Figure 1.--The Chinese people in the early 20th century despite the country's vast resources were backward, largely illiterate, and desperately poor. Here we see a Chinese boy in Tientsin (northern China), during 1928. The Japanese invasion and Communism made China even more poor. In a very short period, however, the introduction of capitalism has lifted more people out of poverty more rapidly than any other similar period of human history.

China came to dominte most of Asia morth of Himilayas economically. The agricultural revolution and the birth of civilization occurred first in the Middle East. This occured later in China, but entirely independently. While the last of the four great river valley civilizations to develop, but it developed the most efficient agricultural economy. And until very modern times, agriculture was the most important economic sector which supported the great bulk of the population. Technological advances meant that Chinese agriculture was more advanced than European agriculture. Until China's free market reforms (1990s) we tended to think about the vast and poor Chinese peasant masses. In fact, until the 18th or even the 19th century, the Chinese were bettr fed and better off than most Europeans. (An exception here was the American colonits.) This is why China developed such a rich and successful society whixch spawned a steady stream od artistic treasures and technological advances. One of the interesting questions in economics is why China which throughout the medieval era led Europe technologically did not lauch the industrial revolution. Many of the important technological innovations that fed into the industrial revolution began in China. Marco Polo was astonished by riches and tecnological level of Chinas. European navigators sought routes to China because it was so much richer than Europe with products highly coveted in Europe. But it was in Europe tha modern science emerged along with capitalism and the industrial revolution. As a result, by the 19th century China had declined to a backward country unable to defend itself from more technicall advanced foreign powers. The Europeans generally confined their commercial activities to coastal cities, but the Japanese drove into the heart of China in an effort to convert it into a colonial depedency providing a stable market and raw materials (1937). At the same time a domestic struggle developed between the Nationalists and Communists. The Communist victory achieved by Mao Tse-tung (1949) condemned China to four decades of economic failure and one of the worst famines in Chinese history. The Great Leap Forward was followed by the even more disatrous Cultural Revolution which ruined both lives and stilted economic activity. As in other countries, communism in China acted primarily to limit real economic growth and wealth creation. Finally the free market economic reforms of Deng Deng Xiaoping and engagement with the West (1980s) has brought about an economic revolution that at long last is unleasing the economic energy of the Chinese people. There are mabny questions about the Chinese economy which are difficult to assess in a closed system, but there is no doubt thast since adopting caspitalist reforms, never before in humazn history have more people hsve been lifted from poverty in such a short period. Another unanswered question about China is if capitalism can proper under a system of political dictatorship.

Stability and Continuity

It would be wrong to think that because the Chinese economy had fallen so far behind thise of the Werst by the 19th century that Chine imperial regimes were not interested in the economy. Nothing could be further from the truth. In fact, Chinese rulers tended to take to give moreattention to the economy than rulers n the West. Chinese historical records show that imperial authorities gave great attention to population, land taxes, and monetary matters. Local historical accounts provide informatioin on local products, grain storage, and similar economic topics. The Chinese believed that properly functioning economy was the tell-tale indicator of a successful emperor,a n indication of the harmony achieved among heaven, earth, and mankind. The belief was that economics and morality were intrinsically linked. A prosperous economy was a sure indication of the basic morality of the ruler. Aseesments of the economy like that of society in general was premised on the phiolosphical outlook that harmony and stability weere funamental. Conceopts like growth and change were fudamentally alien. What was important was maintaing the social order unchanged. The golden age was seen as ome in wehicvh life wnt on as itbhad for centuries. Men plowed the fields and women cooked and wove cloth. Wars and famines were seen as indicators that disruotibe forceswere at play. The role of the role of the empeor was to maintain the ancient status quo ante of the golden age. There was no aspiration to surpass pasr achieemnts. It was widely believed the great achievements of the past could not be surpassed as a kind of perfection had already been achieved. .

