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date: 20 March 2019

Abstract and Keywords

This article discusses how the origins of the two Great Divergences — the early modern divergence when Europe embarked on industrialization while China did not, and the contemporary divergence created by China's economic dynamism and the relative decline of the West — can be explained in terms of the role of cities in economic development. It compares the rise of urban industry in England and later Europe in the nineteenth century, and then in China in the late twentieth century. It considers possible explanations, such as the growth of an engineering culture in the West, the rise of dynamic business elites, and state support for business including urban production and overseas trade. It emphasizes the importance of inputs from the rural economy, through transfers of surplus agrarian capital to the urban industrial sector, through the role of smaller towns as growth centres, and the importance of cheap workers from rural immigration.

Keywords: China, Europe, economic development, cities, urban industry, rural economy, rural immigration, cheap labour

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