San José State University
Department of Economics
Thayer Watkins
Silicon Valley
& Tornado Alley

The Economic History of Manchuria

The core area of the historic Manchuria (the land of the Manchu's) was the lowland plain enclosed by mountains to the west, north and east but open to the sea on the south. The northern portion of this plain is drained by the Nanjiang (South River) and the Sungari River, a tributary of the Amur River (Heilongjiang: Black Dragon River). In the souther portion the Liaohe (Liao River), which drains directly into the Gulf of Chihli.

Although this plain was the core area of Manchu territory, the Manchus historically controlled a portion of northern Korea and the coastal area where the Russian city of Vladivostok (eastern fortress) is now located. Manchuria also included the Liao Peninsula which partially encloses the Gulf of Chihli.

The area which was the core area of Manchuria is now three provinces (Liaoning, Kirin and Heileongjiang) of the People's Republic of China. It is now called the Northeast (Beidong).

A bit of ethnic history is now necessary for following the economic history of the area. In very ancient times (1000 BCE) the region was occupied by the Tung-hu tribes. When the Chinese Empire was established c. 221 BCE it extended its influence into Manchuria. This Chinese Imperial influence continued up until about 900 AD. In 907 the Khitan tribe gained control of the area, but in 1115 AD another tribe, the Juchens, wrested control from the Khitans and became the dominant tribe in the area. Later with the rise of Temudjin (Genghis Khan: Great Leader) in 1234 the Juchens lost control to the Mongols.

The Mongols retained control until the 1500's when a Juchen leader, Nurgaci(also spelled Nurhachi) re-established Juchen control and created a second Juchen empire. In an attempt to forge a new greater Juchen tribal identity the name of the people was changed to Manchu.

In 1644, through a historical fiasco*, the Manchus captured Beijing, the capital of the Ming Empire, and thereby gained control of most of China, although it took until 1680 to make this effective. The empire established by the Manchus was the Qing (Ch'ing) Empire that lasted until 1911. It is said that the invading army which captured Beijing was made up of many tribes; the Manchus were only a small portion.

The ethnic affiliations of the Manchus are revealed by the linguistics of their language. Manchu is part of group called the Manchu-Tungus group. This group has vowel harmony which means the vowels are divided into two sets and a word contains only vowels belonging to the same set. The Manchu-Tungus group belongs to the Altaic language family. This family also includes Mongol and Turkish.

The Manchukuo Affair

In 1932 Japan took control of Manchuria and created the puppet state of Manchukuo on the basis that it was not part of China proper. Since China overthrew the Manchu Empire, reasoned the Japanese, an separate Manchu state was called for. Japan poured a great amount of industrial investment in Manchuquo and after World War II this area was the most heavily industrialized in China.

Investment in Manchuria Under Mao Zedong

Mao Zedong opted to put much of the investment resources into that area. But the operations required ongoing subsidization. Because of the large amounts of labor and capital involved the government had no choice but to provide the subsidies needed, but it did not give the plants the funds that were needed to update their equipment. This made it more difficult to compete and subsequently the Northeast became a rust belt. Japanese businesses offered the hope of joint ventures which would supply the necessary capital to update the equipment in the region. However the exuberant growth of South China left the Northeast as simply an area of industrial stagnation.

(To be continued.)

*The fiasco consisted of the following. In the 1640's the Manchus were repeatedly attacking the Chinese border area. The Ming Empire established fortifications in the border area which were effective in forestalling a Manchu invasion. The Ming emperor in Beijing sent the top Chinese general to the border area to fend off a new Manchu attack. While the general and his army were out of Beijing a warlord from north central China invaded Beijing. The warlord deposed the emperor and made himself emperor. The warlord thought the Chinese general would continue to protect the border and China for him just as he had for the old emperor. The Chinese general was outraged at the action of the warlord and instead of protecting him made an alliance with the Manchus. The joint force then marched on Beijing and deposed the warlord. The Manchus took control and adopted the Ming organizational structure for their empire but with about half of the top leadership positions given to Manchus.

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