"Industrial Revolution in the Prewar Lower Yangzi Region of China: A Quantitative and Institutional Interpretation" January 2004 Industrial Revolution in the Prewar Lower Yangzi Region of China: a Quantitative and Institutional Interpretation

This article utilizes a GDP framework to make an assessment of economic growth and change in China’s most advanced region, the Lower Yangzi, from the early modern period to the present It offers a quantitative assessment of the Shanghai-based industrialization in the first three decades of the 20 century through a detailed compilation of a 1933 Lower Yangzi GDP. It shows that the Lower Yangzi in the 1930s had a per capita GDP 64% higher than China’s national average, and experienced a magnitude of growth and structural change between 1914/18 and 1931/36 comparable to Japan and her East Asian colonies during this period. This paper further provides a historical narrative arguing that the City-state model adopted in the early 20 century Shanghai, with its secure property rights and provision of public goods, laid the institutional foundation of an Industrial Revolution in the Lower Yangzi with long-lasting political and economic impact across East Asia. * I would like to thank the organizer Konosuke Odaka and the participants of the two International Workshops held at Hitotsubashi University in March, 2001 and January 2002, the All-UC Economic History Conferences at University of California at Irvine in Oct. 2002, and the 3 Annual Hakone Conference in Tokyo, 2003, and also Huang Han Ming, Momoko Kawakami, Loren Brandt, Angus Maddison, Kenneth Pomeranz, Bart van Ark and Yuan Weipen. Thanks also go to Thomas Rawski for sending me his unpublished manuscript. I alone remain responsible for all errors. Industrial Revolution in the Prewar Lower Yangzi Region of China: a Quantitative and Institutional Interpretation Abstract: This article utilizes a GDP framework to make an assessment of economic growth and change in China’s most advanced region, the Lower Yangzi, from the early modern period to the present It offers a quantitative assessment of the Shanghai-based industrialization in the first three decades of the 20 century through a detailed compilation of a 1933 Lower Yangzi GDP. It shows that the Lower Yangzi in the 1930s had a per capita GDP 64% higher than China’s national average, and experienced a magnitude of growth and structural change between 1914/18 and 1931/36 comparable to Japan and her East Asian colonies during this period. This paper further provides a historical narrative arguing that the City-state model adopted in the early 20 century Shanghai, with its secure property rights and provision of public goods, laid the institutional foundation of an Industrial Revolution in the Lower Yangzi with long-lasting political and economic impact across East Asia. This article utilizes a GDP framework to make an assessment of economic growth and change in China’s most advanced region, the Lower Yangzi, from the early modern period to the present It offers a quantitative assessment of the Shanghai-based industrialization in the first three decades of the 20 century through a detailed compilation of a 1933 Lower Yangzi GDP. It shows that the Lower Yangzi in the 1930s had a per capita GDP 64% higher than China’s national average, and experienced a magnitude of growth and structural change between 1914/18 and 1931/36 comparable to Japan and her East Asian colonies during this period. This paper further provides a historical narrative arguing that the City-state model adopted in the early 20 century Shanghai, with its secure property rights and provision of public goods, laid the institutional foundation of an Industrial Revolution in the Lower Yangzi with long-lasting political and economic impact across East Asia. For students of the history of industrialization, China presents an intriguing antithesis of England, the first country to industrialize. Why, as Joseph Needham and his colleagues famously asked about two decades ago, did China’s scientific and technological leadership over the rest of the world up until perhaps the 14 century not lead to a British style industrial revolution? For China historians, the Needham story of science and technology became a tale of economic revolution the so-called medieval or “Song” economic revolution in the 10-13 century, as argued by Mark Elvin, Yoshinoba Shiba and others, had thoroughly transformed China’s production technology and market institutions to set her ahead of the rest of the world possibly right before the early modern era. 1 See Mark Elvin, 1973. Li Bo-zhong counted Japanese scholar such as Ichisada Miyazaki, and Chinese scholar Qi sha as among the advocates of the Song Economic Revolution (2002, p.97-99). Angus Maddisons converts this millennial China-Europe divergence paradigm into a plot of a Chinese per capita GDP series between 400 and 1800 AD downright flat except for the upward sloping Song dynasty (roughly between 950 and 1250 AD), against the European series, sinking with the fall of the Rome only to rise continuously from 1000 AD, and overtake China by the 14 century (Maddison, 2001, p.42).