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Published in:
2014 | OriginalPaper | Chapter
Cartel as a Business Network
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As Jiuda adapted its campaign of creative destruction against the revenue farming system, overcapacity and chaotic, if not wasteful, bargaining price wars among the refineries led to adoption of further restrictive strategies. Not unlike other entrepreneurs in China then and elsewhere confronting similar issues, the refineries resorted to collusion for collective survival. 1 Beginning with a local ad hoc collaboration, the salt refineries’ efforts culminated in the establishment of the National Salt Refineries Board (Jingyan zonghui, hereafter NSRB) in 1926. Using agreements to limit production, pool sales, coordinate pricing, and with elaborate compliance rules, as well as lobbying with the government to impose barriers of entry against new refineries, they learned how to manage the market through cartelization from 1926 to 1934.