Economic history of China

The economic history of China, one of the oldest civilizations, stretches from the Xia Dynasty to the modern era — some 4,000 years. Since the Han Dynasty, China has usually had the largest economy in the world.^[1][2][3][4] The Financial Times has noted that "China has been the world’s largest economy for 18 of the past 20 centuries",^[5][6] while according to The Economist, "China was not only the largest economy for much of recorded history, but until the end of the 15th century, it also had the highest income per capita—and was the world’s technological leader."^[5][7]

Early Chinese civilization operated under a feudal economy akin to that of Europe in the Middle Ages. This system gradually expanded during the Xia, Shang, and Zhou Dynasties, reaching its height during the Zhou with the Jintian system. Most of China's industries, such as the iron, silk, salt, and handicraft industries, arose during this period, and currency was first introduced.^[8]

By 500 BCE, Chinese society, economy, and government were rapidly changing. As the feudal system collapsed, legislative power largely shifted to local kings. A merchant class emerged during the Warring States Period, resulting in greater trade. The emperors established an elaborate bureaucracy, using it to aid in waging imperial wars, building large temples, and performing public works projects. This new system rewarded talent over birthright; high positions no longer went solely to nobility. An agricultural revolution brought on by new iron tools led to a large population increase during this period. By 221 BCE, the state of Qin, which embraced these reforms more than other states, unified China, built the Great Wall, and set consistent standards of government. Although its draconian laws led to its fall in 206 BCE,^[9] the Qin institutions survived. During the Qin, China became a strong, unified, and centralized empire of self-sufficient farmers and artisans, though limited local autonomy remained.

The Song Dynasty (960-1279 CE) brought additional economic reforms. Paper money, the printing press, the compass, and other technological advances led to communication on a large scale and widespread circulation of books. The state began to exercise less powers, allowing private merchants to prosper. These new technologies and knowledge, coupled with less bureaucratic control of merchants, allowed investments and capital accumulation on a previously unthinkable scale. Despite disruptions during the Mongol conquest of 1279, the Ming Dynasty continued to evolve the economy in similar fashion to the Song. When the isolationist Qing Dynasty came into power, however, China's economic development began to slow. The discovery of America and the wealth of India aided Europe in rapidly developing during the Industrial Revolution as China's economy slowed—an event known as the great divergence. In 1820, China accounted for 33% of the world's GDP, but barely a hundred years later China accounted for only 9% of the world's GDP. The relative eclipse of China was primarily caused by Europe's Industrial Revolution in the 19th century.^[10]

Contents 1 Feudal Era (c. 2100 BCE - 475 BCE) 1.1 Xia, Shang and Zhou dynasties (c. 2100 BCE – 771 BCE) 1.1.1 Emergence of cities 1.1.2 Developments of metallurgy 1.1.3 Well-field system 1.1.4 Handicraft industry 1.1.5 Transportation 1.2 Spring and Autumn period (771 BCE - 475 BCE) 1.2.1 Emergence of large cities 1.2.2 Beginnings of trade 1.2.3 Technological advances 1.2.4 Collapse of Jintian system 2 Absolutist Era (475 BCE - 960 CE) 2.1 Warring States (475 BCE - 221 BCE) 2.1.1 Beginnings of the iron industry and its effects 2.1.2 Agricultural Boom 2.1.3 Reforms of Shang Yang 2.1.4 Establishment of Absolutist governments 2.2 Qin Dynasty (221 BCE - 206 BCE) 2.2.1 Unification of standards 2.2.2 Public works projects 2.2.3 Strict property laws 2.3 Han Dynasty (206 BCE - 190 CE) 2.3.1 Brief reversion to the feudal system 2.3.2 Prosperity under Wen and Jing 2.3.3 Reign of Emperor Wu of Han 2.3.4 Developments in industry 2.3.5 Developments in Agriculture 2.3.6 Trade and currency 2.3.7 Abortive reforms by Wang Mang 2.3.8 The Eastern Han 2.4 Wei & Jin (190 C E- 304 CE) 2.4.1 Rise of the aristocratic landowner class 2.4.2 Recovery under Jin 2.5 Wu Hu (304 CE - 439 CE) 2.5.1 Collapse, war, and depopulation 2.5.2 Economic impact of the Wu Hu invasion 2.5.3 Recovery of Northern China under Fu Jian 2.5.4 Further disruption after the fall of Former Qin 2.5.5 Development in South China under Jin 2.6 Southern and Northern dynasties (420 CE - 581 CE) 2.6.1 The Yuanjia Era: A brief era of prosperity 2.6.2 Xianbei invasion and disruption 2.6.3 Economic developments during the Qi, Liang, and Chen dynasties in south China 2.6.4 Sinification reforms of northern Wei 2.6.5 War, disruption and reunification of north China after northern Wei 2.7 Sui Dynasty (581 CE - 618 CE) 2.7.1 Reunification of China 2.7.2 Emergence of examination system 2.7.3 Reforms of administration 2.7.4 Prosperity under Wen Ti 2.7.5 Building of the Grand Canal 2.7.6 Collapse under Yang Ti 2.8 Tang dynasty (618 CE - 907 CE) 2.8.1 Prosperity under Zhenkuan 2.8.2 Trade, currency, and government intervention 2.8.3 Kaiyuan Era 2.8.4 The Anshi Rebellion and its effects 2.8.5 Collapse of the Juntian system 2.8.6 Recovery in the early 9th century 2.8.7 Salt monopoly 2.8.8 Collapse of the Tang 2.9 Five Dynasties & Ten kingdoms (907CE-960CE) 2.9.1 Disruptions in the north 2.9.2 Developments in the south 3 Mercantilist Era (960 CE - 1911 CE) 3.1 Song dynasty (960 CE - 1279 CE) 3.1.1 Increase in overseas trade 3.1.2 Boom in manufacturing 3.1.3 Improvements in Agriculture 3.1.4 Boom in Commerce 3.1.5 Relations with Liao and Xi Xia 3.1.6 Wang Anshi's reforms 3.1.7 Song examination system 3.1.8 Invention of paper money 3.1.9 Investment, capital and trade 3.1.10 Disruptions by the Jin invasion 3.1.11 Mongol conquest and the end of the Song 3.2 Yuan dynasty (1279 CE-1368 CE) 3.2.1 Devastation under the early Mongol invasions 3.2.2 Kublai's expansion of the Grand canal 3.2.3 State-sponsored trade in Quanzhou 3.2.4 Collapse of the Mongol Empire 3.3 Ming dynasty (1368 CE - 1662 CE) 3.3.1 Recovery under Hongwu and Yongle 3.3.2 Crisis of the mid-fifteenth century 3.3.3 The Ming government 3.3.4 The booming overseas trade 3.3.5 Ming-era countryside 3.3.6 Privatization of state monopolies 3.3.7 Rise of Wage labour 3.3.8 Currency of the Ming dynasty 3.3.9 Fusion of merchant and gentry classes 3.3.10 Weakening of the state 3.3.11 Little Ice Age and the collapse of the Ming economy 3.4 Qing dynasty (1662 CE - 1911 CE) 3.4.1 Disruptions of the Manchu invasion 3.4.2 Land seizures 3.4.3 Recovery of the "Kang-Qian Age" 3.4.4 Introduction of American crops 3.4.5 Isolationist trade policy 3.4.6 The Opium wars and loss of sovereignty 3.4.7 Disruptions of the Mid-19th century 3.4.8 Self-strengthening movement 3.4.9 Inflow of foreign goods 3.4.10 Development of domestic industries 3.4.11 Collapse of the Qing 4 See also 5 References 6 Sources 7 Further reading 8 External links

Feudal Era (c. 2100 BCE - 475 BCE)

Chinese civilization began in the Yellow River valley region. According to Chinese mythology, the area was unified by Huang-di (c. 2600 BCE), regarded as the ancestor of the Chinese. The Xia Dynasty brought the first organized Chinese state.^[11] Early China was a feudal society similar to European society during the Middle Ages. Kings apportioned land to the nobles, who then distributed the land to their vassals, though the central monarchies exercised little real control over autonomous landholders.^[12] The feudal economy began to collapse after the introduction of iron, when more advanced agricultural tools undermined feudal production. A centralized state after the collapse of the feudal system.

Xia, Shang and Zhou dynasties (c. 2100 BCE – 771 BCE)

Organized Chinese states began with the Xia Dynasty, reputedly established around 2100 BCE, and followed by the Shang Dynasty (1600 BCE – 1100 BCE) and the Zhou Dynasty (1100 BCE - 256 BCE). During this period, a primitive agrarian economy based on rice and pork began to develop. The silk, alcohol, and bronze handicraft industries emerged during this period, and roads, cities, and ships flourished from trade of these items.^[13]

Emergence of cities

Archaeologists have uncovered Xia-era cities at places such as Er li to and Hailing, as well as fortified settlements built to prevent invasion.^[14]

Large cities began emerging during the Shang period. How, an early Shang capital where archeologists found bronze smelting sites and handicraft shops, had a perimeter of only 7,000m. In contrast, the ruins of Yin, a later Shang capital, have an area of some 24 square kilometers^[15].

Under the Zhou Dynasty, cities continued to grow, containing the centers of government, administration, and politics, as well as the residences of the nobility^[16].

