To have a clearer understanding of the very beginning of the Chinese Indusco, we have to trace the background a little bit further.
Helen Snow had spent the summer of 1937 in Yanan, collecting historical materials on the Chinese Communists while her husband Edgar Snow was writing Red Star over China in Peking. While she was in Yanan, the Japanese war broke out in China and the communication system was hazardous for travelers. Edgar Snow met Helen in Xi’an, with James Bertram. The Snows went to Qingdao. From there he went to the war zones and she went alone to Peking for hospital treatment.
In November 1937, Helen Snow embarked on a coastal steamer from Tianjin for Shanghai. Edgar Snow and J.B Powell were at the pier to meet her, where Ed Snow was horrified at the train of luggage and almost refused to allow it to be landed. But Helen Snow lost no time to ask something else:
“How can China fight a war against Japan without machinery?” she demanded to know.
“Seventy percent of China’s industrial plants was in shanghai and Wuxi”, J. B. Powell stated, “and most of the rest is in Hankou.”
In a taxi they drove through suffocating crowds of refugees.
“There must be 600,000 factory workers unemployed and dying on the streets,” J. B. added.
“I’m heading some Red Cross projects and we are swamped. Ridiculous even to try to face the relief problem in China with soup-kitchens.”
“Practically no machinery was moved in time by the Chinese,” Ed Snow pointed out to J. B., “Isn’t there some way to get the government to evacuate some from the Yangtze cities before the Japanese get every scrap of it?”
“It’s never been done that way in China yet,” Powell answered thoughtfully.
The Sunday after Helen’s arrival in Shanghai, the Snows were invited to lunch with Rewi Alley, whom she had not met before, and whom she liked immediately. Rewi was then Factory Inspector of the Shanghai Municipal Council and an expert on Chinese industry and labor conditions.
Rewi and Ed carried on a conversation about how to get the government to use its scant river and land transport to move whole gigantic factories before the Japanese took other cities, such as Hankou. None of them thought there was a chance it would be done. Helen kept wondering, not about those big factories, but about how to get some of the unemployed refugees into production to help themselves and the war.
Before the Japanese occupied areas were open to outsiders, Rewi took Helen in an official car on one of his inspections of the devastated industrial areas, which set her in deep thought.
On a cold and windy December day Helen came up the muddy Huangpu River after the end of the fighting. The city was still burning. Japanese steamers were already loading looted machinery and scrap iron for the home islands. She was aghast at the miles of destruction along the river.
As is well-known, the main purpose of Japan in conquering China is to gain possession of her markets, resources and raw materials- and to prevent China from becoming a modern industrial nation utilizing these for herself, and thereby rising to a position of competition with Japanese industry. Therefore Japan’s first act was to raze to the ground all Chinese industry, and to carry off all portable machinery and scrap iron to Japan for use there. When Japan occupied the Shanghai-Wuxi area, she was able to destroy 70% of all China’s modern industry. Her bombing objectives had been directed toward all Chinese factories, in order to destroy China’s productive power in the rear.