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Chapter 1

ECON 336 Chapter Notes - Chapter 1: South Manchuria Railway, Agricultural Extension, Boxer Protocol


Department
Economics
Course Code
ECON 336
Professor
Christopher Green
Chapter
1

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Chapter 1: Geographical Setting
China’s economic growth has been more robust in coastal provinces than in inland provinces.
Southern coastal regions are now both richer and faster growing than the rest of the county
Coast-inland gap: fundamental feature of the Chinese economy
1999: China launched the Western Development Program to give preference to western and
inland provinces
Also a North-South gap in growth rates (south is growing much faster)
2003: Northeast Revitalization Program (to help North develop heavy industries in face of
resource depletion, loss of customers and the need for downsizing)
Coastal region: dynamic center of the economy
Whereas between 1979-1999 it was the area that benefitted from preferential treatment, now it is
the only area that doesn’t receive preferential policies
Each policy is different (tailored to area)
Effect of economic growth along the coast will likely diffuse to areas within the macroregion
(41% of population lives in coast provinces)
Only 6% of population lives in the far west
China’s greatest development challenges: areas where a dense population pushed up against the
limits of water and what the land can provide
o Aihui-Tengchong line: slices through the middle of the country, dividing east and west
o Belt of environmental degradation: deforestation, soil erosion and other environmental,
social and economic problems
Geographical conditions and environmental challenges will shape China’s development potential
Chapter 2: The Chinese Economy Before 1949
1949: dividing year in Chinese history in terms of economic growth
Traditional view: despite a few disastrous policies in the communist era, China’s economy has
been growing rapidly since 1949
This view is challenged by Rawski, Brandt and etc., who claim that the traditional Chinese was
well suited to support economic development. Economic development is a long-term process that
requires accumulation of physical and human capital, as well as the evolution of institutions. This
view suggests continuity between the features of the traditional economy and the rapid growth
experience that becomes obvious after 1949. They argue that China would have grown regardless
of the economic system in place -> Economic debate
The other side: 1949 is a turning point as a result of social and economic revolution (driven by
factors such as pressure on living standards from population growth, absence of change in
agricultural technology, pressure from class division, etc…). Revolution provided a way to solve
some of these problems and unleashed rapid acceleration of economic growth. With a new set of
social conditions, China was able to “takeoff” -> Historical debate
The Traditional Economy
Over 90% rural population, largely in agriculture
o Used a “traditional triad”: selected se varieties (early ripening rice), organic fertilizer
(night soil, etc.), and irrigation -> highly productive
o Possible through intense labour (high land productivity but low labour productivity) ->
marginal product of labour even lower than average product
o High land yield and intense utilization of resources
o Incomes and consumption was low
o Limited roles of animal in farm work and diet (all calories came from grain)
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