The Last Kings of Shanghai: The Rival Jewish Dynasties That Helped Create Modern China, Kaufman - B+

             This is a history of two Jewish families who dominated Chinese business for decades, the Sasoons and Kadoories, who were lost in the fog of China's erasure of its history from the century of 'humiliation.' Shanghai, once a great world city, is the locus of this story. In the 1930's, the city was the fourth largest in the world. "Together the Sasoons and the Kadoories helped shape a city that made them billionaires - and inspired and enabled a generation of Chinese businessmen to be successful capitalists and entrepreneurs." The two families were also able to protect 18,000 European Jews who fled there during WWII.

            The Sasoons were Baghdad's richest merchants, the family that had led the Jewish dominance of the city's trades for almost a millennium. However in 1829, trouble with the Turks forced David Sasoon to move to Bombay. The British Empire was expanding, and the free market capitalism and its foundation on the rule of law made India the perfect place for Sasoon to reestablish his prominence. "David became a bridge between the traditional trading practices of the Middle East and the new global system developing under the British Empire." Within a decade of his arrival, he was one of the richest men in India. He created Sasoon schools to teach young men how to work in his businesses, and then provided jobs, and later pensions. The British invasion of China afforded the family an entree into the booming opium business, and the second of his eight sons, Elias, was sent to Shanghai to develop that trade. He was wildly successful. When the Second Opium War made the drug legal, the Sassoon businesses controlled 70% of the opium going into China. 

            A distant Baghdadi cousin, Elly Kadoorie, went to work for the family in China for a very brief time before striking out on his own. He had no capital to speak of, but became a stock broker in Hong Kong and a long term investor in a great many businesses. His success was founded on the burgeoning rubber business and the connections provided by his London born wife, Laura. His two sons, Lawrence and Horace, were educated in proper English boarding schools and joined him in Shanghai. While China struggled after the 1911 revolution to find leadership and a steady footing, the city boomed. The British ran the International Settlement and it became the Paris of the Orient, the most fascinating and cosmopolitan city in the inter-war era. A visiting Douglas Fairbanks said it was the most "interesting and progressive" city in the world.

          David Sasoon's sons preferred to spend money and enjoy their wealth in England. It took a grandson, Victor, to reestablish their place in Asia. In the 1920's, he feared the rising independence movement in India, liquidated the family's businesses there and turned to Shanghai. He built the nine-story Sasoon House, a combined office building and luxury hotel. He maintained a close relationship with the Nationalist government and was soon one of the richest men in the world. As the city boomed, there were clouds on the horizon. Anyone looking into inequality could not help but be concerned about the communists. And Japan menaced. 

        Because Shanghai was an open city, no visa was required for entrance, and beginning in 1938, the Jews of Europe began to arrive. They were supported by both families, who funded almost every social service in the Settlement in an effort to feed, clothe and house the refugees. By the time war began in Europe, there were 18,000 Jewish refugees in Shanghai. The Japanese controlled access to the city and brought so much pressure on Victor Sasoon to support them that he left for India in November, 1941. In December, the Japanese occupied Shanghai and interned the British and Americans.  Elly Kadoorie died in Shanghai in 1944 at the age of 80. At war's end, Victor paid his employees three years of back wages. Both families began to liquidate their assets as it became apparent that the communists would win. The Kadoories went to Hong Kong and Victor to London and later Nassau, the Bahamas. The PRC confiscated all holdings in Shanghai. The Kaddoories were able to rebuild in Hong Kong because the British retained sovereignty. The brothers were instrumental in re-creating the city and in providing assistance to the thousands fleeing the communists. Although the Red Army threatened the city in the 1960's, the PRC never attacked. By the 1970's, Hong Kong was booming and would have been the 25th largest economy in the world if it were a nation. When China began to modernize under Deng, it approached the Kadoories to help integrate the country into the world's economy. Lawrence became the liaison between China and the west. In conjunction with the Thatcher government, he tried to forestall the takeover in 1997, but could not. He died a few years before the transition as a member of the House of Lords. His son Michael carried on developing business relationships with emerging China. Today, Shanghai too is booming again. This is an absolutely excellent book. Thanks to Ed Lukes for the recommendation.