Discussion and Evaluation

 

Historical Studies (Chinese Edition)

No.2, 2017

 

“Smithian Growth”: Reevaluating Rural Industry in the Modernization of China

(Abstract)

 

Guan Yongqiang and Zhang Donggang

 

Over the past 30 years, specialists in international economic history have produced a series of significant academic views and arguments revolving around the “Smithian growth” model. Rural industry’s role in China’s modernization affords an excellent point of reference for analyzing and reflecting on these theories. The pre-1949 development of rural handicraft industry, represented by silk spinning and weaving, was mainly driven by the market or “Smithian dynamics.” It also reflects the basic features of the “industrious revolution”; although population pressure existed, its influence is not clear. The “Smithian growth” of rural industry promoted economic development and increased income, and its technological changes were obviously labor-intensive. However, this alone was not enough to take pre-1949 China into industrialization and rapid economic growth. The achievement of industrialization and the success of “Kuznets growth” in China were ultimately determined by effective coordination between government regulation and market mechanisms after 1949.