Book Review — The Kings of Shanghai by Jonathan Kaufman
Yesterday morning, I finished The Kings of Shanghai: Two Rival Dynasties and the Creation of Modern China by Jonathan Kaufman. Jonathan is a Pulitzer Prize-winning reporter and professor of Journalism. The book was published in 2020.
In this drama-filled 350-page book, Jonathan tells the rise-and-fall-and-rise-again multigenerational story of the humble beginning of two rival Jewish dynasties which came from nothing to dominate business in China’s Shanghai and Hong Kong.
History is interesting. Many today know about Steve Jobs, Elon Musk and Mark Zuckerberg. However, long before they came to light, the Sassoons and the Kadoories, with their offices in Shanghai, Hong Kong, Bombay, and London, mastered the global economy and struggled with the moral and political dilemmas of working with China. These issues make top executives of many multinational companies have sleepless nights today.
The story began in the 19th century with the legendary patriarch of the Sassoon family leaving Baghdad in the dead of night to avoid imprisonment or possible death in the hands of the Ottoman rulers of Baghdad to start all over in Iran and then India without any established network. From David, the patriarch of the Kadoories, Elly, would spring forth and come into his own.
Elly benefitted from the foresight exhibited by David in developing a loyal workforce through the establishment of the Sassoon school, where workers are trained on fitting into the Sassoon business ideology. At a time when there was no guarantee of employment, David’s school-to-grave social network enticed a growing stream of workers to his warehouses and offices. It cost him about $300,000 a year in today’s money — and bought him ambition, talent, and loyalty. In addition, employees who retired and lacked family to look after them were given money for food. When they died, they were buried in the Sassoon-endowed Jewish cemetery.
From India, David sent his many sons across the globe and urged them to establish enduring businesses. One of them went to Shanghai. It was when the action got to Shanghai that the reader is lectured on the dwindling fortunes of China as it stopped embracing international trade. Even then, China was strong enough when Britain approached the emperor about recognizing its superiority. When in 1793, King George III proposed that British goods are sold in China, and a British ambassador allowed residence in Beijing and sent along, as gifts, examples of the best of British technology: clocks, telescopes, weapons, and textiles, the Chinese emperor Qianlong rebuffed the efforts and expressed astonishment that the king could be so ignorant of China’s superiority: “We possess all things,” the emperor wrote to King George. “I set no value on objects strange or ingenious and have no use for your country’s manufactures.”
This response was poignant because many decades after this encounter, African kings were so stupified by the sight of umbrellas that they volunteered to sell 40 able-bodied men for one umbrella. Underdevelopment is a terrible thing.
However, this rebuff didn’t last as China’s inability to keep with the times meant they were overrun by the British in the Opium Wars.
#WILT Britain’s pumping of opium to China led to one out of every ten
Chinese being addicted.
With Britain taking over and giving foreign businesses freehand, the Sassoons and the Kaddorie dynasties blossomed. They became two of the wealthiest families in the world. They built iconic architectural masterpieces where some of the most prominent people in the world dined and partied when they went to China. As a result, Shanghai welcomed foreigners, even as Beijing continued to be known for its nationalism. This differentiation continues till date.
One of my favourite parts was the narration of what happened to the Jews in World War II. Because the two families the book focused on are Jews, their role as Jews became endangered across the globe was highlighted. I was surprised to read about the prevalence of antisemitism practically everywhere and how it spread worldwide. The Russians had produced in 1903 a booklet known as the Protocols of the Elders of Zion. It contains claims of the minutes of a meeting of Jewish leaders preparing to dominate the world. Drawing on centuries of antisemitism and anti-Jewish myths and fables, Protocols was translated and reproduced worldwide. In fact, Henry Ford sponsored the printing of 500,000 copies in the United States in 1920. When Japan defeated Russia, they took copies of this booklet, and it played a role as the Japanese teamed up with Germany in WW II to persecute the Jews.
