China’s Foreign Trade:Perspectives
From the Past 150Years
Wolfgang Keller 1,Ben Li 2and Carol H.Shiue 1
1Department of Economics,Princeton University,Princeton,NJ and Department of Economics,University of Colorado at Boulder,CO and 2Department of Economics,Boston College,外联部面试
Chestnut Hill,MA
1.INTRODUCTION
给老师的祝福语简短I N the year 2007,China’s imports accounted for 31per cent of its GDP,lar-ger than for similarly developed India (25per cent)and about twice the size of imports for either Japan (16per cent)or the United States (17per cent).Recently,China has also become the world’s largest exporter.Today,business delegations from all over the world come to China,often accompanied by their political leaders,to ensure they are not left out of the China trade.The lure of China’s big market is nothing new.The British Plenipotentiary Sir Henry Pottinger announced after Britain’s victory over China in the First Opium War (1840–42)that China’s potential for trade was so vast ‘that all the mills of
Lancashire could not make stocking stuff sufficient for one of its provinces’(Chine Maritime Customs (CMC)1933,p.39).In hindsight,Pottinger was overly optimistic:it took some 150years more until China would deliver on its promi for world trade.
The trade history of China is important for how it has affected global production and earnings in poor and rich countries alike.Many contemporary analysts view China’s recent pre-eminence primarily as the result of the post-1978reforms,per-haps contradicting the idea that sustained economic growth requires simultaneous political reform.1Prent-day discussions on Chine development have moved to a focus on China’s currency interventions that keep the Renminbi from appreciat-ing or on China’s entry into the WTO in the year 2001.2We contend that 1See Rawski (1999),Woo (1999),and Sachs and Woo (2000).The rule of the Communist Party in China (CPC)began in the year 1949,and starting with the year 1978market-oriented reforms were implemented.2See Krugman (2010)and Cline (2010)on China’s currency;contrarian views are Wei (2007)and Rein (2010).On the trade effects of China’s entry into the WTO,e Lardy (2002)and Whalley (2006).
The World Economy (2011)
doi:10.1111/j.1467-9701.2011.01358.x
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854W.KELLER,B.LI AND C.H.SHIUE
understanding the fundamental forces behind China’s increasingly dominant posi-tion in world trade require going further back than1978.Reaching to the nineteenth century and earlier,we are in a better position to identify what is(and was)China’s ‘normal’level of foreign trade,and how the levels changed under different trade regimes,from1840to the prent.
论语有多少篇The legacy of the forced opening of China by Western powers,however,is controversial.While some say it slowed down her growth,others hold that China would have actually benefited from the increa in trade–had it not arrived through gunboats.Yet another view is that foreign trade at the time was too trivial in size to matter for China.In this paper,we take thefirst steps to addressing the impact of the opening of China on trade and economic growth by adopting the long-run view of China’s foreign trade.Our approach is also much more quantitative in focus compared to previous re
自相矛盾成语故事arch.Bad on information from the CMC rvice,the organisation t up and run by the West to govern China’s foreign trade,ourfirst contribution is to prent new evidence on China’s foreign trade during the treaty port era(1842–1948).
China,it must be remembered,was a failing state in the nineteenth century, in the n that the ruling Qing government(1644–1911)was by then increas-ingly unable to project effective rule over every part of the empire.Laws which prohibited opium imports(in place since1729),were for the most part disregarded by smugglers and officials alike.Although a customs apparatus was prent,corruption also meant that the state did not or could not collect significant amounts of revenues to fund public goods becau local power competed with officially stated goals.The CMC revolutionid the system of foreign trade in China by introducing a consistent t of rules.In the process, the CMC collected detailed information on trade not only for China as a whole but also for individual ports of trade within China.
To the extent that uncertainty reduces economic activity,this transfer of a Wes-tern institution may increa trade and welfare,and the evidence prented below supports that notion.Our analysis of China’s foreign trade during the treaty port era yields a number offindings important for current rearch in international trade.First,although the volume of trade after liberalisation was not large in t
he beginning,there was a very notable expansion in the diversity of product catego-ries and new goods that were imported into China,a point that previous authors have overlooked.Wefind that the number of new goods imported by China grew by about6per cent per year between the1860s and1940s,which is about50per cent faster than what thatfigure was in the United States between1970and2000. This shows that product variety gains are not limited to highly developed coun-tries;in fact,they may be more important for poorer countries.