Developments of metallurgy

The bronze industry first appeared during the Xia Dynasty, where bronze swords and spears were used for weapons,^[17] and reached its height under the Shang. Excavation of Shang archeological sites has uncovered large quantities of bronze weapons, ritual vessels, and other items.^[18]

Well-field system

Xia agriculture relied on a feudal system where the landowner gave 50 mu of land to his serfs in exchange for cultivation of 5 mu of his own land. One-tenth of the crop from the serfs' plot was also given to the landowner. The Xia introduced many basic crops, including rice, as well as domesticated animals like pigs and chickens. Bronze agricultural tools further increased agricultural production during this period.^[19]

The Shang introduced several reforms to the system. Serfs began to work plots around a central manor that was communally cultivated. Under the Shang Dynasty, more crops were introduced, leading to a population increase. Alcohol production also began to flourish under the Shang.^[20]

The Zhou pushed the Jintian system, where eight peasants cultivated nine plots of land and the central, communaly cultivated plot belonged to the lord. This system is the origin of the Chinese letter tian, meaning field or plot. The system gave rise to the saying, "When one hundred thousand troops are raised, seven hundred thousand families are in disarray", since the seven other families would have to replace the services of one conscripted man.^[21]

Handicraft industry

Handicraft industries first emerged during the Shang Dynasty; these handicrafts included bricks, leather, and jade ornamentation.^[22] The silk industry also emerged during this period. It was recorded that the Shang possessed an early spinning machine to make silk.^[23]

Under the Zhou Dynasty, the pottery and jade industries developed further. By the fall of the Zhou, jade ornaments had replaced bronze as the choice of the nobility. Silk garments, due to their improved quality, also became popular among the nobility.^[24]

Transportation

The first chariots were invented during the Xia Dynasty. However, chariots and small river boats did not become major modes of transportation until the Shang.^[25]

Spring and Autumn period (771 BCE - 475 BCE)

The collapse of the Zhou ushered in the Spring and Autumn Period, a time of war between states named after Confucius' Spring and Autumn Annals. During this period, the Chinese feudal system began to decline, while trade began to flourish. Competition between states led to rapid technological advancement. New, iron tools led to agricultural surpluses, prompting the collapse of the Jintian system. The end of the era saw the newly invented crossbow replace the chariot as the weapon of the nobility, and marked the beginning of the Warring States Period.^[26]

Emergence of large cities

Large cities began appearing more frequently during the Spring and Autumn Period. The prosperous capital of Qi, Linfen, had a population estimated at over 200,000 in 650 BCE, making it one of the largest cities in the world at the time. This and other large cities served as centers of administration, trade, and economic activity. Unlike later periods, however, most of the population in the Spring and Autumn Period engaged in husbandry and was thus self-sufficient. Nevertheless, the growth of these cities symbolized an important step forward for the ancient Chinese economy.^[27]

Beginnings of trade

Large-scale trade began in the Spring and Autumn Period as merchants (including some of Confucius' disciples) transported goods between states. Currency was issued en masse to accommodate the new trade. Although some states restricted trade, other states encouraged it - such as Zheng in Central China, which promised not to regulate merchants. Zheng merchants became powerful throughout China as they carryed goods from Yan in the North to Chu in the South.^[28]

Technological advances

As new iron tools developed, they led to agricultural surpluses. Meanwhile, iron weapons soon made bronze weapons obsolete. Since iron smelting works were large and complex, they were usually under the control of the ruler, giving him a monopoly on weapons. This, as well as the agricultural surpluses, led to the disintegration of the feudal nobility in China.^[29] Livestock husbandry flourished, leading to increased agricultural productivity,^[30] and allowing individuals to produce their own food.

Collapse of Jintian system

As lords expanded their number of plots, the Jintian system began to collapse. The Jintian system collapse was expediated when the State of Lu changed its taxation system in 594 BCE. Under the new laws, grain was taxed based on each mu cultivated, rather than equally from each noble. Other states soon followed suit. With this, large estates began to disintegrate, destroying the Jintian system.^[31] Free peasants began to farm and pay the majority of the taxes.

Absolutist Era (475 BCE - 960 CE)

The Absolutist Era was marked by strong governments and emperors with almost unlimited power. Absolutist Era states were relatively centralized, though local officials still had some autonomy. During the Absolutist Era, self-sufficient peasant farmers and artisans dominated the economy. These groups largely operated independently of the overall market. Commerce was relatively frequent, increasing with the development of the silk road after the Han Dynasty. The Wu Hu uprising crippled the economy, which did not recover until the Tang, under which it transformed into the mercantilist economy of the Song and Ming Dynasties.

Warring States (475 BCE - 221 BCE)

The Warring States Period saw rapid technological and philosophical advances. As rulers sought to outdo each other and take control of China's states, they implemented various reforms. Iron tools were produced on a massive scale, and the old feudal system began to disintegrate. Most states were centered around large cities, allowing governments to organize armies of unprecedented size. Agricultural and military advancements put China further ahead than the rest of the world technologically. Common-born landowners and merchants prospered with help from the state, which was cautious of the old nobility. Some merchants, such as Lü Buwei, were reputed to be as wealthy as the state.^[32][33]

Beginnings of the iron industry and its effects

Although iron tools were manufactured during the Spring and Autumn Period, they became ubiquitous during the Warring States Era after large states began iron production. This rendered bronze weapons, and with it, the old military system, obsolete, giving governments, which controlled the large iron smelting works, a monopoly on military equipment. Iron agricultural tools triggered a massive increase in surplus farm goods, rendering the Jintian system obsolete as well.^[34]

Cast iron was invented the 4th century BCE, but was not adopted by the West for 1,700 years.^[35] Due cast iron's strength, it became even more prevalent and lead to an economic boom.

Agricultural Boom

In addition to the introduction of iron agricultural tools, the new powerful states undertook large-scale irrigation projects, such as the Zhengguo Canal and the Dujiangyan Irrigation System. Thousands of previously desolate mu were thus cultivated and integrated into the Qin economy. The agricultural boom allowed larger armies: while during the Spring and Autumn period supply constraints restricted armies to less than 100,000 men, the armies deployed by the Qin and Zhao at the Battle of Changping reportedly exceeded one million men. Despite the likely exaggeration of these figures, the expression serves to show the relative increase in army size.^[36][37]

During the Warring States Period, new agricultural techniques formed the basis of Chinese agriculture and the later European agricultural revolution.^[38] The sixth century BCE introduced, among other innovations, the iron plow, row cultivation, and intensive hoeing. These techniques spread rapidly, but were limited to China until the Agricultural Revolution in Europe.^[39]

Reforms of Shang Yang

The new technological advances prompted rulers to reform their governments, discarding the old feudal system. The most extensive of these reforms was carried out in Qin by Shang Yang. His reforms included:

1. Abolishing the old feudal nobility. Nobility, as well as land, was now based on military merit.

2. Discarding the old Jintian system and privatizing land to farmers, who paid a tax in grain to the state.

3. Encouraging the cultivation of unsettled lands.

4. Established a strict legal code with harsh punishments and stressed efficiency.

The new reforms were a success and made Qin the strongest state in China. To some extent, they were soon copied by other rulers.^[40]

Establishment of Absolutist governments

In this era, the growing power of the state, helped along by reforms like those of Shang Yang, strengthened the monarchy and allowed an organized bureaucracy capable of carrying out large-scale projects. Absolute monarchy would remain the norm in China until its gradual weakening under the Song and Ming dynasties.^[41]

Qin Dynasty (221 BCE - 206 BCE)

In 221 BCE, the State of Qin conquered the remaining states in China, becoming what scholars consider the first unified Chinese state. It quickly expanded, extending the Southern frontier from the Yangtze to Vietnam, and the northern frontier to Mongolia. While the early Xia, Shang, and Zhou Dynasities had nominal authority over all of China, the feudal system gave most regions a large degree of autonomy. Under the Qin, however, the entire empire had uniform standards and currency to facilitate trade. In addition, the Qin government undertook many public works projects, such as the Great Wall of China, that benefited China for centuries. Qin is sometimes understood to have begun the era of the "first Chinese empire", spanning the period from Qin to the Wu Hu uprising. However, Qin's legalist laws were not easily accepted by the rest of the empire. Rebellion occurred soon after the death of the first Qin emperor, and by 206 BCE, the Qin had collapsed.^[42]

Unification of standards

The Qin emperor unified standards of writing, weight measurement, and wheel length, while abolishing the old currency, which varied from state to state. He also issued a uniform code of laws throughout the empire. In addition, defensive walls in between states were torn down, since they disrupted trade. The Qin Empire did not resort to the old feudal system, but set up 36 prefectures, each of which governed a number of counties. Such organizations established the basis for a unified empire.^[43]

Public works projects

The Qin government undertook many public works projects with labor owed the state as a tax. The most famous of these project is the Great Wall, built to defend against Xiongnu incursions. Other projects included the Lingqu Canal, which linked subsidiaries of the Yangtze and Pearl rivers and secured the Qin's southern conquests. The Qin Emperor also built a magnificent palace complex, which later burned down.^[44]

Strict property laws

Qin laws had strict respect for property. The law condemned persons who had damaged others' property, even as little as taking leaves from a fruit tree, to 30 days' hard labor.^[45]

Han Dynasty (206 BCE - 190 CE)

The Han Dynasty is remembered as the first of China's Golden Ages. Emerging from the devastation of the Chu-Han contention, the Han dynasty rapidly recovered to become one of the most powerful and populous nations on Earth, reaching its apogee under Emperor Wu, who subdued the Xiongnu and took control of the Hexi Corridor, opening up the Silk Road. The Han also saw large-scale enterprises emerge, many of which were state-operated. Technological innovations, such as the wheelbarrow, paper and the seismograph, were invented during this period^[46]. Historians have estimated that the Han economy contributed about a quarter of the world GDP at the time.

