Reconstructing China's Historical GDP : An International Comparison based on the Maddison Historical Data Project

Transcription

1 Reconstructing China's Historical GDP : An International Comparison based on the Maddison Historical Data Project Ye Ma, Herman de Jong Henan University, University of Groningen Beijing ICP conference BNU, October 2018

2 Outline Introduction Motivation Focus of the study Result Method and procedure Conclusion Discussion and extension 2

3 Motivation Great Divergence and Asia s small divergence, GDP per capita Source: Maddison, GDP per capita in 1990 international GK dollars. 29/10/2018 Ma and De Jong 3

4 Motivation GDP per capita estimates, 1840s-1930s Maddison, 2010 (1990 GK dollars) LIU T., 2009 (1990 int. dollars) Broadberry et al., 2013 (1990 int. dollars) 1840s (10.8 taels) (12.95 taels) Shi et al., 2015 (1990 GK dollars) 1850s Chang, 1962 (1880s prices) Ou,1947 (1933 Yuan) Fukao et al., 2007 (1990 int. dollars) 1860s 1870s s taels 1890s s s s s Sources: Constructed by the authors. 29/10/2018 Ma and De Jong 4

5 Focus of the study We try to Position China s economic development in the late Qing period, From an international comparative perspective Demonstrate quantitatively the stagnation of China s economy in history Trends and fluctuations of the economy 29/10/2018 Ma and De Jong 5

6 Results Historical Chinese GDP per capita in 1990 international dollars 700 The Maddison Project Xu et al., 2015a 600 LIU, 2009 Fukao et al., 2007 This paper Sources: Constructed by the authors. 29/10/2018 Ma and De Jong 6

7 Results Annual growth rates, constant prices, (%) Periods Italy Holland/ Netherlands England/ GB India Indonesia (Java before 1880) Japan Qing China Qing China (Total GDP) Sources: Calculated by the authors. Per capita GDP for other countries and regions is from the Maddison Project (Bolt and van Zanden, 2014). The Chinese population is also from the Maddison Project. 29/10/2018 Ma and De Jong 7

8 Methods Procedures of estimation Rates of growth in real terms, real GDP per capita, Nominal terms to real terms General price levels: a new GDP deflator An international comparison Value conversion: a new benchmark PPP estimation for 1912 (with UK and with US) Backward projection from the 1912 benchmark along the real growth rates 29/10/2018 Ma and De Jong 8

9 Methods: General price levels We included in the new GDP deflator: A basket of products: rice, wheat, raw cotton, raw silk, tea, coal, and gold Weights: based on volumes Procedures: 29/10/2018 Ma and De Jong 9

10 Agricultural general price Food crops (domestic prices) Raw cotton (export and import prices) Raw silk Rice Wheat Raw cotton Tea Raw silk GDP deflator Textile input prices Tea consumption Industrial general price Services general prices Food processing Mining Coal domestic price General prices of agricultural and industrial sector Gold domestic prices

11 Methods: General price levels Two different economic trends The new deflator using the new approach An alternative deflator Based on a short-cut assumption of a product basket Rice and gold: fixed weights across time, 70%, 30% 29/10/2018 Ma and De Jong 11

12 Methods: General price levels Two different real economic trends, real GDP per capita, using two different deflators, 1912= this paper, new framework rice-gold,fixed weight Sources: Constructed by the authors. 29/10/2018 Ma and De Jong 12

13 Result 1: Real growth rates The new estimation of Chinese GDP and GDP per capita, , in constant prices, 1912= GDP 1912=1 Per capita GDP Population Sources: Constructed by the authors. 29/10/2018 Ma and De Jong 13

14 Methods: A new benchmark PPP, ca A new benchmark China/UK PPP ca (Chinese Yuan/ ) Exchange rate, Chinese Yuan/, 1 Pound= 9.99 Yuan Chinese Yuan Prices/Ton UK Prices/Ton PPP Yuan per Chinese weights British weights Agriculture 9.10 Rice Wheat Maize Agriculture Industry Service The economy as a whole 8.12 Source: constructed by the authors. 29/10/2018 Ma and De Jong 14

