The diffusion of Western Economics in China

Introduction Although China has had a long and distinguished intellectual tradition in the past, the country’s scholars were long isolated from the West during the seventeenth and eighteenth centuries, at the very time Economics ( jingji xue) was evolving in the West (see Trescott, 2007). Whilst China’s economy had been prosperous by world standards down to roughly 1500, isolation, dysfunctional government and a powerful Malthusian process brought China’s per-capita income levels to a very low level by 1900. As early as 200 bc, some Chinese intellectuals envisioned the self-adjusting processes of market economy (notably the historian, Sima Qian, c.145 or 135-86 bc). But by the nineteenth century, China’s government appeared to lack both vigour and an awareness of policy. The country’s intellectual tradition had neglected the new science and technology, its written language lacked an ‘alphabet’, and there were no modern universities (see Spence, 1990). China’s isolation began to crumble, however, in the 1840s, when ‘unequal treaties’ generated by the ‘Opium Wars’ forced China to admit Western traders and missionaries. Japan, which experienced similar Western pressures, reacted by aggressive modernization (see the chapter by Yagi on Japan later in this volume). China, however, suffered major setbacks in this period. The first of these was the ‘Taiping Rebellion’ (1851-1864), which inflicted as many as 30 million deaths and devastated a substantial area of central China. The second was the ‘obstructionist’ position of Li Hongzhang (1803-1901), an influential adviser to the dowager Empress. The Empress (Cixi Taihu, 1835-1908) herself was initially receptive to modernizing efforts. In 1861, another adviser Zeng Geofan (1811-1872) established China’s first modern arsenal in Anqing. Soon after, the creation of the huge Jiangnan Arsenal became a centre for translations of Western works. The same impulse underlay the decision in 1870 to send 120 young men to America for study. This scheme was abruptly terminated in 1881, a decision no doubt symbolizing antagonism toward Westernization. The reluctance of the Chinese government to study Japan’s modernization set the stage for China’s military defeat in 1894-1895 – one which brought a turn toward reform.