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Before the Great Divergence? Comparing the Yangzi Delta and the Netherlands at the Beginning of the Nineteenth Century

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  • Li, Bozhong
  • Van Zanden, Jan Luiten

Abstract

The debate about the long-term economic development of China compared with Europe has taken a new turn with the publication of Kenneth Pomeranz’ book on ‘The Great Divergence’, in which he maintains that before the Industrial Revolution the most advanced parts of China (in particular the Yangzi Delta) was in terms of real incomes on par with the richest regions in Western Europe (Great Britain, the Netherlands). His tentative results were very different from the estimates produced by Maddison (2001) who concluded that there was already a large gap in real per capita GDP between these two extreme parts of Eurasia. Using the method of historical national accounting, this paper tests these ideas on the basis of a detailed comparison of the structure and level of GDP in part of the Yangzi Delta and the Netherlands in the 1820s, also taking into account differences of purchasing power of the two currencies involved. The results are that Dutch GDP per capita was already almost twice the level in the Yangzi Delta, which is more or less consistent with Maddison’s point of view. The level of agricultural productivity in this part of China was, however, at about the same level as in the Netherlands (and England), but large productivity gaps existed in industry and services (with the exception of government services). We also attempt to explain the patterns found, and conclude that differences in factor costs may have been behind the observed differences in labour productivity.

Suggested Citation

  • Li, Bozhong & Van Zanden, Jan Luiten, 2010. "Before the Great Divergence? Comparing the Yangzi Delta and the Netherlands at the Beginning of the Nineteenth Century," CEPR Discussion Papers 8023, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:8023
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    1. Robert C. Allen, 2009. "Agricultural productivity and rural incomes in England and the Yangtze Delta, c.1620–c.18201," Economic History Review, Economic History Society, vol. 62(3), pages 525-550, August.
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    Cited by:

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    2. Deng, Kent & O'Brien, Patrick, 2017. "How Well Did Facts Travel to Support Protracted Debate on the History of the Great Divergence between Western Europe and Imperial China?," MPRA Paper 77290, University Library of Munich, Germany.
    3. Stephen Broadberry & Hanhui Guan & David Daokui Li, 2017. "China, Europe and the Great Divergence: A Study in Historical National Accounting, 980-1850," Oxford Economic and Social History Working Papers _155, University of Oxford, Department of Economics.
    4. Deng, Kent & O'Brien, Patrick, 2017. "How well did facts travel to support protracted debate on the history of the Great Divergence between Western Europe and Imperial China?," Economic History Working Papers 69923, London School of Economics and Political Science, Department of Economic History.
    5. Deng, Kent & Shengmin, Sun, 2019. "China’s extraordinary population expansion and its determinants during the qing period, 1644-1911," LSE Research Online Documents on Economics 100921, London School of Economics and Political Science, LSE Library.
    6. Milanovic, Branko (Миланович, Бранко), 2016. "Global inequality of class to the country of residence of the proletarians to migrants [Глобальное Неравенство: От Классовой Принадлежности К Стране Проживания, От Пролетариев К Мигрантам]," Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 1, pages 14-26, February.
    7. Rafael, Dobado-González & Alfredo, García-Hiernaux & David, Guerrero-Burbano, 2013. "West versus East: Early Globalization and the Great Divergence," MPRA Paper 48773, University Library of Munich, Germany.
    8. Shuo Chen & James Kai-sing Kung, 2016. "Of maize and men: the effect of a New World crop on population and economic growth in China," Journal of Economic Growth, Springer, vol. 21(1), pages 71-99, March.
    9. XuYi & Bas van Leeuwen & Jan Luiten van Zanden, 2015. "Urbanization in China, ca. 1100–1900," Working Papers 0063, Utrecht University, Centre for Global Economic History.
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    11. Yi Xu & Zhihong Shi & Bas Leeuwen & Yuping Ni & Zipeng Zhang & Ye Ma, 2017. "Chinese National Income, ca. 1661–1933," Australian Economic History Review, Economic History Society of Australia and New Zealand, vol. 57(3), pages 368-393, November.
    12. Jutta Bolt & Jan Luiten Zanden, 2014. "The Maddison Project: collaborative research on historical national accounts," Economic History Review, Economic History Society, vol. 67(3), pages 627-651, August.
    13. Baomin Dong & Jiong Gong & Kaixiang Peng & Zhongxiu Zhao, 2015. "Little Divergence: Evidence from Cotton Textiles in Japan and China 1868–1930," Review of Development Economics, Wiley Blackwell, vol. 19(4), pages 776-796, November.
    14. Deng, Kent & O’Brien, Patrick Karl, 2016. "China’s GDP per capita from the Han Dynasty to communist times," Economic History Working Papers 64857, London School of Economics and Political Science, Department of Economic History.
    15. Jan Luiten Zanden & Joerg Baten & Peter Foldvari & Bas Leeuwen, 2014. "The Changing Shape of Global Inequality 1820–2000; Exploring a New Dataset," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 60(2), pages 279-297, June.
    16. Stephen Broadberry, 2021. "Accounting for the Great Divergence: Recent findings from historical national accounting," CAGE Online Working Paper Series 549, Competitive Advantage in the Global Economy (CAGE).
    17. Branko Milanovic, 2012. "Global Inequality: From Class to Location, from Proletarians to Migrants," Global Policy, London School of Economics and Political Science, vol. 3(2), pages 125-134, May.
    18. Mitchener, Kris James & Ma, Debin, 2016. "Introduction to the special issue: a new economic history of China," LSE Research Online Documents on Economics 69191, London School of Economics and Political Science, LSE Library.
    19. Broadberry, Stephen, 2013. "Accounting for the great divergence," Economic History Working Papers 54573, London School of Economics and Political Science, Department of Economic History.
    20. Philip T. Hoffman, 2020. "The Great Divergence: Why Britain Industrialised First," Australian Economic History Review, Economic History Society of Australia and New Zealand, vol. 60(2), pages 126-147, July.
    21. Baten, Jörg & Sohn, Kitae, 2014. "Impoverished, but Numerate? Early Numeracy in East Asia (1550–1800) and its Impact on 20th and 21st Century Economic Growth," CEPR Discussion Papers 9991, C.E.P.R. Discussion Papers.
    22. Iris Claus & Les Oxley & Kent Deng, 2014. "A Survey Of Recent Research In Chinese Economic History," Journal of Economic Surveys, Wiley Blackwell, vol. 28(4), pages 600-616, September.
    23. Deng, Kent, 2015. "China’s population expansion and its causes during the Qing period, 1644–1911," LSE Research Online Documents on Economics 64492, London School of Economics and Political Science, LSE Library.
    24. Kent Deng & Patrick Karl O’Brien, 2014. "Creative Destruction: Chinese GDP per capita from the Han Dynasty to Modern Times," Working Papers 0063, European Historical Economics Society (EHES).

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    More about this item

    Keywords

    economic development; labour productivity; real incomes;
    All these keywords.

    JEL classification:

    • N3 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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