This thesis aims to explore the motive forces of China rural industrialization in the late Qing and the early Republican periods. I find that some rural handicrafts, especially the hand-cloth industry, became very prosperous even though the competition from the machine-driven industries was intensive. The key factor impelling the development of the rural industrialization, according to my analysis on a county-level dataset, was institutional change. The emergence of the putting-out system played an essential role in technological advancement and market expansion. Through putting out machine-made yarn and iron-gear looms, the merchants helped those poor households overcome capital constraint, thus a large number of cheap laborers was available for employment. Compared with the domestic t...[ Read more ]

This thesis aims to explore the motive forces of China rural industrialization in the late Qing and the early Republican periods. I find that some rural handicrafts, especially the hand-cloth industry, became very prosperous even though the competition from the machine-driven industries was intensive. The key factor impelling the development of the rural industrialization, according to my analysis on a county-level dataset, was institutional change. The emergence of the putting-out system played an essential role in technological advancement and market expansion. Through putting out machine-made yarn and iron-gear looms, the merchants helped those poor households overcome capital constraint, thus a large number of cheap laborers was available for employment. Compared with the domestic textile factories that required enormous capital input, the putting-out system was competitive due to its lower initial capital in an economy where capital market was imperfect. These advantages in labor and capital made the hand-cloth industry survive and blossom in a machine-dominated era.

Chapter One gives a brief introduction to the rural economy in pre-1949 China, and proposes the research questions: how do we evaluate the development of the rural handicraft industry in the Ming-Qing and Republican periods? Does any evidence indicate that a process of industrialization had been launched? If yes, what were the determinants? Chapter Two reviews the literature on the development of China rural handicrafts, European proto-industrialization, and the relationship between institutional change and rural industrialization. In Chapter Three and Four, I examine the development of the rural cotton textile industry in North China and the Yangzi Delta from the late Ming Dynasty to the early Republican period, and conclude that a process of industrialization had developed after 1900. Chapter Five provides a quantitative analysis to explain the regional distribution of the rural industrialization. By constructing two econometric models, I find that the emergence of a new institution, namely the putting-out system, was the key factor explaining the rise of the rural cotton industry. In Chapter Six, I perform a case study to show the mechanism by which the putting-out system provided impetus to the rural cotton industrialization. The final chapter, Chapter Seven concludes the thesis.