Brief reversion to the feudal system

The founder of the Han Dynasty, Liu Bang, briefly reinstated feudalism during his reign. Under the belief that the Qin's fall was partially caused by disregarding traditional feudalism, he gave several kingdoms to his relatives. Under the early Han government, while the central government administered much of the country, the rest was divided into mostly autonomous kingdoms, each with its own currency, government, and army. These kingdoms often clashed with the central government.^[47]

Emperor Wu, modeling his administration after Qin's centralized government, abolished many of these kingdoms, making them into commandries.^[48]

Prosperity under Wen and Jing

The reigns of the Emperors Wen and Jing were a period of peace and prosperity. During them, the state abstained from meddling in the economy, following the Taoist principle of Wu Wei (無為), literally meaning "do nothing".^[49]

Agricultural taxes were reduced from 1/15 of agricultural output to 1/30 and even, for a brief period, abolished entirely. In addition, the labor corvée required of peasants was reduced to from 1 month per year to one month every three years.^[50]

Both the private and public sectors flourished in this period. Under Emperor Jing,

the ropes used to hang the bags of coins were breaking apart due to the weight, and bags of grain which had been stored for several years were rotting because they had been neglected and not eaten.

Mutilating punishments, such as cutting off the nose of an offender, were abolished.^[51]

Reign of Emperor Wu of Han

Emperor Wu's reign was a period of expansion and warfare for the Han. Reversing his predecessors' policies, Wu launched a series of military campaigns, including fighting the Xiongnu nomads controlling the deserts north of China. His victories expanded China's territory both northward and southward.^[52]

In order to fund his campaigns, Emperor Wu initiated a series of radical changes to the economy, including nationalizing several profitable industries like iron, salt and liquor, and controlling mercantile activity.^[53]

Developments in industry

In the early Western Han, the wealthiest men in the empire were merchants who engaged in the production and distribution of salt and iron.^[54] The fortunes gained from these enterprises rivaled the annual tax revenues collected by the imperial court.^[54] These merchants invested their money into land, becoming great landowners and employing large numbers of peasants.^[54] A single salt or iron industrialist could amass a peasant workforce of over a thousand; the men were then used to extract either liquid brine, sea salt, rock salt, or iron ore from the earth.^[54][55]

Emperor Wu of Han (r. 141–87 BCE) viewed such large-scale private industries as a threat to the state, as they drew the peasants' loyalty away from farming and towards the industrialists.^[54] Nationalizing the salt and iron trades would, besides eliminating this threat, reap huge profits for state coffers.^[54] Such a policy was in line with Emperor Wu's expansionary goals of challenging the nomadic Xiongnu Confederation while colonizing the Hexi Corridor and what is now Xinjiang of Central Asia, northern Vietnam, Yunnan, and North Korea.^[56] Under this direction, the government had taken over the salt and iron industries by 117 BCE. Although many wealthy salt and iron industrialists were ruined by this action, the government drafted former merchants such as Sang Hongyang (d. 80 BCE) to administer the national monopolies.^[54] Although a political faction in the court succeeded in having the central government monopolies abolished from 44 to 41 BCE, the monopolies resumed until the end of Wang Mang's (r. 9–23 CE) regime.^[57] After his downfall, the central government relinquished control of these industries to commandery-level governments and private businessmen.^[54][57]

Liquor was another profitable commodity that was monopolized by the government for a brief period between 98 and 81 BCE. After its return to privatization, the government ensured continued revenue by imposing heavy taxes on alcohol merchants.^[58][59]

In the 2nd century BCE, the Han began to make steel out of cast iron. Due to its strength, the Chinese developed better-quality weapons than the iron used by other nations.^[60]

Developments in Agriculture

The Han Era was a period of rapid technological advancement, one that extended to agricultural productivity as well. Inventions during this period include the "two-teeth" plough and an early sickle. The use of cattle-pulled ploughs also improved with the introduction of three-cattle plough (which required two people) and the two-cattle plough (requiring only one person)^[61].

During the reign of Emperor Wu of Han, The "Dai Tian Fa" was introduced, dividing the land into two portions. One portion would see the seed initially planted. Farmers would til only oen part of the land at a time. It was a form of early crop rotation. ^[62].

The Han dynasty also invented the seed drill, allowing farmers to drill seeds in precise rows, instead of casting them out randomly. This, and other agricultural innovations, made China's agriculture at least ten times, and at times 30 times, more efficient than its western counterpart^[63].

The invention of the horse chest harness facilitated easy transportation of grain. ^[64]

Trade and currency

Other sources of revenue used to fund Emperor Wu's military campaigns and colonization efforts included seizure of lands from nobles, selling offices and titles, increasing commercial taxes, and the monopoly requiring government minting of coins.^[65] The central government had previously attempted—and failed—to monopolize coin minting, taking power from the private commandery-level and kingdom-level productions.^[66] In 119 BCE the central government introduced the wushu (五銖) coin weighing 3.2 g (0.11 oz), and by 113 BCE this became the only legally accepted coin in the empire, since the government outlawed and shut down all other coin-minting.^[67] Although Wang Mang's regime introduced a variety of new light-weight currencies (including archaic knife money), which debased the value of coinage, the wushu coin was reinstated in 40 CE by the founder of Eastern Han, Emperor Guangwu, and remained the standard coin of China until the Tang Dynasty (608–907 CE).^[67][68][69]

Trade with foreign nations began on a large scale first during the Han Era, when Emperor Wu sent the explorer Zhang Yi to contact nations west of China in search of allies to fight the Xiongnu. After the defeat of the Xiongnu, however, Chinese armies established themselves in Central Asia, starting the famed Silk Road, which was a major avenue of international trade.^[70]

Abortive reforms by Wang Mang

In 8CE, the Han challcenor Wang Mang usurped the throne of the Han emperors and established his own dynasty, the Xin. Wang Mang wanted to restore the Han to what he believed to be the "idyllic" condition of the early Zhou, and reinstated the feudal system. He also outlawed the buying and selling of land, and instilled control on merchants. This proved highly unpopular with the population, who overthrew him in 25CE and restored the Han dynasty.^[71][72]

The Eastern Han

Under the Later or Eastern Han dynasty whcih followed Wang Mang, earlier laissez-faire policies were restored, and the government withdrew from managing the economy. A new period of prosperity, called the Rule of Ming and Zhang, ushered in. This period was a period of propserity and intellectual thought, and saw the birth of the great scientist, Zhang Heng. Paper was also invented during this period.^[73]. However, by the end of the 2nd Century CE, Han society began falling apart. In 184 CE, a peasant preacher started a rebellion called the Yellow Turban Rebellion, which ended the Han dynasty.^[74]

Wei & Jin (190 C E- 304 CE)

The Wei and Jin Era saw devastating warfare envelope China for the first time in more than 150 years. The population decline, as well as damage to the economy, was immense. Powerful aristocratic landowners offered shelter and gained much power, retaking some of privileges which the Qin and Han had abolished. The centralized state weakened as those under the protection of large landowners were no longer eligible for taxation by the state.^[75] Nevertheless, the economy recovered somewhat under the military agricultural policies of Cao Cao, and later under the Jin dynasty.^[76][77][78]

Rise of the aristocratic landowner class

The aristocratic landowners gained power during this period as millions of peasants sought their protection against bandits, tax collectors, and other threats. These refugees were no longer taxable by the state. During the Jin, the taxable population was only 20 million, while during the Han it was over 50 million. The Jin also weakened the central government by setting up feudal states independent of central authority. This led to the devastating War of the Eight Princes, which, coupled with an ambitious barbarian chieftain, would bring about the fall of China.^[79]

Recovery under Jin

The reunification of China under Jin sparked an economic recovery and commerce boom. In order to alleviate labor shortages, the Jin relocated millions of barbarians conquered by the Han to China proper, a policy that would cause havoc later in the Wu Hu era.^[80]

Wu Hu (304 CE - 439 CE)

In 304 CE, China was faced with a massive barbarian uprising. Following several years of devastating civil war between the various princes of the Jin dynasty, the Xiongnu under their chieftain Liu Yuan, who had served as mercenaries and subjects, suddenly revolted and declared themselves independent. They were followed by several other groups, including the Jie, Qiang, Di, and Xianbei. These groups became collectively known as the Wu Hu, and ravaged the Yellow River valley, carrying out a genocide against the Han Chinese. The collapse of the Jin Empire quickly followed these revolts.^[81] The Wu Hu invasion caused desolation on a massive scale. No population figures are readily available, but scattered statistics indicate as many as perhaps 40 to 60 percent of the old population was wiped out. The era ended with Liu Yu's reconquest of the heartlands and Tuoba Wei's conquest of the areas North of the Yellow River, which lead into the Southern and Northern Dynasties.^[82]

Collapse, war, and depopulation

The initial devastation of the Wu Hu uprising was immense. Large areas were depopulated. Records from the time declared that:

hundreds of miles of land are empty and without trace of human habitation. The Han only live in forts that are hundreds of kilometers apart. In between, is nothing but scorched earth and subject to the rule of the Hu(barbarians).

