The Evolution of China's Share in the Global Economy: 1000—2017 AD


JIN Xingye, GUAN Hanhui, LI Daokui, BROADBERRY Stephen

Summary: An important measure of the significance of a civilization in the world is its share of the global economy. To understand the role of Chinese civilization in world history and the significance of China's rapid economic growth in the era of reform and opening up,it is necessary to estimate as accurately as possible the evolution of the share of China in the global economy.

This paper provides a systematic re-assessment of China's share of world GDP from 1000 to 2017. Until now,the literature has been dominated by Angus Maddison,whose work has been widely cited in both the academic community and popular media. Maddison estimated that China's share of world GDP peaked twice around 1600 and 1820,with latter being the highest at 32. 9%. However,Maddison's medieval and early modern estimates were based on a number of assumptions about Chinese and world per-capita GDP throughout history. Such assumptions are critical to his conclusion and need to be further studied.

In this paper,we take a different approach from Maddison. We draw data from Broadberry et al. ( 2018) ,who apply historical national accounting methods to estimate GDP for China during the Northern Song Dynasty ( 980—1125) ,Ming Dynasty ( 1402—1626) ,and Qing Dynasty ( 1685—1840) using data collected from first-hand historical sources and then calculate the output of the Chinese economy during these periods. These GDP estimates are combined with population data to track trends in per-capita GDP. China's per-capita GDP fluctuated at a high level during the Northern Song and Ming dynasties before trending downwards during the Qing dynasty.  This approach takes advantage of the relatively ample historical data from these Chinese dynasties,and directly estimates aggregate output in a much more reliable way than Maddison,who assumed a certain level of per-capita GDP for each country throughout history.

As a result of recent advances in historical national accounting,we rely upon fresh estimates of per-capita GDP in several European countries,including the United Kingdom,the Netherlands,Belgium,Sweden,Italy,Spain,Portugal,and Germany. We also obtained GDP data for other Asian countries,including Japan and India. For the remaining parts of the world economy, we still rely on Maddison's estimates. Based on the new historical national accounting data,we draw three main conclusions.

First,from 1000 to 1978,China's share of global GDP initially rose and then declined. The only peak reached occurred around 1600,rather than the two peaks identified by Maddison ( 1600 and 1820) . At its peak,the Chinese share was 34. 6% ,higher than the 32. 9% estimated by Maddison. However,after the Industrial Revolution in the West,China's share of the global economy declined drastically. It decreased to 5. 2% by 1952 and to 4. 9% by 1978.

Second,since the reform and opening up,China’s GDP has recovered rapidly,reaching a level of 18. 2% by 2017. This represents the most rapid gain in history over a four-decade span,in terms of share in the global economy.

Third,putting these results in an comparative international framework sheds new light on the timing of the Great Divergence. Since the first half of the eighteenth century,China's living standard as measured by per-capita GDP has fallen behind major European economies. However,the Great Divergence occurred long before the previous estimates in the literature. Although this finding contradicts the early statements of California School writers,it is broadly consistent with the later views of Pomeranz ( 2011) ,who accepts that his early claim that China was on par with Europe as late as 1800 was exaggerated,and now sees an earlier date between 1700 and 1750 as more realistic.

Our findings indicate that the reform and opening-up of contemporary China has brought about the revival of the Chinese economy for the first time since 1600. The findings imply that China's ongoing reform and opening up is one of the most significant changes in the global landscape of the past 400 years.

Published online by China Journal of Economics.