Sheng Hsuan-huai (4 November 1844-27 April 1916), industrial promoter who developed the concept of company organization known as kuan-tu shang-pan [official supervision and merchant management].

Wuchin hsien, Ch'angchou, Kiangsu, was the birthplace of Sheng Hsuan-huai. His father, the gentry-official Sheng K'ang (1814— 1902), was a chin-shih of 1844 who held several minor provincial posts before becoming salt tao-t'ai at Wuchang in 1861. As a youth, Sheng Hsuan-huai undertook the traditional course ofstudy in the Chinese classics as preparation for the civil-service examinations, and in 1866 he passed the first examination for the sheng-yuan degree. Three times (1867, 1873, and 1876) he participated unsuccessfully in the provincial chü-jen examinations. By the time of the last failure, however, he was well on his way to prominence by another route. Like a number of other men who became important at the end of the Ch'ing period, Sheng Hsuan-huai entered public service as a member of the entourage of Li Hung-chang (ECCP, I, 464-71). After serving as a minor functionary in the Huai Army in 1870-71, Sheng rose to become Li's chief deputy for economic affairs in the years prior to the Sino- Japanese war of 1894-95. His first major assignment was an administrative post in the newly founded, semi-official China Merchants' Steam Navigation Company (Lun-ch'uan chaoshang chvi). Until his death in 1916, Sheng was intimately associated with this enterprise as shareholder and officer. He served as assistant manager from 1873 to 1875, left the company, and then returned in 1883. From 1885 until 1902, as its chief executive and largest stockholder, he was in complete personal control of the company.

In the last three decades of the nineteenth century, Sheng Hsuan-huai also carried out several diplomatic assignments for Li Hungchang. The most important of these were the negotiations for the recovery of the unauthorized Shanghai-Woosung railroad, the first in China, which had been completed in 1876 primarily with funds from Jardine, Matheson and Company. In 1879 Sheng briefly held a substantive official post as military-administrative tao-t'ai for the Tientsin-Hochien district. In 1880 he planned the organization of a joint stock company (under the official supervision of Li Hung-chang) which undertook the construction of China's first telegraph lines. This enterprise, known as the Imperial Telegraph Administration (Tien-pao tsung-chu), like the shipping company with which it had close financial ties, was to be Sheng's personal preserve until the telegraphs were nationalized after 1902.

From July 1886 until June 1892 Sheng Hsuan-huai was tao-t'ai and superintendent of customs at Chefoo in Shantung province. In June 1892 he reached the apex of administrative authority under Li Hung-chang with his appointment to the office of Tientsin customs tao-t'ai, the key financial post in Li's Chihli (Hopei) satrapy. In addition to controlling the Tientsin customs and serving as directorgeneral (tu-pan) of the kuan-tu shang-pan [official supervision and merchant management] shipping and telegraph companies, Sheng in October 1893 undertook the reorganization of Li Hung-chang's Shanghai Cotton Cloth Mill, which had been completely razed by fire. This enterprise was refinanced with private capital, in large part invested by Sheng and his business associates, and established on a kuan-tu shangpan basis with Sheng as director-general. Renamed the Hua-sheng Spinning and Weaving Company, it became the first successful modern cotton mill in China and served to enhance Sheng's position as industrial entrepreneur. Since 1877 Sheng also had controlled valuable iron deposits in Tayeh hsien, Hupeh, which were later to form a component of the famous Han-Yeh-P'ing Coal and Iron Company. With the fall of Li Hung-chang, resulting from the defeat of the Peiyang Army and Navy by Japan in 1894-95, Sheng Hsuan-huai's industrial and commercial enterprises gradually came under the aegis of the powerful Hu-Kuang governor general, Chang Chih-tung (ECCP, I, 27-32). During the decade of his association with Chang, Sheng's independent influence in Peking was significantly augmented and his economic empire considerably expanded. The first accretion to his industrial holdings occurred in_1896 when Chang Chih-tung placed under his direction the nearly bankrupt Hanyang Ironworks, which Chang had organized in 1889 as a government industry. With Sheng as a major shareholder as well as its chief officer, the Hanyang Ironworks and its associated mines were operated on a kuan-tu shangpan basis until 1908. Because of its continued inability to raise adequate domestic capital even with a monopoly franchise to supply iron and steel to government railroads and arsenals, the company increasingly was forced to turn to the Yokohama Specie Bank and other Japanese sources for loans in order to enlarge and modernize its plant. This development led eventually to the inclusion of a Japanese demand for control of the company in the Twenty-one Demands of 1915. Sheng continued to head the Hanyang Ironworks after its kuan-tu shang-pan status was terminated in 1908 at the time of its amalgamation with the Ta-yeh Iron Mines and the P'ing-hsiang Coal Mines—both developed by Sheng—to form the privately owned Han-Yeh P'ing Coal and Iron Company.

In October 1896 Sheng Hsuan-huai, with the backing of Chang Chih-tung, was appointed director general of the imperial railway administration, a new official agency charged with planning and constructing a railroad network as part of a renewed effort at "self-strengthening," prompted by Japan's easy victory in the 1894-95 war. Sheng continued to hold this post until the end of 1905, during which time the railway administration arranged for loans from European investors amounting to China $300,000,000 for the construction of 3,000 miles of railroad. When the agency was dissolved in 1906, a trunk line between Peking and Hankow had been completed, and a line from Shanghai to Nanking was well under way. Together with the lines constructed in Manchuria, which were not controlled by Sheng, these formed the basis of China's pre-republican railroad network. His position as director general of railroads brought Sheng Hsuan-huai into extensive contact with Western businessmen and diplomats and also brought him closer to the upper echelons of the Peking bureaucracy.

