An Economic History of Modern China
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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.
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Chapter 1: Population

Joseph C.H. Chai


While traditional China and Europe were of similar size in terms of land area, the former was much more densely settled. Thus China’s population between the tenth and nineteenth century was almost double that of Europe (Maddison 2001). This huge difference in population size needs to be explained. The Chinese were originally a people of the steppes but had ceased being pastoralists before modern history began (Tawney 1964). Early Chinese agricultural settlements were widespread but concentrated mainly in the North China plain and in the central and lower valleys of the Yellow River. Their territorial expansion was, however, exceptionally fast. For example, from the Zhou to the Qing dynasty the size of the empire increased 27.3-fold and farming zones increased 12.7 times (Deng 1999). In fact it has been shown that the speed of the expansion averaged 1.26 kilometres per year during the Tang-Qing period – a development which has no match in Europe. According to Ho (1959), the colonization of the land by the Chinese took three forms. Firstly, the military colonialization in frontier areas. This involved soldiers stationed in garrisons in the frontier areas having to cultivate the land in times of peace in order to become self-sufficient and keep their maintenance costs to a minimum. The second form was the civil colonialization with the assistance of the government. That is, the latter provided wide-ranging incentives to civilians to start cultivating land and to establish agricultural colonies in remote parts of the empire. The incentives could range from land...

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