Before the uprising, the Wu Hu had already outnumbered Han Chinese in many regions. After the defeat of the Jin, the barbarian invaders treated the Chinese, who had formerly ruled them, injuriously. Large cities such as Luoyang and Chang'an were completely destroyed in the fighting; it was recorded that when the Xiongnu under Liu Yuan captured Luoyang, more than 30,000 were put to the sword in two days and the city destroyed. The same city had housed nearly one million during the Han.^[83]

Economic impact of the Wu Hu invasion

The Wu Hu uprising heavily disrupted trade routes as traders lost confidence in the security of their goods. Bandits and starving armies often targeted traders for their wealth. This disruption of trade forced economic activity into forts hundreds of kilometers apart. Feudal serfdom was revived as large portions of the Chinese population were enslaved by the Wu Hu. However, in the South and areas in which the rulers were respectful of Chinese customs, the market economy was better preserved.^[84]

Recovery of Northern China under Fu Jian

A brief recovery occurred under Fu Jian, the Di ruler of Former Qin, who reunified China. Fu Jian repaired the irrigation projects constructed under Han and Jin, and set up hotels and stations for traders every 20 kilometers. In addition, he revived law and order; his Chancellor Wang Mong put more than 20 nobles to death in several days. Under Fu Jian's rule, North China recovered immensely, trade and agriculture revived to a large extent, and many nations again sent tribute to Fu Jian's court.^[85]

Further disruption after the fall of Former Qin

In 383 CE, Fu Jian attempted to destroy the state of Eastern Jin, which ruled South China and was considered by most Chinese as the legitimate government of China. At the battle of Fei River, Fu Jian's army, composed mainly of conscripts, lost to a smaller, but better trained, Jin army. After the defeat, a number of small states arose, while Jin consolidated its hold over the regions south of the Yellow River. Economic activity was again disrupted by the warfare.^[86]

In 406 CE, Liu Yu of the Jin launched a series of expeditions that destroyed the barbarian states of Southern Yen and Later Qin, giving Jin control over nearly all of China and the two capitals of Luoyang and Chang'an. Despite an unexpected defeat and the loss of Chang'an, Jin still held Luoyang as well as most of the Chinese heartland. These victories led to the recovery of the Reign of Yuanjia under Liu Yu's son.^[87]

Development in South China under Jin

When Jin fled to the South in 316CE, the southern provinces were still an undeveloped periphery of the Chinese empire. Jin rulers tried their best to develop this region both as a center of rule and as a launch pad for the reconquest of the Chinese heartland.^[88]

Jin rulers granted large tracts of agricultural land to northern immigrants and landowners, who preserved the system of government that was in place before the uprising. The migration of northerners to the South had the effect of stimulating the southern economy, which rivaled the northern economy for the first time. Agricultural techniques introduced to the south increased produce production. A market economy continued to survive as Jin rulers enforced the law. The improvement of the Southern economy can be seen in the later period of the Wu Hu, when it supported Liu Yu's expeditions which recovered Sichuan and most of the Chinese heartland from the barbarian states of the north.^[89]

Southern and Northern dynasties (420 CE - 581 CE)

The Southern and Northern Dynasties, despite constant war, largely recovered from the devastating Wu Hu ravaging. The early part of this era saw the greater part of China reunified by the native Liu Song dynasty, whose northern border reached the Yellow River. The Liu Song founder and general Liu Yu managed to reclaim much of China's heartland and successfully defeated most of the states that the Wu Hu had set up in the fourth century CE, with the exception of the Xianbei state of Northern Wei. However, Liu Song focused on developing the Southern provinces rather than the traditional Chinese heartland, which was beset by repeated and devastating Xianbei invasions. Under Ming Ti, a civil war allowed the Xianbei to take control of these areas for good, once more reducing the native dynasties to the territories south of the Huai River.^[90] Henceforth, China was divided into the Northern and Southern dynasties, a situation that continued until 589 CE, when the Sui dynasty, already having restored native rule to North China, reunified China.

The Yuanjia Era: A brief era of prosperity

The Yuanjia era, brought about by Liu Yu's son, Wen Ti, is known in China as a period of prosperous rule and growth in the midst of war. Emperor Wen Ti was known for his frugal administration, as well as his caring for the welfare of the people. Although he lacked the martial power of his father, he was an excellent economic manager. He reduced taxes and levies on peasants, and encouraged them to settle the vast areas that had been reconquered by his father. In addition, he weakened the power of large landowners and increased the taxable population. He also set up a system to review officials and the progress they had made. As a result of his policies, China experienced an era of prosperity and economic recovery in contrast to the devastation of the earlier Wu Hu era.^[91]

During the Yuanjia era, the Chinese developed the co-fusion process to making steel, an improvement on the ealier method of making steel. This process involved melting cast and wrought iron together and making steel. This process anticipated the "Siemens stell process" of 1863 by over a thousand years and sparked further increases in Chinese iron quality and production.^[92].

Xianbei invasion and disruption

Towards the end of Wen Ti's reign and the reign of his successors, the Xianbei state of Northern Wei began to grow stronger, partly due to Wen Ti's policy of rejecting alliances with other barbarian states against Northern Wei, and instead allowing Wei to wipe them out. However, towards the end of his reign, Wen Ti launched a campaign against Northern Wei intending to destroy it. Although initially successful, the campaign turned into a disaster and Wei devastated the northern provinces. Following this defeat, Wei grew stronger and repeatedly launched incursions into the northern provinces, literally rendering them a wasteland and economically unproductive. In 468 CE, a civil war in Liu Song allowed Wei to conquer all the Northern provinces and reduce Liu Song's rule to the south.^[93]

Economic developments during the Qi, Liang, and Chen dynasties in south China

Faced with defeat, Liu Song quickly collapsed and was replaced in 479 CE by the Qi dynasty. The Qi, and its successor state the Liang, brought about relative civil peace by giving the royal family higher status than the rest of the population and implementing a system of honest governance. These measures resulted in a period of prosperity called the rule of Yongming. The economic prosperity of the south reached an apogee during the Liang dynasty, and briefly reconquered the north with 7,000 troops under the command of the able general Chen Qingzhi. It is recorded that the Liang emperor, Wu Ti, made a grant of 400 million coins to Buddhist monasteries. However, the southern dynasties started to decline after this point due to the popularity of Buddhist temples, who took on at one point half the population as tenants and resulted in a massive loss of tax revenue for the southern government. Towards the end of Liang, the barbarian Hou Jin rebellion devastated southern China. One record reportedly said that:

The areas which had formerly hundreds of families to the mile now are devoid of human life, having nothing but smoke and charred earth.

The succeeding Chen dynasty was far less competent than its predecessors, and the South lost an important appeal to legitimacy when the North fell under the Sui dynasty, which was also Chinese. In 589 CE, the Sui conquered the South and reunified China.^[94]

Sinification reforms of northern Wei

Surprisingly, the north saw a great economic recovery under the alien administration of Wei that it had not seen even during the prosperous era of Yuanjia. Most of this recovery came under Emperor Xiaowen of Wei, which introduced several important reforms including:

• Moving the capital to Luoyang, which caused that city and the surrounding provinces to be revitalized.
• Banning Xianbei language and customs and introducing Chinese law, language, and surnames. Xianbei officials were now paid with salaries rather than with whatever they looted.
• Implementing the Juntian system, in which the state rented land to the peasants who worked on it until death, then returning the land to the state. A smaller, private plot that could be inherited was given to peasants also. Cattle and farm tools were also rented or sold to the peasants. The support that the state gave to agriculture brought massive recovery.
• Implementing a system of local officials appointed by the state, rather than relying on local landowners.
• Introducing the Fubing system, in which soldiers would farm along with training militarily, and would be called up in times of war. This military system was used until the Tang dynasty, and empowered Han Chinese, as they now made up the majority of the army.

In this way, Northern Wei saw a massive recovery that saw the North recover and rapidly overtake the South. Under Emperor Xiaowen, the taxable population was reportedly 30 million, which surpassed the taxable population of Jin.^[95]

War, disruption and reunification of north China after northern Wei

After Xiaowen's rule, however, Northern Wei went downhill. A series of ill-timed famines and droughts, undermined Wei rule. In 523 CE, the noble Erzhu Yong rebelled and took control of northern Wei, reversing many of Xiaowen's reforms. Highly unpopular, he was overthrown, and north China briefly came under the rule of Liang. However, in 530 CE, Liang's troops were repulsed by Gao Huan and Yuwen Tai, two generals who then split northern Wei among them. The two new regimes, Northern Zhou and Qi, were controlled by Xianbei nobility who reversed some of Xiaowen's reforms, especially the requirement to speak Chinese and take on Chinese surnames. These wars did not end until half a century later, when Northern Zhou eliminated Qi. Very soon, however, Zhou was replaced by the new Sui dynasty under Han Chinese Yang Jian, who restored native rule over North China and whose rule marked the end of Xianbei power in China.^[96]

Sui Dynasty (581 CE - 618 CE)

The Sui Dynasty was established over the Northern Zhou, whose throne was usurped by Yang Jian in 581 CE, restoring native rule to north China. Yang Jian quickly enacted a series of policies that restored China's prosperity. His reunification of China marked the creation of what some historians call the "Second Chinese Empire", spanning the Sui, T'ang and Northern Song dynasties. Despite its brevity, the Sui reunified China, and its laws and administration formed the basis of the later Tang, Song and even Ming dynasties.^[97] The Sui dynasty had a population of about 45 million at its peak.

Reunification of China

One of Yang Jian's first priorities was the reunification of China. Now that both Chinese regimes were native, the southern dynasty of Chen no longer had an advantage over Sui. Moreover, its ruler was incompetent and pleasure-loving, and south China had a smaller population than the north. After eight years of preparation, Sui armies marched on Chen and destroyed it in 589 CE, conquering all of China.^[98]

Emergence of examination system

The Sui was the first dynasty to introduce the examination system (科舉) of officials, an important event in Chinese history. Before the Sui, government officials largely came or were related to the aristocratic landowner class or the military. After the examination system, the economic elite of China, such as merchants and non-aristocratic landowners, started possessing an extensive role in government.^[99]

Reforms of administration

The Sui government reformed government administration a modern "Three bureaus, six ministries" system which formed the basis of the administrations of later dynasties. The Sui government also reintroduced and strengthened the system of commandries which started during the Han, and ended hereditary and feudal holdings which had become more popular during the interval between Han and Sui.^[100]

The Sui government also introduced a new legal code called the "laws of Kaihuang" which was more fair than previous codes and much more concise and clear. This legal code was used as the basis of all late Chinese dynasties.^[101]

Prosperity under Wen Ti

For the first time in roughly 270 years, China was unified under a single regime and civil war was banished. An economic boom followed in the unified Sui Empire, and the population increased fifty percent from 30 to 46 million in just twenty years.^[102]

