D e v e Development Centre Studies lop Development Centre Studies m e Chinese Economic Performance in the Long Run n t C Chinese Economic e SECOND EDITION, REVISED AND UPDATED n tr Performance in the Long Run e 960-2030 AD S t u This book is unique in its depth of perspective. It uses a comparative approach to explain why China’s role in the d SECOND EDITION, REVISED AND UPDATED world economy has changed so dramatically in the last thousand years. It concludes that China is likely to resume its ie s natural role as the world’s largest economy by the year 2015, thus regaining the position it had held until 1890. 960-2030 AD The study provides a major reassessment of the scale and scope of China’s resurgence over the past half century, employing quantitative measurement techniques which are standard practice in OECD countries. A dynamic link (StatLink) is provided for each table and graph, which directs the user to a web page where the Angus Maddison corresponding data are available in Excel® format. C “This second edition is a very impressive and important contribution to a subject that has deep significance h for the world economy.” Professor Lawrence Klein, Nobel Laureate. in e s “The book is a must for anyone who wants to understand the past and the future of the Chinese economy.” e E Justin Yifu Lin, Founding Director, China Center for Economic Research, Peking University. c o “A welcome update to a dazzling essay.” Nicholas Eberstadt, American Enterprise Institute. n o m “This review of a millenium of Chinese economic history and its implications for the future of China and ic the world is a remarkable achievement. A must read for anyone interested in China.” Dwight H. Perkins, P Harvard University. e r f o “A great masterpiece in the field of economic history, the shoulders of a giant on which new generations r m of scholars from all over the world will stand. We Chinese scholars will benefit as greatly from this second a edition as we have from the first.” Li Bozhong, Professor of History, Tsinghua University, Beijing. n c e in t h Angus Maddison is Emeritus Professor of Economic Growth and Development at the e University of Groningen. He held a number of senior posts at OEEC and OECD between L o 1953 and 1978, and has been a policy advisor to governments in Brazil, Ghana, Greece, n g Mexico and Pakistan. He is the author of 20 books on the long run performance of nations, R and their interactions within the world economy. He has built up an international network u n oAfm secrhicoalanr sA wcaodrkeimngy ionf tAhrists fi aenldd. SHcei eisn ac ef,e lalonwd aonf thhoen Borraitrisyh f eAllcoawd eomf Sy,e alw myne mCboeller goef ,t he S E Cambridge. C O N D E D IT The full text of this book is available on line via these links: IO N www.sourceoecd.org/development/9789264037625 : 9 www.sourceoecd.org/emergingeconomies/9789264037625 6 0 www.sourceoecd.org/generaleconomics/9789264037625 -2 0 Those with access to all OECD books on line should use this link: 30 www.sourceoecd.org/9789264037625 A D SourceOECD is the OECD’s online library of books, periodicals and statistical databases. For more information about this award-winning service and free trials ask your librarian, or write to us at [email protected]. ISBN 978-92-64-03762-5 -:HSTCQE=UX\[WZ: 41 2007 09 1 P ����������������������� Faux-titre.fm Page 1 Tuesday, September 25, 2007 12:22 PM Development Centre Studies Chinese Economic Performance in the Long Run SECOND EDITION, REVISED AND UPDATED: 960-2030 AD DEVELOPMENT CENTRE OF THE ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT Faux-titre.fm Page 2 Tuesday, September 18, 2007 10:47 AM ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT The OECD is a unique forum where the governments of 30 democracies work together to address the economic, social and environmental challenges of globalisation. The OECD is also at the forefront of efforts to understand and to help governments respond to new developments and concerns, such as corporate governance, the information economy and the challenges of an ageing population. The Organisation provides a setting where governments can compare policy experiences, seek answers to common problems, identify good practice and work to co-ordinate domestic and international policies. The OECD member countries are: Australia, Austria, Belgium, Canada, the Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Korea, Luxembourg, Mexico, the Netherlands, New Zealand, Norway, Poland, Portugal, the Slovak Republic, Spain, Sweden, Switzerland, Turkey, the United Kingdom and the United States. The Commission of the European Communities takes part in the work of the OECD. OECD Publishing disseminates widely the results of the Organisation’s statistics gathering and research on economic, social and environmental issues, as well as the conventions, guidelines and standards agreed by its members. The opinions expressed and arguments employed herein do not necessarily reflect the official views of the Organisation, the OECD Development Centre or of the governments of their member countries. Also available in French under the title: L’économie chinoise : Une perspective historique DEUXIÈME ÉDITION, RÉVISÉE ET MISE À JOUR : 960-2030 Corrigenda to OECD publications may be found on line at: www.oecd.org/publishing/corrigenda. © OECD 2007 No reproduction, copy, transmission or translation of this publication may be made without written permission. Applications should be sent to OECD Publishing [email protected] or by fax 33145249930. Permission to photocopy a portion of this work should be addressed to the Centre français d’exploitation du droit de copie (CFC), 20, rue des Grands-Augustins, 75006 Paris, France, fax 33146346719, [email protected] or (for US only) to Copyright Clearance Center (CCC), 222 Rosewood Drive, Danvers, MA 01923, USA, fax 19786468600, [email protected]. Table of Contents THE DEVELOPMENT CENTRE The Development Centre of the Organisation for Economic Co-operation