How Did the Modern Chinese Economy Develop? —A Review Article

Unsurprisingly, writings on the economic history of nineteenth and twentieth century China have been confusing and full of controversy. A major question is whether the Chinese economy experienced per capita output growth, stagnated, or declined between 1870 and World War II. Studies prior to 1937 usually claimed that the rural economy's output per capita declined, with only modest expansion of a small, modern sector restricted to railroads and manufacturing firms, and that this modern sector declined during the great world depression of the 1930s (Myers 1970:13–18; Ozaki 1939; Tawney 1932). A few studies of the 1960s and 1970s generally confirmed this view (Eastman 1974:chap. 5; Paauw 1952:3–26). Various theories attempted to explain this continuing or deepening poverty in China, including some, such as Ch'en Han-seng's, that emphasized exploitation or the misdistribution of wealth (Myers 1970).