Distinguished Speaker Seminar: Angus Maddison – Six Transformations in China: 960-2030 AD

Angus Maddison, Emeritus Professor, Faculty of Economics, Groningen University, addressed invited guests and ADBI staff on Six Transformations in China: 960-2030 A.D.

The first transformation relates to the Sung dynasty from 960-1280, when per capita income rose by a third and population almost doubled. There was also a significant opening to the world economy in the southern Sung, Yuan and early Ming dynasties (1130 to 1433). In 1300, China was the world’s leading economy in terms of per capita income. It outperformed Europe in levels of technology, the intensity with which it used its natural resources, and capacity for administering a huge territorial empire. By 1500 however, western Europe had overtaken China in per capita real income, technological and scientific capacity.

The second transformation occurred between 1700 and 1820, when population rose nearly threefold with no fall in per capita income. But China remained isolated from the outside world and repudiated British efforts to establish relations at the end of the eighteenth century.

The third transformation occurred from 1840 to 1950, a time when China suffered from internal conflict and collusive foreign intrusions on its territory and sovereignty. Chinese GDP fell from a third to a twentieth of the world total, and per capita income fell in a period when it rose threefold in Japan, fourfold in Europe and eightfold in the USA.

The fourth transformation is the Maoist period (1950-78), and saw a significant recovery of per capita income, but growth was interrupted by disastrous economic and social experiments, including several wars.

In the fifth transformation (1978-2003), China reversed the Maoist policies and adopted a pragmatic reformism which was successful in sparking off growth. There were large, once-for-all, gains in efficiency in agriculture, an explosive expansion of foreign trade and accelerated absorption of foreign technology through foreign direct investment.

The sixth transformation is largely forward-looking (2003-2030), and Professor Maddison sees China’s catch-up continuing. But he predicts that the pace of progress will slacken as China gets nearer to the technological frontier. But by 2015, China would have overtaken the US as number one economy in terms of GDP, and by 2030 will be producing nearly a quarter of the world’s GDP.

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