A Pre-Capitalist World System: The Soybean Trade between Manchuria and the Lower Yangtze Valley, 1700–1900

The conventional view has been that capitalism emerged in Western Europe from the long 16th century together with the rise of a world system. Enabled and sustained by long-distance trade of bulk goods, this world system centered on Europe and consisted of multiple cultures and polities. As the core of this system, Western Europe underwent capital accumulation by exporting profitable manufactured goods in exchange for cheap raw material produced periphery and thus extracting the surplus. Meanwhile, it is widely assumed that China failed to breed capitalism before the arrival of the western merchants because there was no such system in East Asia. I challenge the validity of this view and argue that a similar “world system” characterized by geographical labor division and long-distance trade of bulk goods also existed in late imperial China. There was also an exchange of manufactured goods with raw materials between the core and peripheral regions in this Chinese world system. The soybean trade between Manchuria and the Lower Yangtze Valley in the 18th and 19th centuries perfectly illustrates this Chinese world system. From the seventeenth century, peasants in the Yangzi delta adopted soybean as a high-quality fertilizer in paddy fields. To provide sufficient fertilizer, a long-distance soybean trade between Manchuria and the Yangzi delta gradually emerged from the eighteenth century onwards. Thousands of tons of soybeans were transported by sea from Manchuria to the Yangzi delta every year during these two centuries. I argue that this Chinese world system could not lead to sustainable capital accumulation because it lacked the critical features of the capitalist world system, such as wage gaps and price gaps between the core and periphery. In the capitalist world system, the wages and prices in the core are significantly higher than those in the periphery, thus allowing capitalists in core to outsource low-profit activities to the periphery to save cost (this is also why the supply chain was moved from developed countries to developing and underdeveloped countries in the globalization of the late 20th century). Disagree with the conventional wisdom that assumes these gaps to be a natural consequence of economic development, my research proves that economic prosperity in the core of the Chinese world system failed to create gaps in wage and price, and the absence of the gaps made the core in the Chinese world system unable to extract surplus through long-distance trade with the periphery.