The Last Kings of Shanghai by Jonathan Kaufman: Overview
Ever wondered how two Jewish families from Baghdad came to dominate Shanghai's business world? How did they shape the city's economic landscape and navigate the tumultuous political changes of 20th century China?
In The Last Kings of Shanghai by Jonathan Kaufman, you'll discover the fascinating saga of the Sassoon and Kadoorie families. This book delves into their rise to power, their influence on Shanghai's development, and their divergent fates in the face of historical upheavals.
Ready to uncover the captivating story of these influential dynasties? Let's dive into Kaufman's exploration of wealth, power, and survival in one of Asia's most dynamic cities.
Overview of The Last Kings of Shanghai
The Last Kings of Shanghai by Jonathan Kaufman chronicles the rise and influential legacies of the Sassoon and Kadoorie families in China. This intriguing account follows their entrepreneurial dynasties—originating from Baghdad and India—as they shrewdly navigated shifting political tides.
The book explores how the Sassoons, Kadoories, and other prominent families helped forge Shanghai into a global commercial powerhouse. It delves into their business enterprises, spanning trade, banking, hospitality, and infrastructure development. The families contended with wars, revolutions, and the rise of Chinese nationalism, culminating in a divergent path for the two dynasties in the 20th century.
The Sassoon Family's Journey to Power
The Sassoon family's rise to prominence is a tale of ambition, adaptability, and shrewd business acumen. Their journey began in Baghdad, took them through India, and ultimately led them to Shanghai, where they would leave an indelible mark on the city's history.
David Sassoon, born in 1792, laid the foundation for the family's future success. He made a pivotal decision to relocate to Bombay, aligning himself with the British colonial administration. This move proved to be a masterstroke, as it set the stage for the family's enduring wealth and influence. David's linguistic adaptability and knack for fostering relationships served him well in his new environment. He quickly capitalized on the advent of steamships, ensuring that departing vessels were well-stocked with products from his own Sassoon brand.
The family's business empire expanded rapidly, encompassing a diverse array of products and establishing connections with nomadic desert societies. Their commercial expertise caught the attention of the British East India Company, which supported their ventures in India. The Sassoons didn't stop there, though. They continued to diversify their portfolio, venturing into narcotics, textiles, and financial services in Shanghai. While their involvement in the drug trade was controversial, it's worth noting that it was similar to later entrepreneurs who focused on tobacco and alcohol—industries that received official approval and were subject to taxation by the British government.
The Kadoorie Family's Rise to Prominence
While the Sassoons were making their mark, another family was carving out their own path to success. The Kadoorie family, also originating from Baghdad, would go on to achieve significant status in Hong Kong.
Elly Kadoorie, the patriarch of the family, demonstrated remarkable business acumen and strategic foresight. After distancing himself from the Sassoons' commercial practices, he embarked on his own ventures. Elly's insight into market movements led him to establish his own stock brokerage and make a series of diverse investments, drawing comparisons to a modern-day Warren Buffett.
The Kadoories wisely channeled their assets into utilities, emerging sectors, and real estate investments. They leveraged Shanghai's robust economic growth, investing in crucial infrastructure and property. Their foray into the hotel industry, marked by the creation of notable structures such as Marble Hall and the Peninsula Hotel, not only expanded their wealth but also transformed the city's skyline.
But the Kadoories weren't just about making money. Elly and his wife Laura made significant contributions to charitable endeavors and were dedicated to educational programs. Their initiatives to create educational institutions and enhance the well-being of underserved communities showcased their understanding of how social capital contributes to creating wealth. This commitment to philanthropy, with a particular emphasis on female empowerment, played a crucial role in shaping their public reputation and enduring legacy.
Shaping Shanghai's Economic Landscape
The Sassoons and Kadoories weren't just successful businessmen—they were instrumental in transforming Shanghai into a bustling hub of global commerce. Their vast commercial networks and financial resources played a pivotal role in this transformation.
The Sassoon family's expertise was particularly crucial in developing Shanghai's transportation, communication, and financial networks. They leveraged cutting-edge innovations such as electronic communication systems and powered water vessels, giving them a competitive edge, especially in the opium trade. The founding of the Hongkong and Shanghai Bank, which rose to become Asia's most affluent and influential monetary entity, was a key factor in propelling Shanghai's economic expansion.
During times of turmoil and rebellion, Elias Sassoon established sanctuaries for Chinese seeking safety. This not only provided humanitarian aid but also fueled additional increases in the city's population and economic activity. The family's ability to quickly spread information about the worth of opium gave them a significant commercial advantage.
Victor Sassoon, a later generation of the family, further elevated their status through major real estate projects. He oversaw the construction of Sassoon House and the luxurious Cathay Hotel, both situated in Shanghai's famous waterfront area. These projects showcased the family's financial expertise and played a substantial role in enhancing Shanghai's international allure.
The Kadoories, meanwhile, were making their own mark on the city. They invested heavily in real estate, utilities, and hospitality, contributing significantly to Shanghai's reputation as a cosmopolitan city. Their involvement in property development, notably through financing the Shanghai Land Investment Company and collaborating in the management of the Shanghai Gas Co., had a profound impact on the city's social and economic infrastructure.
Competition and Cooperation: A Delicate Balance
The relationship between the Sassoon and Kadoorie families was complex, characterized by both competition and collaboration. This dynamic significantly influenced Shanghai's economic and social structure.
In key industries such as the drug trade and textile production, the families were fierce competitors. The Sassoons leveraged their prominent position in the opium business to expand into various industries, while the Kadoories energetically explored a variety of entrepreneurial activities and investments. Both families harbored ambitions to become key influencers in Shanghai's economic future.
