Analysis of economic growth generally concentrates on the nineteenth and twentieth centuries in which the pace of economic progress was unprecedented. Earlier performance has received much less attention because economic advance was at best very slow, quantification more difficult or non–existent.

The Ch’ing dynasty performed extremely well in terms of its own objectives from the end of the seventeenth to the beginning of the nineteenth century. From 1700 to 1820 population rose from 138 to 381 million — nearly eight times as fast as in Japan and nearly twice as fast as in Europe. This population growth was accommodated without a fall in living standards. Chinese GDP grew faster than that of Europe in the eighteenth century even though European per capita income rose by a quarter.

The establishment of the People’s Republic marked a sharp change in China’s political elite and mode of governance. The degree of central control was much greater than under the Ch’ing dynasty or the KMT. It reached to the lowest levels of government, to the workplace, to farms and to households. The party was highly disciplined and maintained detailed oversight of the regular bureaucratic apparatus. The military were tightly integrated into the system. Propaganda for government policy and ideology was diffused through mass movements under party control. Landlords, national and foreign capitalist interests were eliminated by expropriation of private property. China became a command economy on the Soviet pattern. After a century of surrender or submission to foreign incursions and aggression, the new regime was a ferocious and successful defender of China’s national integrity, willing to operate with minimal links to the world economy.

As a consequence of successful policy, Chinese per capita income rose by 6.6 per cent a year from1978 to 2003, faster than any other Asian country, very much better than the 1.8 per cent a year in the United States and Western Europe and four times as fast as the world average. Per capita GDP rose from 22 to 63 per cent of the world average and China’s share of world GDP rose from 5 to 15 per cent. It became the world’s second biggest economy after the United States. In 1998, when most east Asian countries were caught in a foreign exchange crisis and had substantial recessions, the impact was small in China1. With the rather cautious assumptions we have made, China will probably surpass the United States as the number one economy in terms of GDP before or shortly after 2015. It is likely to account for about a quarter of world GDP in 2030, with a per capita income about one third larger than the world average. Its influence on the performance of the world economy and its geopolitical leverage will certainly be greater in 2030 than in 2003.