A REVIEW OF THE CHINESE ECONOMIC PERFORMANCE IN THE LONG RUN, SECOND edition, revised and updated: 960-2030 ad, Angus Maddison Reviewed by Adera Legesse Tulu

Table of Contents

 I. IntroductionThe china’s economic miracle is a move from a decline and an isolation to be the world’s largest trading economy. The determinant factors and enablers attributing to the economic growth and the impediments for the persecution of its economy is a center to draw lessons for developing countries. However, most of the Chinese leaders and scholars seen advising not to copy Chinese way of development. Hearing those advice could spark questions in minds of most of us. Achieving an outstanding and remarkable economic performance, why Chinese leaders and scholar’s advice their fellows not to copy? This and other questions initiated the review of this book for better understanding of the Chinese decline and rise mystery and draw lessons. Angus Maddison (1926–2010), a British economist specializing in quantitative macroeconomic history and analysis of economic growth and development, and an author of 20 book on economic development, including: Chinese Economic Performance in the Long Run second edition, revised and updated: 960-2030 AD, ( a book under review) broadened our scope of understanding on the concise economic performance and history of ancient and new china, from a series of remarkable studies over the years, and a staggering intellectual achievement. He provides a detailed analysis of the development of the Chinese economy over the past millennium and the prospects for the next quarter century. “To understand contemporary China, it is useful to take a long comparative perspective. In many respects China is exceptional. It is and has been a larger political unit than any other, as described by his own words (Angus Maddison,1926–2010; page 15).”Though Angus Maddison elaborate the economic performance and its implication to the economic growth of the west in focus, it is not difficult to draw lessons for developing nations like Africa. His work has deepened immeasurably our understanding of the long-term growth of the Chinese economy – the challenges that were met and the opportunities that were missed. For the developing nation like Africa, the book could immerse with basic economic performance to draw attention to the need in recognizing potential weaknesses in our own performance related to growth in China. The “Chinese Economic Performance in the Long Run” is one of Angus Maddison’s contribution to enhance understanding of the rise and decline of economies to develop policies to encourage growth and spread prosperity.The purpose of this review is therefore, to evaluate how Angus Maddison analyses the performance of the Chinese economy over the past millennium and to draw some lessons from its rise and decline. The paper tries to summaries his findings and provide some argument on his remarkable works. The first is part is the brief summery of the content based on the central idea of the book. The second part is the analysis and the evaluation of the book and finally the conclusion of the review will be presented consecutively. II. Summary of the contentThe book, “Chinese Economic Performance in the Long Run, second edition and revised”, contained a detailed analysis of the development of the Chinese economy over the past millennium and the prospects for the next quarter century, on which the book bases as its micro foundation. Maddison’s approach to this work is a comparative perspective combining macro-economic data with historical evidence and economic theory, to examine China’s standing in the ranking of nations and its interaction with the rest of the world economy via technology, trade, investment and geopolitical leverage. He applies “standard OECD measurement techniques to estimate the pace of Chinese progress and finds somewhat slower growth, nearly 8 per cent a year rather than the 9.6 per cent of Chinese Bureau of Statistics. Instead of using the exchange rate to measure the level of Chinese performance, which greatly understates China’s role in the world economy, Maddison uses purchasing power parity to convert yuan into US dollars and finds that China accounted for 5 per cent of world GDP in 1978, 15 per cent in 2003 and that this is likely to rise to 23 per cent in 2030”.Maddison’s study of Chinese economic growth was devoted with “Chinese economic policy and performance in the second half of the twentieth century in which there was major institutional change and the trajectory of growth accelerated sharply”. If so what is the purpose for his long run view? Maddison provide five important reason for why he considers the long run comparatives analysis of Chinese economic growth. His first reason was the exceptionality of the Chinese political and economic realities. His motives to provide new perspectives on the nature and causes of economic growth also forced him to consider the long run comparative analysis. As he noted in his book “a more integrated view can illuminate both exceptionalism and normality and provide a better understanding of the reasons for the rise and decline of nations”. His third reason to consider the long run view was the various structural transformation seen over a long period. Since echoes from the past are important, he consider a longer view to help us understand China’s contemporary policies and institutions. Finally, he was inspired to show us the impacts of pioneer bureaucratic mode of governance on the development of a nation.Based on those objectives one could easily examine Maddison’s book, “Chinese Economic Performance in the Long Run” from three historical perspective of the Chinese performance. The first, which is long, very complex but basic for the analysis is the Chinese performance from the ninth to Maoist era, the second is the period of the Maoist transformation era and the last one is the reformist era, where he tried to show the determinant factors that played a great role for the rise of china.The first part of the book glowed out that, before West Europe over took the leadership, China built a modern bureaucracy whose economic impact was negative hindrance on Commerce and industrial bourgeoisie but positive on agricultural development which were operated in institutional order. Angus Madison provide a detailed analysis on how Chinese ruler build a powerful bureaucracy on the basics of confusion classics to impose social and political order to maintain its unitary states. Angus Madison emphasis much to elaborate on the Chinese bureaucracy to show academic and meritocratic enrollment by examination, their social hierarchy and power in the administration system, their negative and positive consequence in the long economic performance