Becoming professional: Chinese accountants in early 20th century Shanghai

Accounting Historians Journal, The, Jun 2003 by Xu, Yin, Xu, Xiaoqun

Abstract: This paper examines the experience of Chinese accountants transforming themselves into a profession during the early 20lh century. It delineates how the experience was shaped by an intersection of economic development, the political culture and the nationalist movement in semi-colonial Shanghai. Chinese accountants responded to the daily manifestations of these larger historical forces by combining their professional self-interests with a nationalist agenda and by adapting to the changing political environment. The history and legacy of this experience provides a point of reference for observing the re-emergence of the accounting profession in China since the end of the Maoist era.

Submitted April 2002

Revised August 2002

Revised October 2002

Accepted January 2003

INTRODUCTION

After forced de-professionalization during the Maoist era (1949-1976), the accounting profession, along with the legal profession and other professions, re-emerged in China with increasing social and economic significance. Long before, and especially after, the entry of China to the WTO in 2001, the Chinese government emphasized the imperative of conforming to international norms in economic fields. This offered professions an increasingly important role to play. An underlying need for Chinese accountants was to commit themselves to professionalism. Profession and professionalism are not entirely new concepts in China. They were present in early 20th century China and contributed to the development of the accounting profession at that time. Unfortunately, due to political and ideological suppression during the Maoist era, the legacy of the accounting profession in the Republican era (1912-1949) has been largely forgotten in China and has received little attention from historians. Based on primary sources in the Chinese language and through historical interpretation, this paper seeks to unearth that history and explore the professionalization of Chinese accountants in the early 20th century. Our primary interest is not in the development of accounting techniques, but the way in which notions of profession were conceived and actualized at that time by Chinese accountants in the pursuit of a professionalization project.

PROFESSION AND PROFESSIONALIZATION IN THE CHINESE CONTEXT

'Profession' and 'professionalization' are contested concepts whose definition involves much sociological debate. For working purposes here, we will define 'profession' simply as an occupational group that is recognized by the state and the public as having special knowledge and expertise in a particular field. We take 'professionalization' as the process by which such a group obtains status and the privileges of a profession. Behind these working definitions, of course, lies a large body of literature on professions. Of this we can only give a very brief review.

The early paradigm that dominated the study of profession and professionalization in the West was the 'taxonomic approach'. This had two variants - the trait model and the functionalist model [Saks, 1983]. Under these models, the claims of certain occupational groups, such as their knowledge and expertise, public-serving ethics, and self-regulation, were taken as 'attributes' or 'traits' and applied to defining professions and specifying their roles in society. In response to the taxonomic paradigm, a 'process model' or 'power analysis model' emerged. This model emphasized the analysis of professionalization as the process by which occupational groups strive to gain power, status, and privilege and to monopolize the market of their services. The process was mediated by the class structure, the role of the state, and the acquisition and use of power by professions [Povalko, 1988, pp. 19-29].

The new process/power analysis paradigm led to a number of approaches that were action/agency oriented rather than structure/function oriented, including neo-Marxian, neo-Weberian and critical approaches. The critical approach significantly revised our understanding of how professional organizations, such as those of accountants, were motivated, established and sustained [Willmott, 1986; Walker, 1991, 1995]. The notion of 'professionalization project' or 'professional project' contains a neo-Weberian thrust by stressing the ways in which certain occupational groups built up a monopoly of a special body of knowledge and the services based on it through the mechanism of social closure [Macdonald, 1995, pp. 1-35]. But closure and monopoly were often more the intention or strategy of professional actors as opposed to the results they achieved [Chua and Poullaos, 1998]. The history of the Chinese accounting profession is to be examined in light of such a theoretical framework.

Most studies of professions based on the process model have been biased towards Anglo-American experiences. Scholars tended to discount the experiences of professional groups in continental European countries [Larson, 1977, pp. xvii-xviii; Freidson, 1983, p. 26; 1986, pp. 30-38]. Recent scholarship on professionalization has corrected this bias. As one authority has conceded "there was and there is more than one model of professionalization" [Larson, 1990, p. 29] Indeed, more recent studies such as those by Macdonald [1995] attempts a comparative approach, considering professions and professionalization in France and Germany as well as in Britain and the United States. Studies on the accounting professions in countries such as Australia, Canada, South Africa [Chua and Poullaos, 1993, 1998, 2002] have been augmented by research into locations such as Spain [Carrera, Guiterrez and Carmona, 2001] and China [Hao, 1999]. It is in these different cultural and historical environments that manifold issues relating to professionalization - such as the role of the state, class structure, class formation, social closure, social stratification, stratification within professions, bureaucracy and professions, nationalism, and gender - have been profitably explored and analyzed.