Second,the expansion of ports did more than increa geographical diver-sity.It also helped to increa the volume of goods imported.An important intermediary in this process was Hong Kong,which functioned as an entrepoˆt.
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CHINA’S FOREIGN TRADE855 The importance of Hong Kong also suggests highfixed learning costs to trade during this period.We show that larger countries conducted less of their trade with China through Hong Kong than smaller countries.In addition,subquent to every change in the trade ight after the opening of new CMC treaty ports),Hong Kong’s trade intermediation becomes less important over time.
Furthermore,China’s recent position in world trade appears less exceptional in the light of its long-run history.While other factors no doubt play a role,a large part of China’s recent growth in trade is attributable to two factors.First, it is a reversion from the depresd levels of the pre-1978period and is attrib-uted to lifting of trade restrictions impod during that period.As we show below,China’s share of world trade at the turn of the twenty-first century was similar to that of the year1925.Second,China’s current footprint in world trade is mainly that of a very large country rapidly industrialising.
带鹿字的成语We are not thefirst to study the opening of China for trade in the nineteenth century.This subject has been looked at by a number of authors(Mor,1926; Fairbank,1978),and the question parallels more recent papers by Bernhofen and Brown(2004,2005)on Japan’s opening of trade.Work on this period is inextricably linked to the fact that this trade came about through a quasi-colonial t-up impod by Western powers,reflecting China’s diminished posi-tion in the world during this period.In certain earlier writings,the foreign intrusion is en in an overwhelmingly negative light,and by implication,the foreign trade it generated was detrimental to Chine interests.The authors refer not only to opium addiction,but also to more general effects of foreign trade in destroying domestic industry.3A counterargument is that the foreign trade was small and the extent of foreign penetration
was very limited,cer-tainly insufficient to effectively counter the forces of China’s traditional culture and society,as well as government,to lead to a higher rate of economic devel-opment.4The implication of the argument being that foreign trade would have carried benefits to China,but did not becau foreign influence was ultimately very minor.In either ca,the authors rarely provide conclusive evidence on trade that supports the claims.5By relying on the detailed information on for-eign trade in the CMC archives,our analysis extends the largely descriptive accounts in Mor(1926)and Fairbank(1978).
3For example,Hou(1965)argues that foreign trade(and investment)ruined the domestic handi-craft industries,disrupted agriculture,and foreignfirms did not compete on a level playingfield with Chinefirms(p.1).According to this view,foreign imperialism in trade slowed down China’s economic development.
4Dernberger(1975)provides a summary of the views.
5More generally,the quantitative information that studies on historic trade of China prent tends to be he classic study by Remer,1926)and from the summaries by Yang and Hou (1931)and Hsiao(1974).
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Previous authors have examined the information collected by the CMC r-vice,although thus far most of this analysis has been undertaken by historians who have written in detail about many institutional aspects of the CMC(Brun-ero,2004,Van de Ven,2004;Bickers,2008).6In terms of economic analysis, Rawski(1970)has shown that even though treaty ports were opened to foreign merchants,Western traders continued to rely heavily on Chine middlemen (so-called compradors)to conduct their business in China.More recently, Mitchener and Yan(2010)have studied the role of foreign trade for China’s wages in the early twentieth century,arguing that a surge in trade around the First World War caud a decline in the relative skilled wage in China.7Our work differs,first,in that we cover a longer time period,from pre-1850until today,which allows us to place the CMC era into the broader context of eco-nomic development in China and elwhere.In addition,we contribute to a bet-ter understanding of the economics of trade intermediation and the role of new goods for the welfare gains of international trade by focusing also on the regio-nal and commodity dimensions of China’s foreign trade.8
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New goods are known to be important in driving overall trade growth (Hummels and Klenow,2005).Our analysis of the range of goods that is traded,or the extensive margin,is related to Feenstra(1994)and Broda and Weinstein(2006).The latter authors show that a large fraction of welfare gains from trade for the United States in the late twentieth century can be attributed to the availability of goods that could not be had before.9Little is known,how-ever,about the trade effects of new goods during historical periods.10To our knowledge,there has been no analysis of new goods and the ensuing welfare effects for China in this period.
