A single-authored research paper by Professor Dong Baomin from the Faculty of Economics, titled Doomed to fail? Legitimacy crisis and the fiscal-military state in Republican China, was published online in Business History, a leading international journal of business history.

Paper Abstract

Modern state-building is often forged through warfare. The canonical fiscal-military state theory regards the mechanism of “war creating states” as an inevitable historical law. Nevertheless, this widely accepted theory encountered anomalies when applied to Republican China (1912–1937). Frequent warfare failed to cultivate robust state capacity; instead, it triggered fiscal collapse and ultimate institutional disintegration.

Through a detailed comparative analysis of Kincheng Bank, which maintained close political ties, and the Shanghai Commercial and Savings Bank, which adhered to a strategy of “political insulation”, this paper elaborates the foundational role of political legitimacy in state-building. Without legitimacy as the bedrock, the interaction between coercive power and financial capital will inevitably descend into a destructive cycle, spurring unconstrained predatory extraction and financial turbulence.

This historical evidence revises the narrative logic of the fiscal-military state theory. It also offers an invaluable theoretical perspective for deeper understanding of political capacity building, commercial evolution and the dynamic interactions between government and business in modern China.

Brief Introduction to the Author

Dong Baomin is a professor at the School of Economics and Deputy Director of the Faculty of Economics, Liaoning University. He also serves as an Adjunct Professor at Northwest University, Distinguished Guest Professor at Hainan University, Associate Editor of Industrial Economic Review, Economic Consultant of the Asian Development Bank, and Member of the Chinese Game Theory Society.

His main research areas include Chinese economic history, history of economic thought, international economics, industrial economics and development economics.

He has published more than forty academic papers in leading domestic and international journals such as Economic History Review, Explorations in Economic History, The World Economy, Review of International Economics, Economic Research Journal and China Economic Quarterly, alongside numerous monographs, translated works and textbooks.

He presided over a major research project in philosophy and social sciences funded by the Ministry of Education: “Early Confucian Thought and the Modernization of National Governance System and Governance Capacity”.

Translated by: Fu Zuoqi

Edited by: Gao Mengdi, Liu Hanlin

Proofread by: Li Zhibin

Reviewed by: Jin Jinghua