before the final expulsion of the imperialists in 1949. contemporary Chinese bistorians for baving progressively With the decline of the tea and silk trade,China's "crushed"and "exploited"domestic bandicraft industry exports became considerably more diversified-escaping the from the mid-nineteentb century onward is belied by the sort of restrictive dependence on the export of two or three actual state of the Chinese economy as late as tbe primary products which still plagues most Latin American and 1930's....Anyone wbo would claim that the Hunan or African nations.This diversification of exports,however,was Szecbwan peasant in the 1930's dressed in Naigaiwata not accomplished by a shift from the export of extractive cottons,smoked BAT cigarettes,and used Meiji sugar bas a commodities to the export of manufactures.In fact,between big case to prove.27 1913 and 1936,beverages,foodstuffs and raw materials increased from 46.5%to 60.5%of China's exports,while Is it,however,necessary to prove these propositions? Feuerwerker's own research has demonstrated the decline in manufactures and semi-manufactures declined from 50.9%to 39.5%.21 In effect,China's foreign trade was increasingly handicraft spinning.In addition,he has acknowledged.that conforming to that pattern so common to underdeveloped when handicraft weaving relies on yarn from foreign mills, nations:she was exporting products the demand for which is handicraft production becomes "ancillary to the mechanized relatively inclastic and likely to fall as manufactured factories," and "subservient to forcign capitalism." substitutes are developed.Thus,in the postwar years,an Handicraft workshops thus prove incapable of contributing to unblockaded China would have found her hog bristles replaced the development of an independent,self-sufficient national by plastics,her silk overwhelmed by synthetic fabrics,her tung economy..Furthermore,as we attempt to assess the impact of and linseed oil replaced by government-subsidized production foreign trade on socio-political developments in China,we in the U.S.,and her tin and tungsten replaced by lower grade should note the conclusions of Frederic Wakeman on South American ores which the U.S.learned to refine Kwangtung at the time of the Opium Wars:"...the rural efficiently in the course of war production.22 areas in which the decline of cottage industry seemed most Well before the 1950s,the terms of trade had turned marked were precisely those areas which were most against China.The net barter terms of trade(=price of imports antiforeign.It was almost as if the peasantry rationally blamed over price of exports,1913 here taken as 100)stood at 76.5 in their plight on foreign imports. The inescapable fact 1870 and had risen to 122.9 by 1935.23 What this meant,in remains that imperialism transformed a remarkably stable, effect,is that in 1935 China would have had to export 160% albeit"underdeveloped"Chinese economy into an increasingly as much in real goods to buy the same imports she got in unstable and dependent economy in which millions of peasants would experience displacement and deprivation 1870.Needless to say,the pattern of international trade prices which has prevailed since World War II would have produced a traceable to the vagaries of the international market.To such far greater deterioration in the Chinese terms of trade had she peasants-for whom one bad year could mean perpetual debt and poverty-there was little solace in the thought that the remained within the "Free World"trading system in the 1950s and'60s.24 textile industry was being mechanized,GNP was rising and “modernization”was taking place, If we turn from China's exports to her imports,we are immediately faced with the enormous question of their effect on handicraft production.Albert Feuerwerker's meticulous The effects of foreign investments in China were somewhat different from the effects of foreign trade.Foreign study of the cotton textile industry indicates that handicraft trade spinning of cotton yarn was severely crippled by foreign produced instability,while the very permanence of imports as early as 1910,suffering a 50%reduction from an capital investment produced a lasting impact on the structure of the Chinese economy.Both,however,made the Chinese estimated 4,883,381 tan average annual production for 1871-80 to 2,449,715 tan for 1901-10.Handicraft weaving economy more dependent on foreigners.Here it is perhaps (with foreign and domestic factory yarn)managed to hold its appropriate to reexamine the claim in the leading apologist own,but weaving could only absorb one-tenth of the two work on economic imperialism in China:"..foreign capital million man-years of labor released by the decline in was largely responsible for the development of whatever spinning.25 Furthermore,there was a tendency for weaving to economic modernization took place in China before 1937." concentrate in urban weaving shops,which made it an unlikely Quite obviously,this same proposition could be stated alternative source of income for peasants who used to spin at somewhat differently:the modern sector of the Chinese home in the winter months to supplement their meagre economy was under the domination of foreign capital.To be sure,this was not true of all segments of the industrial sector: earnings.Cotton spinning is the classic case of the crippled handicraft,but it is not the only one:Feuerwerker elsewhere smaller,labor-intensive,consumer goods industries were notes that "native iron and steel production in Hunan and generally left for Chinese capital to develop.In the areas where Kiangsi nearly disappeared by the end of the nineteenth foreigners concentrated,however,they overwhelmed all native century,"and of course Standard Oil's kerosene replaced competition.The key sectors of mining and transportation vegetable oil for lighting purposes.Obviously,in the absence were almost an exclusive foreign preserve.In 1920,99%of the of tariff autonomy,China was powerless to shield any of these pig iron,99%of the iron ore,and 76%of the coal mined by handicraft industries from the immediate and drastic impact of modern methods was extracted from foreign mines.In the same year,83%of the steamer tonnage cleared through the imports,or,for that matter,to reshape in any way the pattern of her foreign trade. Maritime Customs,and 78%of that on China's main internal Despite all this it is undoubtedly true,as Feuerwerker waterway,the Yangtze River,was in foreign bottoms.Foreign control of railways resulted largely from loans rather than contends,that direct investment,but according to one set of figures,foreign The simplistic indictment of "foreign capitalism"by some capital controlled 93%of China's railways in 1911,98%in 1927,and91%in1936.31 11• • • I before the final expulsion of the imperialists. in 1949. ., contemporary