CE final

CE final - Charles Ho Chinese Econ 1(1)Why the industrial...

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Charles Ho Chinese Econ 12/14/09 1. (1)Why the industrial revolution did not originate in China? What is the demand side explanation? What is the supply side explanation? After the seventeenth century, China began to lag farther and farther behind in technology compare with the rest of the world. Several hypotheses have been stated to explain the situation. First, those based on failures of demand for technology and those based on failures of supply of technology. Several arguments have brought out by the economists such as, inadequate capital, restricted markets, political hazards, and finally lack of entrepreneurship in China. However, the main cost is that unfavorable man to land ratio. Chinese family’s obsession with male heirs to extend the family has despite deteriorating economic conditions. The rising man-to-land ratio implied that labor became increasingly cheap and resources and capital increasingly expensive. Therefore, the rising man-to-land ratio implied a diminishing surplus per capita. As a result, China did not have a surplus to be tapped for sustained industrialization. Other explanation is that if technological change fails to take place, the problem does not stem from a lack of demand but from a failure on the supply side. What really distinguished the Industrial Revolution from other innovation is the sustained high and accelerating rates of technological innovation. Technological invention basically stem from experience, whereas in modern times, it mainly results from experiment cum science. However, for China’s a single production period an artisan or farmer can have only 1 trial, while an inventor can perform many trials by experiment. The lack of experiment and scientific knowledge is the other main reason for China to fail on the supply side of industrial revolution.
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2. (2)What are the fundamental geographic characteristics and constraints of the Chinese economy? China is big, rugged, and diverse within its own land. Most of China consists of hills, mountains, and high plateaus, broken by river valleys and a few plains and basins. Three most important rivers (Yellow river, Chang Jiang river, and Song Hua river) in China all flow from west to east in accord with the basic topography. This basic topographic type in China has created the perfect conditions for developing industry and agriculture. However, since China has only one seacoast, the occasional good harbors tend to be cut off from the inland regions. This is cost problem for China to transport products from the seacoast to
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This note was uploaded on 02/10/2011 for the course ECON 155 taught by Professor Jin during the Spring '11 term at USC.

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CE final - Charles Ho Chinese Econ 1(1)Why the industrial...

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