IIAS | IIAS Newsletter Online | No.17 | Institutes

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A Case of the Overseas Chinese Business Network

The Tai Yi Firm in Nagasaki and its Documents

In recent years the Chinese have been making extensive use of network analysis to explain their business activities. Chinese networks have played an unusually prominent role among the East and Southeast Asian Chinese and have made a great contribution to their economic success in this region. However, the concept of network is used largely as descriptive technique and is extremely loose. The study of Chinese networks is still at a relatively primitive stage and needs to establish itself more firmly in both case study and theoretical construction. The discovery of the Tai Yi documents contributes a very interesting opportunity to explore the Chinese business networks around the China Sea in greater depth.

By Dai Yifeng


In the late 1840s or early 1850s the Chinese trader Chen Guoliang moved to Nagasaki and there devoted himself to the trade between China and Japan. With seven of his fellow townsmen, he set up the Tai Chang Firm in 1861. Tai Chang's main business was the export and import trade as a wholesaler and agency. Exactly how many companies had business relations with Tai Chang is unknown, but a hundred and sixty traders were named in its account books. Most of these were Fujianese, and they distributed in Japan, Mainland China, Hong Kong, Taipei, and Singapore. Tai Chang thus represented a fairly large-scale business network around the China Sea.

In 1901 Chen Guoliang left Tai Chang and set up a new company in Nagasaki, Tai Yi. He handed over the business to his son, Chen Shiwang. Before taking over his father's position, Chen Shiwang had worked in Tai Chang for many years. The account books show that in Tai Yi's early years (1901-1905), it inherited several businesses from Tai Chang and Tai Yi put his shoulder to the wheel to extend its business network. Letters show that Taiwan was the area where Tai Yi's business made most rapid progress. In its first five years there were fifty-five firms in Taiwan with business relations with Tai Yi.
After 1906, business began to boom for Tai Yi (1906-1915). It had 249 customer firms and Taiwan, where more than half were located, still continued to be the most rapidly developing area. Southeast Asia was another area of development. There were 47 customer firms, most of which were concentrated in Singapore. In this period, because of the change in trading port, many overseas Chinese, among them Tai Yi, moved from Nagasaki to Kobe. Tai Yi established relations with twenty-two firms in Kobe, a business network that laid a solid foundation on which Tai Yi's business could flourish. It enjoyed an eleven-year period of prosperity (1916-1927).
A victim of worsening relations between China and Japan about 1928, Tai Yi went into decline. In 1928, Tai Yi made its first loss. In 1938, Tai Yi had to suspend business owing to the Sino-Japanese war and it finally closed down in 1939. In its forty years of existence, Tai Yi preserved a large number of documents which consists of four parts as follows:
(1) Documents relating to Tai Yi's business, consisting of more than fifteen thousand volumes of account books, such as Huashang Zhongbu (General Book for Chinese Traders), Taishang Zhongbu (General Book for Traders in Taiwan), Peizhi Chachun (General Cash Book) and Juecai Fengying (Final Account Book), and forty thousand letters. (2) Documents relating to other companies in Nagasaki. They cover 368 volumes of documents concerned with thirteen companies. These companies had close relations with Tai Yi. They were mostly (South) Fujianese, which shows that Tai Yi was the leader of the Fujianese group in Nagasaki during the late nineteenth and the early twentieth centuries.
(3) Documents relating to Fujianese associations in Nagasaki. There are forty-five volumes documents consisting of records of meetings, account books, lists of members, etc, mainly relating to the Fujian Guild in Nagasaki. The Fujian Guild in Nagasaki, Bamin Huisuo, was set up in 1868 and Tai Chang was one of its sponsors. Chen Guoliang became its President in the 1880s. He rebuilt the guild and changed its name to Fujian Huiguan. The number of members grew from sixteen to twenty-three companies. As soon as Tai Yi was established, in 1901, it joined the Fujian Huiguan. Ten years later, Chen Shiwang, then manager of Tai Yi, became chairman. His son, Chen Jinzhong, took this position before he died in 1940. The documents reveal that the chief activities of the Fujian Huiguan were (a) organizing memorial ceremonies for ancestors; (b) subsidizing the overseas Chinese schools; (c) giving financial aid to poor villagers from south Fujian; (d) organizing social and diplomatic activities; (e) collecting donations for China; and (f) administering the temple and public graveyard.
(4) Documents relating to various institutes in Nagasaki. These consist of nearly five hundred volumes of material from the Nagasaki Overseas Chinese School, of which Chen Shiwang was a board member, eighty-five volumes of documents relating to the Chinese temples in Nagasaki; and three volumes of material from the consulate of the Republic of China, the American consulate and the Kuomintang organization in Nagasaki.
The Tai Yi documents attracted the attention of Japanese scholars when they came to light in the early 1980s. In 1984, Professor Ichikawa, joined by some Japanese and Chinese scholars, started to sort out and study the material. Some research reports have been published.
It is very surprising that as a medium-to-small company, Tai Yi had a wide business network. There are some forty thousand letters on which addresses and postmarks can be distinguished and these show that four thousand companies had had business dealings with Tai Yi between 1901 and 1938. They distributed in Japan, Korea, Taiwan, Mainland China, Hong Kong, and Southeast Asia. Tai Yi's business network consisted of four interlinked trade zones: the North China Sea (Huanghai) trade zone, the East China Sea (Donghai) zone, the South China Sea (Nanhai) zone, and the China coastal zone.
The most fascinating point is that, as a family-managed trading company, the structure of Tai Yi's business network can be analysed in terms of concentric circles working, from inside to outside, from core management, through basic customer companies and general Chinese customer companies to Japanese customer companies. The core management of Tai Yi was composed of members of Chen Shiwang's family and more distant relatives. In the early days of Tai Yi these family members and relatives made up more than seventy percent of all the salesclerks and were the main force of Tai Yi.
It is worth mentioning that there were certain customer companies that had special relations with Tai Yi. These core customers not only did a lot of business with Tai Yi, they also acted as transfer traders. Tai Yi would deliver goods to these core companies, which then transferred the goods to various consumer companies. They served as an intelligence network being responsible for collecting local news and sending it to Tai Yi, and assisted with funding and dealing with remittances. Tai Yi also had many general customers, but, these companies only had temporary business relations with Tai Yi and the trade value they generated was generally small. Before a business relationship could be established, companies needed an introduction from Chen Shiwang's clan or a fellow villager before such a connection could be considered. The credit of these firms could offer was the most important factor when they were introduced.
Although Tai Yi's business network consisted predominantly of Chinese merchants, generally, Chinese merchants and Japanese merchants tended to operate in their own exclusive spheres, but Tai Yi also had business dealings with a few Japanese merchants, mainly wholesalers. The Japanese customers were however regarded as inferiors.
An important conclusion is that Tai Yi established its business network through personal relationships. This network started with relatives and later included clan members and villagers and finally general Chinese merchants. This personal relationship network went far beyond the transportation of goods, it was the basis for other special functions such as the exchange of news, meditating, the co-ordination of loans and the introduction of sales clerks, and much more.

