University of Groningen Essays on China’s Economic History of the Late Qing Empire Ma, Ye

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University of Groningen

Essays on China’s Economic History of the Late Qing Empire

Ma, Ye

DOI:

10.33612/diss.146792235

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Ma, Y. (2020). Essays on China’s Economic History of the Late Qing Empire: Historical GDP, Early Industrialisation and the Qing State’s Role in Economic Development. University of Groningen, SOM research school. https://doi.org/10.33612/diss.146792235

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Chapter 1 Introduction

The modern economy of China has experienced unprecedented and sustained growth since the late 1970s. Its achievements in manufacturing and trade have made the country one of the driving forces of the world economic development. Although it has faced difficulties in further promoting economic growth in recent years, the influence of China’s economy is likely to continue and expand in the future. The long boom has already attracted academic interest and debates, particularly about the origins and future of China’s economic trajectory.

China’s recent development can be viewed as part of long-term dynamics taking place over more than one century. It may not be solely ascribed to the economic reforms of the late 1970s. Taking a long-term perspective, we will obtain a more comprehensive review of modern China’s economic success. For centuries, China had been the world’s largest economy, maintaining this status into the turn of the nineteenth century. However, at per capita levels China had experienced a long period of economic stagnation at least from the eighteenth century. Meanwhile, some countries had entered into the process of modern economic growth, benefited in the process of industrialisation and from the boom of globalisation. The economic gap between early industrialised nations and China widened significantly in the nineteenth century. China’s catching-up since the late twentieth century has considerably decreased the gap. It seems that China is regaining its place in the world economy in recent years. Modern China’s economic growth could, therefore, be understood from the perspective of economic history as both an extraordinary upsurge away from centuries of stagnation and missed opportunities and also as a delayed resurgence after a century of war and social disorder.

The different phases in China’s economic development thus encourage research from a long-term and historical perspective. Researchers have tried to search for historical explanations behind the modern economic phenomena. The economic history approach often focuses on the growth effect of institutional changes over centuries of development, which leads to a recent surge of interest in China’s economic history. With an expansion of the research field, it is still not possible to precisely pinpoint the economic and political institutions, for instance, that can explain China’s economic transition from the prolonged stagnation of the nineteenth

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century to the economic miracle of the recent decades. Despite the enormous potential for future growth, however, for now China remains far from an advanced high-productivity economy. Recent discussions have also shown diverged expectations on China’s economic prospects after assessing the historical roots of the present economic and political system.

Improving our understanding of China’s economic and institutional changes in history is a prerequisite for the research that tries to trace modern China’s economic achievements back to its historical performance and before drawing a conclusion on the future of the country. It seems to be apparent that cultural and institutional changes after the establishment of modern China in the second half of the twentieth century had shaped the path of subsequent development. Doubts remain around whether and how we can relate China’s modern economy to its counterparts before WWII and in the pre-modern period. The commonly discussed period in the related literature, 1840–1939, covers the late Qing regime and the republican era followed the downfall of the Qing Empire in 1911. This period is referred to as among the most turbulent centuries in the history of China that may still have a substantial impact on modern society.

The research in this dissertation takes a close look at the economic performance in China before WWII (hereinafter, pre-war China), focusing on the late Qing period and the early decades of the republican regimes, i.e. from the mid-nineteenth to the early twentieth century. Two research objectives are designed for this research: the first is to measure economic growth in pre-war China in comparison with other nations and among regions within China; the second is to explore the developmental role of the Qing state played in the economy. One concern related to the study of economic history is whether this interdisciplinary research approach can provide an understanding of an economy in history different from historical research. This research attempts to address this issue concerning the economic history of China through the application of statistical and quantitative analysis, to inspire and facilitate future investigation into long-term economic development.

The rest of this chapter will be organised as follows. The first three sections, 1.1–1.3, briefly introduce the findings about the concerned period in the economic history of China from three aspects, respectively, and review a number of critical studies on pre-war China’s economic development. Section 1.4 gives an extended

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3 summary for each chapter in the dissertation and concludes with an overview of the research objectives.

