In 1400, Western Europe and China had about the same literacy rates -about 5%. By 1700, a gaping leap had opened up between those literacy rates, only to close in the 1990s.
If one studies the Chinese character writing system, one is struck by how complex and inconsistent it is. One also notices how much simpler and less in number the oracle bone characters are relative to the character system as it existed in the 18th century. The only way, other than divine intervention to stop China from rising (cf., the Tower of Babel), to explain the growing complexity of Chinese characters over time is if writing Chinese characters were a form of exercise which, like all good exercise, increased fertility. The fact Chinese characters persisted in Korea and Japan and even more complex systems arose in Vietnam and the Western Xia dynasty is further confirmation that writing Chinese characters was likely to have increased writers’ fertility, and that alphabetic writing was simply less ergonomic than character writing. Nevertheless, the fundamental complexity of the Chinese character system kept full literacy down in China to ~5%, though partial literacy (which would have counted as full literacy with the simple alphabet in the West) was in 1800 somewhat higher than full literacy in Italy.
In contrast to Chinese characters, the Perso-Arabic script was dead simple and was the ultimate speed-writing script. As it was oriented right to left, men’s and doctors’ handwriting in the Perso-Arabic world is better than average. Nevertheless, unlike Chinese characters, the Perso-Arabic script insidiously reduced fertility via low back flexion, thus gradually reducing the population most prone to learning writing from 900 to 1900.
The golden mean between the complex and ergonomic Chinese script and the simple and anti-ergonomic Perso-Arabic script are the left to right writing systems in Europe and southeast Asia. Gaining literacy in the Latin script did reduce fertility -literacy was lower in 1200 than in 200 AD- but it was both insufficiently quickly written and did not select against literacy so much as to block the invention of the moveable type printing press after Europe’s economic recovery during the second half of the middle ages.
Though both China and Europe developed moveable type printing between 1000 and 1500, the simplicity of the alphabet resulted in a rapid rise in European literacy rates between 1500 and 1700 (meanwhile, Chinese literacy declined between 1200 and 1800, probably due to the rise of brushwriting reducing writers’ fertility advantage). In contrast, the audience for literature in the Perso-Arabic world was too small and scribal writing cheaper relative to the printing press so as to result in blocking the use of the printing press on any notable scale until the nineteenth century. Buddhist Southeast Asia had high literacy rates relative to China or the Perso-Arabic world for religious reasons, but technical skill there was, unlike in Germany, too low to create a cheap printing press.
The printing press in Europe also resulted in an explosion of vernacular literature -prior to it, both China and Europe had similar growth in vernacular literature relative to Latin/classical Chinese starting in the eighth century. Though China did have a vernacular literature in the 北京 dialect in the nineteenth century, its dispensing with classical Chinese as the most common form of scholarly writing took place rapidly among intellectuals in the 1920s, while Europe’s abandonment of Latin took place over a centuries long period from the Middle Ages to the mid-nineteenth century, as it was Europe which was first to progress in its movement from reliance on ancient texts to new ones, while the quick adoption of modern printing technology led to Chinese jumping into European-created modernity.
In short, exercise.