References:

- The documents of Tai Yi.
- Dai Yifeng, The Overseas Chinese Business network: A Case Study on Tai Yi Firm in Nagasaki (1901-1938), Asian Culture, Singapore, 1998.
- Nobuchika Ichikawa and Dai Yifeng (eds), Jindai liri huaqiao yu dongya yuanhai diqu jiaoyuquan (Overseas Chinese and the Trade Zone on the East Asian Coast in Modern Times), Xiamen Daxue Chubanshe, 1994.
- Zhu Delan, Meijiki ni okeru Nagasaki kasho Taishogo to Taiekigo to no boeki nettowaku no keisei (The Form of the Business Network of the Chinese Traders Tai Chang and Tai Yi in Nagasaki, Minji era), Kyushu kokusai daigaku shakai bunka kenlyusho kiyo, No.35, 1994.
-Yuka Yamaoka, Nagasaki kasho no keieishi teki kenkyu: Kindai Chugoku shonin no keiei to chobo (A study on the History Management of Chinese Traders in Nagasaki: The Management and Account Book of Chinese Trader in Modern Times), Mineruba shobo, 1995.
Dai Yifeng was an IIAS research fellow in between June and September 1998 and is currently attached to Xiamen University as a Professor of History at. He is the director of the Centre for Chinese Customs Studies. E-mail: yfdai@xmu.edu.cn.

   IIAS | IIAS Newsletter Online | No.17 | Institutes