1.1 Pre-war China’s economic dynamics

In contrast to the generally peaceful and prosperous eighteenth century, China experienced drastic social and economic changes in the following century, especially after the 1840s (von Glahn, 2016). Maddison (2007) described this transition as a dismal contrast. According to Maddison’s historical data, at the end of the nineteenth century China was no longer the world’s biggest economy when the share of pre-modern China fell from a third to one-twentieth of world GDP (Maddison, 2007). Brandt, Ma, and Rawski (2014) referred to this period, specifically 1840–1939, as a turbulent century.

This century contains the collapse of the Qing Empire in 1911, the start of the republican regimes and also a period of military and warlord government. Traditional social orders and economic activities were heavily damaged by internal rebellions, such as the Taiping rebellion (1850–64), defeats in wars, such as in the First Sino-Japanese War (1894–95), and also natural disasters such as the Northern China Famine of 1876–79. Meanwhile, in the same period, the country went through considerable changes in political and economic institutions, such as the abolition of the traditional examination system (1905) and the introduction and abolition of the Likin taxation (1853–1931). The economy became more connected with the global market via an increasing number of treaty ports and embraced the first wave of industrialisation.

Maddison reviewed the patterns of economic development of pre-war China in an OECD report on China’s long-term economic performance (Maddison, 2007). He pointed out a decrease in per capita income from 1820 to 1890 caused by internal rebellions and natural disasters and possibly full recovery only after 1890 based on data on population growth and urbanisation. According to trade records, up to 1890 the comparative advantage of the economy mainly involved primary goods production. Even though the Qing state had tried to promote modernisation via the self-strengthening programmes in the 1860s–90s, the overall influence on economic growth might be trivial or even harmful. Based on an estimation of 1933 per capita

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GDP, Maddison derived an estimated average annual growth rate of 0.16 per cent from 1890 to 1933. According to this historical GDP estimation, until the 1930s China was still by large an agrarian economy and traditional handicrafts took a significant part of the industrial sector.

Thomas Rawski, in his early work Economic Growth in Prewar China, provides a different understanding of the overall economic performance of pre-war China (Rawski, 1989). In contrast to the traditional ideas of economic stagnation and decline, Rawski’s view on the economy of pre-war China appears to be more optimistic. According to his estimation of economic growth between 1914/18 and the 1930s, before WWII China had presented clear momentums of sustained economic growth at per-capita levels at least in the early twentieth century, despite an unstable and warlord-ridden political environment. In his description, pre-war China had overcome a series of political and economic difficulties of the late nineteenth century and “experienced rapid industrialisation, a considerable expansion of modern networks of transport and communications, a sweeping transformation of the monetary and fiscal system, and a rapid growth of modem-oriented fixed investment” (Rawski, 1989, p. 268). Different from other studies that tend to examine a specific region or industry with detailed information, Rawski's book presents a macroeconomic overview of pre-war China based on quantitative evidence at sectoral levels and a national income accounting, particularly for the early twentieth-century Chinese economy.

Similar to Rawski’s approach, recently economists and economic historians have tried to study the economic dynamics of pre-war China through a macroeconomic and quantitative perspective. Wang (2005) looked into the economic cycles of pre-war China through a set of Indexes of prices, output and trade and divided the pre-war period of economic performance into three stages, i.e. a decline in 1850–87, a slight increase in stagnation in 1887–1914, and a relatively significant rise in 1914–36. This analysis of historical economic cycles supports the increasing pattern in Rawski (1989) but also does not entirely reject the idea of economic stagnation. Cha (2014) found falling living standards in Qing China throughout the eighteenth and nineteenth centuries from estimated interest rates and land rents, different from the traditional idea of stagnation and also involutionary development argued by Huang (1990, 2002). Other economic indicators are also used to understand the long-term economic development in pre-war China, for instance, the money supply of 1887–1936 (Yan, 2011) or the changes in financial institutions after 1900

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5 (von Glahn, 2016). Both studies reinforce the portrait of economic depression in the late Qing period. von Glahn’s research also suggests that China’s modern banks contributed little to the industrialisation before WWII.

