#2991 - 3 Silk Sector - Chinese Economic History Since 1850

Most important export commodity for China and Japan

• France and Italy silk cloth production

Historically the technology transfer was towards Europe

Hand-reeled silk persisted in China despite partial transfer of European technology

• Higher transaction costs

• High learning effort

• High capital investment required

• Centralization required institutional and social changes

• Labour was cheap in East Asia anyway

Fundamental change only occurred after Sino-Japanese War

Four new features from Southern Europe

• Rigid-axis and cogwheel to more efficiently drive the belt adopted from China

• Additional twisting mechanism to cross silk threads dry

• Centralized steam boiler

• Mechanization

Uniformity of European style silk

• Demanded higher price

Meiji government promoted industrialization

• Promoted standardization movement of cocoon varieties

After 1900s began to deprive China of the raw-silk export market

• Has a traditional Zaguri raw-silk production system before Meiji

1500 water or steam powered filatures by 1895 and rapid diffusion of the filature system

Firth’s hypothesis on the time-sequence of adaptations in transplanting foreign culture (inc. tech.):

• Acceptance of new foreign tech proceeds organizations, institutions and beliefs

A 1/3^rd cheaper than European silk

By 1930s, exports were 3x that of China

First Western-style, steam-powered, silk-reeling factory, began 1860 in Shanghai

Jardine-Matheson adopted western techniques

Wrongly believed it would be easy to bring cocoons from the interior

Three main problems:

• Cost

  • Shanghai was still primitive

  • Equipment had to be built in HK and transported to Shanghai

  • Delays increased capital costs

• Labour force

  • Labour force had to be recruited and trained to European standards

  • Less troublesome than thought

• A regular supply of good quality cocoons had to be found

  • No investment allowed outside the treaty ports

  • Had to dry them in the countryside potential spoilage, costly, difficult for indigenous

Technologically successful, economically not so sure

Couldn’t operate in isolation from the traditional institutions and values of Chinese society

Western style factory management i.e. Sunday holidays, working day, better meals and housing conditions in dormitories than average rural conditions

“quality first” principle

First real steam filature in Japan, 1872

Adapted expensive French filature system

• Modifications to technology, marketing and institution

Problems:

• Shortage of workers

  • Prejudice and ignorance of Western culture and technology

    • Meiji undertook powerful enlightenment policies to remove prejudice

  • Social resistance to young girls’ migration under the traditional value system

Economic adaptions

• Subsequent factories were smaller

• Shifted to “quantity first”

  • Led to insufficient supply of cocoons

    • But bi-voltine silkworm varieties solved this

• More advanced financing e.g. joint-liability lending

Better infrastructure

Influenced by European style filatures in Vietnam

Adapted rather than adopted technology and methods

Cheaper than Shanghai

Relied on lineage and village organization

Used credit advances

Made a profit, and fetched higher...