Entrepreneurship, knowledge and employment

Chinese debates on economic development in the 1920-s-1940s

Borokh Olga, Institute of Far Eastern Studies, Russian Academy of Sciences

The paper focuses on the thoughts on economic development in China in the Republican period. Publication of Sun Yat-sen’s Industrial plan in the early 1920s signified the end of decades of discussion on the necessity of industrialization. A discussion on relationship between agrarian-based and industrial-based types of economy of the 1920s was initiated by the supporters of traditional reliance on agriculture who proposed to move towards industrialization via rural reconstruction and the peasants’ increasing purchasing power. The mainstream economists supported the path of industrial development of China. During the second wave of this controversy in 1934–1935 they stressed the urgent need to build defense industries and criticized the idea of development of rural industries as transition stage to the industrial economy. The debate on China’s economic modernization in 1933 was focused on the choice between individualist (capitalist) and socialist paths of development. It marked an evident shift of attention to the state-led planned model of modernization. Growing interest in the Soviet model led to debates of 1934–1935 about the perspectives of controlled economy in China. After 1945 the Chinese economists rallied around the task of industrialization. They debated problems of complementarity between industry and agriculture, balanced development of heavy and light industry, rational location of industries. Liu Dajun’s concept of industrialization proposed to use state planning to ensure people’s welfare while avoiding copying the Soviet model and one-sided concentration on the defense industry. The economists paid attention to the import substitution policy and the control over foreign trade to support industrialization. In the late 1940s overseas Chinese doctorate students produced first theoretical works on development economics. Zhang Peigang’s Agriculture and Industrialization (1949) discussed general patterns of industrialization in agricultural countries.

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Keywords: China, economic development, economic thought, national specifics, industrialization, modernization

Paper file