15 Methods: A new benchmark PPP, ca A new benchmark China/US PPP ca (Chinese Yuan/$) Exchange rate, Chinese Yuan/ $, 1 Dollar= 2.03 Yuan PPP between countries Recent estimations China/UK PPP from our estimation PPP yuan/ =8.12 US/UK PPP from Woltjer (2013) PPP $/ =6.1 China/US PPP PPP yuan/$ =1.33 (64.6%) Source: constructed by the authors. 29/10/2018 Ma and De Jong 15

16 Results: A new benchmark GDP of 1912 A benchmark estimate of GDP per capita in 1912 in 1990 international dollars China GDP per capita (Yuan) US GDP per capita ($) Exchange rates in 1912 exchange rate (Yuan/$) 2.06 PPP (Yuan/$) 1.33 (64.6%) Comparative China/US GDP per capita At the exchange rate At PPP GDP in 1990 international dollars US 5017 China 507 Maddison s estimation 552 Sources: Constructed by the authors. 29/10/2018 Ma and De Jong 16

17 Methods: A new benchmark PPP, ca PPPs in manufacturing industry, China/UK ca Matches and coverage of industries Matched industries Coverage ratios (%) In gross output value In employment China, 1912 UK, 1907 China, 1912 UK, 1907 Total manufacturing Iron, steel, engineering, and 1 shipbuilding 0 2 Metal industries 0 3 Textile industries Clothing industries Food, drink and tobacco Chemicals Paper and printing Leather and leather products Lumber and wood products 0 10 Stone, clay, and glass product Miscellaneous 0 Sources: Constructed by the authors. 29/10/2018 Ma and De Jong 17

18 Methods: A new benchmark PPP, ca PPPs in manufacturing industry, China/UK ca Gross output PPP (Yuan/Pounds) 1910s Relative to exchange rates b Gross output PPP (Yuan/Pounds) 1930s Relative to exchange rates b Fisher a 1 Pound= 9.99 Yuan Fisher 1 Pound= Yuan Total manufacturing Food, drink, and tobacco Textiles Leather Clothing Chemicals Clay, stone, glass products Paper Sources: Estimated by the authors. a Fisher PPP is a geometric mean of Laspeyres and Paasche PPPs for manufacturing PPPs and for branch PPPs. b Relative to exchange rates: Fisher gross output PPP/ the exchange rate. 29/10/2018 Ma and De Jong 18

19 Conclusions Stagnation in an international comparative perspective Rate of growth the potential path of sustained economic growth after the 1900s Compared to other Asian countries, no sign of persistent and sustained economic growth in the late 19 th century Qing Empire 29/10/2018 Ma and De Jong 19 19

20 Discussion and extension Labour productivity Relative labour productivity in late Qing China, three sectors, 1850s/1910s (%) Employment shares Agriculture Industry Services Total ca Value-added shares in GDP 1850s Relative labour productivity ca ca Sources: Employment shares of 1850 and 1915 are from Shi et al (2014) and Wu (2016). 29/10/2018 Ma and De Jong 20

21 Discussion and extension Labour productivity Comparative labour productivity in manufacturing, China/UK ca. 1910/ 1935 Comp. LP 1912/1907 Comp. LP ca UK, 1907 =1 UK, 1935 =1 Total manufacturing Food, drink, and tobacco Textiles Leather Clothing Chemicals Clay, stone, glass products Paper Sources: from Ma, de Jong, and Xu (2016). Employment is defined as numbers employed rather than hours worked. For the comparative China/UK labor productivities in 1935, we combine two estimates, the comp. LP US/UK ca calculated by de Jong and Woltjer (2009) and the comp. LP China/Us ca calculated by Yuan, Fukao, and Wu (2010). 29/10/2018 Ma and De Jong 21

22 Discussion and extension Labour productivity Comparative labour productivity in manufacturing, ca. 1910/ 1935 (UK=100) US Germany Sweden Italy Japan China Sources: Broadberry, 1997, Chapter 4 and 5. For China, the estimation of comparative labour productivity is from Ma, de Jong, and Xu (2016). 29/10/2018 Ma and De Jong 22

23 Thank you! 29/10/2018 Ma and De Jong 23