China’s part in international commerce may have been relatively small, but its internal trade may have been as large, if not larger, than that of contemporary Europe.

The Song Dynasty might justly be considered the world’s first large-scale capitalist economy: land was privately owned, merchant families invested in joint-stock companies, international trade was open, harbors were improved, and Chinese ocean-based trade expanded throughout the Indian Ocean to East Africa and the Red Sea. A navy established in the

Pre-industrial China had reached a ‘high-level equilibrium’, a plateau of economic success. Its misfortune was that there was no incentive to climb any higher: the high-level equilibrium had become a trap.