China's Historical GDP Accounting and its International Comparison: A Literature Review

David Daokui Li, Xingye Jin, Hanhui Guan

Abstract: What was the level of economic development in ancient China and how did the cycle of prosperity and decline change throughout history? It seems certain that a systematic review of ancient China’s development is the very foundation for the studies of nation’s economy. As a result, a comprehensive restoration and mapping of ancient China’s economic data is of fundamental importance in advancing relevant research. Estimation of GDP and economic structure, based on Historical National Accounting, is a frontier in the area international economic research. Maddison’s research, in this regard, is most well-known but problems in method and final outcome has led to a review and re-calculation from scholars of Peking and Tsinghua University. They worked on the output method of the Historical National Accounting to revise Maddison’s findings and reconstructed data of GDP per capita in China’s Northern Song Dynasty, Ming Dynasty and Qing Dynasty. Major findings from their work are as follow:

1- Annual GDP growth in the 3 dynasties above were 0.88%, 0.25% and 0.36% respectively and has experienced a downturn in Qing after fluctuating at a high level in Song and Ming.

2- It is suggested that although people in Song Dynasty were of higher livelihood standard than their counterparts in most of the world, they fall behind the Italians before 14th century. Despite the fact that wealthier part of China remained much of the same as of similar regions in Europe, the gap between the nation and Europe, as a whole, has been increasingly widening before mid-18th century – Great Divergence happened actually before the Industrial Revolution.

3- According to latest research, Maddison’s work was found to be less accurate and precise to some extent. Consequently, this paper, while covering relevant literature, is focused on specific method which combines Historical National Accounting and historical data in each country as well as different outcomes compared with Maddison’s. Moreover, it also tends to explain reasons of the Great Divergence based on GDP record of different countries in history.

Published online by China Journal of Economics.