Docstoc

wright - Download as PowerPoint

Document Sample
wright - Download as PowerPoint Powered By Docstoc
					China in the World
    Economy
      Tim Wright
 University of Sheffield
            Introduction
Question:
• Was China harmed by its
  involvement with foreign trade and
  investment in the 19th and early 20th
  Century?
             Disclaimer
Emphasise:
• Don’t deny negative influence of e.g.
  indemnities, such as Boxer indemnity
             Disclaimer
Emphasise:
• Don’t deny negative influence of e.g.
  indemnities, such as Boxer indemnity
• Don’t deny some loss of political

  sovereignty
             Disclaimer
Emphasise:
• Don’t deny negative influence of e.g.
  indemnities, such as Boxer indemnity
• Don’t deny some loss of political

  sovereignty
But relevant question for today:
• Effect of participation in global trade

  and investment flows
       Possible Harmful Effects
   Destruction of China’s handicraft
    industries, especially cotton textiles
    • Leading to impoverishment of peasantry
       Possible Harmful Effects
   Destruction of China’s handicraft
    industries, especially cotton textiles
    • Leading to impoverishment of peasantry
   Prevention of emergence of modern
    industry
    • Through unfair competition
          Raise three issues
   Economics not the same as politics
          Raise three issues
   Economics not the same as politics
   Issue of unit of analysis
    • Sectoral and temporal
          Raise three issues
   Economics not the same as politics
   Issue of unit of analysis
    • Sectoral and temporal
   Issue of implied counterfactual
    hypothesis
Economics not the same as politics
Political loss of sovereignty
 not the same as harmful economic
 effect, e.g. on GDP or living
 standards
Economics not the same as politics
Political loss of sovereignty
 not the same as harmful economic
 effect, e.g. on GDP or living
 standards
Outrageous example:
          Kailuan coal mines
   Illegal, basically criminal, take-over
    by foreign (British and Belgian)
    interests
          Kailuan coal mines
   Illegal, basically criminal, take-over
    by foreign (British and Belgian)
    interests
   BUT:
    • Was output lower than it would have
      been under Chinese control?
           Kailuan coal mines
   BUT:
    • Was output lower than it would have
      been under Chinese control?
    • Were wages and conditions worse than
      they would have been under Chinese
      control?
           Kailuan coal mines
   BUT:
    • Was output lower than it would have
      been under Chinese control?
    • Were workers’ wages and conditions
      worse than they would have been under
      Chinese control?
    • Not even clear that Chinese
      shareholders incomes lower than they
      would have been under Chinese control
       Kailuan coal mines
Not arguing either way, except:
Even outrageous and criminal swindle
 not necessarily, in any quantifiable
 way, harmful
         Unit of Analysis
Fundamentally:
• Some lose out in economic change

• But some gain

Need to look at both sides
         Unit of Analysis
Fundamentally:
• Some lose out in economic change

• But some gain

Need to look at both sides
Here look at example of textile
  industries
          Textile industries
Losers
• Cotton spinners

  • Replaced by factory yarn
          Textile industries
But winners
• Weavers

  • So part of loss of employment in hand
    spinning made up by hand weaving
            Textile industries
But winners
• Weavers

    • So part of loss of employment in hand
      spinning made up by hand weaving
•   Consumers
    • Enjoy cheaper and (probably) better
      quality textiles
 Edgar Snow on Japanese Goods
―Many Chinese necessary purchase entirely
  on a price basis, and here few native
  products can compete with the foreign
  article – usually better in quality, also.
  The price margin is decisive for the
  average impoverished Chinese and the
  ingredient of patriotism cannot enter into
  it at all. It is generally a question of
  buying Japanese—or not buying!‖
         Textile industries
But winners
• Weavers

• Consumers

• People in other industries who gain

  from international trade
           Textile industries
•   People in other industries who gain
    from international trade
    • Alvin So’s calculations
    • 58600 jobs lost among Guangdong
      cotton spinners during 1870s
           Textile industries
•   People in other industries who gain
    from international trade
    • Alvin So’s calculations
    • 58600 jobs lost among Guangdong
      cotton spinners
    • BUT: 59400 jobs gained by farmers
      working in silk export industry
          Textile industries
One final point:
Silk industry
• Need to balance

  • Decades of prosperity in Jiangnan and
    Guangdong because of silk exports
          Textile industries
One final point:
Silk industry
• Need to balance

  • Decades of prosperity in Jiangnan and
    Guangdong because of silk exports
  • Poverty and misery portrayed by Fei
    Xiaotong in the context of the Great
    Depression
             Textile industries
One final point:
Silk industry
• Need to balance

    • Decades of prosperity in Jiangnan and
      Guangdong because of silk exports
    • Poverty and misery portrayed by Fei Xiaotong
      in the context of the Great Depression
•   No single right answer, but need to look at
    both sides
         Textile industries
Should not just focus on losers, also
 look at winners
Implied Counterfactual Hypothesis?
If talk about impact e.g. of foreign
  trade.
NOT an issue of what happened after
  growth of foreign trade in
  comparison with what happened
  before
Implied Counterfactual Hypothesis?
If talk about impact e.g. of foreign
  trade.
NOT an issue of what happened after
  growth of foreign trade in
  comparison with what happened
  before
BUT of comparing what happened with
  foreign trade with what would have
  happened in some situation without
  foreign trade.
Implied Counterfactual Hypothesis?
What that situation would have been is
  a very complex question.
Just time for one example
Implied Counterfactual Hypothesis?
Pomeranz:
• Area along Grand Canal declined
  because Chinese government’s
  attention diverted to coastal areas by
  imperialist aggression
Implied Counterfactual Hypothesis?
Pomeranz:
• Area along Grand Canal declined
  because Chinese government’s
  attention diverted to coastal areas by
  imperialist aggression
• Therefore decline of those areas the
  result of imperialism
Implied Counterfactual Hypothesis?
BUT
In what situation would what kind of
  Chinese government not have
  switched their attention to the coast?
Implied Counterfactual Hypothesis?
Argument:
Any Chinese government involved in
 articulating with world and world
 economy would inevitably focus on
 the coast at the cost of the interior.
For example reform government under
 Deng Xiaoping
Implied Counterfactual Hypothesis?
So, what if they had cut themselves
 off from the world economy?
Implied Counterfactual Hypothesis?
So, should they have cut themselves
 off from the world economy?
BUT, this also involves very serious
 costs:
Implied Counterfactual Hypothesis?
So, should they have cut themselves
  off from the world economy?
BUT, this also involves very serious
  costs:
• Costs of China’s small involvement in
  foreign trade under Mao
Implied Counterfactual Hypothesis?
So, should they have cut themselves
  off from the world economy?
BUT, this also involves very serious
  costs:
• Costs of China’s small involvement in
  foreign trade under Mao
• Costs of Third Front investment
Implied Counterfactual Hypothesis?
Again, no easy answer.
But need to examine:
• Plausibility of counterfactual
  hypothesis (could China have
  remained isolated in any
  circumstances)_
• And cost of alternative (costs of

  isolation)
             Conclusion
No easy answer either way
Core argument:
• Cannot approach this problem on
  basis of isolated examples of losers
  (or of winners) from world economy
• This as true nowadays with
  globalisation as in the 19th and early
  20th centuries

				
DOCUMENT INFO