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This paper analyses the trajectories of handicraft cloth production in three major sub-regions of Jiangsu Province in the late nineteenth and early twentieth centuries. In contrast to traditional focus on the bankruptcy of rural handicrafts in the face of competition from the modern industry, it argues that the fate of handicrafts depended on the specific characteristics of each sub-regional economy. Thus in Song-Tai, handicraft weaving declined as labour was drawn off into modern industry. In Tong-Hai the availability of machine-spun yarn in the market enabled the development of a commercialised handicraft weaving sector. Finally, in Xu-Huai-Hai machine-spun yarn enabled the inhabitants to substitute their own subsistence handicraft production for cloth purchased from elsewhere. [ABSTRACT FROM AUTHOR]