Napoleon Bonaparte never visited China, but his reflections on its future role on the global stage have stood the test of time. “Let China sleep,” he wrote about 200 years ago, “for when she wakes, she will shake the world.” Ironically, back in Napoleon’s day China’s share of the global economy was far larger than it is today, according to the economic historian Angus Maddison. The chart is based on data from his monumental economic study of the second millennium, The World Economy: A Millennial Perspective, which was published by the OECD in 2001. In the early 19th century, China’s share of the economy stood at just under 33%, according to Maddison, but fell to 4-5% in the 1960s and 1970s before recovering to reach about 12% in 2000, the latest year this study provides. China’s global share has continued to rise since then, as more recent, albeit differently based, World Bank estimates indicate. But why the earlier long decline? Maddison splits the millennium into two parts – before 1820 and after…
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Up to that date, people’s incomes around the world grew at only “a slow crawl”, writes Maddison. “For the world as a whole, the rise was about 50%.” (Slow it may have been, but it was still a lot stronger than in the first millennium, when per capita income effectively stagnated.)
By 1820, the gap in per capita income between the wealthiest parts of the world (Western Europe, North America, Australasia and Japan) and the rest of the world – including China – still stood at only about 2 to 1. As a result, for much of the second millennium, the size of a country’s population pretty much determined its share of the global economy.
But over the next 200 years, on the back of factors such as colonisation, innovation and openness to trade and capital flows, that gap grew much wider, to about 7 to 1. (And between the wealthiest country, the United States, and the poorest region, Africa, it expanded to about 20 to 1.) So, while China continued to represent a large slice of the world’s population, its share of the global economy fell, hitting a low of about 4% in the early 1960s before beginning its long return to relative economic strength.