Industrialisation is another central theme in the study of pre-war China’s economic dynamics. The initialisation of China’s industrialisation during the late nineteenth century is characterised by semi-state promotion and opening up to international markets and foreign direct investment. In contrast to the economic difficulties often discussed in related studies, many researchers describe a fast-growing new industrial sector in the pre-war period. Xu and Wu (2003) concluded a brief expansion period of China’s industrialisation before the 1930s based on a new estimation of capital stock. A recent review of the history of China’s industrialisation shows from a new collection of industry data that the increase in the modern industrial sector can be traced to at least the 1910s (Brandt, Ma and Rawski, 2016). According to their estimation, the industrial growth rate had exceeded that of Japan, India and Russia/USSR for most of the twentieth century. From an internationally comparative perspective, however, China’s pre-war industrial development remained at a very low level. Manufacturing labour productivity of pre-war China in the 1930s accounted for only 7 per cent of the US level, while Japanese manufacturing was above 20 per cent of the US level (Yuan, Fukao and Wu, 2010). From a regional and comparative perspective, pre-war China’s industrial development concentrated in some regions, such as the Yangzi delta region and Manchuria as the leading industrial centres in the 1930s.

1.2 Pre-war China’s economy in comparison

We can also get a more comprehensive understanding of the economic history of China by comparing with other contemporaneous economies. More exciting and sometimes controversial findings have been derived from positioning the historical status of China’s economy in the world economy. Pomeranz (2000) compared the most advanced regions in China and Europe before 1800, i.e. the Yangzi Delta area and England, in population history, agriculture, handicraft industry, income and consumption. He then argues that the two economies were comparable and the divergence did not occur until the end of the eighteenth century. Similarly, Li and van

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Zanden (2012) compared the Lower Yangzi region and Holland of the nineteenth century and, in contrast to Pomeranz’s finding, they find that per capita income in China in the period remained substantially lower than in Holland. Allen et al. (2011) measured living standards of unskilled labour by comparing wages and prices between several historical cities in both Asia and Europe. The results show that from the eighteenth to the early twentieth century China’s living standards stagnated at a lower level relative to advanced European cities. Notably, this study also helps to understand China’s historical economic dynamics through changes in real wages. It supports the traditional description of long-term stagnation but also points out an insignificant increase in real wages in some Chinese cities during the late nineteenth and early twentieth century.

The above studies combined may indicate a downward shift in the relative position of China’s economy during the eighteenth and nineteenth century. According to Maddison’s estimation of GDP per capita, the difference between China and Europe on average may be traced to the fourteenth and fifteenth centuries and widened significantly since 1800 (See Figure 1. 1). Similarly, the divergence between China and Japan seems to be related to social and economic changes of the 1850s. The timing and the level of the divergence between advanced European countries and pre-war China and the mechanisms behind pre-war China’s economic difficulties relative to the industrialising West and then to Japan are still under debate. The comparative approach also serves to understand the differences in economic development within pre-war China. The estimation of China’s provincial GDP indicates a broader gap between China and Europe in the pre-war period; the wealthy provinces in pre-war China were barely comparable with less developed countries in Europe (e.g. Caruana-Galizia and Ma, 2016). The level of regional inequality was below that of India and European countries. As mentioned above, the process of early industrialisation in pre-war China was also regional-specific.

