The end of export-led growth?

Filed under: — Alan Baumler @ 7:03 am

I don’t post much about current affairs1 but the current Chinese stimulus package seems worth talking about. To forestall the possibility of an economic downturn, China is planning a Rmb4,000bn ($586bn) stimulus package. This number may be a bit exagerated, but that is still a lot of simoleons. If this does come about it will be a pretty decisive shift in Chinese policy. Partly it will be China really becoming the world financial leader it would like to be. One reason they are announcing it now is to have something to brag about at the upcoming G20 meetings. More importantly, though, it may been seen in the future as a decisive point where China turned to domestic demand to drive its economy. This has been going on for a while, of course, but this seems an important new step. It also seems like a good time to retro-fit a social safety net. The money is supposed to go to “low-income housing, rural infrastructure, roads, airports, water, electricity, the environment and technological innovation” at least some of which seems to indicate that the cash may be used to fix some of the festering problems of rapid growth. Who knows where the money will end up, of course, and there are some bad signs here (like an emphasis on trying to continue the real estate boom). The plan supposedly “offers an opportunity to push forward the long-waited revision of oil and natural gas prices by linking them with global markets.” Raising gas prices would not be very stimulative, but apparently the idea is if Beijing is handing out all this money it would be a good time to quit subsidizing gas prices. Half a trillion dollars is a lot of money, and spending it will give Beijing a good chance to show what sort of economy they want to be running ten years from now and the extent to which they would like that economy to be run from Beijing.

  1. despite what they do to our hit counts []


China under construction

Filed under: — Alan Baumler @ 5:17 am

Apparently China produces a lot of cement


From the Oil Drum, via Andrew Sullivan, Another in our series of cool teaching graphics.


It’s the shoes

Filed under: — Alan Baumler @ 9:14 pm

For people who have read Sherman Cochran it is not news that Chinese merchants developed brand names and consumers developed brand loyalty. Cochran mostly focuses on an earlier period (and the medicine business) but Lang Jing looks at the athletic shoe industry.1 Lang is looking at the development of modern athletics in Shanghai. One issue he looks at is how widespread interest in modern athletics was outside of schools and national competitions and such. This is always a hard thing to find out about, but he does show that there must have been some market for Western-style sports in China, as Shanghai had a number of manufacturers of ping-pong equipment, basketballs (basketball assimilated quickly in China) and of course athletic shoes. It was in the shoe industry of course that you see advertising wars. 金刚 (jin gang)2 brand shoes ran ads in the 1940s urging consumers ”勿相信牌子,相信你自己的眼睛“ (don’t trust brand names trust your own eyes) Presumably meaning they should not be taken in by advertising hype. The target of these adds was of course 回力 (Hui Li, Returning Strength), the kingpin of the Chinese shoe industry. The campaign seems to have worked, as 金刚 became a major player in athletic shoes. Perhaps it did not work well enough, however, since 回力 is still around and they are not. 回力has an interesting logo, as you can see below. I don’t think Nike can sue them however, since 回力 has been fighting sneaker wars far longer than Nike has even existed.

Hui Li

  1. 郎淨 “近代體育在上海(1840-1937)” 上海社會 2006 p.361 []
  2. Golden Exactly? its hard to translate. It’s also the word used for King Kong []


Needling Needham

Filed under: — Jonathan Dresner @ 3:08 am

The Needham Question is hot, hot, hot! Thanks to Simon Winchester’s The Man Who Loved China: The Fantastic Story of the Eccentric Scientist Who Unlocked the Mysteries of the Middle Kingdom1, everyone who’s everyone is talking about China’s “failure” in the face of Western intellectual and technological revolutions.

While it’s kind of nice to see a China scholar like Needham getting the pop culture treatment, and the questions he raised are still worth pursuing, the reviews suggest that the emphasis on “Eccentric” is pretty severe. They also suggest that Winchester’s biographical emphasis has left him with the wrong impression about the body of work which Needham’s intellectual descendants still do. Andrew Leonard writes:

In the epilogue, Winchester asserts that the consensus opinion of current Sinologists is that “China, basically, stopped trying.” That’s too facile a summation when one is writing a biography of a man who devoted his entire life to understanding why China failed to capitalize on thousands of years of scientific and technological innovation. Winchester then skips through the main contending theories that attempt to explain China’s failure: China’s bureaucracy siphoned talent away from a potentially entrepreneurial merchant class, China did not have the spur to competition that Europe’s many warring states inflicted on each other, China’s totalitarian government quashed initiative.

In fact, as I wrote in response to Winchester’s NYT op-ed2:

This is a rehashing of old views of China that inspired the great “Needham Question”3: “Why didn’t China have a Scientific Revolution and Industrial Revolution”? Half a century of scholarship has produced a massive aggregation of knowledge about science and technology in China which shows, among other things, that scientific and technical progress continued throughout the early modern period (which, started a half millenium earlier in China than in the West) but that China’s population obviated the need for the kind of massive “labor saving” capital equipment, so industrial production moved in other directions.

