The “Umbrella Society” and the Emergence and Development of Modern Enterprises During the Self-Strengthening Movement in China

The “umbrella society” is a main feature of the Chinese social structure. The “umbrella” protection that government offers business operators is not only a major social relationship but also an important means of resource allocation in China. During the Self-Strengthening Movement, the “paternal”, “kinship” and “friendship” relationships between the government and enterprises promoted the emergence of state-owned enterprises, government-supervised commercial enterprises and commercial enterprises, respectively, as modern enterprises. Simultaneously, different resource allocations facilitated their development. However, due to the ambiguities in the umbrella services provided by the government to enterprises, the Chinese efforts to establish modern enterprises during the Self-Strengthening Movement were far from successful.