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Today's Economic History: Historical GDP for Early Modern China

Daniel Little: Historical GDP estimates for early modern China: "Li Bozhong is one of China's most influential economic historians...

...Li's most recent book... appl[ies] the methodology of historical national accounts to China... to arrive at systemic and internally validated estimates of economic activity in a region over a period of time.... The results are highly interesting, and they challenge several key assumptions that have been made about the early Qing economy....

Huating-Lou is roughly a single county, Songjiang County, with an area of 870 square kilometers and a population in 1816 of 563,052.... a microcosm of... Jiangnan [which] had a population of roughly 36 million in the mid nineteenth century.... [Measures of] production, expenditure, and income... are fairly independent; but... should... lead to similar estimates of overall economic activity.... He finds that production, income, and expenditure estimates for Huating-Lou in 1823-29 all converge on an estimate of about 13.5 million taels of silver... GDP per capita of about 24 taels of silver.... The primary sector, including agriculture and fisheries, amounts to only 31% of the local economy, while the secondary sector (manufactures and textiles) contribute 33% and the tertiary sector (commerce, service, government, etc.) contributes 36%.... 27% of employment was in the primary sector, with 56% in the secondary and 16% in the tertiary sectors.... Wages represented 61% of the Huating-Lou economy; rent 11%; interest 3%; profit 20%; and depreciation 6%....

The one comparison that Li does not highlight (in the English summary, anyway) is the GDP per capita comparison between Huating-Lou and the Netherlands.... Smits, Horlings and van Zanden estimate... [Dutch] GNP per capita of 227 guilders per capita.... What is the conversion of tael to guilder?... In silver equivalents... 2,145 grams versus 895.2 grams.... However, the purchasing power of silver was significantly greater in China than Europe.... If we took the wage basket as the basis of a cost-of-living deflator... Dutch GDP per capita PPP-adjusted product is 3.7 against a 3.6 per capita PPP-adjusted product for China.... This would indicate that the Dutch economy was marginally richer than the Chinese economy in the lower Yangzi region--but not by much....

These comparisons indicate a surprisingly urban, manufacturing- and service-based economy in the second decade of the nineteenth century, and Li argues that we can appropriately describe each of them as a "modern" economy...

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