China and the Global Economy Since 1840 PDF
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CHINA AND THE GLOBAL ECONOMY SINCE 1840 UNU WORLD INSTITUTE FOR DEVELOPMENT ECONOMICS RESEARCH (UNU/WIDER) was established by the United Nations University as its first research and training centre and started work in Helsinki, Finland, in 1985. The purpose of the Institute is to undertake applied research and policy analysis on structural changes affecting the developing and transition al economies, to provide a forum for the advocacy of policies leading to robust, equitable and environmentally sustainable growth, and to promote capacity strengthening and training in the field of economic and social policy-making. Its work is carried out by staff researchers and visiting scholars in Helsinki and through networks of collaborating scholars and institutions around the world. UNU World Institute for Development Economics Research (UNU/WIDER) Katajanokanlaituri 6 B, FIN-OOI60 Helsinki, Finland China and the Global Economy since 1840 Lu Aiguo Research Fellow Institute 01 World Economics and Politics Chinese Academy 01 Social Sciences Beijing China Foreword by Giovanni Andrea Comia palgrave macmillan First published in Great Britain 2000 by MACMILLAN PRESS LTD Houndmills, Basingstoke, Hampshire RG21 6XS and London Companies and representatives throughout the world A catalogue record for this book is available from the British Library. ISBN 978-1-349-62442-3 ISBN 978-1-349-62440-9 (eBook) DOI 10.1007/978-1-349-62440-9 First published in the United States of America 2000 by ST. MARTIN'S PRESS, INC., Scholarly and Reference Division, 175 Fifth Avenue, New York, N.Y. 10010 Library of Congress Cataloging-in-Publication Data Aiguo, Lu. China and the global economy since 1840 1 Lu Aiguo. p. cm. Includes bibliographical references and index. 1. China-Foreign economic relations. 2. China-Economic policy-19th century. 3. China-Economic policy-20th century. 4. China-Economic conditions-19th century. 5. China-Economic conditions - 20th century. 6. International economic relations. I. Title. HF1604.L825 1999 337.51-dc21 99-15427 C1P ---_._---- © The United Nations UniversityIWorid Institute for Development Economics Research 2000 Foreword © Giovanni Andrea Cornia 2000 Softcover reprinto f the hardcover 1st edition 2000 978-0-312-22628-2 All rights reserved. No reproduction, copy or transmission of this publication may be made without written pennission. No paragraph of this publication may be reproduced, copied or transmitted save with written pennission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the tenns of any licence pennitting limited copying issued by the Copyright Licensing Agency, 90 Tottenham Court Road, London WIP OLP. Any person who does any unauthorised act in relation to this publication may be liable to criminal prosecution and ci vii claims for damages. The author has asserted her right to be identified as the author of this work in accordance with the Copyright, Designs and Patents Act 1988. This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources. Logging, pulping and manufacturing processes are expected to confonn to the environmental regulations of the country of origin. 10987654321 09 08 07 06 05 04 03 02 01 00 Transferred to Digital Printing in 2014 Contents List ofTables vi Foreword VB List ofA cronyms and Glossary ix Introduction: A Framework for Analysis 1 Part I: Westernization (1840-1949) 13 1 The Westernization Movement 16 2 Foreign Trade 28 3 The Dual Structure of the Economy 42 4 Falling Behind: The Lessons 55 Part 11: Delinking and Self-reliance (1949-78) 69 5 The Formation of a Strategy for Catching Up 72 6 Industrialization 86 7 Trade and Trade Performance 96 8 Outcome: A Mixed Package 108 Part III: Reintegration (1978 and Beyond) 117 9 A Different Game 121 10 Economic Restructuring 130 11 The State 141 12 The Overseas Chinese Capitalist Diaspora 152 13 Catching Up? 162 Conclusion 172 Notes 183 Bibliography 193 Index 215 V List of Tables 2.1 China's major exports, 1871-1936 35 2.2 China's major imports, 1871-1936 36 2.3 The share of principal countries in China's foreign trade 37 2.4 China's imports, exports and total trade, 1871-1929 39 4.1 Comparative performance ofWestern Europe and China in per capita GDP, 1400-1950 57 4.2 Per capita GDP in advanced capitalist countries and other selected countries, 1900-50 58 4.3 Average tariff levels, 1913-25 64 6.1 The structure of investment in capital construction, 1952-78 90 6.2 Employment structure of the labour force, 1952-78 91 7.1 The China-US trade, 1972-80 101 7.2 China's foreign trade, 1971-78 102 7.3 Shares in China's imports and exports, 1979 103 7.4 Shares in China's imports and exports, 1934 103 7.5 China's share of world exports, 1950-79 106 8.1 Annual average real GDP growth in selected countries and regions, 1900-73 110 8.2 Economic performance, 1900-87 113 10.1 China's foreign trade, 1978-95 134 13.1 Average annual growth rate, 