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Week 5 Reading Debin Ma Between Cottage And Factory Notes

History And Economics Notes > Chinese Economic History Since 1850 Notes

This is an extract of our Week 5 Reading Debin Ma Between Cottage And Factory document, which we sell as part of our Chinese Economic History Since 1850 Notes collection written by the top tier of London School Of Economics And Political Science students.

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Topic 5: Reading - Between Cottage and Factory (Debin Ma 2005)

"Between Cottage and Factory" (Debin Ma 2005) Introduction

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Contrasting levels of performance between Chinese and Japanese silk-reeling directly linked to differential decline in barriers to learning and transaction costs o Due to divergent political and economic changes Silk was the leading export in Japan and China between 1850 and 1930 (Yamazawa and Yamamoto 1979) Japan rapidly overtook Chinese raw silk production during their time of modernization around the turn of the 20 th century o China had historically been the leader in silk production Chinese silk was favoured due to: o Geography o Factor endowments o Global reputation Market for sericulture was free and integrated

Stylized Facts and Framework

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Chinese technology for sericulture moved to Southern Europe Then Italian and French innovated subtle changes that led to them being world leaders These innovations came back to East Asia around 1850 allowing China and Japan to once again take the lead 4 new features came from Southern Europe o 1) Rigid-axis and cogwheel to more efficiently drive the belt that had been adopted from China o 2) Design of an additional twisting mechanism to cross silk threads dry
? Allowing for higher quality thread (Zanier 1994) o 3) Use of a centralized steam boiler
? The most important innovation from Europe o 4) Mechanization The last two innovations were more difficult to implement o Led themselves to factory style production o Silk-reeling was a relatively small scale operation
? Dispersed locations
? Low capital intensity European style silk became popular due to evenness and uniformity o Demanded a higher price than traditional hand-reeled silk (up to 40% more) (Fujino et al. 1979) Even by 1920, machine reeled silk still only accounted for half of silk exports from Shanghai Why did hand-reeled silk persist in China?
Factory based production results in higher transaction costs o Higher operating costs (marketing, distribution, procurement etc.)

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