Chinese historians for having progressively With the decline of the tea and sdk trade, ChIna s "crushed" and "exploited" domestic handicraft industry exports became considerably more diversified-escaping the from the mid-nineteenth century onward is belied by the sort of restrictive dependence on the export of two or three actual state of the Chinese economy as late as tbe primary products which still plagues most Latin American and 1930's . ... Anyone who would claim that the Hunan or African nations. This diversification of exports, however, was Szechwan peasant in the 1930's dressed in Naigaiwata not accomplished by a shift from the export of extractive commodities to the export of manufactures. In fact, between 1913 and 1936, beverages, foodstuffs and raw materials increased from 46.5% to 60.S% of China's exports, while manufactures and semi-manufactures declined from SO.9% to 39.S%.21 In effect, China's foreign trade was increasingly conforming to that pattern so common to underdeve~ope~ nations: she was exporting products the demand for which IS relatively inelastic and likely to fall as manufactured substitutes are developed, Thus, in the postwar years, an unblockaded China would have found her hog bristles replaced by plastics, her silk overwhelmed by syntheti~ ~abrics, her t~ng and linseed oil replaced by government-subsldlzed production in the U.S., and her tin and tungsten replaced by lower grade South American ores which the U.S. learned to refine efficiently in the course of war production. 22 Well before the 19S0s, the terms of trade had turned against China. The net barter terms of trade (=price of impo~s over price of exports, 1913 here taken as 100) stood at 76.5 In 1870 and had risen to 122.9 by 1935. 23 What this meant, in effect, is that in 1935 China would have had to export 160% as much in real goods to buy the same imports she got in 1870. Needless to say, the pattern of international trade prices which has prevailed since World War II would have produced a far greater deterioration in the Chinese: terms of ~ade had she remained within the "Free World" trading system ID the 19S0s and '60s. 24 If we tum from China's exports to her imports, we are immediately faced with the enormous question of their effect on handicraft production. Albert Feuerwerker's meticulous study of the cotton textile industry indicates that handicraft spinning of cotton yarn was severely crippled by foreign imports as early as 1910, suffering a SO% reduction from an estimated 4,883,381 tan average annual production for 1871-80 to 2,449,71S tan for 1901-10. Handicraft weaving (with foreign and domestic factory yarn) managed to hold its own, but weaving CQuid only absorb one-tenth of t~e ~o million man-years of labor released by the decline In spinning.25 Furthermore, there was a tendency for weaving to concentrate in urban weaving shops, which made it an unlikely alternative source of income for peasants who used to spin at home in the winter months to supplement their meagre earnings. Cotton spinning is the classic case of the crippled handicraft, but it is not the only one: Feuerwerker elsewhere notes that "native iron and steel production in Hunan and Kiangsi nearly disappeared by the end of the nineteenth century,,,26 and of course Standard Oil's kerosene replaced vegetable oil for lighting purposes. Obviously, in the absence of tariff autonomy, China was powerless to shield any of these handicraft industries from the immediate and drastic impact of the imports, or, for that matter, to reshape in any way the pattern of her foreign trade. Despite all this it is undoubtedly true, as Feuerwerker contends, that The simplistic indictment of "foreign capitalism" by some cottons, smoked BA T cigarettes, and used Meiji sugar has a b ' 27 tg case to prove. I, Is it, however, necessary to prove these propositions? r Feuerwerker's own research has demonstrated the decline in ! handicraft spinning. In addition, he has acknowledged ,that I when handicraft weaving relies on yarn from foreign mills, I handicraft production becomes "ancillary to the mechanized factories," and "subservient to foreign capitalism." 28 Handicraft workshops thus prove incapable of contributing to I the development of an independent, self-sufficient national economy,. Furthermore, as we attempt to assess the impact of foreign trade on socio-political developments in China, we should note the conclusions of Frederic Wakeman on Kwangtung at the time of the Opium Wars: ..... the rural areas in which the decline of cottage industry seemed most marked were precisely those areas which were most antiforeign. It was almost as if the peasantry rationally blamed their plight on foreign imports,,,29 The inescapable fact remains that imperialism transformed a remarkably stable, albeit "underdeveloped" Chinese economy into an increasingly unstable and dependent economy in which millions of peasants would experience displacement and deprivation traceable to the vagaries of the international market. To such peasants-for whom one bad year could mean perpetual debt and poverty-there was little solace in the thought that the textile industry was being mechanized, GNP was rising and "modernization" was taking place. The effects of foreign investments in China were somewhat different from the effects of foreign trade, Foreign trade produced instability, while the very permanence of capital investment produced a lasting impact on the stru~ture of the Chinese economy. Both, however, made the ChInese economy more dependent on foreigners. Here it is perhaps appropriate to reexamine the claim in the leadin~ apolo~ist work on economic imperialism in China: " ... foretgn capital was largely responsible for the development of whatever economic modernization took place in China before 1937,,,30 Quite obviously, this same proposition could be stated somewhat differently: the modern sector of the Chinese economy was under the domination of foreign capital. To be sure, this was not true of all segments of the industrial sector: smaller, labor-intensive, consumer goods industries were generally left for Chinese capital to develop. In the areas wh:re foreigners concentrated, however, they overwhelmed all native competition. The key sectors of mining and transportation were almost an exclusive foreign preserve. In 1920,99% of the pig iron, 99% of the iron ore, and 76% of the coal mined by modern methods was extracted from foreign mines. In the same year, 83% of the steamer tonnage cleared through Maritime Customs, and 78% of that on China's main internal waterway, the Yangtze River, was in foreign bottoms. Foreign control of railways resulted largely from loans rather than direct investment, but according to one set of figures, foreign capital controlled 93% of China's railways in 1911, 98% in 1927, and 91% in 1936. 31 I I