Rewi Alley was born in Springfield, Canterbury, on 2 December 1897 to Frederick James Alley, a schoolmaster, and his wife, Clara Maria Buckingham, who was active in the temperance and women's rights movements. He was christened Rewi on the wish of his father's childless sister, Amy, who had great admiration for Rewi Maniapoto, a Ngāti Maniapoto leader. Hard work, discipline, respect for education, and a willingness to challenge authority were formative factors in his upbringing. His academic record at Christchurch Boys' High School, however, was indifferent. In March 1917 he volunteered for war service. He was wounded during combat in France and gained the Military Medal. On returning to New Zealand he joined a companion, Jack Stevens, in an unsuccessful six-year attempt to break in, and then farm, hill and bush country at Moeawatea, inland from Waverley, Taranaki. These were hard physical experiences that endowed Alley's short frame with stamina and resilience.
Out of curiosity about China, he first went there in 1927. He intended only to visit but stayed for the rest of his life. For the next decade he worked in Shanghai, first as a fire officer and then as a municipal factory inspector. Within a year of his arrival he formed a friendship with Joseph Bailie, an Irish-American missionary, whose ideas about the primacy of village-level education and training were an inspiration to Alley. Another significant friendship began in 1933 when he recruited to the Shanghai municipal council an American public health expert, George Hatem. Other early formative friendships included those with the Americans Edgar Snow, a journalist; Anna Louise Strong, a left-wing writer; and Agnes Smedley, a writer and revolutionary. Alley adopted two boys within five years of his arrival in China, Mike (Li Xue) and Alan (Duan Simou). Both later assumed positions of public responsibility, surviving attempts by adversaries to demote them during the Cultural Revolution. Alley was almost certainly homosexual, and never married.
From his Shanghai base, Rewi Alley became involved in government-sponsored flood and famine relief work, activities that were gaining international support. In centres like Wuhan, this provided him with direct experience of the poverty and hardship sustained by the Chinese peasantry at the hands of the Kuomintang, an incompetent and corrupt Chinese nationalist administration. Politically, this moved him from the conservatism of his younger years towards active sympathy with the Chinese Communist Party. Despite conditions of physical hardship and some illness during the 1930s, Alley travelled widely throughout China, gaining the experience that made his working knowledge of the country unique among foreigners. In 1937 he briefly returned to New Zealand and also toured Europe and North America, visiting factories. After he went back to China later that year, he became heavily involved in establishing the Industrial Co-operative (INDUSCO). The slogan associated with the scheme, 'Gung Ho, Work Together', subsequently entered common usage in the English language.
Throughout the Second World War Alley attempted to strengthen INDUSCO's international funding base, but the scheme's need to maintain relations with a crumbling nationalist government as well as links with the Chinese Communist Party complicated matters. More significantly, in 1942 Alley joined the Englishman George Hogg in running a school based on industrial co-operative principles at Shuangshipu (Feng Xi’an), approximately 125 miles west of Sian (Xi'an).
In 1942 Alley's relations with the nationalist government deteriorated, resulting in his dismissal from INDUSCO. Accordingly, in 1944 the school at Shuangshipu was relocated 688 miles north-west to Shandan in Gansu province. Only a year later, Hogg’s death from tetanus at the age of 29 was a severe blow to Alley. However, following the principles of his mentor, Joseph Bailie, Alley encouraged the Shandan school to grow through its tenets of 'create and analyse' and a daily routine of shared work and study designed to instil self-discipline, teamwork, and co-operation between industry and agriculture.
Rewi Alley's widening international reputation as a man close to the needs of the ordinary Chinese was vital for the fund-raising needed to maintain the school. This was achieved through bodies like CORSO and the China Defence League headed by Madame Sun Yat-sen (Soong Ch’ing-ling), who consistently supported Alley's work. Subsequently, he regarded his years as headmaster of the Shandan Bailie school as the happiest and most productive of his life. The school was maintained when the Communist Party succeeded to power in 1949, but was increasingly controlled by local party officials. In 1954 it was relocated to Lanchow (Lanzhou) and taken over by the oil industry.
Because of his association with a communist regime, public opinion in New Zealand was divided in its assessment of Alley’s activities, and from 1950 attitudes hardened towards him when he publicly identified himself with opposition to American policy in the Korean War. As the Cold War deepened, the familiar name of the man many New Zealanders had admired, through such widely publicised ventures as the shipment of local sheep to China, rarely appeared in newspaper coverage.
In 1952 Rewi Alley declined an invitation from Jawaharlal Nehru, the prime minister of India, to establish village co-operatives there. He settled in Peking (Beijing) in 1953 and travelled extensively within and beyond China, propagandising on behalf of international peace committees, especially the World Peace Council. In the following decade, and in his capacity as secretary of the Asian–Pacific peace liaison committee in Beijing, he visited Pyongyang, Havana, Stockholm, and Jakarta to speak at international peace conferences.
During this period he became increasingly immersed in writing about China, pamphleteering, and some less than memorable poetry. Among his 53 books, many of which were published in New Zealand, those describing his philosophy and experience of co-operative education included Yo banfa!; Sandan: an adventure in creative education; and Fruition: the story of George Alwin Hogg. In the 1950s he turned to translations of early Chinese writers. An assiduous collector, he devoted more attention to organising his major collection of artefacts, pottery and works of art. This was subsequently housed at the Rewi Alley museum in Shandan.
With the establishment of diplomatic relations between Wellington and Beijing in 1972, Rewi Alley assumed importance for the New Zealand government's Chinese policy. Previously – in 1960, 1965 and 1971 – he had maintained a wide range of New Zealand contacts through brief return visits, and in 1972 Victoria University of Wellington awarded him an honorary doctorate in literature. In 1982 Beijing granted him honorary citizenship, and his residence there was a pilgrimage point for thousands of visiting New Zealanders. On the occasion of his 90th birthday David Lange, then prime minister of New Zealand, publicly eulogised him. Shortly afterwards, on 27 December 1987 at Beijing, Rewi Alley died. His ashes were scattered over the Shandan countryside, in accordance with the instructions in his will.
To China, Alley's most significant legacy was his faith in the co-operative capacities of the ordinary Chinese. To compatriots, he epitomised a practical and self-reliant humanitarianism which had its roots in New Zealand.