Bottom-Up Industrialization in the People’s Republic of China: A Case Study of Industries Producing Small Things in Zhejiang

Abstract

This chapter examines the historical development of small things industries in the People’s Republic of China, focusing on the institutional constraints under the planned economy and the development process after the beginning of marketization reforms. A wave of socialist movements in the 1950s eliminated small businesses as well as the market itself, and resulted in serious shortages in small goods, whereas marketization reform allowed for the rebirth of small businesses; however, it was not long before product-quality issues emerged. By examining the case of the Yiwu Market, a large-scale wholesale market for consumer goods, this chapter shows that the crucial factors in the development of Yiwu as a center for the production of small things included the agglomeration of numerous small producers and buyers, operating with aggressive support by the local government. The chapter argues that small goods production and trade in Zhejiang should be seen as a bottom-up pattern of industrialization in Chinese light industry.