Did Late Imperial China Go Backwards or Forwards or Stand Still?

Using grain and farmland price data, this article estimates the interest rate and land rent in five provinces of Qing China to find that they tended to fall in the eighteenth and nineteenth centuries. Given that population growth outstripped both acreage expansion and capital accumulation, the weakening in the rental income for capital and land leads one to predict that Chinese workers also suffered shrinking real incomes, which is what available wage evidence shows. The downward trends in factor prices imply late imperial China suffering deterioration in living standards and total factor productivity, rather than achieving Smithian growth or muddling through an involutionary path. The Chinese failure contrasts with Tokugawa Japan improving total factor productivity and living standards without resorting to coal or foreign trade, which helped England achieve the first industrial revolution. Hence the causes of the growth disaster occurring in late imperial China are more likely to be found in the country’s institutions than luck.