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Figure 1. 1 Great Divergence, Little Divergence and GDP per capita estimation

1.3 Pre-war China’s institutional changes

Discussions around China’s traditional institutions and institutional changes constitute another line of thinking in the literature on the economic history of China, such as the debate around the linkage between economic performance and traditional Confucian values and related education and the imperial civil-service examination. Research on economic development has considered political institutions as a fundamental factor behind long-term economic growth. The often-mentioned benevolent role of traditional Chinese states includes encouraging new crop adoption and technology diffusion, managing large-scale irrigation projects, and light taxation on farming. In contrast, it is commonly believed that China’s imperial system rarely contributed to the process of generating new technologies and innovations. This argument is usually used to explain the failure of the Qing economy to take advantage of the first wave of industrialisation in the nineteenth century. Brandt, Ma and Rawski (2014) suggested an analysis of the political economy and institutional changes starting from the late nineteenth century to understand China’s long-term economic development and its

1 10 100 1,000 10,000 100,000 1000 1100 1200 1300 1400 1500 1600 1700 1800 1900 2000 West Europe China Japan

Sources: Constructed by the author. The data on per capita GDP is from the Maddison Project data (Bolt and van Zanden, 2014). Logarithmic scales are used on the vertical axis.

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recent growth spurt. Their study points out channels through which the old imperial system could constrain growth, including limited fiscal capacity, weak administrative capability and interlocked elite interests. Vries (2015) described the Qing regime before the 1850s in contrast to the UK and pointed out that the state financial capability and monetary system can be a fundamental factor behind Qing China’s economic problems in the following century. Recent studies have also tried to link geographical conditions with state capacity and to address the impact of Qing China’s vast territory and demographic size to the formation of fiscal capacity and property rights protection (Sng, 2014; Sng and Moriguchi, 2014).

Brandt, Ma and Rawski (2014) summarised major changes in economic and political institutions during one of the most turbulent centuries in the history of China, 1840–1939. The political and economic system in late Qing China faced rising pressure from the internal and the external. A series of domestic rebellions, including the Taiping Rebellion (1851–64), seriously eroded the Qing regime and especially the fiscal capacity. Simultaneously, international conflicts with other countries also weakened the old imperial system. Disputes in international trade with Britain resulted in the Opium War (1839–42) and the initialisation of the treaty port system by opening five Chinese ports in the 1840s. The survey study firstly reinforces the critical role of treaty port in initialising changes in China’s traditional economic and political system. New commodities and also new ideas flew into Qing China’s domestic economy through the treaty port system, which then started to influence the traditional long-term political equilibrium. Military defeat in the First Sino-Japanese War of 1894–95 led to a rapid expansion of foreign direct investment to inner China through treaty ports and, more fundamentally, a nation-wide reflection on China’s traditional thinking. The ideological transformation triggered another round of political and economic reforms and contributed to the fall of the Qing regime in 1911. China subsequently entered into a republican era that was characterised by regional military regimes. After decades of political uncertainty and fragmentation, the Nanjing government established its control over a major part of the country in ca. 1927.

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1.4 Structure, summary and contributions of the dissertation

The dissertation intends to provide a new description of China’s economic performance before WWII from several aspects: general growth patterns, early industrialisation and the role of the Qing state, different from the previous historical description. These chapters together improve our understanding of the Qing economy in the so-called turbulent century.

Chapter 2 tries to position pre-war China’s economic performance relative to other contemporaneous economies in Europe and Asia and addresses the question of whether there was an economic decline in the late Qing period. Maddison’s estimation gives a long series of historical GDP levels for China but with comparatively few GDP estimates for late nineteenth century China. (Maddison, 2007). This study provides a time series estimation of per capita GDP for the period 1840–1912. Previous studies on China’s history and new data from archival work make the new GDP estimation possible. We first calculate nominal GDP by combining value-added of the agricultural, industrial and services sectors and derive real GDP by constructing new price indexes. We then calculate a new benchmark purchasing power parity between China and the US and convert the new GDP estimates to the term of 1990 international dollars (int. dollars) for international comparison. According to the new estimation, per capita GDP stagnated at an average level of 563 int. dollars in the late Qing period, similar to per capita GDP of India but only a half of the Japanese level. The real growth of GDP per capita is on average 0.06 per cent annually for the period 1840–1912, which is considerably slower than in Japan and India. Compared with Maddison’s estimation, the new estimation in this study presents more details of economic development in the late Qing period. The new GDP estimation at sectoral levels shows that around two-thirds of total GDP (in current prices) was produced in the agricultural sector. Qing China in the late nineteenth century was an agrarian economy despite the quick expansion of the industrial sector found in our estimation. The share of new industrial production is so low that its growth hardly affected the growth rate of the whole economy.

