Friday, 8 October 2010

Why did China industrialise after England?

To an economist this is an interesting question. I have read widely on this subject. This paper provides a possible answer although by no means all of it.

For that we need to look at England colonies, slave labour and massive imports of raw material. China did not have an "empire" that England accumulated during the Victorian era. This enabled capital to accumlate and the shortage of labour required the design of labour saving devices - this was not necessary in China for obvious reasons.

"Why China Industrialized after England"

Economic Inquiry, Vol. 48, Issue 4, pp. 860-863, October 2010
BARRY S. KAHN, affiliation not provided to SSRN

Although industrialization first occurred in England, it is thought that China, not England, may have been the world leader in technology at the time. Yet, China did not industrialize until 150 yr after England and nearly a century after less advanced European countries. This represents a puzzle because two-sector neoclassical growth models, such as Hansen and Prescott (2002), that accurately match industrialization, require that more technologically advanced countries industrialize at an earlier date. I find that a model that accounts for cross-country heterogeneities in population density accurately predicts the timing of industrialization in China.


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