A study of the impact of the 1930s World Depression on Southwest China intersects with two major controversies in modern Chinese economic history. First, there is still substantial disagreement over the severity of the impact of the Depression on China. The ‘traditional’ interpretation inside China has focused on the ‘bankruptcy’ of the economy in the 1930s (of which the Depression was one but not the only cause). While many aspects of the ‘bankruptcy’ and ‘stagnation’ theses have more recently been discarded or modified by Chinese scholars, recognition is still made of the gravity of the crisis of the 1930s: China's leading historian of its modern economy, Wu Chengming, writes in the third volume of the History of Chinese Capitalism: ‘The economic crisis of 1932–1935 was, with the exception of the wars of invasion launched by foreign countries, the single most severe blow to the Chinese economy’.