The new estimation of historical GDP provides for the first time measurement for living standards in the late Qing period. Previous research has pointed out the problem of representativeness in historical GDP estimation concerning data availability and the application of extrapolation in estimation. The GDP estimation in

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Chapter 2 starts from a new estimation for the agricultural sector, which explains a significant part of Qing China’s output and growth. The time-series estimation relies on assumptions about sectoral growth and previous sectoral output estimations to deal with limited historical data sources. This study performs a series of cross-checks to test the reliability of the new GDP estimation, such as daily energy consumption.

The estimation of growth rates and the economic structure helps to understand China’s historical growth patterns. It is generally believed that the Qing economy faced difficulties to grow after a generally prosperous eighteenth century. The new GDP estimation confirms the economic stagnation of the late Qing period quantitatively and draws attention to the large agricultural sector and the stagnation in economic structure. This study gives quantitative evidence on the “Great Divergence” between Europe and China and especially the “Little Divergence” within Asian economies. In the late Qing period, the gaps between China and other advanced economies became increasingly widened. Together with the time-series estimation for the Ming-Qing period before 1850 by Broadberry, Guan and Li (2018) and the point estimations for an extended period 1661–1933 by Xu et al. (2017), these studies together form a group of recent new research on historical GDP estimation.

Chapter 3 is motivated by the discussions on China’s industrialisation before WWII. The 1930s is often considered the golden age in China’s pre-war industrialisation and is thus reflected accordingly within the broader literature. This study draws attention to the early stage of China’s industrialisation by providing a new benchmark for industrial development around the 1910s. This new benchmark also addresses queries regarding the level that China’s early manufacturing had reached at the end of the Qing Empire (1911) and after half a century’s attempt to promote industrialisation. By comparing the 1910s benchmark with the 1930s, this study measures the industrial development of China in the inter-war period. Similar to Chapter 2, this study provides an international and regional perspective to look at the process of China’s industrialisation. Moreover, this study adds the evidence on early industrialisation to the debate on the “Great Divergence”.

The study in Chapter 3 first calculates new purchasing power parity (PPP) converters in manufacturing between China and the UK from the production side. Gross output PPP is calculated from the data on the quantity and value of gross output and employment for the two economies. Data are collected on manufacturing products and industries in the early 1910s for both China and the UK. This study compares

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11 industrial products between China and the UK to find matched products. Then, the sample contains 31 matches of products in seven major manufacturing branches. The sample of China also contains provincial data. Chapter 2 uses the estimated PPP for manufacturing to calculate the PPP for the whole economy. The estimated PPPs provide relative levels of producer prices in China’s manufacturing industries, necessary for calculating comparative output and labour productivity relative to the UK levels. According to comparative labour productivity, we find that China’s manufacturing industry improved from the 1910s to the 1930s relative to UK levels. The industrial growth of China in the inter-war period helped to narrow the gap with the early industrialised economies. However, the improvement was not unique for pre-war China, especially compared with the pace of industrialisation in Japan.

Chapter 3 also calculates regional manufacturing PPPs for nine regions within China and accordingly calculates comparative labour productivity for each of these regions. Comparative labour productivity of the 1910s differs significantly across regions within China, which reveals the regional imbalance in China’s industrialisation already at a very early stage. The regional PPP and comparative labour productivity make it possible to compare regional China with other countries in Europe and Asia. For instance, Manchuria was already the leading region of manufacturing in the 1910s, with a level of comparative labour productivity similar to levels in Japan. According to the new benchmark, the lower Yangzi delta was not among the leading industrial regions in the 1910s.