Shanghai was one of the places open to the persecuted Jews because of these two families, but that still did not stop the hopeless despair that overcame the refugees as they landed on Shanghai soil, surrounded by dirt and hunger. Successful men, stripped of their substance and materials, wept like children. Yet, many decades after, compared to how other Jews were treated in Europe, they were grateful for the opportunities afforded them to live and the schools built to educate under such gloomy circumstances as World War II approached. One of those educated became the US treasury secretary. Those who went to Shanghai would not forget these families.
#WILT In an alternate universe, Jews may have set up the Jewish nation in Latin America if the Brazilian government had accepted the proposal made by the Sassoon family to give them land for the Jews. But instead, President Vargas said he wanted no dealings with the Jews. Instead, he wanted “a race like Danes and Scandinavians with no imagination, no brains, but with a great capacity for tilling the ground”. Think about that.
The story of Victor Sassoon is cautionary as he fell from being one of the richest men in the world to irrelevance. From being the fifth or sixth most prosperous family in the world in the 1930s, the Sassoons are no longer part of the business world today. Indeed, he who controls the army controls he who controls the money. It is no coincidence that the richest men, especially in feudal-like societies, want to be associated with the political elite.
But as the reader saw in the book, only the right political elite can lead to the people’s progress. Mao Zedong wasted the Chinese during the cultural revolution. In 1970, the average per capita income of Chinese peasants, who made up 80 per cent of the population, was $40 per year. Less grain was produced per person in 1970 than in 1957. The technology in factories hadn’t been updated since the 1950s. Colleges had been shut for a decade.
One of my favourite sentences in the book is, “The best protection against Communism is to provide living conditions that are better than those in China”, Lawrence declared.
That was what brought about China-styled capitalism; Deng Xiaoping, who nursed his paralyzed son due to being tossed out a window by Mao’s Red Guards, opened up China.
This alliance with the right political elite is a significant reason the Kadoorite family survived where the Sassoons failed. As Deng Xiaoping opened up China and the economy boomed, inequality rose rapidly and led to protests. In 1989, China cracked down on protesters who wanted a more Western-style political system. Thousands died. Eventually speaking up, Lawrence Kadoorie did for Deng, “Too much democracy is not the best thing for this area of the world. There must be controls.”
When the British attempted to introduce political reform in Hong Kong that would leave the colony with a more democratic system before the Chinese formally took over in 1997, Lawrence criticized him: “In a large country, you must have a strong leader. One man, one vote, or Western-style democracy will not work. You can’t run a country or a business just by everybody saying, ‘This is my idea, and yours is no good.’” It was just what the Chinese government wanted to hear. To date, the Chinese government sees the Kadoories as family. After Lawrence passed and his son Michael took over the family business, China met with two dozen Hong Kong business leaders. There, current Chinese President Xi Jinping sent an aide over to shake Michael’s hand and deliver a personal message: “Your family has always been a friend to China.”
The book is Kaufman’s absorbing and innovative angle on the story of two Jewish families who went where governments wouldn’t, or couldn’t, go. Their decisions changed the lives of hundreds of millions of people. The Sassoons helped stabilize China’s economy in the 1930s when the rest of the world fell into depression. The Kadoories who fled from Shanghai transformed Hong Kong; their decision after 1949 to partner with Chinese factory owners from Shanghai who were fleeing communism opened global markets. It ignited Hong Kong’s growth and helped set the stage for the export boom that would make China the world’s factory floor in the twenty-first century.
History in China is fungible. The government constantly deletes what it does not want from the archives. Under Mao, you couldn’t get anything about the Sassoons and the Kadoories and their transformative impact on Shanghai. Now, China allows it. At the moment, the history of western religion in China is being cracked down on even when it was widely circulated a few decades ago. And this is why Kaufman’s exciting book is so important as we understand the factors that have led to the transformation of an important city like Shanghai, which is now the world’s largest city with one of the most billionaires in the world.
