The Rise of China's Economy - Thomas G. Rawski

THE RISE OF CHINA’S ECONOMY
By Thomas G. Rawski
Foreign Policy Research Institute, June 2011

Thomas G. Rawski, Professor of Economics and History, joined the University of Pittsburgh's faculty in 1985 after fourteen years at the University of Toronto. His research focuses on the nature and implications of recent developments and long-term changes in the economy of China. He delivered this paper at A History Institute for Teachers, March 19–20, 2011 on “China and India: Ancient Civilizations, Rising Powers, Giant Societies, and Contrasting Models of Development,” held at the University of Pennsylvania. This History Institute was co-sponsored by The Foreign Policy Research Institute’s Wachman Center as well as by three centers at the University of Pennsylvania – Center for East Asian Studies, South Asia Center, and Penn Lauder CIBER (Center for International Business Education and Research). [1]

China’s remarkable economic boom, now in its fourth decade, has spawned numerous discussions of “China’s Rise.” [2] Beijing’s self-congratulatory slogan “China’s peaceful rise” has advanced this theme. From a historical perspective, however, this terminology seems misplaced. Both the Ming (1368-1644) and Qing (1644-1912) empires occupied key positions in Asian trade and diplomacy. Crude figures compiled by Angus Maddison, author of several sweeping studies of global economic history, show China contributing nearly one-third of global output as late as 1820. The great boom of the late twentieth century has enabled China to regain some of the global economic weight and leverage that the Middle Kingdom enjoyed during the Ming and much of the Qing eras.

The industrial revolution pushed European and North American productivity far ahead of China and India, former giants whose combined share of global output plunged from nearly half to under one-tenth between 1820 and 1950. [3] Prior to 1800, Europeans — for example Marco Polo [4] — viewed China as prosperous and well-governed. As China’s relative economic position eroded, opinions shifted. Both Europeans and Chinese came to view China as a backward society whose very foundations—families, beliefs, values—obstructed progress. Hu Shi (1891-1962), a prominent philosopher who served as China’s wartime ambassador to the United States, summarized this perspective in Chabuduo xiansheng (差不多先生), a witty vignette portraying Chinese people as incapable of the precise thinking needed in the modern world. [5]

China’s recent economic boom, along with the success of Hong Kong, Taiwan, and Singapore, demonstrates that Chinese culture is not inimical to economic progress. Indeed, the opposite perspective, which sees Chinese society as unusually capable of producing individuals who can operate effectively in market systems, helps to explain China’s historic prominence as well as its recent economic surge.

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