Market Rules and Market Structure in New Private Business Practices in North China in the Early 20th Century
Summary：Many economic activities are regulated by market rules, a combination of private rules and public rules. Previous research has shown that Chinese traditional commercial customs and regulations failed to promote further expansion of trade as well as modern market transformation in the nineteenth century. Research focused on the twentieth century hasincluded a long debate on the characteristics and the roles of the rules makers, merchant groups and governments in China's modernization process, especially with regard to their impact on industry. However, two important questions remain vague: How did private business practices interplay with market rules in a new trade order? What was the effect of this interplay on the domestic market structure and industrialization? Therefore, this paper examines these questions through case studies of the wild-silk-weaving industry, the native-cloth industry, and the egg industry all in North China, exploring the ways in which the potential market structures were pushed by the interplay between private business practices and market rules. And this paper argues that merchant associations, which were unable to drive competitors who did not meet demanding market standards out of the market, pushed the market toward a hyper-competitive structure; the resolution of the problem of hyper-competition depended on the effective operating mechanism of private rules.
ZHANG Wei, Assistant professor, Institute of Economics, Nankai University