However, they also understood the importance of strategic partnerships. Their collaborations in sectors like financial services and property development played a pivotal role in shaping Shanghai's vibrant commercial landscape. By combining their resources and influence, they were able to create rules through organizations that controlled Shanghai, fostering an environment favorable for foreign investment and capitalist practices.
Their connections with influential figures like Robert Hotung and José Pedro Braga further enhanced their influence over the city's social and economic framework. These relationships allowed them to navigate the complex political and social landscape of Shanghai more effectively.
The Impact of Historical and Political Shifts
The fortunes of the Sassoon and Kadoorie families were deeply intertwined with the significant historical and political transformations occurring in China during their era. The creation of the International Settlement in Shanghai, stemming from British influence after the Opium Wars, provided a fertile ground for their business ventures.
Following Britain's victory in the Opium Wars, both families seized the opportunities for trade and commerce that arose. The stable, affluent environment of the International Settlement, protected by the British navy, played a crucial role in their success. The Sassoons, in particular, distinguished themselves as market leaders, prospering without engaging in unlawful activities.
However, the families had to constantly adapt to maintain their status in China's evolving political scene. From the establishment of the Republic of China in 1911 to the start of Zhou Enlai's Communist movement in 1927, the involvement of international forces in China faced considerable scrutiny and opposition. During these periods of political instability, the "International Settlement" remained under the control of the Sassoons and the Kadoories, protected by the presence of British armed forces.
The Rise of Chinese Nationalism and Communism
As Chinese nationalism grew and the Communist movement gained strength, the once unchallenged dominance of families like the Sassoons and the Kadoories began to wane. The political climate became increasingly hostile towards international and leading corporate entities, necessitating substantial changes in their business practices.
The escalating disparity within the Chinese population and the shift towards more extreme views played a substantial role in propelling the Communist movement forward. This political turmoil had a profound effect on the Sassoons and the Kadoories, leading to suspicions about their business ethics and implications of involvement in unscrupulous profit-making.
The year 1949 marked a turning point, as the Communists emerged victorious. This abruptly ended the era when these families shaped dominant business cultures in Shanghai. The Communist regime quickly assumed control of essential industries and mandated that international managers address pending tax liabilities, adhere to regulatory norms, and guarantee adequate remuneration for their workers.
For the Sassoons and the Kadoories, this meant the challenge of divesting their business interests. The Communist authorities swiftly ended their economic dominance in Shanghai by seizing their assets and businesses, bringing an end to their long-standing influence in the city.
Diverging Paths: The Sassoons' Decline
The Sassoon family, once a dominant force in Shanghai, experienced a significant decline in the face of these political changes. Their vast fortune, largely accumulated through the narcotics trade, faced a harsh new reality due to global shifts. To put their wealth in perspective, their profits would be comparable to around 2.7 billion dollars in today's currency.
Victor Sassoon, a British tycoon and key figure in the family, recognized the impending threats posed by the Axis powers in Japan and Germany. Despite his deep involvement in significant social efforts and aid to Jewish refugees, Victor's concerns about the city's political instability led him to leave Shanghai before the Japanese took control of the International Settlement.
The family's decline was further accelerated by the worldwide crackdown on the opium trade. As Shanghai's assets were confiscated without compensation, and internal family disputes eroded the strength of the once-dominant dynasty, the Sassoon estate fell into decline. Victor Sassoon's financial downturn was partially a result of his choice to divest from his real estate holdings. Despite efforts to hold onto the remnants of their vast empire, they were unable to restore their former glory.
The Kadoories' Strategic Move and Resurgence
In contrast to the Sassoons, the Kadoorie family managed to navigate the political upheaval and rebuild their fortune through a strategic move to Hong Kong. Under the wise leadership of Lawrence Kadoorie, the family redirected their attention away from the uncertainties of Shanghai, leading to the creation of an enduring legacy in Hong Kong.
Lawrence foresaw the need for a modernized strategy and dedicated significant resources to electricity, which was essential for Hong Kong's rapid progress. He took the helm at China Light and Power, steering the company through a period of substantial growth to cater to the needs of a swiftly expanding economy. His pivotal role in electrifying Hong Kong significantly improved the city's foundational facilities, aiding in its emergence as an "Asian tiger" during the period when the Chinese Communist Party was strengthening its grip on Shanghai.
Meanwhile, Horace Kadoorie's establishment of the Kadoorie Agricultural Aid Association was instrumental in revolutionizing Hong Kong's agricultural scene and offering support to refugees. This initiative further reinforced the family's significant status in the region.
The Kadoories' Lasting Impact
In the aftermath of the war and as sovereignty was transferred to China, the Kadoorie family continued to wield significant influence. Their investments in infrastructure and education improved living conditions for numerous Hong Kong residents. The family's steadfast position and decision to oppose the Communist influence in Shanghai played a pivotal role, greatly contributing to China's rise and bolstering Hong Kong's substantial development.
The Kadoories' commitment to shaping the socio-economic growth of influential cities is underscored by their choice to allocate their resources once more in Shanghai, as evidenced by their initiatives with the Peninsula hotel. Their story is a testament to their resilience and ability to not just persevere but also to prosper amidst obstacles, highlighting their determination and sharp strategic acumen.
The divergent paths of these two families offer a fascinating lens through which to view the unfolding of modern Asian history. While the Sassoons' influence waned, the Kadoories prospered by making substantial contributions to sectors that continue to influence the global economic landscape. Their stories demonstrate the profound impact that individual decisions and broader historical circumstances can have on the fortunes of even the most powerful dynasties.