World Economic Performance

World Economic Performance

Past, Present and Future

Edited by D. S.P. Rao and Bart van Ark

World economic performance over the last 50 years has been spectacular. The postwar period has witnessed impressive growth rates in Western Europe and Japan, and in recent times China and India. This new book discusses these issues and tackles topical questions such as; what are the socio-economic and institutional factors that have contributed to this impressive performance? Will China and India continue to grow at the same rate over the next two decades? What are the prospects for Japan, the US and other advanced economies? The book brings together contributions by eminent scholars including the late Angus Maddison, Professors Justin Lin, Bob Gordon, Ross Garnaut, Bart van Ark and others to provide answers to these fascinating questions. The chapters analyse the economic performance of selected countries including China, India, Japan, Indonesia and the US, as well as Western Europe, Latin America and developing countries as a group. The time period of the study is from 1850 to the present and includes forecasts to 2030.

Chapter 3: The Needham Puzzle, the Weber Question and China's Miracle: Long Term Performance since the Sung Dynasty

Edited by D. S.P. Rao and Bart van Ark

Subjects: development studies, development economics, economics and finance, development economics, economic psychology, international economics

Extract

Since the start of reform and open–door policy in 1978, the Chinese economy has achieved a miraculous GDP growth of 9.6 per cent annually. Such an economic success has aroused world–wide interest. However, it is worth mentioning that China had also achieved great success in ancient times. According to the estimation of Maddison, in the first century A.D. the development of Han Dynasty in China was on the same level as that of the Roman Empire. Until 1820, Chinese economy had maintained its status as the largest economy in the world. Its GDP accounted for 32.4 per cent of the world total (Maddison, 1998, p.40). However, after Chinese economy reached its peak in the Sung Dynasty, its per capita income remained stagnant ever after. While Chinese economy remained stagnant, through the Renaissance that started in the fourteenth century, the Europe gradually walked out of the darkness of the medieval age. In the eighteenth century, the industrial revolution first broke out in the Great Britain, which led to a rapid increase in per capita income. According to the Purchasing Power Parity (PPP), the aggregate GDP of the European countries comprised 26.6 per cent of the world total in 1820; in 1890, the ratio increased to 40.3 per cent. Their average annual growth rate of GDP per capita increased from 0.22 per cent in 1700–1820 to 1.03 per cent in 1820–1952. The percentage of Chinese GDP in the world total, however, dropped dramatically to 13.2 per cent in 1890 (Maddison, 1998, p.40). Moreover, during its whole period of modern history (1840–1949), the Chinese economy had been stagnant. Its per capita GDP even dropped during the period of 1820–1952. During the same period, its GDP as a percentage of the world total decreased from 32.4 per cent to 5.2 per cent.

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