In 1896 and 1897 Sheng Hsuan-huai was rewarded by the emperor with sinecures carrying high court rank; in 1900 he was made vice director of the imperial clan court, and he gained the upper-third rank; in 1901 the empress dowager, from her self-imposed exile in Sian, appointed Sheng imperial commissioner to conduct the renegotiation of commercial treaties with the Western powers as provided by the Boxer Protocol. In recognition of his role in arranging the "Yangtze Compact," which secured the neutralization of southern China during the Boxer Uprising, Sheng was made a junior guardian of the heir apparent (t'ai-tzu shao-pao) in December 1901. It is because of this title that he is often referred to as Sheng Kung-pao in Western-language sources. In February 1902 he was given the post of vice president of the ministry of works and the upper-second rank.

During the years that he filled these numerous entrepreneurial and official posts, Sheng also found time to organize China's first modern bank in Shanghai in 1897 (the Chung-kuo t'ung-shang yin-hang, known in English as the Imperial Bank of China) ; to found and finance with funds from his shipping and telegraph companies two important centers of Western-style education, Peiyang College in Tientsin (1895) and Nanyang College in Shanghai (1896), both of which later developed into good technical institutions at which such political leaders as Ch'en Li-fu and Wang Ch'ung-hui (qq.v.), as well as many Chinese engineers, were educated; and to promote the organization of Chinese chambers of commerce in Shanghai and elsewhere.

Sheng Hsuan-huai was at the peak of his power in September 1902 after the conclusion of the (later abortive) Mackay Treaty, which was intended to set a new pattern for commercial relations between China and the West by raising import tariffs and abolishing transit duties (likin). It was just at this point, on 24 October 1902, that the death of his octogenarian father set loose a train of events that cost Sheng his official posts and the control of several of his kuan-tu shang-pan enterprises. The prime mover behind Sheng Hsuan-huai's discomfiture was Yuan Shih-k'ai (q.v.), who, having succeeded to Li Hung-chang's military and political power in north China, sought also to bring under his control the economic components of Li's regional domain. The telegraphs were nationalized; Yuan's appointees assumed control of the China Merchants' Steam Navigation Company; and only the strong support of Chang Chih-tung enabled Sheng to maintain his post as director general of railroads until 1905. Despite his losses, however, Sheng was able to protect his position in those enterprises, such as the Hanyang Ironworks and mines and the bank, which had not been associated with Li Hungchang. Until the dismissal of Yuan Shih-k'ai in 1909, Sheng was embroiled in a complex struggle to regain his power and position. With the aid of his enormous personal wealth and in alliance with Yuan's enemies in Peking, he eventually was successful. In 1907 Sheng recovered control of the China Merchants' Steam Navigation Company, and in 1908 he received the nominal appointment of junior vice president of the Board of Posts and Communications. But only toward the end of 1910 did Sheng return to official prominence in Peking and to de facto control of the board, of which he was appointed president in January 1911.

As head of the Board of Posts and Communications, Sheng Hsuan-huai again dominated the modern means of communications in China. His principal endeavor during 1911 was to seek the establishment of a national railroad system by bringing under the control of the Peking government uncompleted railroad projects which had been undertaken in the provinces by local gentry and merchant interests. Sheng's memorial of 1 9 1 1 particularly condemned the delays and corruption on the Canton-Hankow and Hankow-Szechwan lines as being injurious to the Manchu reform movement and to the national defense. The close association of the railroad centralization program with large-scale borrowing from the Four-Power Consortium contributed to a fusion of provincial xenophobia with growing anti- Manchu sentiments; and both were aggravated by extreme dissatisfaction with the proposed method of compensation to those who had invested in the railroads. Rioting in Szechwan and elsewhere through the summer of 1911 culminated in the Wuchang revolt on 10 October, which brought about the collapse of the dynasty.

Sheng Hsuan-huai was dismissed from office in the last days of Manchu rule and was forced to flee for his life to Japan. He returned to his home in the Shanghai International Settlement in October 1912. Until his death in 1916 he lived in retirement, but retained control of the China Merchants' Steam Navigation Company, the Han-Yeh-P'ing Coal and Iron Company, and his textile interests. The career of Sheng Hsuan-huai and the history of his enterprises are useful indices to China's response to the West in the last part of the nineteenth century. At the same time, the kuan-tu shang-pan formula foreshadowed the "bureaucratic capitalism" of more recent decades, one of the obstacles to the modernization of China within a democratic framework. Despite their pioneering character and the fact that they were few in number, the kuan-tu shang-pan companies controlled by Sheng showed a remarkable range and diversity. Heavy industry (coal and iron mines, a steel plant), light manufacturing (textile mills), communications (a steamship company, telegraphs, railroads), and finance (a modern bank) were all represented. It was undeniably a substantial achievement for one man to have pioneered in all these fields, especially in the unpropitious environment of late Ch'ing China. It was all the more notable that Sheng was able to undertake and manage these enterprises while pursuing an active official career. His industrial enterprises, however, did not signify the beginning of a basic transformation of the Chinese economy. On the contrary, their constitution represented a compromise with traditional Chinese institutions and patterns of behavior. Their opportunities for expansion were circumscribed by foreign economic pressure, by official indifference if not outright rapacity, by capital and personnel shortages, and by a framework of values that emphasized personal and family ties rather than rationalized economic activity. These enterprises inevitably were forced to depend upon the monopoly patents their official patrons had been able to secure for them. These monopolies could be relied upon to sustain the profits and perquisites and to protect the capital of the promoters, but they were not compatible with reinvestment of profits and long-range growth. In short, after an initial period of expansion, the modern enterprises founded by Sheng Hsuan-huai tended to be transformed into institutions for the protection of bureaucratic capital./p>