China was also experiencing a scientific flourishing in the Qing era, featuring fields from philology to botany.4

China doesn’t “fall behind” until around 1800, when the steam power revolution put England a quantum leap ahead of the pack. It then went through about 150 years of political turmoil in which economic and technical development often took a back seat to other issues, including imperialism, uprisings, revolutions, warlords…. [ellipsis in original; it’s a bad habit]

The assumption that the Western model is “natural” or somehow inevitable unless someone “fails” to achieve it is patently absurd. Europe spent centuries in the shadow of the rest of the world before catching up in their Early Modern age (with the aid of a lot of imported Chinese technology), and finally, as Paul Kennedy (among others) argued, pulling ahead due to competitive pressures and (in the case of the British steam revolution) a certain amount of luck.

The upshot of the Needham tradition scholarship, as I understand it, is that it was more macroeconomic and political problems than technological skills which resulted in China’s “lost ground” in the modern age, but a significant component of it was historical contingency (or “dumb luck,” as we used to say). Nothing inevitable about it, and nothing fundamental. China wasn’t the only great Early Modern empire to flounder in the modern age — in fact, it was more the norm than the exception, as the Ottomans, Russians, Mughals, Iberians and Hapsburgs show. “The West” wasn’t a terribly coherent entity — especially not organizationally! — and contrasting “it” with China without a little consciousness of the internal tensions, backwards regions, and failures contained within the Western tradition makes no sense, intellectually, historically or politically.

  1. is that subtitle a 19th century classic, or what? []
  2. Which my colleague, Alan Baumler, aptly dismissed with “Don’t get me started.” []
  3. I did not, when I wrote this, realize that Winchester was the author of a Needham biography []
  4. The term kaozheng escaped me until later []


Qing China’s modern economy

Filed under: — Alan Baumler @ 10:28 am

Shanghaist among others reports on Asia’s growing rice crisis. Well, actually it’s only a crisis if you are trying to live on less than a dollar a day. Much of the world is trying to do this of course, which has led to rice riots. For historians rice riots call up lots of associations. Although the modern neo-liberal state does not much concern itself with guaranteeing the food security of its people lots of pre-modern states did, and the Chinese Late Imperial state in particular was obsessed with stabilizing the price of grain, hence the ever-normal granaries. A lot of Asian states are currently trying to find ways to up grain production for next year, banning exports of grain, fixing prices and scrounging around for extra supplies. There has been a fair amount of popular violence, in the long tradition of food riots, which are usually focused on forcing sales at a “fair” price or preventing exports of local supplies. In America Sam’s Club is limiting rice purchases. No doubt this will make the W.T.O. grumpy, since we should be entering the glorious era of the universal free market.

Free markets vs. paternalism/meddling is often presented as one of the big traditional/modern dichotomies. Actually, even in China officials have a long history of relying on market mechanisms to deal with food problems. Although Confucian officials have long had a reputation in the West for being anti-commercial this not very accurate. According to Rowe1

Qing provisioning policy might be divided into the following five strategies (listed
in roughly ascending order of controversiality): (1) attacking extravagance and encouraging frugality, on the part of both government and society; (2) encouraging increased food production; (3) promoting maximum commercial circulation of grain;(4) attempting to meet sporadic and localized food crises through administrative means; and (5) maintaining large permanent stocks of grain in government hands as leverage to control local availability of grain on a routine basis. …

Chen Hongmu did not see encouraging commerce as betraying the classical tradition as he showed in his letter to Fang Bao

“The pervasive dilemma today is that the price of rice is high and the people are too
poor to afford it. But if those who seek to deal with this lack an overall conception of
the problem, they will never be able to come up with a comprehensive policy approach
to resolve it. This overall concept is none other than the Way of Producing Wealth
[shengcai], identified in the Great Learning and repeated by Mencius: “Open the well-
spring and restrict its flow [kaiyuan jieliu}” [i.e., produce more and consume less].”

Chen Hongmu was Qing China’s chief provincial-level troubleshooter felt that the most important method of dealing with famine was “relief through commercial circulation”. One of his main concerns was avoiding any state or private action that would cut off the flow of grain. Rowe emphasizes his reliance on market forces. For instance in 1743 when dearth occurred in Jiangxi he dealt with the situation by loaning a large sum of state money to pawnshops, in other words pumping more liquidity into the commercial economy, much as the American Federal Reserve would do today. As Rowe points out “however ‘liberal’ such promarket policies might appear, there were by no means laissez-faire. The objective was less one of letting the market accomplish its task than of making it do so” (p.162) He was certainly a moralizer and willing to nag (or force) people to stop wasting land on tobacco or grain on alcohol. He was also very big on encouraging increased production and such. Chen did not share the modern world’s market idolatry, nor was he willing to question the Confucian imperative to care for the poor.

So how would Asia’s current responses to the rice crisis rate with Chen Hongmu? Any comments from readers would be welcome as I am not following this as closely as some, but it seems that China is taking a pretty free-market approach, not doing anything radical2 and assuming that they have enough cash on hand to maintain a low price on rice. China, at least, seems to have moved a bit beyond the historical phase where states worried about grain supplies.


