The State in Chinese Economic History

Abstract

We survey the recent economics and history literature on the Chinese state to investigate its role in China's long-term socioeconomic development. We highlight three insights. First, unlike in Europe, where interstate competition helped give rise to capitalist states with high capacity, the Chinese state emerged from a different historical context. Second, the eighteenth- and nineteenth-century Chinese state does not fit into the mold of a strong and extractive Oriental despotic state as once commonly believed. By conventional measures, early modern China had a weak state. Third, state building and center-local relations are two useful dimensions to understand development and change in China's recent history and political economy. To adapt China to a changing world, Chinese state builders embarked on a long process of state building from the late-nineteenth century through the Republican and Communist eras. Facilitated partly by regional decentralization, the process now sees the Chinese state playing a substantially larger role in the economy and everyday life than any previous time in history.