and Development was established by decision of the OECD Council on 23October 1962 and comprises 22 member countries of the OECD: Austria, Belgium, the Czech Republic, Finland, France, Germany, Greece, Iceland, Ireland, Italy, Korea, Luxembourg, Mexico, the Netherlands, Norway, Portugal, Slovak Republic, Spain, Sweden, Switzerland, Turkey and the United Kingdom as well as Brazil since March 1994, Chile since November 1998, India since February 2001, Romania since October 2004, Thailand since March 2005 and South Africa since May 2006. The Commission of the European Communities also takes part in the Centre’s Governing Board. The Development Centre, whose membership is open to both OECD and non-OECD countries, occupies a unique place within the OECD and in the international community. Members finance the Centre and serve on its Governing Board, which sets the biennial work programme and oversees its implementation. The Centre links OECD members with developing and emerging economies and fosters debate and discussion to seek creative policy solutions to emerging global issues and development challenges. Participants in Centre events are invited in their personal capacity. A small core of staff works with experts and institutions from the OECD and partner countries to fulfil the Centre’s work programme. The results are discussed in informal expert and policy dialogue meetings, and are published in a range of high-quality products for the research and policy communities. The Centre’s Study Series presents in-depth analyses of major development issues. Policy Briefs and Policy Insights summarise major conclusions for policy makers; Working Papers deal with the more technical aspects of the Centre’s work. For an overview of the Centre’s activities, please see www.oecd.org/dev 3 ISBN: 978-92-64-03762-5© OECD2007 Chinese Econonomic Performance in the Long Run: 960–2030 AD Foreword When historians look back at our period, it is likely that few developments will appear quite so striking as the economic emergence of China. When those historians step back a bit further, though, they will see that this was not an emergence, but a re-emergence. China may well be on course to become the world’s largest economy, but it has held that title before – little more than a hundred years ago. Our knowledge of China’s long-term economic development is based in large part on the work of the author of this book, Angus Maddison. In a series of remarkable studies over the years, Mr. Maddison has traced the course of China and the world’s economy over the past 2000 years. This is a staggering intellectual achievement, and one with which the OECD is proud to be associated. His work has deepened immeasurably our understanding of the long-term growth of the global economy–the challenges that were met and the opportunities that were missed. The world faces a new set of economic opportunities and challenges, and China lies at the heart of them. Years of phenomenal growth have made China one of the engines of the global economy, bringing great benefits: the lives of millions of Chinese have been transformed, providing them with new opportunities for work, travel and personal development. But there are challenges that need to be addressed if China is to continue on this growth path. They include increasing inequality in income distribution; regional disparities; population ageing; environmental degradation and impediments to innovation. Yet, by overcoming those, the Chinese economy will provide the foundation to future prosperity and wellbeing of its population. In recent years, OECD has worked ever more closely with China to examine issues such as these, sharing insights we have gained from our member countries and learning from the extraordinary experience of this country. Our analysis has focused on issues such as governance, the economy, agriculture, innovation and environmental performance, as well as its growing economic relationships with countries in Africa and South America. Now, as this book – the 2nd edition of Chinese Economic Performance in the Long Run – goes to press, OECD is beginning a new phase of our relationship, a process we call “enhanced engagement”. A deepening of our ties with China is indeed essential if OECD is to continue to play its role in developing responses to global policy challenges. To prepare for where we are going, of course, we must first understand from where we have come. Thanks to Angus Maddison, we have never been better equipped to do so. Angel Gurría Secretary–General of the OECD September 2007 ISBN: 978-92-64-03762-5© OECD2007 4 Table of Contents Acknowledgements I was very fortunate to have Chinese friends — Gai Jianling, Meng Xin, Ren Ruoen, Wang Ziaolu, Harry X. Wu, Xu Xianchun and Yue Ximing who were willing to help in interpreting Chinese language material. I am grateful to Michèle Fleury–Brousse, Remco Kouwenhoven, Boon Lee, Peter van Mulligen, Aparna Rao and Ly Na Tang Dollon for help in statistical processing, to Sheila Lionet for her skill and patience in typesetting a very difficult manuscript and Michèle Girard for bibliographical help. The Food and Agriculture Organization was kind enough to provide access to its data files on Chinese agricultural output. Graeme Snooks and Prasada Rao were very generous in providing comments and hospitality when I visited their universities. I received useful comments from Derek Blades, Pierre van der Eng, David Henderson, Peter Nolan, Eddy Szirmai, Victor Urquidi, Donald Wagner and from participants in seminars in the Australian National University, CEPII, Griffith University, the Hong Kong University of Science and Technology, Melbourne Business School, the University of New England, Peking University, the Reserve Bank of Australia, the School of Oriental and African Studies, the Oxford Centre for Chinese Studies, the European Historical Economics meeting in Montecatini Terme, an SSB–OECD Workshop on National Accounts and a seminar in Beijing organised by the OECD Development Centre and the Institute of Industry and Techno–economics of the Chinese State Planning Commission. My biggest debt is to my wife, Penelope Maddison, for continuous encouragement, sustained moral and material support. (cid:144) (cid:144) (cid:144) The second edition of this book was made possible by a generous financial contribution from the Government of the Czech Republic to which the Development Centre expresses its gratitude. 