Why Japan, Not China, Was the First to Develop in East Asia: Lessons from Sericulture, 1850–1937

Abstract

Raw silk exports constituted the most important foreign currency-earning item for China and Japan during the period of 1860-1929. In the 1870s, China exported three times as much as Japan, but by the late 1920s, Chinese exports became less than 30% of Japanese exports. This paper focuses on the comparative performance of sericulture in Japan and the Lower Yangzi delta of China and constructs productivity indices including a price dual total factor productivity index. These indices, supported by a comparative narrative of the cocoon production and distribution sectors, suggest that Japan’s competitive success resulted from a set of interrelated technical and institutional innovations. It was the different reform policies pursued by Meiji Japan and Late-Qing China that created different conditions leading to the rise and absence of innovations respectively in these two regions.