One Billion Customers - James McGregor [21]
Life was grand for the foreign businessmen. Their mansions were well staffed with servants and they spent weekends playing golf, betting at the horse races, or relaxing on houseboats pulled by teams of coolies along rural canals. Young Western men recruited through newspaper advertisements to work in China had the services of some seventy thousand prostitutes in Shanghai’s foreign concession to help fill their idle hours. As Harold Sheridan, a young American working in Shanghai, wrote to his mother in 1913: “I tell you, I can easily understand the fascination of the Far East where living is cheap, and a white man need never lift his little finger unless he cares to.”
Chiang Kai-shek allowed businesses to flourish as long as they supported his government financially. Gangsters allied with the KMT collected tolls from small merchants. Tycoons were taught lessons through high-profile arrests. It wasn’t difficult for the Communists to make capitalism a dirty word in China as relatives of the generalissimo’s American-educated wife, Soong Mei-ling, turned the Chinese economy into a family business. While business boomed in the big cities, the Communists were organizing the country’s peasants and dodging KMT military assaults. Antiforeign movements and worker strikes also spread across China. When Japan occupied Manchuria in 1931, some Western businessmen began to leave China. The early trickle turned into a flood as Japan continued to take more Chinese territory. As Beijing, Shanghai, and much of China’s east coast fell to the Japanese in 1937, Chiang’s KMT government fled to new wartime headquarters in the far west city of Chongqing.
The Triumph and Failure of Communism
When World War II ended, China’s economy was in tatters. American military and diplomatic advisers tried to act as mediators between the KMT and the Communists, but when their efforts failed the United States sided with the KMT. American money and munitions had funded the KMT opposition to Japan’s occupation. Chiang now turned those weapons on the Communists. But the Communist message to China’s millions excoriating the corruption and poverty under Chiang was too powerful. In 1949, the KMT government fled to Taiwan. U.S. and European sanctions against doing business with China isolated the otherwise triumphant Communist government. China’s tycoons fled and reestablished their businesses in Hong Kong, Taiwan, the United States, Europe, and Southeast Asia.
While Mao and his compatriots had obtained funds and equipment from the Soviet Union to fight their battle against the KMT, Mao had always been wary of Stalin. He had no desire to become a Soviet satellite like Eastern Europe. He thwarted a Soviet attempt for joint control of China’s military but did sign a mutual defense treaty. China needed money and technical assistance to build its industrial base and the Soviet Union was the only place to turn. With the February 1950 Treaty of Friendship, Alliance, and Mutual Assistance, Mao signed onto the Soviet industrial model, getting $430 million in Soviet loans, ten thousand Soviet technical experts, and various forms of assistance to rearm and reorganize the People’s Liberation Army (PLA). By the time that China was ready to talk business again with the West two decades later, the country’s economy was flat on its back. The rapid Soviet-backed industrialization