5 ISBN: 978-92-64-03762-5© OECD2007 Chinese Econonomic Performance in the Long Run: 960–2030 AD Table of Contents Foreword by the Secretary-General of the OECD ...........................................................................................4 Acknowledgements........................................................................................................................................5 Preface by Javier Santiso...............................................................................................................................11 Author’s Prelude to the Second Edition........................................................................................................13 Summary and Conclusions...........................................................................................................................15 Chapter 1 Intensive and Extensive Growth in Imperial China..................................................................23 Chapter 2 Economic Decline and External Humiliation, 1820–1949......................................................43 Chapter 3 Dynamics of Development in the New China.........................................................................59 Chapter 4 Problems and Prospects: The Outlook for China and the World Economy, 2003–2030..........93 Appendix A Performance in Farming, Fishery, Forestry and Agricultural Sidelines, China 1933–95..........105 Appendix B Industrial Performance, China 1913–2003............................................................................143 Appendix C Growth and Level of Chinese Gross Domestic Product.........................................................149 Appendix D Population and Employment.................................................................................................165 Appendix E Foreign Trade........................................................................................................................173 Appendix F People and Places in Pinyin and Wade–Giles.......................................................................177 Maps .............................................................................................................................................181 Bibliography .............................................................................................................................................183 List of Chapter Tables, Figures and Box Table 1.1 Chinese Imperial Dynasties and Capital Cities........................................................................24 Table 1.2 Rough Comparative Estimates of the Population of China, Europe, India, Japan and World, 1–2003 AD ............................................................................................................................24 Table 1.3 Levels of Chinese and European GDP Per Capita, 1–1700 AD................................................29 Table 1.4 Land Use and Population in China and Other Parts of the World, 1993..................................32 ISBN: 978-92-64-03762-5© OECD2007 6 Table of Contents Table 1.5a Dated Irrigation Works by Dynasty .........................................................................................34 Table 1.5b Irrigated Area, 1400–1995......................................................................................................34 Table 1.6 Major Magnitudes in Chinese Farming, 1400–1952 ...............................................................37 Table 1.7 Rozman’s Urban Ratios for China from T’ang to Later Ch’ing..................................................39 Table 1.8 De Vries’ Estimates of Urban Population of Europe, 1000–1800 AD......................................40 Table 2.1 Comparative Levels of Economic Performance, China and Other Major Parts of the World Economy, 1700–2003........................................................................................44 Table 2.2a Shares of World GDP, 1700–2003..........................................................................................44 Table 2.2b Rates of Growth of World GDP, 1700–2003...........................................................................44 Table 2.2c Rates of Growth of World Per Capita GDP, 1700–2003..........................................................44 Table 2.3 Population by Province, China 1819–1953 ............................................................................51 Table 2.4 Exports Per Capita, China, India and Japan, 1850–2003.........................................................54 Table 2.5 Structure of Chinese GDP in 1933 Prices, 1890–1952 ...........................................................54 Table 2.6 Length of Railway Lines in Service, 1870–1995......................................................................56 Table 2.7 Stock of Direct Foreign Investment, China, 1902–36..............................................................56 Table 2.8 Leading Items in Chinese Commodity Trade, 1937.................................................................56 Table 3.1 Growth of GDP, by Sector, at Constant Prices, China 1890–2003...........................................60 Table 3.2 Structure of Chinese GDP, 1890–2003...................................................................................60 Table 3.3 China’s Geopolitical Standing, 1820–2003.............................................................................60 Table 3.4 Comparative Growth Performance, 14 Countries, 1913–2003................................................62 