Institute of Science and Technology for Development of Shandong Research Center on Innovation and Entrepreneurship Shandong Academy of Science
Jinan, Shandong, P R China
*email address protected*
International Triple Helix Institute (ITHI), Palo Alto, CA94304, USA Research Center on Innovation and Entrepreneurship Shandong Academy of Science
Jinan, Shandong, P R China 250014 *email address protected*
The focus of this paper is the Government’s dominant role in the formation of Shanghai state electric power in the transition period (1945 -1965) for government administration, the economic system and the ruling party, based on “state logic – putting national interests above all else”. This is a case study of government-driven Triple Helix. When World War II ended in 1945, the American-run Shanghai Electric Power Corporation struggled to maintain electricity production. The Shanghai municipal government decided to form the “Shanghai Joint Electric Power Corporation” in 1948, but the project was not approved by Kuomintang’s central national government. However, the People’s Republic of China Government nationalized the key plants in 1950 that led to the establishment of a state electric power enterprise.
The Triple Helix concept arose from an analysis of government’s relations with university and industry, and the role it played in innovation (Etzkowitz and Leydesdorff, 1995; 2000). The study of the university-industry-government Triple Helix model dates back to the initial exploration on government-industry interaction by Henry Etzkowitz (1984). He highlighted government’s critical role in the development of new high-tech industry, including the American government’s key investment in developing the nuclear industry after World War II. He indicated that the solar industry did not receive much support from the government. He argued that the United States decided to develop a nuclear power industry in part to justify the continued development of its nuclear weapons program. One result of this decision was the repression of solar energy technology.
Nuclear energy became institutionalized as a “big science” in the United States immediately after the Second World War. Government research laboratories, university engineering departments, and divisions of major industrial corporations were committed to developing nuclear energy. Solar energy, meanwhile, remained a “little science.” Solar research was limited to researchers at small companies and universities, with only occasional involvement by government and large corporate research laboratories (Etzkowitz, 1984).
Etzkowitz and Leydesdorff defined this historical situation as a specific model of Triple Helix configurations, in which the nation state encompasses academia and industry and directs the relations between them (Etzkowitz and Leydesdorff, 2000). Even in the USA’s social system with a free market economy, government plays an indispensable role directly and indirectly in industrial development, in war and peacetime (Etzkowitz, 2000). In contrast, state ownership is still dominant in the social system of the P R China, where universities and industries are mainly owned and run by the government – Statist model, or government-driven Triple Helix, is formed for innovation and sustainable development (Zhou, 2008; 2015).
Inspired by the studies above, this paper explores government’s dominant role in the development of Chinese industry, on the grounds of the research in government-driven Triple Helix (Zhou, 2011), and a doctorate dissertation, “The research on electrical industry in Shanghai 1945-1965” (Gao, 2014), in which the state-of- the-art development of the Electric Power industry in Chinese’s modernization has been analyzed based on the theme of “state electric power”.
As an important part of “the Making of Modern China”, the development of the electrical industry has attracted academic attention from the diverse fields of history, politics, and economics. It is has been shown that the electric power sector, as a fundamental support of national industrialization, interacts with the government administrative apparatus under the leadership of the Communist Party of China (CPC) to achieve industrialization. Since individual units in the electric power industry made dramatic contributions to this development, the government’s dominant role in electric power higher education is investigated to confirm the government’s ‘pulling effect’.
Considering the Chinese electric power industry as a typical instance, and looking into its history, this research focuses on three basic issues:
The government’s dominant role in Chinese electrical industrialization: how is the top-down dynamic mechanism driven by the government in Shanghai;
State logic of the electric power industry development: why different, even opposing, administrations, Kuomintang, and the CPC made similar decisions for nationalizing this industry although different capital input and resource allocation
methods were chosen;
The development of China’s Triple Helix model under state
logic and government drive: how are electrical higher education institutions and electric power enterprises are managed or administrated by the government?
The Chinese electric power industry, with a complex industry capital composition, was established in order to provide the power supply infrastructure for lighting. Government originally did not have a dominant power position in the development of the industry. The government-oriented strategy arose from the Kuomintang government’s plan for the construction of power stations in the home front during World War II.
A ‘state logic’ of electric power was formed in the postwar period, and has systemically been implemented both in Chinese Taiwan and mainland China since 1949. Furthermore, under Communist Party governance, China has developed an educational system within the electric power sector, and brought to bear the intellectual and technological resources to work in the development of a national electric power system.
Electrical Higher Education Institutions (EHEIs) have played a critical role in the industry’s growth. The EHEIs development in China can be divided into three periods: the prior period (1950- 1966), the Culture revolution period (1966-1978), and the latest period (since 1978). In all these periods, both the political power and state logic have affected EHEIs’ development. The trajectories of the Triple Helix interaction such as university-industry linkage, government-industry relationship, and government-university relationship, have also been oriented by political power and state logic.
