Owing to the development of global history in recent decades, the idea of the West as the standard by which to consider economic development in other parts of the world has been abandoned.

In his studies, Kenneth Pomeranz emphasised the similarities in the living standards that existed in the core region of East Asia and Northwest Europe until the beginning of the nineteenth century. He concludes that the reasons for the great divergence between East Asia and Northwest Europe had to do with the regions' access to coal mines and the New World. His studies stimulated comparisons between East Asian countries, such as China, India, and Japan, with Northwest Europe using different economic indicators.

However, these studies do not adequately explain the reason for the “small divergence” between China and Japan after the mid-nineteenth century. There were no significant differences in the living standards or real wages in the core regions of China and Japan until late in the century. Because of the development of transportation technology during the 1800s, the location of coalmines cannot explain the difference between the two countries. Therefore, it is important to examine the institutional background for the “small divergence” between China and Japan.