Comparison of Modernization Paths between China and Japan

China twice missed the opportunities of industrial revolution during the late Qing Dynasty, and fell behind Japan both in economic growth and modernization level. Faced with the historic opportunity of the third industrial revolution, China seized the first window of opportunity through opening-up and reform. However, how to seize the second window of opportunity provided by the new technological revolution to catch up in technologies and industries becomes the key issue for China in upgrading China’s economy and transitioning from "made in China" to "intelligent manufacturing in China." Based on theoretical models and numerical simulations, this paper summarizes and analyzes the different industrial and technological evolutionary patterns of China during the Modernization Movement in the Qing Dynasty and Japan during the Meiji Restoration. The main finding of this paper is that an economy can only expand its overall products in the most convenient way and maximize economic surplus when it chooses the appropriate technology which suites its own factor endowments for production. This implies that governments of late developing countries should focus on the structural upgrade of their factor endowments instead of purely pursuing advanced industries and technologies.