Table 3.5 Comparative Levels of Economic Performance, 14 Countries, 2003–06..................................64 Table 3.6 Vital Statistics, Labour Input and Education Levels, China 1952–2003....................................65 Table 3.7 Student Enrolment by Level of Education, China 1930s to 2005.............................................66 Table 3.8 Years of Education Per Person Aged 15–64, Ten Countries, 1950–92......................................66 Table 3.9 Basic Growth Accounts, China, Japan, South Korea and the United States, 1952–2003..........68 Table 3.10 Indicators of Sectoral Growth Performance, China 1952–2003...............................................70 Table 3.11 Changes in Economic Structure, China 1952–2003................................................................70 Table 3.12 Degree of Participation in Different Forms of Socialist Agriculture, 1950–58..........................73 Table 3.13 Characteristics of Agricultural Performance, China, 1933–2003 .............................................73 Table 3.14 Rates of Change in Farm Output, Inputs and Total Factor Productivity: Four Phases, China 1952–94 ......................................................................................................................76 Table 3.15 Wen’s Measures of Rates of Change in Agricultural Output, Inputs and Total Factor Productivity, China 1952–87 ......................................................................................................................77 Table 3.16 Comparative Performance Levels in Chinese, Japanese, Soviet and US Farming, 1933–94......77 Table 3.17 Rural/Urban Distribution of Population and Employment, China 1952–2005.........................78 Table 3.18 Characteristics of Small–Scale Enterprise by Type of Ownership, China 1978–96...................79 Table 3.19 Sector Breakdown of Small–Scale Enterprise, China 1995 ......................................................79 7 ISBN: 978-92-64-03762-5© OECD2007 Chinese Econonomic Performance in the Long Run: 960–2030 AD Table 3.20 Comparative Performance in Agriculture, Industry and Services, China 1952–2003 ...............80 Table 3.21 Characteristics of Industrial Performance, by Type of Ownership, China 1952–96..................82 Table 3.22 Comparative Performance Levels in Chinese, Japanese, Soviet/Russian, and US Manufacturing, 1952–94............................................................................................82 Table 3.23 Volume of Merchandise Exports, Seven Countries, 1929–2003...............................................86 Table 3.24 Value of Merchandise Exports in Constant Prices, Seven Countries and World, 1929–2003 ..86 Table 3.25 Export Performance, China 1870–2003..................................................................................88 Table 3.26 Geographic Distribution of Commodity Trade, China 1952–2005..........................................88 Table 3.27 Leading Items in Chinese Commodity Trade, 2005.................................................................88 Table 3.28 Size and Structure of Government Revenue and Expenditure, China 1952–2005 ...................90 Table 4.1a Comparative GDP Performance of China, Russia, Japan, India and the United States, 1990–2030.............................................................................................................................95 Table 4.1b Comparative Per Capita GDP Performance of China, Russia, Japan, India and the United States, 1990–2030.............................................................................................................................95 Table 4.2 Intensity of Energy Use and Carbon Emissions, China, the United States and World, 1973–2030.............................................................................................................................98 Table 4.3 World Economic Growth Performance and Projections, 1952–2030.....................................100 Table 4.4 Per Capita GDP: the World and Major Regions, 1952–2030.................................................102 Table 4.5 Growth of GDP: the World and Major Regions, 1952–2030.................................................102 Table 4.6 Shares of World GDP, 1700–2030........................................................................................103 Figure 1.1 Chinese Population 1–2030 AD.............................................................................................30 Figure 3.1 Comparative Levels of GDP in China and Four Other Big Countries, 1952–2003...................61 Figure 3.2 Total GDP and Labour Productivity, 1952–2003.....................................................................63 Figure 3.3 Gross Value Added and Labour Productivity in Chinese Agriculture, 1952–2003 ...................75 Figure 3.4 Gross Value Added and Labour Productivity in Chinese Industry and Construction, 1952–2003 ..83 Box 3.1 China’s Emergence from International Isolation, 1949–2001..................................................87 Figure 4.1 Comparative Levels of GDP, China and the United States, 1700–2030...................................94 Appendix Tables and Maps Table A.1 Input–Output Characteristics of Chinese Farming, Official Estimates, China, 1987...............109 Table A.2 Official Annual Measures of Aggregate Performance in Agriculture, China 1952–95............110 Table A.3 Maddison Measures of Chinese Agricultural Performance, Benchmark Years, 1933–94 ........111 Table A.4 Estimated Levels of Gross Output, Inputs and Value Added in Chinese Farming, Benchmark Years, 1933–94 ..................................................................................................111 Table A.5 Estimated Levels of Gross Output and Value Added in Chinese Fishery, Benchmark Years, 1933–94...............................................................................................................................112 ISBN: 978-92-64-03762-5© OECD2007 8