The Sui continued to use the Juntian system introduced by northern Wei. It was recorded that every able-bodied male would receive 40 mu of land as well as 80 mu of "Lu" land, which had to be returned to the state when the recipient died. Even women could received 40 mu of "Lu" land. The Sui government charged three "Shi" of grain each year. Peasants were required to do 20 days of labor for the state per year, but those over 50 years could instead pay a small fee.^[103]

The Sui government encouraged commerce in two main ways. Firstly, the Sui issued new currency to replace the poor currency issued by its predecessors, northern Zhou and Chen.^[104] Secondly, the Sui encouraged foreign merchants to come to China and Chinese merchants to import goods. In order to house these merchants, the Sui government built many hotels.^[105]

Building of the Grand Canal

In 605 CE, Yang Ti of Sui ordered the Grand Canal, connecting the Yellow and Huai rivers, built. This canal eventually became the economic highway of transporting goods between north and south China, and encouraged commerce on a large scale.^[106]

Collapse under Yang Ti

In 604 CE, Wen Ti was assassinated by his son Yang Guang, who became Yang Ti of Sui. Yang Ti was an ambitious ruler who immediately started many projects, including the Grand Canal, his palaces, and the Great Wall. Thousands of forced laborers died while building the projects, and eventually women were required to labor in absence of men. Sui Yang Ti also launched a series of campaigns against Gorguyeo, all of which failed. These campaigns tainted Chinese image, and uprisings and raids by the Gokturks became common place. In 618 CE, Yang Ti was assassinated and the Sui dynasty came to an end.^[107]

Tang dynasty (618 CE - 907 CE)

A Golden age again came with the Tang Dynasty. The Tang started off in the ruins of the Sui, but rapidly ascended to the top ranks of power. By 630, it had defeated and destroyed the powerful Gokturk Khagnate, removing any threat of China's borders for more than a century. A series of strong rulers, beginning with the founder and including a woman, ruled China well and expanded the Tang Empire massively, to the point that it rivaled the later Yuan, Ming and Qing. The Tang was also a period of rapid economic growth and prosperity, as well as technological advances such as gunpowder. Tang rulers issued large amounts of currency to facilitate trade; however, the state kept a tight rein on economic activity.^[108] Although the state weakened and withdrew from managing the economy in the 9th century, this had the effect of encouraging economic growth and helped China's economy begin to develop into the mercantilism of the Song and Ming Dynasties.

Prosperity under Zhenkuan

Emperor Taizong of Tang, who ruled during the Zhenkuan era, is regarded as one of the best rulers in Chinese history. Under his rule, China progressed very rapidly from the ruin of civil war to the most prosperous and powerful nation on earth. Taizong reduced forced labor requirements and lowered taxes; in addition, he was careful not to undertake projects that drained the treasury and the strength of the population. Under his reign, a legal code called the Code of Tang was introduced, moderating the laws of the Sui.^[109]

During Taizong's reign and until the Anshi rebellion, the Chinese Empire went through a relatively peaceful period of economic development. Taizong and his son's destruction of the Gokturk, Xueyantue, and other enemy empires ensured relative peace for China, and his control over the western provinces of China reopened the Silk Road and caused trade between China and the regions to its west to again flourish. Tang armies repeatedly intervened in the western regions to preserve this state of affairs.^[110]

Trade, currency, and government intervention

The Tang government, beginning with Taizong, issued a large amount of coins to facilitate trade. The Tang also saw overseas trade develop on a large scale as Tang ships sailed as far as India to trade with foreigners. In order to facilitate trade, the Tang continued the Sui's policy of building hotels to house traders.^[111]

In order to provide revenue, industries such as salt and iron were nationalized by the Tang government.

Kaiyuan Era

The height of Tang prosperity was reached under the Kaiyuan Era of Emperor Xuanzong of Tang, who expanded the Tang territory westward until it reached the Aral Sea.^[112] Emperor Xuan was an able administrator, and his Kaiyuan Era is often compared with the earlier Zhenkuan era as far as efficiency of administration. Tang China was reputed to have had 75 million inhabitants and more than 27 percent of the world's GDP^[113]. The Tang dynasty started to decline after reaching its height in this era.

The Anshi Rebellion and its effects

Emperor Xuanzong's reign ended with the devastating An Shi Rebellion, lead by a barbarian general named An Lushan who used barbarian troops in large numbers.^[114] This civil war was the first war in the Chinese homeland in over 120 years; the Tang economy was decimated as the northern regions, which were the heart of the economy, were destroyed. Large cities such as Luoyang and Chang'an were reduced to complete ruin. After the war, the Tang central government never recovered its power, as local generals grew independent of Tang rule. Periodically, emperors would mount campaigns to assert control over provinces that defied the central government.

The weakened Tang government was forced to abolish several of its monopolies after the rebellion; however, this had the unintended effect of stimulating trade and commerce in Tang China, which reached an apogee in the early 9th century. After the mid-9th century, renewed strife, drought, famine, and the unpopular salt monopoly led to a complete disintegration of the Tang dynasty.

Collapse of the Juntian system

The Juntian system (均田制度), which had formed the basis of agriculture for the past two and a half centuries, began to collapse after the Anshi Rebellion. This can be mainly attributed to two causes. First, the Juntian system relied on the state having large amounts of land, and landholdings had shrunk as it was privatized or granted to peasants. Secondly, the Fubing (戶兵) system, in which soldiers served the army and farmed on Juntian land was abolished and replaced with the Mubing system (募兵), which relied on a volunteer and standing army. The increasing power of landowners who perpetually enlarged their estates helped speed this trend. In 780 CE, the Tang government discontinued the Juntian system and revamped the tax system to collect taxes based on property value once in Spring and once in Autumn.^[115]

Recovery in the early 9th century

Despite the weakening government, the early 9th century was a period of recovery for the Tang dynasty^[116][117] as commerce and trade boomed with the withdrawal of government controls and Tang armies again asserted their superiority over nomadic empires such as Tibet and the Ughyurs, which had arose during the Anshi Rebellion. In addition, the increasing power of officials who had arose from the examination system conflicted with older aristocratic officials, leading to a struggle called the "Liu-Li Partisan struggle", plaguing the Tang court. The population was believed to have recovered from the Anshi Rebellion and continued to grow during this period.

Salt monopoly

Even after the Anshi Rebellion, the Tang government continued to enforce and strengthen its monopoly on salt. During the reign of emperors Shi and Yi, private salt sellers were executed, and the price of salt was so high that most of the population had to eat their food without it. Eventually, private salt sellers began to band together to combat the army, and eventually rebelled.^[118]

Collapse of the Tang

The collapse of the Tang was ensured by the devastating Huang Chao Rebellion, which lasted ten years and destroyed a large swath of the country, from Guangzhou to Chang'an.^[119] Following the rebellion, two generals, the Shatuo Li Keqiang and the former rebel Zhu Wen, dominated the Tang court.^[120] Civil war broke out again in the early 10th century, ending with Zhu Wen's victory. Following his victory, Zhu Wen forced the emperor of the Tang dynasty to abdicate, and the Tang empire disintegrated into a plethora of states known as the five dynasties and ten kingdoms.^[121]

Five Dynasties & Ten kingdoms (907CE-960CE)

The Five Dynasties and Ten Kingdoms was a period of warfare and disruption that marked the height of the local Fanzhen that had steadily gained power in the Late Tang. After 907 CE, the Tang government effectively disintegrated into a plethora of small states in the south, while the north saw a series of short-lived dynasties and barbarian invasions. This era ended with the establishment of the Song dynasty, though China would not be reunified until 979 CE, and would not again reach Tang's size until the Ming dynasty.^[122]

Disruptions in the north

The Later Liang dynasty replaced Tang rule in the north, but suffered through a Shatuo invasion that overthrew it in 926 CE. During their rule, the Shatuo gave the vital Sixteen Prefectures area, which contained the natural defences of North China as well as the Eastern section of the Great Wall, to the Khitan, a barbarian people that occupied Manchuria after Tang's collapse. This effectively left north China defenceless against incursions from the north, a major factor in the fall of the Song dynasty. In addition, invasions by the Shatuo and Khitan severely disrupted economic activity in the North and caused the economy to shift southwards.^[123]

Developments in the south

The southern areas were not affected as heavily as the north by the collapse. While northern China suffered from devastating rebellions by the Fanzhen, peasant revolts, and barbarian invasion in the Late Tang, the southern provinces remained relatively untouched. In fact, the five dynasties and ten kingdoms era was largely a time of continued prosperity for the southern provinces of China.^[124]

Mercantilist Era (960 CE - 1911 CE)

In 960CE, a general named Zhao Kuangyi toppled his master and established a new dynasty, the fifth time in a half a century. However, this was not a simple change of government. The dynasty he established, the Song, would bring an economic revolution to China.

The new mercantilist era, spurred on by technological advancements, would witness the birth of large enterprises, wage labor, and paper money. Overseas trade appeared, reaching a crux at the Ming. Investment, capital, and commerce were liberalized both by technological advancements and the weakening of the state. New manufacturing industries appeared, involving large enterprises which were first state-owned, but later privatized. The emergence of rural and urban markets in which production was geared towards consumption was a key development in this era. This era is speculated to have had "sprouts of capitalism" before the Qing^[125], meaning signs that the economy could have developed into an industrial capitalistic economy like Europe. China's growing wealth in this era lead to the loss of martial vigour, and this era was characterized by two periods of native rule each followed by periods of alien rule. By the end of the isolationist Manchu Qing dynasty(1662-1911), China had lost the lead it had obtained during the Warring states Era and had fallen behind the Western nations in development.