1980-95 163 13.2 Changes in China's share of GDP, merchandise exports and private consumption, 1980-95 164 13.3 Index of per capita GNP /GDP relative to the rich countries 165 13.4 Index of per capita GDP relative to the US 165 vi Foreword This book is a timely contribution to an expanding literature on China and China's integration into the world economy, as well as to the cur rent debate on alternative strategies of transition from the plan to mar ket economy. This work deals with one of the most important economic events of the twentieth century, that is, the rise of China. The uniqueness of the book is that the recent trajectory of China's development is placed within the historical context of the evolving relationship between China and the world economy. The book takes a long-term perspective, which is the proper way to undertake such an exercise, providing a systematic account of China's re action to the expansion of the world capitalist eco nomy from the early-nineteenth century to date. Since the beginning of the 1990s, a great deal of attention has been paid to the anticipated 'rise of China', a rise wh ich is hailed by some and feared by others. China's impressive economic growth since the intro duction of the economic reforms in 1978 has been viewed by many as the result of the liberalization of the economy. This approach highlights implicitly the merits of free market as opposed to these of central plan ning, the declining role of the government as opposed to state-led indus trialization, and the advantages of the free flow of capital and of economic openness gene rally speaking as opposed to inward-looking development strategy. This book addresses these issues not so much by engaging in current debate as by deriving insights and lessons from the historical development of China over the last two centuries. It deals critically with the scholarship on China's performance under the impact of Western imperialism in the pre-1949 period. Based on the analysis of the process of China's opening up, the book suggests that China's integration into the world economy on the terms set up by Western powers did not lead to its development but to its marginaliza tion. The book goes on to provide a careful account of the Maoist period, outlining its many development successes as weil as its prob lems in terms of China's limited 'catching up' with the most advanced nations. Overall, the author assesses this period as one of de-linking from the world economy. The volume further analyses the reasons for and results of the post-Mao opening up, and China's renewed attempt to 'catch up'. Each of these periods is interpreted from a relevant ana lytical perspective, emphasizing the difficulties China faced throughout Vll viii Foreword these years. The author brings to our attention the peculiarities of each period, as weIl as the elements of continuity throughout the entire period, especially the Maoist and the post-Maoist development paths. This is one of the first books, if not the first, which in a convincing way applies the 'world-system interpretation' to China's modem history and current development, covering such a long historical time period within such a compass. To be sure, not everything the author argues will be convincing to all. Indeed the study reaches some provocative con clusions, which will no doubt feed the critical debate on the participa ti on of China. But these viewpoints are entirely valid. They need to be understood, especially at the current juncture in international relations and the structural change of the world economy. The book is apart of the 1994-95 research programme of UNU/ WIDER on the globalization process. Its publication will contribute to and stimulate the development of our interdisciplinary research. Giovanni Andrea Cornia Director UNU/WIDER List of Acronyms and Glossary ACRONYMS ASEAN Association of Southeast Asian Nations CCP Chinese Communist Party GMD Guomindang or Kuomintang (KMT), the Nationalist Party MFN most-favoured-nation treatment NIEs newly industrialized economies PPP purchasing power parity RMB renminbi (national currency) TVEs township and village enterprises GLOSSARY Angang xianfa the Charter of the Anshan Iron and Steel Company tu qiang wealth and power gaige reform guan shang he ban joint government and merchant enterprises guanban government enterprises guandu shangban privately owned and government supervised enter prises hang business firm kaifang openness qianzhuang 'money house', old-style Chinese private bank qiufu the pursuit of wealth taban general manager of a hang tael Chinese ounce (the equivalent of 1.208 British ounces) of silver as a former monetary unit Yangwu yundang Westernization movement yuan current Chinese monetary unit (valued approxi mately $ 0.12) zhuan kau transit or entrepöt trade zili gengsheng regeneration or reconstruction through one's own efforts ziqiang self-strengthening ix
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