Sectors

Agriculture

Chinese agriculture has serious limitations. Both topographic and climatic features pose serious limitations to agriculture in China. The area suitable for cultivation is limited. Large areas of the country is rugged an mountanous. TheGobi Dsert cover a large ae of northwestrn China. Percipitation is limited in large ares of northern China (Manchuria). One estimate suggests that only about 10 percent of the country's total land area is suitable for agriculture. A little more than half of that area is unirrigated. The other half includes approximately equal areas of paddy and irrigated fields. Critical to Chinese agriculture had been irrigation and water managment. This was a powerful force in incouraging state develipment. The quality of the soil in cultivated regions varies substantially from region to region. The agricultural revolution and the birth of civilization occurred first in the Middle East. This occured later in China, but entirely independently. The Yellow (Hueng He) River valley Civilization began in China (about 4000 BC). This would be basis for sucessve Chinese empires. A vast area populated by diverse ethnic groups became, gradually over time became a single culture cntered on the Yellow River Valley--the Han Chinese. The Yellow stretches across China for more than 2,900 miles. It carries a rich yellow silt all the way from Mongolia to the Pacific Ocean. The Yangtze River is even longer, stretching about 3,400 miles across central China. China's two major rivers merge together to create a vast food-producing area. While the last of the four great river valley civilizations to develop, China developed the most efficient agricultural economy. And until very modern times, agriculture was the most important economic sector which supported the great bulk of the population. This was why China was such a rich society and during the medieval area a mor advaned and prosperous society than the West. Even so, environmental problems such as floods, drought, and erosion created serious threats. There was a major regional divide in China. Initially it was the north that was heavily populated. The Chinese in the densly populated north developed wheat farming. Those in the more lightly populre south developed an agriculture based on rice. Technological advances meant that Chinese agriculture was more advanced than European agriculture. Major technological imprvements were made both in ancient and medival times. Here China was aorld leader and some of the developments in China would have enormous consequnces in the west, such as the cast iron plow, but it would be centuries before the idea trabsited the Silk Road. (The primary goods carried over the Silk Road were light-weight, high valued itens.) No one carried a heavy iron plow west, but ideas did flow east and west. What did not occur ib Chin dspite ll its riches and technological advances was modernity--the idea offreedom, capitalism, idemocracy, scince and ndustrialization. As a result, China began to fall behind the West. Not only did China not industrialize in the 18-19th century like Europe., but agriculture also changed little. China at the turn-of-the 20th century was still a largely agricultitral, peastant so iety with the great bulk of the population living in the countryside. Food would prove to be central to the Chinese war effort against the Japanese. Million of Chinese peaants lived on a razor edge of survival, producing just enough to feed themselnes. Thus any decline in production could have dire consequences for the Chinese people.

