The Growth and Decline of the Modern Sector and the Merchant Class in Imperial China

Abstract This paper offers an explanation of why, in Imperial C hina, the merchant class expanded and the economy modernized up to the 13th century, and why it entered into decline from the 14th century onward. The modernization of C hina required the accumulation of public capital and the building of good institutions, upon which a vibrant class of merchants and entrepreneurs could gradually emerge. This class contributed to the enrichment of …