Economic History of China Before 1912

Economic History Of China Before 1912

The economic history of China stretches over thousands of years and has undergone alternating cycles of prosperity and decline. According to the book 'China and the Knowledge Economy: Seizing the 21st century', China was for a large part of the last two millennia the world's largest economy, even though its wealth remained average. China's history is usually divided into three periods: The pre-imperial era, consisting of the era of before the unification of Qin, the early imperial era from Qin to Song, and the late imperial era, marked by the economic revolution that occurred during the Song Dynasty.

By roughly 10,000 BCE, in the Neolithic Era, agriculture was practiced in China. Stratified bronze-age cultures, such as Erlitou, emerged by the third millennium BCE. Under the Shang (c. 1600–1045 BCE) and Zhou (1045–771 BCE), a dependent labor force worked in large-scale foundries and workshops to produce bronzes and silk for the elite. The agricultural surpluses produced by the manorial economy supported these early handicraft industries as well as urban centers and considerable armies. This system began to disintegrate after the collapse of the Western Zhou Dynasty in 771 BCE, preceding the Spring and Autumn and Warring states eras.

As the feudal system collapsed, much legislative power was transferred from the nobility to local kings. A merchant class emerged during the Warring States Period, resulting in increased trade. The new kings established an elaborate bureaucracy, using it to wage wars, build large temples, and perform public works projects. This new system rewarded talent over birthright; important positions were no longer occupied solely by nobility. The adoption of new iron tools revolutionized agriculture and led to a large population increase during this period. By 221 BCE, the state of Qin, which embraced reform more than other states, unified China, built the Great Wall, and set consistent standards of government. Although its draconian laws led to its overthrow in 206 BCE, the Qin institutions survived. During the Han Dynasty, 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 compass, and other technological advances facilitated communication on a large scale and the widespread circulation of books. The state's control of the economy diminished, allowing private merchants to prosper and a large increase in investment and profit. Despite disruptions during the Mongol conquest of 1279, the population much increased under the Ming Dynasty and Qing Dynasty, but its GDP per capita remained static since then. In the later Qing period, China's economic development began to slow and Europe's rapid development since the Late Middle Ages and Renaissance enabled it to surpass China—an event known as the Great Divergence.