and the weak institutional set up attributed to the decline of china.Madison indicated in his book, the meritocratic bureaucracy nurtured agriculture, developed and diffuse new seeds and crops by technical advice settled farmers, commissioned and distributed agricultural materials, but hinders navigation and entrepreneurial activities, prevented the emergence of an independent commercial and industrial bourgeoisie on the European pattern. why they did so? In his first part of the book, with detailed empirical evidence Madison pointed out that agriculture was not only by far the biggest part of the economy but also the key sector from which the Emperors could “squeeze” a surplus in the form of taxes and compulsory levies, while bureaucracy and gentry were quintessential rent–seekers which dominated urban life whose legal and customary privileges defined their status, lifestyle and attitudes. He compared the initiation and performance of meritocratic bureaucracy with west and found that professionally trained public servants on a meritocratic basis was initiated by Napoleon, more than a millennium later, which never had the social status and power of the Chinese literati. He provides a detailed information on the meritocratic basis of selection and their role, it’s improvement overtime, the criteria for recruitment, advancement and evolution schemes, the competitive recruitment process in determining the nature and content of education, show how the prestige attached to credentials had a profound influence on social attitudes and social structure. As Angus Madison clearly indicated in his book, there was no significant church hierarchy or doctrine to resist or counterbalance bureaucratic power after the important Buddhist properties were seized in the ninth century and the official ideology was essentially secular, which was not found else were in the world by the time.Next to bureaucracy Madison devoted in providing many evidences on earlier development and innovation of agricultural in ancient China. In his economic performance analysis, local agricultural market, agricultural institutional order which was efficient in resource allocation and technical capability, intensive use of manure and silage development, concentration on crops than animals because of land scarcity, heavy use off irrigation, multi cropping, diffusion of best practices through printed materials was started very earlier in China then elsewhere in the world. “With official encouragement, early ripening seeds were developed which eventually permitted double or even triple cropping of rice. Until the beginning of the eleventh century, the total time for rice to mature was at least 180 days (4 to 6 weeks in a nursery bed and 150 days to mature after transplanting. The Sung emperor Chen–Tsung (998–1022) introduced early ripening and drought resistant Champak rice from Vietnam. Over time, this made double cropping feasible and allowed extension of cultivation to higher land and hillier slopes. The original Champak rice matured 100 days after transplanting. By the fifteenth century there were 60–day varieties. In the sixteenth century 50–day varieties were developed, in the eighteenth a 40–day variety and in the early nineteenth a 30–day variety became available page 35-36). In his concise work Maddison, identified the ninth and the thirteenth centuries as a major shift in the center of gravity in the Chinese economic performance. While doing so, he tried to disprove earlier finding that showed China as a pioneer for industrial revolution and commerce for they have no macroeconomic empirical evidence. By analyzing the Chinese economic performance from the ninth to the eighteenth Century he concluded that “higher land productivity permitted denser settlement, reduced the cost of transport, raised the proportion of farm output which could be marketed and released labor for expanded handicraft production, particularly the spinning and weaving of cotton, which provided more comfortable, more easily washable and healthier clothing. While there is widespread agreement that this change in the locus of production and product– mix increased Chinese living standards, there has hitherto been no quantification of how big a rise occurred. My assessment is that it was relatively modest – a rise in per capita income of about a third. The rise in income was accompanied by a more intensive use of labor, so labor productivity did not rise as much as per capita income, as described by his own words” (page 16).The second part of Madison’s book contained detailed evidence on the establishment of new China that marked a sharp break with the past China, it’s success and ideological commitment to the socialist economy and rejection of capitalism. As illustrated by the book the new regime aimed to change social political order, economy growth and restore it is national identity. Maddison’s comparative analysis showed that during this period, compared to the world economy the growth acceleration of China is less than the world average because of the interruptions of economic development by political upheavals, to large units in production, isolation from the booming world economy, inflicts wounds of the great leap forward and the cultural revolution The third part of the book is all about the reform policy, expansion of smaller scale industry particularly in rural areas, massive integration into the world economy, trouble free opening to the world economy and its miracle achievement. Maddison’s comparative approach to explain new china’s first phase concludes that “from 1952 to 1978 there was a major acceleration in the pace of growth, with GDP rising three– fold and per capita income by 80 per cent. The economic structure was transformed. The industrial share of GDP rose from 8 to 30 per cent. The acceleration in performance was due to a massive increase in inputs of physical and human capital. The capital stock grew by 7.7 per cent a year, labor input rose faster than population. Human capital was improved by significant advances in education and health” (page 18). As Maddison concluded and supported by Song and Fang 40 years of china’s comparative economic performance analysis decades of struggle and phenomenal growth have made China again one of the engines of the global economy. China now plays a much bigger role in the world economy and its importance is likely to increase further. The pace of economic change in China has been extremely rapid since the start of economic reforms just over 40 years ago. As China continues to take a more active role on the global stage, it is in an ideal position to partner more closely with other developing countries and share the lessons it has learned from its own experience (Song and Fang 2018).