Song dynasty (960 CE - 1279 CE)

In 960 CE, the Later Zhou general Zhao Kunyi overthrew his imperial master and established a new dynasty, the sixth in fifty-three years. However, this event was an event that changed Chinese and world history. Merely nineteen years later, the Song had reunified most of China and created one of the most prosperous periods the world had ever known up to that point^[126]. Unlike its absolutist predecessors, the Song empire saw the monarchy and aristocracy weaken and give way to the class of non-aristocratic gentry, thanks to the expansion of the examination system(which was introduced during the Sui dynasty). In addition, the central government withdrew from managing the economy; the result was nothing less than an economic revolution, the most drastic changes China would ever see since the Warring states Era. Technological productivity spurred growth in this era, with three of China's four great inventions being either invented or perfected in this era. Unfortunately, this strength did not translate to strength outside. Unlike earlier Chinese dynasties, who had crushed their barbarian opponents, the Song bears the dubious honor of the first unified Chinese dynasty to subcumb to barbarian conquest^[127]. Eventually, the prosperity of the Song dynasty was destroyed by the invasions of first the Jur'chen Jin and then the Mongol Yuan^[128][129].

Increase in overseas trade

During the Song, the compass was invented by Chinese engineers. This sparked a boom in overseas trade and investment, and lead to a decline in the importance of the silk road(which was largely inaccessible). Overseas trade increase largely, though it was state-regulated and largely based on several sanctioned courts. The Song Court received tribute and had relations with many overseas countries, such as the Chola dynasty of India and Java.^[130]

Boom in manufacturing

The Song dynasty saw a gigantic increase in the manufacturing industry, which might be termed an early industrial revolution. During the Song dynasty, iron production rose to about 125,000 tons^[131], a figure that would not be matched by Europe until the 18th century.

Initally, the iron industry was managed by the government, but after Bao Qingtian's petition to the Song government, the ban on private smelting was lifted^[132]. Iron was not the only industry that boomed during this period; Sulphur, for use in gunpowder, was also a booming industry and in 1076 was placed under government control^[133], as the Song Chinese wanted to keep their monopoly on gunpowder weapons. Other industries, such as textiles, also boomed substiantially during this period.

In addition to iron, many other industries saw some deal of control by the government. For example, in Sichuan province, the Song government's monopoly on tea was used to purchase horses for the Song's cavalry forces^[134]. The Challcenor Wang Anshi instated monopolies in several industries, which sparked heated debate.^[135].

Improvements in Agriculture

Song agriculture saw a gignatic boom. The Song government, coming out of the devastation of the fall of the Tang, encouraged land to be ploughed by the peasants. The total amount of cultivated land during the Song skyrocketed to about 720 million Mu, a figure not surpassed even by the later Ming and Qing dynasties^[136].

Song agriculture was noted for a variety of crops, unlike the monoculture of previous dynasties. Specialized crops proppelled by a new commercial economy produced crops such as oranges, sugar canes, fruits, and vegetables were planted along with rice.^[137]. New tools such as the Water Wheel greatly enhanced productivity. Although most peasants in China were still primarily farmers of rice, some specializd agriculture arose in this period. For example, Luoyang was known for its flower cultivation; flower prices reached such exorbiant prices that 1 bulb reached the price of 10,000 coins^[138].

Unlike the earlier self-sufficient peasantry of the Han and Tang Eras, rural families in the Song Era could afford to sell a large surplus not only could afford to buy food, but also more charcoal, tea, oil, and wine, but they could also amass enough funds to establish secondary means of production for generating more wealth. Many Song peasants also had a secondary income doing handicraft work^[139].

Boom in Commerce

The Song dynasty's lift on controls in commerce helped spark a gigantic increase in the amount of trade. The first of these restrictions lifted was that commerce could now be conducted anywhere, instead of being restricted to the "Fang" and "Shi" of earlier eras. In all the major cities of the Song dynasty, many shops popped up in large areas, often focused on selling the same product. For example, all the rice shops would be on one street, and all the fish shops on another.

Unlike the later Ming dynasty, most businesses in the Song dynasty were both producers and retailers in that they sold the products they prodcued; a mixture of both handicraft and commerce. Although the Song dynasty saw some large enterprises, the majority of enterprises were of this type.

Relations with Liao and Xi Xia

Unlike earlier Chinese dynasties who had chosen to confront the barbarians with military force, the Song eschewed military conflict in favour of treaties^[140]. In the earlier period of the Song dynasty, Song armies clashed bitterly with the Khitan Liao, who had occupied China's traditional terroritory in the Northeast, the sixteen prefectures. With the loss of the sixteen prefectures, China's terroritory was defenceless against the Liao Cavalry. Eventually, the Song concluded a peace with the Liao in 1004(the treaty of Shanyun) in which they agreed to give the Liao about 200,000 taels of silver and 100,000 pi of silk per year, about 2 or 3 percent of the Song's tax revenue^[141][142].

Another threat was the Xi Xia, another barbarian nation in the Northwest who often clashed with the Song dynasty. In contrast to the Song's usual practices, Emperor Shenzong of Song launched several campaigns against the Xi Xia, eventually defeating them and reaching a truce in which the Xi Xia would pay tribute to the Song in exchange for Song payments of currency^[143].

Economically, the wars in the North proved on a burden on the Song economy. Up to 75 percent of Song revenues were devoted to the army, which however performed poorly in comparison with earlier Chinese armies.

Wang Anshi's reforms

In 1069 CE, Wang Anshi, a famed Chinese reformer become challcenor. His ideas were close to the modern welfare state, in which he believed that the state must provide for the people. He initiated a series of reforms that proved highly controversial.

In summary, the reforms were made up of 6 changes:

• The government would directly transport goods in abundance in one region and bring them to another area, without the need for merchants.
• Several industries such as tea, salt and liquor were nationalized.
• The government would provide loans to peasants in need, instead of merchants.
• Abolishing forced labor and replacing it with a tax.
• The government would give its horses to peasants in peacetime as livestock and recall them in wartime.
• Peasants had to participate in military training during lull in agricultural activity.

These reforms were continously reinstated and abolished by the Song court, depending on which faction was in power^[144].

Song examination system

During the Song dynasty, an important change was engineered in that officials which were appointed through the examination system became more prelevant than officials who had obtained their rank through birth. This marked a crucial point in Chinese history as this new scholar-official class came mostly from a new, non-aristocratic gentry class and marked the end of the hereditary aristocracy. They were also more symphathetic to merchants and other classes, especially when compared with the snobbery of the aristocracy, who disdained merchants. The eight-legged essay, which became the standard later on, was also invented during this period.

Invention of paper money

The boom in the Song dynasty necessitated the rise in currency. By the year 1085 the output of copper currency was driven to a rate of 6 billion coins a year up from 5.86 billion in 1080 (compared to just 327 million coins minted annually in the Tang Dynasty's prosperous Tianbao period of 742–755, and only 220 million coins minted annually from 118 BC to 5 AD during the Han Dynasty). ^[145]

Paper receipts of deposit first started in the 10th century, but the first officially sposnered bills were introduced in Sichuan Province^[146], as the currency in this province was made with metal and extremely heavy to carry. Although private businesses began this business with private bills of exchange, by the 1120s the central government officially stepped in and produced their own state-issued paper money (using woodblock printing). Even before this point, the Song government was amassing large amounts of paper tribute. It was recorded that each year before 1101 AD, the prefecture of Xinan (modern Xi-xian, Anhui) alone would send 1,500,000 sheets of paper in seven different varieties to the capital at Kaifeng^[147].

In the Southern Song, standard currency, with their face value marked, began to be used. However, a lack of standards caused their face value (and even time of usage) to wildly fluctate. A nationwide standard was not produced until 1274, two years before the Southern Song's fall^[148].

Investment, capital and trade

The development of new technologies allowed trade and investment on a large scale. Developments in shipping technology, facilitated by the invention of the compass, allowed the Song-era Chinese to engage in large amounts of trade with the outside world. Song-era commercial enterprises became very complex at this time. The accumulated wealth of merchants often rivaled that of the scholar-officials who administered the affairs of government. For their organizational skills, Ebrey, Walthall, and Palais state that Song Dynasty merchants:

set up partnerships and joint stock companies, with a separation of owners (shareholders) and managers. In the large cities, merchants were organized into guilds according to the type of product sold; they periodically set prices and arranged sales from wholesalers to shop owners. When the government requisitioned goods or assessed taxes, it dealt with the guild heads.^[149]

Basic concepts of capital were known during this period, as evidenced by this statement by Shen Kuo, a prominent scientist and finance minister:

The utility of money derives from circulation and loan-making. A village of ten households may have 100,000 coins. If the cash is stored in the household of one individual, even after a century, the sum remains 100,000. If the coins are circulated through business transactions so that every individual of the ten households can enjoy the utility of the 100,000 coins, then the utility will amount to that of 1,000,000 cash. If circulation continues without stop, the utility of the cash will be beyond enumeration^[150]

Disruptions by the Jin invasion

The good days of the Song were interrupted by the invasion of Jur'chen Jin in 1127. After a successful alliance with the Jin in which the Song destroyed its old enemy, the Khitan, the Jin attacked the Song in 1127 and sacked its capital in Kaifeng^[151]. This event was followed by about 15 years of unrelenting warfare which ended with the surrender of all of China's terroritory north of the Huai river and the Song court retreating to the south, much as the Jin dynasty (265-420) (a native dynasty not to be confused with Jur'chen Jin above) did 800 years earlier. These events predisposed that the southern Chinese provinces would later become China's economic center^[152].

Mongol conquest and the end of the Song

The Southern Song would continue in an uneasy truce until the Jin were destroyed by the Mongols in 1234. Taking advantage of this fact, the Song army briefly recaptured all the lost terroritory south of the Yellow River as the Mongols withdrew. However, a flood in the yellow river, coupled with Mongol attacks, eventually forced the Song to withdraw^[153].

