The Press THURSDAY, SEPTEMBER 24, 1942. China’s Industrial Co-operatives

Press, Volume LXXVIII, Issue 23751, 24 September 1942, Page 4

The Press THURSDAY, SEPTEMBER 24, 1942. China’s Industrial Co-operatives

The news that Rewi Alley has resigned from the position of ActingDirector of the Chinese Industrial Co-operatives probably means that the most promising economic and social movement which has emerged in China since the beginning of the present war with Japan now faces a crisis in its fortunes. The co-opera-tives were in the first instance a response to needs of the situation which faced China after the loss of the coastal regions to the Japanese invaders in the first months of the war. Loss of those regions meant not merely the reduction of trade with the outside world to a thin trickle; it also meant the loss of almost the whole of China’s modern industrial equipment, for industry, like trade, had developed mainly in the westernised coastal fringe. Unfortunately, too, the influx of cheap factory-made goods from abroad had killed the domestic and guild handicraft industries which until half a century ago supplied China's needs in the way of fabricated goods. It seemed to Rewi Alley, a New Zealander who had been a factory inspector in Shanghai, that industrial co-operatives, adapted to Chinese conditions, might be a means of reviving China’s local industries, of giving employment to the refugee craftsmen who had moved westward from the occupied areas, and of meeting some of the more serious shortages caused by the shutting out of imports. Helped by the Chinese Government with a grant to cover administrative expenses and the cost of some capital equipment and by an International Promotion Committee which raised funds abroad, the movement made a start towards the end of 1938. Considering the difficulties encountered, it has made remarkable progress, even if its economic importance is commonly exaggerated. At its peak in 1940 it had more than 1800 production units with some 28,000 members and was filling important Government orders for military equipment. But from the first the movement was politically suspect and for at least a year reports from Chungking have indicated that it was making little headway. The more far-sighted of its founders have always regarded it as a political as well as an economic experiment, as a means of developing a true democracy in China as well as a means of overcoming China’s lack of industrial equipment. It was perhaps inevitable that a , movement having such aspirations should come into conflict with the Kuomintang, which has latterly had no real enthusiasm for democracy and is fast becoming a reactionary and corrupt oligarchy. The Chinese Industrial Co-opera-tives complain that funds and equipment sent to them from abroad have been wrongly withheld by the Chungking Government, that large numbers of their members have been imprisoned on the suspicion of revolutionary opinions, that they are persistently spied upon by Government agents, and that loans promised by the Bank of China have not been made. The Chungking Government has complained that the movement refuses reasonable information about its affairs and refuses to submit to supervision by Government agencies. This last complaint touches what is perhaps the core of the difficulty. The maintain that independence is the essence of their movement and that once they come under Government supervision they will cease to be cooperatives in any real sense. They also know well enough that Chungking officialdom i? inherently incapable of running any economic enterprise successfully. It is probably on this issue of independence that Alley has resigned.