Regional industrial development in China along the Yangtze and Zhujiang rivers, ca. 1915-2004 Yi Xu 1, 2, Bas van Leeuwen 2,3, Lin Wang1, Zhihua Tang1 1 Guangxi Normal University, Guilin, China 2 Utrecht University, Utrecht, the Netherlands 3 International Institute of Social History, Amsterdam, the Netherlands Abstract The Chinese economy has grown spectacularly since the early 20th century. Partly this is due to the great transformation that made China (one of) the biggest manufacturing economies in the world. The shifts in industries from the predominantly Western world to China is a hotly debated topic. Yet, both this intern development in China, nor the shifts from the Western economies to China did not occur at random. Rather, industries in China are highly localized in certain regions. This paper is a first attempt to analyze shifts in regional industrialization in China over the 20th and 21st centuries. By combining a large list of both published and unpublished sources, we construct current price output data by province and prefecture for 5 benchmark years (1915, 1933, 1954, 1963, 1988, and 2004) for 5 provinces (Guangdong, Guangxi, Shanghai, Jiangsu, and Anhui). We find that, after an initial clustering in the port cities, industry slowly expanded Westwards via main rivers and railroads. 1.Introduction Industrialization has been a hotly debated topic in the field of world economic history field ever since the industrial revolution occurred in Britain in the 18th centur. Even though initially focused on national development, regional industrialization patterns receive increasing attention. Also given its recent rise in industrial development, it is therefore remarkable that Chinese regional industrialization has not attracted a comparable amount of attention. An important reason for this lack of regional studies is the lack of comprehensive data. Only in 1933 China witnessed the most complete and comprehensive pre-New China industrial census, which was conducted and published by D.K. Lieu (Lieu1937), Director of the China Institute of Economic and Statistical Research of Shanghai. Partly relying on these data, Ou Pan-San (Ou1947) was the first to attempt to combine the increasingly common national accounting approach with Lieu’ census to estimate the value added for the countrywide industrial sectors for 1933’s China. This study was directed towards finding fundamental explanation for the phenomenon of industrialization China confronted at that moment. Ou’s study resulted in two results 1 that profoundly influenced subsequent studies. First, it offered the following scholars with a standard classification for China’s industry. Second, it also provided a national perspective on quantifying the trajectory of Chinese industrialization in long run by incorporating Republican China in New China research. Nevertheless, the merging of studies on New China and Republican China have contributed to the Chinese regional industrialization study in two aspects. First, some countrywide studies for certain benchmark years provide us with some regional data for such indictors as output, total value, number of factories, number of workers, wage, price and so on. Second, there are increasingly studies focusing on smaller regions. For example, H.D. Fong (2015) was the first scholar who performed a quantitative study on Chinese regional industrialization based on the 1928 survey focusing on 2 mining products and 4 manufacturing products for 6 provinces. Recently, the Lower Yangtze Delta became the popular region for the study of Chinese industrialization. For example, Debin Ma (2008) offered estimates of annual growth ratio of industry covering modern and handcraft sectors in 1914/1918 and 1931/1936. Bozhong Li (2010) also provided an estimate of value added for industry as a whole in Hua-lou, both leading counties in lower Yangtze delta. It is noteworthy that Brandt et.al. (2016) made the first quantitative overview of Chinese regional industrialization over time through providing the share of industrial output by big region from 1933 to 2008.1 However, they didn’t offer a more detailed study on such as the structural change of regional industry over time. Above studies lead to a debate on the nature of Chinese industrialization, especially between 1850 and 1949. The common view on industrialization during this period was that it was characterized by long-term stagnation. Indeed, an earlier generation of scholars from both mainland China and oversea identified the industrialization concentrated only on treaty port cities. However, this classic consensus is questioned by the recent scholars, such as John K. Chang (1965), Rawski (1989), Kubo(2005), and Brandt et al. (2016). They have argued there were periods of rapid industrialization between 1912 and 1949. From the point of this revisionist view, industrialization not only quickly developed in both the Jiangsu and Manchuria areas, but also diffused in the vast inland and border regions. However, no matter whether industry was limited to treaty port cities between 1840 and 1949, or experienced spread from 1912 to 1949 related to Japanese colonizing nearby areas-Korea and Taiwan, the problem of explaining what was the driving force affecting industrialization remained. Different authors point to a variety of causes. Ou, Liu etc. attributed the long run stagnation of China’s industry to insufficient capital accumulation. Perkins (1967) argued that Chinese government was hostile to commerce and industry and that this hostility was a major element in the country’s failure to achieve industrialization. Heavily influenced by the Marxist stages of social evolution and class revolution, the studies from mainland China (Peng 1957, Kong 1980) insisted on the double oppression of foreign imperialism and domestic feudalism as the reason 1 In their study, a big region usually consists of several provinces. See Loren Brandt, Debin Ma, and Thomas G. Rawski(2016), Industrialization in China ,IZA Discussion Paper No. 10096. 2 for industrial stagnation. Rawski (1989) questioned this array of economic and political explanations by arguing China’s economy was from 1880s dominated by domestic, private and competitive forces rather than monopoly of imperialism and feudalism warlords. He then attributed relatively fast industrialization to freewheeling market by which penetration of international trade and domestic traditional economic pattern cross-polonised. The empirical research on the Lower Yangtze region also sheds some light on the ongoing debate on driving force of industrialization. The California school revisionist’s widely cited studies (Pomeranz 2000; Bozhong Li 2000; 2010) argue that the Lower Yangtze Delta, a leading region in China, faced a failure to achieve further industrialization for two reasons: lack of cheap coal and lack to access to land-intensive products from outside the Yangtze Delta. On the contrary, Debin Ma (2008) argued that Lower Yangtze Delta, which successfully industrialized since 1880 onwards, was characterized by a the local absence of most of the essential materials for manufacturing, especially coal. He then attributed its take-off industrialization to the treaty port institution, a unique political institution focusing on its rule of law and secure property rights laying the foundation for industrialization in the Lower Yangtze. In sum, we find that the current research focus on Chinese regional industrialization no longer can make use of these previous because different regions might have much more divergence within China than the leading areas between Europe and China did as mentioned in Pomeranz’s book (2000). Hence, the purpose of this paper is to revitalize the regional approach, combined with new systemic datasets that focus on both Jiangsu and Guangdong provinces2, the first industrialiers in China (Ma 2005), as well as another both Anhui and Guangxi provinces, the late follower regions. For these regions we present of the pattern of regional industrialization in both Republican China and New China, which experienced the transformation from hesitant 19th century experimentation into the world’s largest manufacturer. To use Chinese historical statistics over time, it is necessary to examine their plausibility and accuracy in every respect and use all the direct and indirect evidence, without preconceived notions about their reliability. Based on the available data we chose two benchmarks during the Republican China (1916, 1933), and four during New China (1954, 1963, 1984, and 2004). The data for these benchmark years allow us to analyse the spread pattern of manufacture industrialization in more details. In order to make the reliable test how different factors (i.e. real wage, coal, urbanization, institution and human capital) effected on China’s regional industrialization based on the 4 provinces as examples, we follow the suggestion of De Vries (1981) and divide 4 provinces into smaller political unites below provincial level. As showed in table A-1 in the appendix, the 4 provinces above consist of different amounts of political units below provincial level. Due to datasets available from different statistics in different benchmark years, we totally take 30 comparable political prefectures of 4 provinces for all benchmark years. (see table A-1) 2In order to taking unified political provincial boundary over time, Shanghai is included in Jiangsu province, and Hainan area is excluded in Guangdong province for all benchmark years. 3 In our paper, we begin