Putting their eyes on the wealth of Song China, then the richest in the world, the Mongol Empire launched a series of attacks on the Song. Eventually, in 1275, with the help of a surrendered Song general who handed over to the Mongols cannon, the Mongols defeated the Song army near Xiangyang and eventually captured Hangzhou, the Song capital in the following year. Song resistance, however, did not end until the Battle of Yamen, in which the last Song emperor drowned with the remants of his navy^[154].

Yuan dynasty (1279 CE-1368 CE)

The Yuan were the first foreign dynasty to rule over all of China. As the largest khanate in the Mongol Empire, the emperors of Yuan also had nominal authority over the other three Mongol Empires. This period of Pax Mongolica stimulated trade. However, the cruelty and devastation of the Mongol conquest hampered China's development for nearly a century. During the Yuan dynasty, China's population decreased to about 80 million^[155].

Devastation under the early Mongol invasions

In their conquest of China, particularly the north under Jur'chen Jin, the Mongols resorted to brutal scorched earth policies that left entire provinces devastated. Mongol forces carried out massacres in cities they captured, and one khan even proposed to have all Chinese under Mongol rule slaughtered and using their land as pasture. In their conquest of the Song, the Mongols also carried out brutal massacres to suppress the population.

Kublai's expansion of the Grand canal

Kublai Khan, after he became ruler of all China, expanded the Grand Canal built during the Sui in order to make transportation between the south, which now was the hub of economic activity and his capital, Beijing, much easier. He had the canal, which connected the Yellow and Yangtze rivers, extended to Beijing. This enhance the status of Beijing, who had formerly been a peripheral city in China, and played a great role in later regime’s decision to make this city the capital^[156].

State-sponsored trade in Quanzhou

Mongol rulers encouraged trade between China and other Khanates of the Mongol Empire. During this era, trade between China and the Middle East increased and many Arabs, Persians and other foreigners entered China. Some even lived here. It was during this period that Marco Polo visited China^[157].

Collapse of the Mongol Empire

Mongol rule in China was highly unpopular. During the 1340s, frequent famines and droughts made the Chinese people miserable and highly agitated. In 1341, a peasant rebel leader who claimed he was the successor of the Song Emperor Huizong and who had the stated goal of reviving the Song dynasty lead a massive rebellion against Mongol rule. By 1351, much of South China was now free of Mongol rule. In 1368, after reunifying South China, the Ming dynasty advanced northward, capturing Beijing in the same year and putting an end to the Mongol Empire^[158].

Ming dynasty (1368 CE - 1662 CE)

Amidst the ruin of the Mongol Empire, a simple peasant, Zhu Yuanzhang, joined countless numbers of his countrymen rebelling against Mongol rule^[159]. The dynasty he founded, the Ming, is considered to be the last of China's three Golden Ages^[160]. . Ming rule saw the emergence of private industries which supplanted the state, as well as a vibrant foreign trade that allowed for the first time contact between East and West. In addition, the emergence of cash crops and specialized industries, as well as the boom unleashed by privatization of state industries, resulted in one of the most prosperous periods in Chinese history, exceeding that of the earlier Song dynasty. The Ming was also a period of technological progress, though perhaps not as much as the earlier Song^[161] The Ming dynasty is sometimes regarded, along with the earliers Song dynasty, as having the "roots of capitalism", meaning that it had the potential to develop into a capitalist society^[162]. Ming China had a population of almost 200 million and an economy that produced nearly a third of the world's GDP.

Recovery under Hongwu and Yongle

Zhu Yuanzhang, being born of a peasant family, was sympathetic to peasants and their plight. After he became ruler, Zhu enacted a series of policies designed to favor agriculture at the expense of other industries. The state gave aid to the farmers as they were searching for land, as well as aiding them with agricultural equipment. The state also repaired many canals and dikes that aided agriculture that were neglected by the Mongols. In addition, the Ming dynasty revived the examination system and revised the taxation system to make it more fair to peasants. The agricultural tax was lowered to 3.3% by Hongwu^[163].

After Hongwu's death, a period of disorder followed after which his son Zhu Di emerged as emperor in 1405. Zhu Di was more liberally-minded than his father and he repealed many of the controls on gentry and merchants Hongwu had established. The agricultural tax was also lowered to 1.5%^[164] during his rule. In addition, he also opened up a new trade avenue through the gigantic expeditions under his eunuch, Zheng He. Under Yongle's rule, Ming armies continued to win victories against the Mongols, who were forced to acknowledge him as their ruler.

Crisis of the mid-fifteenth century

A decline in the production of silver, which was the main medium of exchange in China, caused a severe monetary contraction and forced the Ming economy to operate under a monetary constraint for much of this era. It was reported that even counterfeiters were short of metal.^[165]. In addition, The Ming defeat in the Tumu Crisis saw a revitalization of the Mongol threat on China's northern border.

The Ming government

The Ming government has been described as "one of the greatest achievements of Chinese civilization"^[166]. Although it was despotic earlier, Ming government eventually evolved to become a system of power sharing between the emperor and the vast civil service(whom the emperor depended on) to make decisions, and whom without the Ming government could not survive.

Despite charges by traditional historians of over-taxation, the Ming government actually collected far fewer revenues than the Song dynasty which had existed 400 years earlier. Regional tax quotas set up by the Ming emperor Tai-Tzu would be collected, though in practice Ming revenues were far below the quotas decleared. In addition, a new gentry class managed to win concessions from the government, and resist tax increases. Throughout the Ming dynasty, the state was in a constant state of having not enough revenues.^[167]. As such, historians usually regard the Ming's fiscal system as a step backwards from earlier Tang and Song systems, though not because of over-taxation; in fact, the Ming empire was under taxed, due to specific circumstances from the earlier part of the dynasty.

The booming overseas trade

The Ming's overseas trade was begun by Zhu Di, who launched massive expeditions to Southern India and Africa, which greatly enhanced China's contacts in those areas. Shortly after, the Ming dynasty established a state-regulated trade in those areas.

However, private activity was curtailed by the state and merchants were restricted from competing with the Ming government. In the 1550s private trade was prohibited altogether. This created much discontent with the merchants, who then carried out a gigantic illegal trade, which the Ming state attempted to curtail with failure. Merchants pressured the government repeatedly to lift the prohibition, or at least turn a blind eye to it. In 1578, the "Hai Jin", or prohibition on the overseas trade^[169], was lifted by the Ming government and a gigantic expansion of the trade followed. This trade was estimated at about 300 million taels from 1578 to 1644^[170]. Many merchants prospered heavily in this trade; Zheng Zhilong's company, for example, regularly engaged in transactions of several million taels, at a time English traders with a few thousand pieces of silver were considered extremely wealthy^[171].

Although earlier Chinese trade with Europe had been hampered by what was called by some historians the "great economic depression" of the renaissance, China's foreign trade had began to boom by the late fifteenth and sixteenth centuries. At that time, China was the largest and most powerful and wealthy nation on Earth, and a lucrative market for Europeans.^[172]

Ming-era countryside

Ming agriculture was much changed from the earlier areas; firstly, gigantic areas, devoting and specializing in cash crops, sprung up to demand from the new market economy. Secondly, agricultural tools and carts, some water-powered, help to create a gigantic agricultural surplus which formed the basis of the rural economy. Besides rice, other crops were grown on a large scale^[173].

Although images of autarkic farmers who had no connection to the rest of China may have some merit for the earlier Han and T'ang dynasties, this was certainly not the case for the Ming dynasty. During the Ming dynasty, the increase in population and the decrease in quality land made it necessary that farmers make a living off cash crops. Many of these markets appeared in the rural countryside, where goods were exchanged and bartered^[174].

A second type of market that developed in China was the urban-rural type, in which rural goods were sold to urban dwellers. This was particular the case when landlords decided to reside in the cities, and use income coming from rural land holding to facilitate exchange in the cities. Another way this type of market was used was professional merchants who bought rural goods in large quantities^[175].

The third type of market was the "national market" which was developed during the Song dynasty but particularly enhanced during the Ming. This market involved not only the exchange described above, but also products produced directly for the market. Unlike earlier dynasties, many Ming peasants were no longer producing only products they needed; many of them produced products for the market, which then they sold at a profit^[176].

Privatization of state monopolies

Initially, Hongwu followed Song-era practice and instilled state monopolies in vital industries such as iron and salt. However, as the Ming monarchy weakened, the state crackled to the pressure of the merchants and privatized its monopolies in iron, salt and other industries^[177]. A boom in private industries followed, and these enterprises grew to huge sizes. Some factories employed hundreds of workers in their operations^[178].

Rise of Wage labour

During the Ming, forced labour was abolished and wage labour became dominant. The Ming government abolished the requirement that peasants do forced labour for the state and instead hired wage laborers to do the jobs required. The labor market became freer as wage labor replaced forced service and self-sufficient proprietors in large areas of the economy ^[179].

Currency of the Ming dynasty

Initially, Hongwu issued fiat currency as the standard currency, while private providers issued currency based on metals. Eventually, the state stopped issuing currency because the population lost faith in the fiat paper, which was frequently inflated by Hongwu. By 1425, the paper currency was only worth about 0.014% of its original value^[180]. Although the Ming government attempted to stop the inflow of silver, it was too profitable and was unable to be prohibited.^[181]

The overseas trade brought great prosperity for China as American silver was used as payment by the European countries purchasing China's products. The demand for silver was so great that it overwhelmed the earlier paper currency used by the Ming. Silver was used as a common medium of exchange^[182] during the Ming and its successor dynasty, the Qing. All transactions were measured and mostly carried out in silver.

Fusion of merchant and gentry classes

The newfound wealth of the merchants and capitalists of the Ming society allowed them a higher position. The merchant class, which had formerly been discriminated against in the Chinese social hierachy prescribed by Hongwu, was accepted and admired for its newfound wealth. It began to fuse with the gentry^[183], who had formerly dominated China's government. The two classes became one as merchants too brought land and participated in government^[184]. The presence of many officials born in merchant families played a key role in the laissez-faire policies of the late Ming.