Chapter 4 builds on the findings in Chapter 3 on regional differences in China’s industrial performance in the 1910s. The Self-Strengthening Movement (1861–95), supported by the Qing state, is considered an important part of China’s early industrialisation before WWII. We explore whether the regional distribution of manufacturing production could be affected by the early investment in industrialisation initialised and financed by the Qing state.

This chapter provides for the first time measurements for the Qing state’s investment in new technologies and industries and presents a picture of provincial variations in China’s early industrialisation and modernisation. This chapter first classifies the Qing state’s investment in new technology and scientific knowledge into several major categories: new education and training, military production, state-owned factories, telegraphy and railways. The data are constructed at provincial levels and for two periods: the Self-Strengthening Movement of the 1860s–90s and the last

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decades of the Qing regime. We then use an Exploratory Factor Analysis to extract from the different categories of the Qing state investment two common dimensions for all sample provinces, military-related and infrastructure-related state investment. Based on the indicators for the two dimensions, we find that the Qing state’s investment target shifted from military-related to infrastructure-related programmes after the First Sino-Japanese War (1894–95). During the Self-Strengthening Movement, most provinces had been involved in the Qing state-invested programmes of industrialisation but focused on different investment activities. The provincial differences formed in this period were reinforced after the 1890s.

This chapter then examines the correlation between the Qing state investment and the performance of private manufacturing at provincial levels in ca. 1910. The data on regional industrial performance covers 22 provinces and 31 manufacturing industries in pre-war China for the 1910s. The regression shows that on average military-related state investment had been negatively associated with provincial manufacturing output. The post-1896 military-related investment may have promoted the heavy industry though. This result seems reasonable since the rise of capital-intensive military production benefits the heavy industry such as chemicals, iron and steel. Surprisingly, the infrastructure-related investment that consists of mostly railway construction may have harmed provincial industrial production at the very beginning of China’s industrialisation. This chapter also points out one problem of the Qing state investment that may have contributed to the delayed industrialisation in the late Qing period: that state-invested programmes failed to prompt the expansion of modern factory production and failed to shift the economic structure towards industrial production. In summary, this chapter presents a case study on an old empire’s capacity to promote economic growth, especially at its weakest moment, and adds to our knowledge regarding the role of the state and the history of industrialisation.

Chapter 5 turns to examine another political arrangement in the Qing Empire. The state civilian granary system – constructed and managed by the Qing Empire – represents the Qing state’s recognition for the importance of grain production and local grain markets, and signifies the Qing state’s benevolent intention to maintain general living standards. Will and Wong (1991) referred to the granary system as a penetrating and systematic achievement in the Qing Empire; however, recent research on grain prices and market integration indicates an insignificant role played by local

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13 granaries (Shiue and Keller, 2007). This discussion motivates the study in Chapter 5. The granary system is believed to have had three tasks: to provide disaster relief against food shortage, to provide short-term loans to peasants such as seeds, and to stabilise grain prices. Chapter 5 conducts a quantitative analysis on the relationship between local granary storage and grain price fluctuations and tries to answer the question as to whether the Qing state was able to intervene into local grain markets and to affect prices through the granary system. Rather than examine its role during exceptional events, such as following natural disasters, this study intends to check the role of the granary system in regular social and economic circumstances.

