An Economic History of Modern China

An Economic History of Modern China

Joseph C.H. Chai

As a country’s current development is path dependent, the rise of China and its strategic implications can only be understood in a historical context. Hence, the key to understanding contemporary China is the understanding of its past. So far there has been an absence of a comprehensive text dealing with Chinese economic history in the English language. An Economic History of Modern China fills this important gap, focusing on modern Chinese economic growth and comprehensively surveying the patterns of China’s growth experience over the past 200 years, from the Opium wars to the present day. Key events are traced back to their foundations in history to explain their impact on China’s modern economic growth.

Chapter 2: Agriculture

Joseph C.H. Chai

Subjects: asian studies, asian development, asian economics, development studies, asian development, development economics, economics and finance, asian economics, development economics, economic psychology


The importance of agriculture for traditional China can never be over emphasized because it has always been an agrarian economy. Between the ninth and eighteenth centuries agriculture accounted for 80 per cent of all employment and 70 per cent of national gross domestic product (GDP) (Feuerwerker 1984). Thus Chinese economic history in the pre-modern period is simply the history of Chinese agriculture (Perkins 1969). One of the main reasons why traditional China outperformed Europe in terms of population and per capita income was the unique performance of China’s agriculture. It brought much higher yields than that of Europe. This was partly due to comparatively better conditions, for in many parts of China there were regularly two harvests per year, and in the warmer southern rice-growing regions even three. However, the comparatively better performance of China’s traditional agriculture was also due to better technology, institutional arrangements and more favourable government policies. In the early period agriculture was confined to the North China dry lands which has similar farming conditions to those of Northern Europe. But due to population pressure and the general scarcity of farmland the Chinese farmers were inspired to improve and perfect their cultivation techniques early on. The first step was to shorten the period during which land was left fallow after harvesting to allow the soil to reaccumulate nutrients before the next sowing. In the early times, from Shang to Zhou times, slash-and-burn cultivation was practised, with long periods for land recovery in between. However, in Zhou times...

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