Laissez-faire thought became prominent under the Ming, represented by scholar Qiu Jin, who argued that the state should only mitigate the market during times of crisis and the merchants were a good gauge of the nation's wealth.^[185]

Weakening of the state

Initially, the Ming government frequently intervened in the economy through monopolies and controls. However, by the late Ming, under pressure from merchants, the Ming government began withdrawing from the economy, through privatizing state monopolies, lowering taxes, and withdrawing controls. Taxes on agriculture were lowered from 3.3% to 1.5%, while the tax on trade was lowered to 0.5%. Throughout the dynasty, the Ming government found itself short of revenues.^[186] A key sign of the weakness of the late Ming state was the riots under the Wanli Emperor, in which an attempt to raise taxes ended with the death of Wanli's tax collectors. Much to his fury, the perpetrators went unpunished.

Little Ice Age and the collapse of the Ming economy

The Little Ice Age literally put a halt to Chinese agriculture in the Northern provinces. From 1626 on, famine, drought and other disasters hit Northern China, which brought rebellion and uprisings by starving peasants. The Ming government's inability to collect taxes resulted in troops frequently going unpaid and joining the rebels, worsening the situation. In 1644, the rebels under Li Zicheng took Beijing, ending Ming rule in the North^[187]. However, the Ming state would continue to exist in southern China until 1662 CE.

Qing dynasty (1662 CE - 1911 CE)

China's last imperial dynasty, the Qing, were not founded by ethnic Han Chinese themselves, but the Manchu, a tribe that had been the subjects of the Ming^[188]. In 1616, under Nurhaci, the Jur'chens (later known as the Manchu) rose up against the Ming. In 1644, taking advantage of a Ming general who invited them in to crush the peasant rebellions rising up against the Ming, the Manchus went into China proper and quickly took control, founding the Qing dynasty. After a long, bloody war which did not end until 1683, when the last Chinese resistance ran out, the Qing took control of all of China and suppressed dissents through measures such as killing scholars for alleged slurs of the Manchu, banning Chinese dress and forcing Chinese men to tie pigtails in the Manchu fashion^[189], and others. Nevertheless, the Qing dynasty continued until its overthrow in 1911, and saw China fall behind the rest of the world, a far cry from the Han, Tang, Song and Ming.

Disruptions of the Manchu invasion

As conquerers, the Manchu forces requistioned large amounts of land from the Chinese landowners and enslaved hundreds of thousands of Han Chinese as Booi Aha or slaves to work on these estates, effectively reintroducing slavery. In addition, attacks by Ming loyalist forces based overseas prompted the Manchu to adopt a policy of clearing the shore line in which all cities and towns along China's coast were destroyed and their inhabitants moved inland. This event virtually ended all of China's maritime activity in that era, which did not recover until modern times^[190]..

Viewing the Manchu as barbarians, the Han Chinese carried out heavy resistance against the Manchus. The Manchus responded with massacres, sometimes of horrific scale. The Yangzhou massacre, for example, was estimated to have killed between 300,000 and 800,000 people. In addition, the Manchus forced Han Chinese to wear pigtails in their fashion and banned traditional Chinese dress, an event that resulted in farther humiliation.

Land seizures

A direct result of the Manchu invasion was the "requistioning of land". Disrupting the market for land in the Ming Dynasty, Manchu chieftains seized large quantities of land. In Hebei province alone, some 16.6 million Mu of agricultural land was seized. In addition, some 47 million Mu of "military land" was requistioned by the Manchu government. These seizures were accopmanied by driving out of the Chinese landowners, and a revival of serfdom as thousands of landless farmers became serfs for the Manchus. ^[191].

Recovery of the "Kang-Qian Age"

Following the completion of the Manchu conquest in 1683, the Kangxi Emperor revoked some of the policies such as princely estates and the clearing of the shoreline that had been formerly adopted. Under the reign of him and his successors, the Qing dynasty reached the apogee of its existence in the Kang-Qian Golden Age. Historians still debate whether this "golden age" was comparable to earlier golden ages in Chinese history, and whether it originated from good rule by the Manchus or simply recovery from war^[192].

Militarily, Kangxi and his successors launched a series of campaigns in the west that subjugated the area of Xinjiang and Tibet, and established tighter control over these regions than the Ming dynasty. Qing forces' major opponents in these campaigns were the Dzungars who were defeated in 1755^[193].

Introduction of American crops

The Qing dynasty saw the introduction of American crops, such as potatoes, on a large scale. Unlike earlier crops, these crops could be grown on areas that were earlier regarded unable to be cultivated. This was especially useful in dry, northern regions, such as Xinjiang and Shanxi. The introduction of these crops may have contributed to Qing military success in the Northwest, which the earlier Ming dynasty had been unable to establish a firm control over. These crops sparked a gigantic increase in population. The population increased from roughly 150-200 million during the Ming to over 450 million during the Qing.

Isolationist trade policy

The Qing dynasty viewed trade with suspicion. Emperor Qianlong proclaimed that:

Our land is so wealthy and prosperous, that we possess all things. Therefore there is no need to exchange the produce of foreign barbarians for our own.

Despite earlier disruptions such as the destruction of coastal settlements, the Qing carried on a limited trade with European powers in the port of Guangzhou, where the Qing government exported tea, silk and other goods^[194].

The Opium wars and loss of sovereignty

Viewing China as a big market, the British tried several times to open up the Chinese market, including sending an embassy to the court of the Qianlong Emperor. When they were rejected, the British started smuggling the drug Opium into China. The result was disastrous for the Chinese, as large amounts of silver in China began to flow out of China and thousands of formerly able men were now incapacited by Opium^[195].

When the Qing government tried to stop this trade, the result was the Opium Wars, in which the Qing government was defeated due to its inferior firearms. The resulting treaty saw "concessions" given to European powers in China, which undermined Chinese sovereignty. The opium wars would begin a pattern of war, defeat, concessions and silver payments, which would further weaken the Chinese government and the Chinese economy due to the outflow of silver, which served as the main currency of the Qing Empire.

Disruptions of the Mid-19th century

Anger at Qing rulers grew after the Opium wars. In 1851, Hong Xiuquan revolted against the Qing dynasty, proclaimed Qing's rulers to be "filthy barbarians and beasts", which had "lead China into despair". His rebels, called the Taipings, quickly took control of much of southern China. However, the rebels' institution of social reforms such as land socialization and abolition of foot binding made them unpopular, while their own disunity contributed to the eventual Qing victory, which was to a large extent aided by European powers such as the British and French. This rebellion claimed over 20 million lives and was one of the bloodiest wars in history, lasting until 1871^[196].

Self-strengthening movement

Following the Taiping rebellion, some Manchu nobles realized that reforms were necessary. Thus, they instituted the Self-strengthening movement, in which a limited modernization was carried out, such as re-equipping the army, creating a standing navy (abolished since the Ming) and building some industries. Although some of these reforms were successful, they were opposed by most of the Manchu nobility. After the defeat to Japan in 1894, the movement became discredited. The Chinese economy received some industrialization in this period, but it was painfully limited, especially compared to Japan's Meiji restoration^[197].

Inflow of foreign goods

After the loss of sovereignty during the Opium wars, the Qing dynasty was powerless to stop the inflow of large numbers of European goods.

Initially, the only good that was selling in China was opium. English and American merchants found that their goods were not wanted in China. In 1852, a British official claimed that he found it astounding that a country of four hundred and fifty million persons only consumed 40% of the English manufacturing goods that were consumed in Holland.^[198].

After the 1880s, however, this situation changed drammatically. In 1885, the cotton imports of China exceeded opium for the first time, most of this cotton coming from Britain and America. Meanwhile, Chinese exports fell heavily as foreign competitors entered the market. Tea was especially hard hit by competition from Indian and Sri Lankan tea. By 1889, England imported 122 million pounds of Indian and Sri Lankan tea, while only 92.5 million pounds of Chinese tea. By 1894, Chinese exports fell to 54.4 million pounds while South Asian tea was now 186.7 million pounds^[199].

Development of domestic industries

Domestic industries were developed in China, but at a slow pace. In 1872, there was only 1 factory set up in China, with a capital of only 36 000 dollars. In 1892, 6 factories were set up in China, with a capital of some 1,549,560 dollars. 1908 was the peak of industrial development in the Qing dynasty, when some 52 factories with a capital of 22,527,338 dollars was set up^[200].

Qing rule was also marked by the "road controversy" in which Qing rulers sold the right to develop railroads to foreign powers. This was heavily opposed by the Chinese people. Industiral development sped up after the Sino-Japanese war, which forced Manchu rulers to acknowledge the necessity for industrial development. In addition, patriotic movements by Chinese to boycott foreign goods(especially American goods in 1905 after the US passed racist legislation discriminating against Chinese) helped China's industries develop.^[201]

Collapse of the Qing

After losing to Japan in 1894, many Chinese believed the Qing dynasty was at the root of China's problems and needed to be overthrown. In 1911, the Xinhai revolution overthrew the Qing dynasty. The collapse of the Qing accelerated the decline of the Chinese economy, now rapidly losing share of the world GDP^[202].

See also

• Economy of China
• Economy of the Han Dynasty
• Economy of the Song Dynasty
• Economic history of Modern China
• Economy of the Ming Dynasty
• Economic history of the People's Republic of China
• Economy of the People's Republic of China
• Economy of Taiwan

References

Sources

Further reading

• Duara, Prasenjit, State Involution: A Study of Local Finances in North China, 1911-1935, in Comparative Studies in Society and History, Vol. 29, No. 1 (Jan., 1987), pp. 132–161, Cambridge University Press

External links

• Economic History of Premodern China (from 221 BC to c. 1800 AD) Kent Deng, London School of Economics (LSE)

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