THE CHINESE ECONOMY Transitions and Growth Barry Naughton The MIT Press Cambridge, Massachusetts London, England ? 2007 Massachusetts Institute of Technology All rights reserved. No part of this book may be reproduced in any form by any electronic or mechanical means (including photocopying, recording, or information storage and retrieval) without permission in writing from the publisher. MIT Press books may be purchased at special quantity discounts for business or sales promo- tional use. For information, please e-mail special_******@ or write to Special Sales Department, The MIT Press, 55 Hayward Street, Cambridge, MA 02142. This book was set in Times Roman by SNP Best-set Typesetter Ltd., Hong Kong. Printed and bound in the United States of America. Library of Congress Cataloging-in-Publication Data Naughton, BarryThe Chinese economy : transitions and growth / Barry Naughton p. cm. Includes bibliographical references and index. ISBN-10: 0-262-14095-0—ISBN-13: 978-0-262-14095-9 (hc.: alk. paper) ISBN-10: 0-262-64064-3—ISBN-13: 978-0-262-64064-0 (pb.: alk. paper) 1. China—Economic policy. I. Title. 2006 —dc22 2006046840 ********** Acknowledgments xv INTRODUCTION 1 From Transition to Development 3 The Distance Traveled 4 The Dual Transition 5 China’s Growth Performance 6 ing a “Normal” Country 8 China to the Future 10 Using This Textbook 12 Bibliography 13 I LEGACIES AND SETTING 15 1 The Geographical Setting 17 Landforms 18 Climate and Water 20 Provinces and Regions 22 Mineral Resources 28 Conclusion: Regional Differentiation 29 Bibliography 31 2 The Chinese Economy Before 1949 33 The Traditional Chinese Economy, 1127–1911 34 High-Productivity Traditional Agriculture 34 mercialized Countryside 36 Sophisticated Institutions 36 Markets 37 Small-Scale, “Bottom-Heavy” Economy 37 Contents Crisis of the Tr