A number of studies have recently analyd other key aspects of China’s for-eign trade regime since1978,highlighting the factors that are driving it as well 6Many of the works are related to a project at Bristol and Cambridge(www.bristol.ac.uk/ history/customs/),which has also started to make information on trade during the CMC period available on the Internet.Moreover,CMC information has helped to better understand how trade shaped the history of economies such as Taiwan(Ho,1978;Mizoguchi and Umemura,1988),as well as China’s role in the greater Asian context during the early twentieth century(Ko,1994, 2005).
7While mostly relying on information on prices from Hsiao(1974),Brandt(1989)also employs CMC data on trade volumes in his analysis of the integration of Chine regions with the South Asian rice
market from1870–1936.
8Antra`s and Costinot(2010),Blum et al.(2009),Ahn et al.(2010),as well as Feenstra and Hanson (2004)are recent analys of intermediation in international trade.
9The arrival of a new good through trade reduces its price from infinity to somethingfinite,and the welfare gains from this depend on whether clo substitutes were already available or not.
10Hersh and Voth(2009)estimate the combined gains from increas in tea,sugar,and tobacco consumption in England at more than10per cent between the years1600and1850.They employ information on foreign trade to estimate new good consumption,which is ud together with other data to back out preference parameters.
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CHINA’S FOREIGN TRADE857 as its impact on other economies(Branstetter and Lardy,2008;Amiti and Freund,2010;Brambilla et al.,2010;Hanson and Robertson,2010;Wang and Wei,2010).Becau the focus in the studies is on a relatively short period, they place less emphasis than we do on natural advantages and disadvantages across regions and the gradual ri and decline of countries i
n the world.11 Exceptions to this are Maddison(2007)and Chow and Shen(2005).12Our work differs from theirs in that although the era we examine is far earlier in time,we are actually able to provide an even more disaggregated picture of foreign trade of China by exploiting the primary CMC sources.
The remainder of the paper is as follows.The next ction ts the stage by summarising what is known facts about China’s early foreign trade as well as the events that led to the opening in the1840s.In Section3of the paper,we first describe the organisation of foreign trade in China before prenting key findings on the arrival and diffusion of new goods and trade intermediation in China during the treaty port era.A synthesis of China’s foreign trade in the post-1949era is provided in Section4,which emphasis putting China’s very recent trade growth into historical perspective.A summary as well as a discus-sion of China’s extraordinarily high level of trade openness today is provided in the concluding Section5.
2.CHINA’S FOREIGN TRADE BEFORE1842
China has been engaging in foreign trade since ancient times.Overland trade in luxury goods such as silk,slaves and spices took place with the Mediterranean along the famed Silk Road since around
1,000BC.In the fourth-andfifth-century CE,Chine junks appeared in Siam(Thailand), Ceylon(Sri Lanka)and India,and by the eighth century Canton(Guangzhou) had established itlf as the centre of agoing trade with the Arab merchants from the Persian Gulf.The majority of China’s early trade by the eleventh century was with relatively proximate countries,mostly in Asia.13Trade routes with Japan and Korea,as well as the Philippine Islands,were estab-lished by the twelfth century,and by the early1400s a Ming dynasty(1344–1644)admiral commandeered expeditions from China going west to as far as 11By showing that the relatively rich regions of China in the late twentieth century were already relatively advanced in the early eighteenth century,Keller and Shiue(2007)argue that the effect of the post-1978reforms can be easily overestimated due to natural advantages such as access to water transport.
12See also Lardy(1994,p.2)who discuss China’s contribution to world trade for most of the twentieth century.
13Interregional tradeflows over land and a connected China with South and Southeast Asia, Central Asia and the Islamic world around the eleventh century AD,according to Curtin(1984). See also Findlay and O’Rourke(2007).
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