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The Economic Consequences of the Opium War

Author

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  • Wolfgang Keller
  • Carol H. Shiue

Abstract

This paper employs new data to study the impact of Western colonial institutions on China’s economy during the 19th century. It is shown that trade and legal institutions in the treaty port areas accelerated industrialization and increased capital market efficiency. The former was driven by technology transfer and market access gains at the ports, while the latter was due to increased security through extraterritorial legal rule at the consular courts. Furthermore, a geographic spillover analysis demonstrates that even though the number of foreign places was relatively small, the Western impact was substantial because it radiated far from the ports and affected most of the country. At the same time, the West’s intervention harmed China’s economy by increasing protest activity organized by secret societies, thereby reducing Qing state capacity. A picture emerges according to which the West’s intervention had a major impact that is neither all-favorable nor all-unfavorable.

Suggested Citation

  • Wolfgang Keller & Carol H. Shiue, 2021. "The Economic Consequences of the Opium War," NBER Working Papers 29404, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:29404
    Note: DEV EFG ITI POL
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    Cited by:

    1. Laura Alfaro & Cathy Ge Bao & Maggie X. Chen & Junjie Hong & Claudia Steinwender, 2022. "Omnia Juncta in Uno: Foreign Powers and Trademark Protection in Shanghai’s Concession Era," NBER Working Papers 29721, National Bureau of Economic Research, Inc.
    2. An Huang & Paulo Santos & Russell Smyth, 2023. "Paddy and Prejudice: Evidence on the Agricultural Origins of Prejudice from China and 12 other Asian Societies," Monash Economics Working Papers 2023-02, Monash University, Department of Economics.

    More about this item

    JEL classification:

    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • N25 - Economic History - - Financial Markets and Institutions - - - Asia including Middle East
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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