China's nineteenth-century industrialization: the case of the hanyehping coal and iron company, limited 93

Chang Chih-tung, the governor-general of Hupei and Hunan, and Sheng Hsuan-huai, the director-general (tu-pan) of the Hanyang Ironworks, were exceedingly proud that the Chinese were manufacturing iron and steel at Hanyang with modern equipment purchased in Europe as early as 1894—two years before the Japanese government even began its premier iron and steel works at Yawata. ⁹⁴ Yet the year 1910, when Hanyang produced 119,396 tons of pig-iron and 50,113 tons of steel while Yawata, which had blown in its furnaces only in 1901, produced 126,894 tons of pig-iron and 153,491 tons of steel, was the last in which the output of the Chinese plant came anywhere near rivalling that of its Japanese counterpart. ⁹⁵ The cumulative effects of poor management, an increasingly obsolescent plant, a weak domestic market, disadvantageous agreements with Japanese creditors, and the unsettled political milieu in China at the turn of the century led to the complete failure of Hanyang after World War I. Yawata, in contrast continued to grow, and down to the 1930’s manufactured as much as 70–80 per cent of the pig-iron and 40–50 per cent of the steel produced in Japan. ⁹⁶ The irony in the tale of these two companies is that in a sense the success of the Japanese government ironworks belonged to the Chinese firm. Between 1900 and 1914, for example, 61 per cent of the iron ore used by Yawata came from mines in China controlled by the parent company of the Hanyang Ironworks; ⁹⁷ and these Tayeh mines exported 64 per cent of their total output between 1893 and 1934 to Japan, largely to Yawata. ⁹⁸ Moreover, from 1903, Hanyang began to sell pig-iron in Japan through the agency of the Mitsui Bussan Kaisha. Soon 50 per cent of its total output was being exported; and large parts of this iron, especially after 1913, went to the Japanese government ironworks. ⁹⁹