Industry

Transport

Transport is an essential part of any economy which has been the case since the dawn of civikization. For much of history, China had the world's most advanced economy. This continued to be the case througout the medieval era. Marco Polo gave us a taste of this (14th century). What transport that existed was water based, up and diown China's great rivers, especially the Yangtze, Yellow, and Pearl Rivers. This was not unusual. The same was true in Europe as well. Riverine transport was the omly way of moving goods in quantities. Roads hardly exsisted. Of couse the Silk Road existed, but transport costs were so highh, it only involved small quantities of luxury goods. The transport problem for Chiuna, is that all the major rivers flowed eastward into the sea. There was nothing connecting north and south enabling the flow of commerce. The great accomplishment of the Sui dynasty's was connectung China north to south -- the 1,794-kilometer (1,115 mi) Grand Canal (7th century). It ran from Hangzhou to Beijing. It was the central pillar of the Chinese economy. The Canal was not just a matter of transport, but was vital for irrigation, flood control, taxation, military transport, and colonization of new lands from the Zhou dynasty throug to the Manchu (Qing) Dynasty. The canal stsyem was maintained for more than a millenium, but there was massive destruction and lack if maintenance as a result of the domestic and foreign wars of the first half of the 20th century. China also had an extensive network of foreign maritime trade with Southeast Asia. The famed Ming admiral and court eunuch Zheng He who made celebrated voyages west with a huge fleet of giant ships. This was shorty before the Western mariitime explosion east. After Zhenh He state-sponsored Ming naval efforts declined dramatically. It is not entirely clear why. It is thought that the increasing pressure the Ming were expeiencing from the Mongols was a major factor. At the same time Europeans were expnding maritime trade all ovr the world. At the onset of the 17th century, China was still a commanding presence. But during the century Europe began to be transformed by the Industrial Revolution. The Imperial Government did not take the dynamic vchanges in Europe seriously. And slowly the balance oif poweer changed. The Europeans as a result if the Opium Wars could dictate termns on establishiung Treaty Ports (1840-60). While the basic Imperial policy was to ignore the Europeans, they did understand the importance oif the rail rioads. And China turned to the Europeans to begin to conndect the major cities and Treaty Ports. This was achierved during the late-19th and early-20th century. This was not just an economic matter. It was a major matter when the Japanese invaded with a much more modern army (1937). The Japanese advanced primarily up rivers and along railroad lines. Away from these arteries, the Japanese made little progress because of logistical constraints. Historians give great attention to the primitive infrastructure the Gerams had to confront in the Soviet Union. The Grerman problems were, however, minor comapred to what Japan faced in still largerly feudal rural China and the rugged terraine of the interior.

Sceince and Technology

Medical

Finance

Mining

Energy

Chronology

There have been many huge swings in the Chinese economy affecting not only China, but the entire world. Civilization did not begin in China, that occured in Mesopotamia a few millennia before China. Once China unified it developed what was to become not only the strongest ecomomy Asia, but the world. As in in all countries there were economic ups and downs as in all societies, but China emerged as the wealthiest country on earth. Ancient China economically dominated most of Asia up to the Himilayas. The agricultural revolution and the birth of civilization occurred first in the Middle East. This occured later in China, but entirely independently. While the last of the four great river valley civilizations to develop, but it developed the most efficient agricultural economy. And until very modern times, agriculture was the most important economic sector which supported the great bulk of the population. Technological advances meant that Chinese agriculture was more advanced than European agriculture. These trechnical advances began in ancient times and continued into the medieval era. Marco Polo was famously astonished at what he found in China during his travels. China was not only rich, it was the world center of technology and innovation. Much of the technology that led Eyurope out of the medievsl era originated in China. China even with its wealth and technology, did not develop modernity. This occured in the West. Chinese technology never develped into science. Nor did the Chinese develop capitalism and democracy. The industrial revolution occurred in the West. China's traditionl society resisted change. Traditional agriculkture and the lsck of indistry meant that China with low productivity coukdnoit comete with the est. This led to the Unequal Treaties, European controlled ports, and national humiliation. Eventually much of the country was cinquered by Japan and subjected to a brutal occuption. When change came it was totalitarian Communism. But in contrast to the optimistic expectations of committed Communists, they were not able to develop a modern economy. Rather than prosperity mAo, in the Great Leap Forward engineered disaster and a devestaing famine. As long as Mao was in chsarge, asking questions resulted in arrest or death. After the Cultural Revolution and Mao's death, Chinese leaders began asking questions. Chairman Deng Xiaoping on a visit to prosperous Singapore, Deng asked the architect of the country's prosperity, Lee Kuan Yew, how he had been so successful. The answer was capitalism. Deng did not use the term, but the capitalism he introdyced in only a few years turned the counhtry into an economic powerhouse.

Sources

Fairbank, John K. "The Canton trade and the Opium War", in Fairbank, John K. (ed.), Late Ch'ing 1800–1911 Part 1, The Cambridge History of China Vol. 10 (Cambridge: Cambridge University Press, 1978), pp. 163–213.

Murphey. (2007).

Created: 7:54 AM 12/1/2010
Last updated: 7:44 AM 10/16/2021