Political Institutions and China's Early Industrial Revolution, 1000 - 1300 A.D

During the millennium 250 B.C. to 750 A.D., China's long-run economic performance was characterized by a self-sufficient agrarian economy with per-capita GDP and population remaining more or less constant. In the mid-8th century AD, a major civil war initiated a transition away from a self-sufficient agrarian economy towards industrialization. Throughout China, local commercial markets appeared, developed and interconnected, creating national markets for some goods. Commerce and industry appeared on an unprecedented scale and the pace of technological innovation increased. These developments continued and accelerated during the 1000 – 1300 A.D. period, during which time per-capita GDP and population roughly doubled and China emerged as the world's technological leader. This raises an important question in political economy: “What gave rise to China's early Industrial Revolution of 1000 – 1300?” I argue that from the civil war period (755 – 763 A.D.) the political acceptance of regional military governors throughout China changed the power structure of Chinese society. This led to an important change in the property right system, protecting commercial and industrial interests, which gave rise to China's early Industrial Revolution