The 1930s saw some industrialization in China. However, it was impeded by conflicts between the Nationalist government in Nanjing, the Communist Party, and the remaining warlords after the Japanese invasion of Manchuria. In 1937, a skirmish between the National Revolutionary and the Imperial Japanese Army led to a full-scale invasion by Japan following the Second Sino-Japanese War.
A significant overproduction of agricultural goods during the Great Depression caused falling prices for China and increased imports (as agricultural commodities produced in western countries were “dumped” in China). China imported 21 million bushels of rice in 1931, compared with 12 million in 1928. Other imports increased even more. The amount of grain imported in 1932 was 15 million bushels, compared to 900,000 bushels in 1928. As a result of increased competition, China’s agricultural prices plummeted, and rural farmers’ incomes plummeted. In 1932, agricultural prices were 41% lower than in 1921. In some rural areas, incomes had fallen to 57 percent of what they were in 1931. Japan invaded China in 1937, and the resulting war devastated the country. The Japanese occupied most of the prosperous east coast, committing atrocities such as the Nanjing Massacre.
