Breaking into the Market

On May 13, 1923, Jiuda received from Li Yuanhong, one of its shareholders, a presidential citation for contributing to the people’s sustenance (minshi) and over 2 million yuan in gabelle annually to the country’s coffers. 1 This chapter analyses the reasons for Jiuda’s success and how it continued to wrestle with the institutions of the republican government, law, and the market. At times Kafkaesque, the saga of its progress unfolded with ironic twists and turns. Disagreements between them notwithstanding, Jiuda was saved, at least in part, by the synarchic Revenue Inspectorate. The descent of the country into political chaos, too, created both opportunities and crises for the company. In addition to a skillful blending of market, network, and hierarchy, Fan and his colleagues championed free marketing of refined salt with petitions and lawsuits while exploiting the different interests and factionalism within the salt bureaucracy as well as the division between the central and provincial governments. Drawing on their networks, influence (shili) could be exerted on officials to do nothing or decide in favor of the company, reinforced by goodwill (qingyi) invoked through network transitivity or manufactured by rent creation. 2 When the strategy failed, the company resorted to bribery. To secure Jiuda’s place in the heavily regulated and imperfect salt market, Fan’s entrepreneurship skill includes not merely managing the company, but also mastery of the economics of regulation, rent extraction, and political extortion.