More Tea in India, More Crimes in China

Abstract

Tea has been China's major export product since the 17 th century. This paper studies the effects of tea export decline on social instability in the late Qing Dynasty (1880-1894). The booming tea export of British India and Ceylon in the 1880s caused the decline of China's tea export to Britain, which serves as a natural experiment in our analysis. Using a panel data set of 266 prefectures in China, we find that compared to other areas, the tea-growing prefectures have more organized crimes, especially Huidang, which were clan-like quasi-blood underground organizations, widely known as secret societies. In particular, Huidang crimes increased nearly fivefold in tea-growing areas after the tea export decline. Our finding suggests that the loss of work opportunity was a crucial channel through which the negative shock on tea export impedes social stability. Moreover, we find that clan culture and state capacity are also important mechanisms for understanding the negative impacts.

Keywords: Tea Export, Social Stability, Organized Crimes, Work Opportunity F61, K42, N75