The 1930s Depression in China

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The economic depression of the 1930s had a terrible impact on the western world – but did it also have the same impact in China?

Studies of China during the Great Depression have been rather controversial in nature. Some scholars found that the ‘Bankruptcy’ of the country’s economy was a direct result of the crash in the West, others that it was coincidental because the Chinese economy was only weakly linked to the global economy at that time and was suffering from other ills, not least of which were the prospect of Japanese invasion, Civil War and all kinds of social disruption. A third line of thought argues that the Chinese economy then, as to some extent is true now, actually consists of more than economic area which are linked together by virtue of being controlled by the same government, Consequently, the coastal region was involved in international trade; the central plains region was involved primarily in agriculture and industry. Other regions were anterior to these more powerful regions; one such anterior region was the south-west of China, bordering the highlands of Tibet in the south and the deserts and Steppes of Central Asia in the west. This area had completely different economic characteristics to either the coastal region and the central plains, at least so it has been argued. It also had its own system based on relations with is neighbours and with riverine transportation and trade based on the River Mekong, which rose in Tibet and passed through Yunnan Province and on to the sea via Laos, Burma, Siam, Cambodia and Vietnam.

In some ways, it is political ideology which determines how economic analysis takes place; certainly this has been true in China since the victory of the Chinese Communist Party in 1947. However, it seems to be true that all economics takes place against a background of dogma, no matter what the date or what the country in which it takes place. Consequently, interpretation of the same set of data by economists operating under a different set of beliefs will produce different conclusions. In some cases, a consensus of opinion will mount, although this is far from certain to happen. What is the truth in the case of China? It is certainly true that many people suffered during this period – although many people have suffered throughout the history of the country without there needing to be the imposition of external sources. The reason was weakened demand for the commodities that were produced for internal or external export by the people of Southwest China – there was far less industrial development then than there is today – and millions of people depended on silk. As war, famine and depression (the reader can determine the importance of these factors for herself) reduced demand for silk, economic depression settled on Southwest China. It then spread further, as depressions are wont to do.