China’s Economic History

Why China’s Innovation Fell Behind Europe’s

Song Dynasty figurine of a man holding a compass. Public Domain.

Did you know, that the compass, gunpowder, paper, and the printing press, all history-changing technologies, were invented in China? Yet, the realization of their economic values happened in Europe, not in China. This is the story of the steep price that imperial China paid for the sake of stability and scale, a story that Communist China seems to be repeating now.

By Adel Aali, HbN host

Dr. Yasheng Huang of MIT’s Sloan School of Management, HbN’s guest for this subject, analyzes China’s colossal economic successes and gigantic failures (“gigantic” is his word) in the context of innovation, freedom of ideas, and diversity of ideologies. Similar to other countries, China’s economic success depends on the right balance between scope and scale, terms that Dr. Huang explains. But in most of China’s long history, this balance has tipped towards scale, with grave consequences for China’s economy and civilization.

In this episode, Dr. Huang discusses the following:

1. What new perspective does his book (see below) offer about China? Hint: EAST.
2. When was China’s golden age of innovation?
3. China’s civil service exam system was an opportunity ladder — similar to America’s rags-to-riches…