The domination of government is a key element for a fast- developing country, especially in the field of foundational industries and infrastructure. Electric power is viewed as a national strategic resource, and thus the electric power industry is recognized as a state-controlled industry. As the industry and the EHEIs are both owned by the state (government and the CPC), it clearly exemplified a statist model, a government-driven Triple Helix.
In the early stages of the Chinese electric power industry, facilities were owned and operated by foreign capital, native merchant, regional community, or local government (Wang, 1997; 2002). The diversity of investment sources led to a frequent circumstance of electric power companies and their plant alternating their ownership between private management and public-owned control, partially supported by individual investors when there was a shortage of funds.
Before the 1930s, the electric power industry, representing the power supply infrastructure for lighting, had gone through a period of privatization. Yingjia Tan described the nationalization of the electric power industry driven by Party-State authority in 1937- 1957 as ‘Revolutionary Undercurrent’ (Tan, 2015). Tan’s research investigated the Chinese electric power industry with different historical scenes including North China in the Sino-Japanese War, Tennessee in the Pacific War, and Chiang’s Taiwan in 1950s. Tan argued that, under the situation of ‘War Time’, national authority controlling grid construction and price setting were aimed at getting energy security and electric constancy driven by limited time and resources, although the plan of ‘State Electric Power’ consumed the significant wealth of the nation.
Since 1949, ‘State Electric Power’ in the Chinese Mainland had been driven by measures that were concerned with unifications and mergers in the field of industrial capital, fixed assets, transmission network, and sales management. Within the regional economic plan, Shanghai became the center of the electrical system of East China, instead of an isolated urban area between the provinces of Jiangsu and Zhejiang (Jun, 2008). Jun’s research clarified that ‘State Electric Power’ implemented a synergetic strategy on electrical construction that realized holistic enhancement in an across-province region, instead of separate improvements in developed cities. What’s more, before the global electricity reform in the 1990’s, electricity provision in Asian developing countries was an activity dominated by the state. Electricity’s central role in industrialization and modern living standards, made electrification an urgent priority for every national government. For the majority, regardless of political system, government was seen as the appropriate vehicle for the construction and operation of national electric grids, and the only entity capable of mobilizing the necessary human and financial capital (Williams and Dubash, 2004).
A government-industry-university interaction Triple Helix is used as a basic framework in this paper, with a focus on a top-down government role in developing the electric power industry as a national strategic resource. Combining historical and logical methods based on facts and narratives from multiple media data resources, such as archive documentation on China’s electric power industry development; this article analyzes the effect of the government drive on a state strategic industry. Some actual cases and systemic data are used. Moreover, the exploration targets 1945-1965, because it is a period of Chinese state electric power system formation. Since Shanghai is the city that first utilized electricity in China and became a typical city that can reflect what took place in other cities hereafter, it is chosen as an exemplary case.
THE STATIST MODEL IN CHINA: A GOVERNMENT‐ DRIVEN TRIPLE HELIX
The path to the Triple Helix formation begins from two opposing standpoints: a statist model of government controlling academia and industry (Figure 1), and a laissez faire model, with industry, academia, and government separate and apart from each other, interacting only modestly across strong boundaries. From both of these standpoints, there is a movement toward greater independence of university and industry from the state. The interaction among institutional spheres of university, industry, and government, playing both their traditional role and each other’s, in various combinations, is a stimulant to organizational creativity. New organizational innovations especially arise from interactions among the three helices (Etzkowitz, 2008).
In a Statist model, government is the dominant institutional sphere. Industry and the university are subordinate parts of the state. When relationships are organized among the institutional spheres, government plays the coordinating role. In this model, government is expected to take the lead in developing projects and providing the resources for new initiatives. Industry and academia are seen to require strong guidance, if not control. The statist model is characterized by specialized basic and applied research institutes, including sectoral units for particular industries. Universities are largely teaching institutions, distant from industry. The model relies on government to link each other in a top-down way (Etzkowitz, 2008).
STATE LOGIC: FROM PROPAGANDA AND WHITE BOOK TO SOCIALISM TRANSFORMATION
A statist model caused by dominant state-ownership, hierarchy administration, and coordinated resource arrangements, characterized as government’s “pulling” role, rather than “pushing”, in a technology following society. In this study, state is considered as a concept that consists of four elements: relatively stable land size, relatively stable population, and relatively stable political and economic system(s); and the culture and history. A State is defined as the sum of politics, economy, and culture, forming a group of people in a piece of land, including its history. According to the “Modern Chinese Dictionary” (2012), Government is a political institution that is defined as “authority of a state” and responsible for the administration; and Party is a political organization that represents a social group to achieve its benefit per se.
“State logic” has three cornerstones:
- All wealth belongs to the state, Ò state-ownership.
- The national interest is above all else, Ò Government becomesthe highest authority.