The data on monthly grain prices are collected at both provincial and prefectural levels and the data on granary storage for four provinces close to the Grand Canal: Anhui, Shandong, and two provinces in the Lower Yangzi Delta, Jiangsu and Zhejiang. The granary system reached a peak in the 1780s and collapsed in the 1850s; thus, the sample covers the periods 1776–96 and 1827–46. We then conduct a fixed effects regression with control variables such as the distance to the Grand Canal, climate and geographical conditions. The estimation results show that a higher level of granary storage in the previous year is correlated with a low level of price fluctuation in the year followed. However, the effect is only significant in the period 1776–96, which implies the decline of the system in the nineteenth century. The effect of the granary system is also regional-specific. We find in this limited sample that the granary system did work better in these provinces where the system could take advantage of the inland waterways. We also find that the granary system as a political arrangement still worked in the Lower Yangzi Delta, which enjoyed better-performed markets, although the effect may be limited compared with other parts of China. The granary system could be beneficial, but this was conditional upon a sufficient level of grain storage. Therefore, the effect of the granary system is generally economically insignificant.

This dissertation is structured according to two research objectives. Firstly, it aims at providing new statistical indicators measuring the economic performance of pre-war China and new benchmarks for regional and international comparisons. In particular, this dissertation draws attention to the process of convergence or divergence in economic history with a focus on the economic history of China. Different from a Chinese or Asian perspective, this dissertation intends to participate in the general discussions on the history of industrialisation and global economic

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development. Chapter 2 measures growth rates of GDP per capita and structural change in the Qing economy and compares living standards and economic development in Qing China with other contemporaneous countries. Chapter 3 provides a new 1910s indicator for China’s early industrialisation before WWII and a new benchmark relative to early industrialised European countries. With the new indicator, this chapter also compares regional performances in early industrial development within the country. Chapter 4 provides a quantitative indicator for the Qing state investment in new technology and new methods of production during the political and economic reforms of the late Qing period and measures provincial variations. Chapters 3 and 4 together present a regional-based picture of China’s early industrialisation from both the private and public sides. Rather than highlighting the advanced Yangzi delta area, this dissertation gives equal attention to other provinces and regions, some of which are not often mentioned in the related literature.

For this objective, the dissertation follows the quantitative approach, which is still under debate in the research of China’s economic history. Researchers have discussed problems in using historical data that may lead to misleading conclusions. Among others, historical GDP estimation is the most often discussed topic. The importance of the transparency of data sources and estimation procedures is emphasised by the Maddison Project in deriving historical GDP (Bolt and van Zanden, 2014). This dissertation tries to build up new estimation procedures that allow for the input of new historical data found in future research and further improvement on the assumptions made in estimation procedures.

Why do we need to work on quantitative indications in economic history, such as historical GDP and labour productivity? Case studies have long been the mainstream, especially in the research field of China’s economic history. Statistical aggregation otherwise provides an overview of an economy which will help to reveal the uniqueness of a case study and facilitate a comparative analysis between cases – both regionally and internationally. Understanding an economy at an aggregate level will help to form a consistent approach to looking at, e.g. long-term economic growth. Calculating economic indicators for a historical period will link past economic performance with its modern counterpart. In general, the quantitative approach may not always be the best solution for all research questions in economic history but certainly a crucial one to generate a long-term and comparative perspective.

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15 The second research objective of this dissertation is to investigate the developmental role of the Qing state and changes in political arrangements during the eighteenth and nineteenth centuries. Rather than a comprehensive review of the political economy of the Qing state, the dissertation considers two political arrangements that may represent the Qing state’s active participation in economic activities and may have influenced economic performance. Chapter 4 links the Qing Empire’s investment that may have promoted industrialisation during the late Qing period, 1860–1910, with the provincial industrial performance of the 1910s. Chapter 5 connects the state civilian granary system with local grain prices during the late eighteenth and the early nineteenth century. The two cases demonstrate the Qing state’s capacity to monitor market behaviour and intervene in the economic system, especially considering the declining fiscal capacity and rising costs to maintain the regime when facing increasing internal and external pressures in the mid and late Qing period. These two chapters focus on direct and short-term economic outcomes of political arrangements in the Qing period. The policy evaluation approach followed by this dissertation also tries to identify regional differences in political arrangements and economic influences. Political arrangements may have long-term and far-fetching influences on various economic and social activities; comparing short-term and long-term influences calls for research in the future.

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