This essay examines some of the major institutional and structural characteristics of the Chinese domestic economy on the eve of the Opium War.1 As the title indicates, this is a thought piece. An underlying assumption is that the patterns of economic interaction that evolved in China during the late Ming and Qing were not simply representative of an early stage of modern development. Rather, they were the result of a combination of political, institutional, and geophysical factors unique to China. Their interaction determined to a large extent how Chinese people would make their living, organize their markets, and pool their resources. The introduction of Western capital, goods, technologies, and business practices changed the environment within which the workings of the domestic economy were played out. Many of the underlying structures, however, remained intact well into the twentieth century and are important in determining the way the economy of China operates today.