I learned a good deal reading Ramon H. Myers’s essay “The World Depression and the Chinese Economy 1930-6” in Ian Brown’s The Economies of Africa and Asia in the Inter-war Depression. Here are a few of his points:
1. In the 1920s, per capita growth in China was probably around 0.33 percent a year, one percent a year in absolute terms. I would add the notion that the country already was on an explosive growth path does not seem borne out by these estimates.
2. The Chinese financial system at the time was quite free-wheeling and money flowed into China to facilitate the country’s 1915-1930 growth.
3. By the late 1920s, China’s exports were only about 2 to 3 percent of gdp.
4. The Japanese seized Manchuria 1931-32, and the region had been accounting for a significant portion of China’s industrial growth.
5. The loss of Manchuria excepted, Chinese internal growth rose about 11.6 percent a year across 1930-36. It seems the country just wasn’t hit that hard by the global Great Depression.
6. There was sustained deflation during 1931-1935; some of this ties in to complex developments in the silver market, as China was on a silver standard. Yet economic activity still expanded. Silver flowed out of the country, but there was a big boost in credit and “inside money.”
7. As an aside, had I mentioned that the Nanjing government only firmly controlled two provinces of the country as of 1935, with “minimal control” in eight others?
8. Shanghai grew throughout most of the 1930s, with exceptions for the Japanese attack and the Yangtse flood of 1931.
Myers’s conclusion that the Great Depression did not hit China so hard has been challenged (pdf), but so far his account is the most convincing I have found. China during the Great Depression remains an understudied topic.