This chapter provides an analysis of the structure and development of Chinese agriculture in the nineteenth century and its implications for the rest of the economy. It discusses the single rural handicraft in the nineteenth century. The agricultural sector of the Chinese economy in the last decades of the Ch'ing dynasty was characterized by a factor mix in which land and capital were in short supply and the superabundance of labour was subject to some diminishing returns. Handicraft and modern industries in late nineteenth-and early twentieth-century China were subservient to foreign capitalism. The economy of late-Ch'ing China was, at its given level of technology, characterized by a high degree of commercial development. Goods and traders moved extensively throughout the country and, to a limited extent, the domestic economy had developed links with the world market. In brief, the fiscal system of the central government like other aspects of its administration was quite superficial.