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Midterm Exam
Economics 5420/6420, Spring 2009
Total: 30 points (15 points for each question)
1. As late as the early 19th Century, China remained the world’s largest territorial economy and
accounted for one-third of world GDP. However, modern capitalism first emerged in Western Europe
rather than China and the rest of Asia. Based on lecture notes and Arrighi’s Chapter 11, answer the
following questions and discuss the historical roots of the great divergence between China and the West:
(a) According to Giovanni Arrighi, from the 14th Century to the 18th Century, East Asia enjoyed five
hundred years’ peace. Explain the East Asian tribute-trade system. How was the East Asian inter-state
system different from the Western European inter-state system?
(b) Giovanni Arrighi refers to the Chinese economy before the 19th Century as “a non-capitalist market
economy”. How was China’s non-capitalist market economy different from a capitalist market economy?
Discuss the essential distinctions between capitalism and non-capitalism, and why capitalism emerged in
Western Europe rather than in China.
Answer Keys:
(a) East Asian tribute trade system: China granted imperial titles, “gifts”, and military protection to
vassal states; in return for “tributes” and political allegiance (2.5 points); East Asia: imbalance of
power and dominance of the Chinese empire (2.5 points); Western Europe: competition between
several states of approximately equal size and power (2.5 points).
(b) Capitalism: inherent drive for capital accumulation and overseas expansion; Non-capitalism: lack
of the drive (2.5 points); Western Europe: inter-state competition drives the states to support
capitalists and promote capital accumulation (2.5 points); China: central empire repressed
merchant capitalist activities (2.5 points).
2. From the mid-19th Century to the mid-20th Century, China was reduced to a peripheral member of the
capitalist world system and one of the poorest countries in the world. Different social classes/groups
made successive attempts to reverse China’s historical decline but failed. These failures paved way for
the victory of the Communist Party, based on the massive mobilization of the peasants and workers.
Based on the lecture notes, answer the following questions:
(a) Discuss the Taiping Rebellion, Westernization Movement, and the 1911 Revolution. Explain the main
social group or class behind each of them and discuss why they failed to reverse China’s historical decline.
(b) Two historical events (the Russian Revolution and the May Fourth Movement in 1919) played a
crucial role in the rise of the Chinese communism. Discuss the historical background behind Soviet
Russia’s decision to assist the Chinese revolution. Explain the May Fourth Movement and its historical
significance.
Answer Keys:
(a) Taiping Rebellion: peasant rebellion in the mid-19th century; defeated by the joint force of Qing
Empire and Western imperialism (2.5 points); Westernization Movement: a program of military
modernization undertaken by the Qing government and provincial warlords; unable to resist the
emerging Japanese imperialism (2.5 points); 1911 Revolution: a revolution led by the national
bourgeoisie and overseas Chinese communities; detached from the peasant masses and had no
access to military power and financial resources (2.5 points).
(b) Soviet Russia: after the failure of the German Revolution, Soviet Russia championed colonial
people’s anti-imperialist struggle to break international isolation (2.5 points); May Fourth
Movement: Chinese students and workers protested Western Powers’ decision to transfer German
interests to Japan after WWI (2.5 points); Historical Significance: large sections of the Chinese
intellectuals became disillusioned with the West and were attracted to Marxism-Leninism (2.5
points).