- The Party and the State are one, and the Party represents theState, Ò the supreme leadership of the ruling party.
“State Logic” mentioned here respects the reality that government administers significant economic sectors with foundational strategic resources, eg, energy, transportation, and communication. It is necessary to understand State Logic through historical backtracking, in which plan designers or policy makers are viewed as specifically political authorities. The Party and government take the lead and have a pivotal impact on the evolution of the country.
Chinese modernization and industrialization was launched through the Westernization Movement (1861-1895), and New Policy in the late Qing Dynasty. The ideology of the modern nation was first clarified in the form of authority by Sun Yat-sen in The International
Development of China (《建国方略》), published in both Chinese
and English in the 1920s. In the book, Sun as one of the founders of the modern nation of China, described a dual pattern of industrial economy as follows:
Development of Chinese industry should depend on private proprietorship and national operation both. The business accessible or more appropriate to individuals than state ownership is supposed to be open to private economy. By national awards and legislative protection we shall pursue to realize the prosperity of personal enterprises (Sun Yat-sen, 1928).
Sun had a blueprint for the modern country based on his Three Principles of the People ( 三民主义 ), ie, “Nationalism’’ ( 民族主义 ),
“Democracy” ( 民权主义 ), and “People’s Livelihood” ( 民生主义 ),
which was never realized in his time. The quotation above seemed a description of an open space for a private economy whose future would be actually delineated under an institutional and executive atmosphere. According to the Principle of People’s Livelihood, the government of modern China should cultivate state capital instead of private economic composition; the development of the latter would be governed by the policies of restriction. In the decade following the 1920s, multiple sources of capital poured into the industries that propelled them to prominence. NB. This was called the “Golden Ten Years” of Chinese economy before World War II.
The year of 1937 was a very critical point in modernization history, because then government reviewed economic achievement and drafted the modernization construction of China, while Japanese military power increasingly invaded the land. Considering the electric power industry growth as a national strategy, the Kuomintang Government denoted its reliance to both public- owned and private industry without any division of province and city, in order to keep the domestic balance between supply and demand, and the State would not remove private ownership but rather expect economic improvement through the private sector.1 Moreover, central government worked towards taking administrative control gradually to drive the electric power industry without any interference from private enterprises.
1 ianshe weiyuanhui quanguo dianqishiye zhidao weiyuanhui 建设委员会全国电气事业指导委员会 [Electric Utility Regulation Board of The National Construction Commission],“Zhongguo dianli” 中国电力 [Electrical China],Vol1, No.1, (1937), 1.
2 Guomindang zhongyang dangbu guominjingjijihua weiyuanhui 国民党中央党部国民经济计划委员会 [National Economic Plan Commission of KMT Central Department], “Shinianlai zhi zhongguo jingji jianshe yijiuerqi zhi yijiusanqi” 十年来之中国经济建设 1927-1937 [Chinese Economic Construction in the Last Decade 1927-1937] (Nanjing fulun ribaoshe, 1937), Chapter 6, 6.
3 “waijiaobu guanyu shanghai lianhe dianli gongsi ti’an de yijian” 外交部关于“上海联合电力公司”提案的意见 (Comments on the Proposal of “Shanghai United Power Company” from Ministry of Foreign Affairs), 1947, Record Number: Q5-3-5468, Shanghai Municipal Archive, Shanghai.
4 “Shanghaishi canyihui yaoqiu ziweihui jiang fadianji zhuanshou bing jiang lianhe dianli gongsi ji jieshou dianji juti banfa bingzhuanhe de han” 上海市参议会要求资委会将发电机转售并将联合电力公司及接收电机具体办法并转核的函 (The Letter of City Council Asking Central Resources Commission for Electric Generator traded to Shanghai United Power Company and Checking the Reception of Facilities), 1947, Record Number: Q1-14-456, Shanghai Municipal Archive, Shanghai.
5 “zhonggong shanghaishi gongyongju fendangzu guanyu zhabeishuidiangongsi xingzhi de diaocha yanjiu ji muqian ying caiqu shenme taidu de baogao” 中共上海 市公用局分党组关于闸北水电公司性质的调查研究及目前应采取什么态度的报告 (Report about Shanghai Public Utility Bureau sub-party group’s investigation and attitude on capital essential of Zhabei Water and Power Company), 23 November 1951, Record Number: B169-1-32, Shanghai Municipal Archive, Shanghai.
6 “yijiuwuyi nian qi yue shisi ri li fuzhuren guanyu shanghai dianli gongzuo jige wenti de zhishi jilu” 1951年7月14日李副主任关于上海电力工 作几个问题的指 示记录 (Record about vice director Li’s indication on Shanghai electricity on 14 July 1951), 1951, Record Number:A38-2-277, Shanghai Municipal Archive, Shanghai.
7 Data in this section draws from the official website of Shanghai University of Electric Power. on June 10, 2015.