Here is an angle I had not thought of. Sexy Beijing has been interviewing Chinese consumers about increasing prices. They also talk to some shopkeepers who are finding business off. One woman then interviewed at the end of the clip below said that if the dofu-selling business keeps getting worse she may go back home and return to farming. Chen Hongmu was alway worried about famine causing peasants to flee the land, but this price increase may have the opposite effect.

  1. Rowe, William. Saving the World: Chen Hongmou and Elite Consciousness in Eighteenth-Century China. Stanford University Press, 2001. []
  2. China has not restricted rice exports, but they were not a top exporter anyway []


Comparative Colonialism-Taiwan

Filed under: — Alan Baumler @ 6:06 am

 Japan Focus has a nice article by Anne Booth on Japanese colonialism in Taiwan (and Korea) The standard view is that the post-war development of both places has a lot to do with the economic transformation created under colonialism. Booth compares Taiwan and South Korea to the European colonies in S.E. Asia and finds very little systematic difference. Yes, Taiwan did double its value added in agriculture, and both places were insulated from the Great Depression more than the European colonies, but the Japanese colonies do not consistently stand out. She looks at a lot of other data, but here are her 1938 GDP per capita figures

Philippines 1522

Korea        1459

Malaya      1361

Taiwan      1302

Indonesia  1175

Thailand      826

Burma         749

I don’t have much to say about it, but it is an interesting paper.

Via Michael Turton


How to get rich in Chinese business

Filed under: — Alan Baumler @ 9:15 am

This is from the Hawai’i Reader in Traditional Chinese Culture1 It is a wonderful reading to use in classes, as our hero Dou Yi manages to make dough in pretty much every way that you can imagine in the Tang-Song period. He is sponsored by a temple, does commercial agriculture, invents something new, (the ‘firewood’) creates personal connections with foreign merchants, swindles someone out of a piece of jade, reclaims land, gets involved in commercial entertainment, sucks up to powerful officials and sells offices. The only real question is if the essay’s emphasis on his frugality makes him more of a Confucian merchant or if his Zhuangzi-ian use of things at hand makes him more of a Daoist entrepreneur.

Dou Yi, a Mid-Tang Businessman

Dou Yi of Fufeng was thirteen years old. His various aunts on the paternal side had been royal relatives for several reign periods. His paternal uncle Dou Jiao was honorary president of the Board of Works, commissioner for the palace corrals and stables, and commissioner of palace halls and parks. [Dou Jiao] owned a temple yard in Jiahui Ward. Yi’s relative Zhang Jingli served as aide in An Prefecture. After he was relieved of his duty by his replacement, he returned to the city [of Chang’an]. An Prefecture produced silk shoes. Jingli brought with him more than a dozen pairs of those to give to his nephews and nieces. All except Yi fought for them. Soon only one slightly oversized pair was left behind by the nephews and nieces. Yi bowed twice before he accepted them. Jingli asked him why. He just kept quiet. Little did they know, Yi harbored great ambitions for business success like Duanmu. So he went to the market and sold them for 500 cash, which he stored away in a secret place.


  1. This is a wonderful book that includes translations of all sorts of things that do not ordinarily turn up in sourcebooks. The preface says that it is intended for use in classes on the “history, culture and society of China, both modern and premodern” How it could work for a Modern class I can’t guess, as there are only and handful of readings from the Qing and later. I’m also not sure how well it would work for a straight history class, as it seems more geared to a culture class. Still, there is a lot of cool stuff in here. []


The Chinese are way more advanced than the Americans

Filed under: — Alan Baumler @ 12:35 pm

Geoff Wade sent a long message to H-Asia detailing the current status of the raising of the Nanhai1, a large Song dynasty (or maybe Ming dynasty, accounts vary) cargo ship being raised off the coast of Guangdong. The thing I find most interesting is the scale of the project, the first bit of underwater archeology done by the Chinese1 We do have underwater archaeologists in the West, but they are poorly funded. This seems to be a huge project, and part of the motivation is keeping the treasures of China’s cultural heritage out of the hands of foreign treasure hunters.

What impresses me most is what they are doing with it. The whole ship is being moved to shore and put in a giant pressurized tank so that it can be displayed and people can watch the underwater archaeologists work on it. China is truly at the forefront of Public History with Chinese Characteristics.

This is a really big tank being built to hold the Nanhai1 in its new exhibit (from the BBC)

NanHai1 tank

  1. Press accounts are not very clear on who is doing this. A university? The state? A special commission? []


A tame civil society in China?

Filed under: — Alan Baumler @ 9:30 am

Via Kevin Drum (where the comments so far are better than you might expect) a link to an article by Christina Larson in the new Washington Monthly about environmentalism in China. It’s a nice piece, although not much of it will be terribly new for the Old China Hands who read this blog.



It’s a -very large- stuffed panda

Filed under: — Alan Baumler @ 12:11 pm

As a visual aid for Charles’s post below I would like to add this.

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