees in the designated zone. These regulations restricted the circulation of timber, and as a result, the Gubeikou custom house had to close its sub- bureaus, change its models of management and reduce the annual tax quota. Even so, the timber tax revenue experienced a long-term deficit.

Timber tax revenues in North China decreased from the mid-Qianlong period (1711-1796). The decline in tax revenue was one manifestation of the deterioration of the forest environment in the northern area. However, the tax station at Gubeikou was a special case, due to the influence of the imperial mausoleum system. The Eastern Qing Tombs, for the burial of members of the Qing imperial house, were in Zunhua, 125 kilometers northeast of Beijing, and the government designated a protected area around the tombs to preserve the geomantic power of the site. Overtime, the government enlarged the protected area and banned the felling of trees in the designated zone. These regulations restricted the circulation of timber, and as a result, the Gubeikou custom house had to close its sub- bureaus, change its models of management and reduce the annual tax quota. Even so, the timber tax revenue experienced a long-term deficit.

2nd half

Who benefited from the commercial tax system, government or market? A case study on Hebei Province since 1900

Wei ZHANG, Linda GROVE

The commercial tax system after 1900 was characterized by conflict between efforts to establish formal institutions to collect taxes and demands from national, provincial and local governments to increase revenue for modernizing agendas, while simultaneously meeting the costs of regional militarization. Different regions of the province were developing in different ways. This paper will examine the impact of commercial taxes and the new tax collection institutions on three types of local economic development: (1) areas with labor intensive rural industrialization; (2) areas where mining, railroads and modern industry developed based on imported models; and (3) regions where small-scale farming produced commodities for export. In the first case local governments were relatively successful in balancing the demands of government and protection of local industry; in the second case new tax collection methods proceeded relatively smoothly, while in the third case tax collection efforts varied depending on the demands of local government.

The commercial tax system after 1900 was characterized by conflict between efforts to establish formal institutions to collect taxes and demands from national, provincial and local governments to increase revenue for modernizing agendas, while simultaneously meeting the costs of regional militarization. Different regions of the province were developing in different ways. This paper will examine the impact of commercial taxes and the new tax collection institutions on three types of local economic development: (1) areas with labor intensive rural industrialization; (2) areas where mining, railroads and modern industry developed based on imported models; and (3) regions where small-scale farming produced commodities for export. In the first case local governments were relatively successful in balancing the demands of government and protection of local industry; in the second case new tax collection methods proceeded relatively smoothly, while in the third case tax collection efforts varied depending on the demands of local government.

Preliminary explorations of the System for Urban Taxes in Modern China

Limin Zhang

Under the Chinese imperial system, neither the national or local governments assessed taxes on cities. Control over the urban economy was extensive but indirect. Efforts to extend the tax system to urban areas only began in the modern period. These efforts represented an important expression of changes in the Chinese administrative system, as well as major reforms in the tax system. This paper begins with a short explanation of traditional methods of urban control and then explores the efforts to create new types of taxes and tax-collection institutions. As the movement for self-government developed, new institutions and new taxes to support them were created, leading to the emergence of a more organized and extensive system. The creation of this urban tax system was an important part of the reform of Chinese government finances, and also an important sign of the extension of state power to lower levels of society.

Under the Chinese imperial system, neither the national or local governments assessed taxes on cities. Control over the urban economy was extensive but indirect. Efforts to extend the tax system to urban areas only began in the modern period. These efforts represented an important expression of changes in the Chinese administrative system, as well as major reforms in the tax system. This paper begins with a short explanation of traditional methods of urban control and then explores the efforts to create new types of taxes and tax-collection institutions. As the movement for self-government developed, new institutions and new taxes to support them were created, leading to the emergence of a more organized and extensive system. The creation of this urban tax system was an important part of the reform of Chinese government finances, and also an important sign of the extension of state power to lower levels of society.

Commercial Taxes and their Collection in Dingxian (Central Hebei) from the late Qing through the Republican Period

Jinzheng LI

In the late nineteenth and early twentieth centuries we rarely come across the term "commercial taxes" as a general category, although we do find references to taxes on specific commodities. The records on tax collection in Dingxian, which is well-known in academic scholarship as a result of the publications of Li Jinghan and Sidney Gamble, provide data to explore these issues. Of the 15 kinds of commercial taxes we can identify in the Republican period, only a very small number were already present in the Qing dynasty. New commercial taxes were added, first in the late Qing, then under the Beiyang government (1912-1928), and finally under the Nanjing government (1928-1949). However, commercial taxes did not occupy a very large percentage of county tax revenue, and we can describe them as "fragmented but not heavy." For the county government, managing this array of fragmented taxes was a major problem.

In the late nineteenth and early twentieth centuries we rarely come across the term "commercial taxes" as a general category, although we do find references to taxes on specific commodities. The records on tax collection in Dingxian, which is well-known in academic scholarship as a result of the publications of Li Jinghan and Sidney Gamble, provide data to explore these issues. Of the 15 kinds of commercial taxes we can identify in the Republican period, only a very small number were already present in the Qing dynasty. New commercial taxes were added, first in the late Qing, then under the Beiyang government (1912-1928), and finally under the Nanjing government (1928-1949). However, commercial taxes did not occupy a very large percentage of county tax revenue, and we can describe them as "fragmented but not heavy." For the county government, managing this array of fragmented taxes was a major problem.