International Trade – China Notes
1. A. Geography
o Population: 94% in eastern half of the country (east of the dashed line in the map
below)
o Altitude: Mountainous, one seacoast, large distances in western half. Note the
dark orange (map next page)represents land over 10,000 feet in altitude.
o Yellow river corridor (not for river transport), Yangtze, and Pearl
o Political: bordered by 15 countries, but little trade with these countries
o Cultural diversity (diversity of spoken languages, ethnic minorities (Mongols,
Muslims, Tibetans, Zhuang, Manchus…)
B. Main Points (for trade)
o Large countries trade less (as a % of GDP)
o Gravity model (“distant” countries trade less)
15 Neighbors but Not Much Trade
2. A. Historical Legacies (before 1949)
o Around 960-1300, China’s per capita GDP was similar to European levels. Having
higher population, at that time, China’s was the largest economy in the world.
Table 1.3. Levels of Chinese & European GDP Per Capita, 1–1700 AD
(1990 $)
Year
China
Europea
1
450
550
960
450
422
1300
600
576
1700
600
924
a. Excluding Turkey and former USSR
Source: see Maddison (2007), Contours of the World Economy (forthcoming).
Rough Comparative Estimates of the Population of China, Europe, India, Japan and World,
1–2003
AD
(million)
China
Europea
Indiab
Japan
World
1
60
30
75
3
226
1000
59
32
75
7.5
267
1300
100
52
88
10.5
372
1500
103
71
110
15.4
438
1700
138
100
165
27
603
a) excluding Turkey and former USSR; b) India +
Bangladesh + Pakistan.
Source:
See Maddison website: www.ggdc.net/Maddison
1820
381
170
209
31
1 042
2003
1 288
516
1 344
127
6 279
o By the 1800s China’s economy had stagnated
Comparative Levels of Economic Performance
China
1700
1820
1952
1978
2003
82.8
228.6
305.9
935.1
6 188.0
1700
1820
1952
1978
2003
138
381
569
956
1 288.4
1700
1820
1952
1978
2003
600
600
538
978
4 803
Japan
Europe
United
USSR
States
GDP (billion 1990 “international” dollars)
15.4
92.6
0.5
16.2
20.7
184.8
12.5
37.7
202
1 730.7
1 625.2
545.8
1 446.2
5 268.2
4 089.5
1 715.2
2 699.3
8 643.8
8 430.8
1 552.2
Population (million)
27
100.3
1
26.6
31
169.5
10
54.8
86.5
398.6
157.6
185.9
114.9
480.1
222.6
261.5
127.2
516
290.3
287.6
GDP per capita (1990 “international” dollars)
570
923
527
610
669
1 090
1 257
688
2 336
4 342
10 316
2 937
12 585
10 972
18 373
6 559
21 218
16 750
29 037
5 397
India
World
90.8
111.4
234.1
625.7
2 267.1
371.4
694.5
5 912.8
18 969.0
40 913.4
165
209
372
648
1 050
603.2
1 041.7
2 616.0
4.279.7
6 278.6
550
533
629
966
2 160
615
667
2 260
4 432
6 516
Maddison (2001 and 2003) updated, see www.ggdc.net/Maddison. Europe includes 29 west and 10
east European countries (Turkey is not included). The figures for India exclude Bangladesh and
Pakistan from 1952. The figures for the United States include the indigenous population.
o
o
o
o
The Opium Trade (and the Opium War)
Early 1800s; Chinese Trade Surplus and inflow of silver
Revealed Comparative advantages for China
 Tea, silk, cotton (but not textiles)
Stimulus to domestic economy
British promotion of opium (traded from India, via British merchants, to China.
 1839 – Opium Wars, Chinese concessions of trading ports
 Increased imports of opium , Chinese trade deficit, and outflow of gold
and silver
B. Main Points
o Trade effects (+ and -) are greater when trade introduces new products
o Distribution of gains from trade
o External costs associated with trade (opium addiction)
o Historical experience with trade generates an “anti foreigner/trade”
sentiment
From the 1850s to the 1940s, Chinese trade remained stagnant. Exports were from the extractive
sectors; Imports were mainly industrial output from the West and passed through Western
controlled trading ports like Hong Kong and Shanghai.
Table 2.4. Exports per Capita, China, India and Japan, 1850-2003
($)
China
India
Japan
(at current prices & exchange rates)
1850
0.12
0.36
0
1870
0.28
1.01
0.44
1913
0.7
2.49
6.1
1929
1.36
3.39
15.32
1950
1.01
3.18
9.95
1973
6.6
5
341
2003
339.96
54.4
3 278.9
China from Appendix E. India and Japan from W.A. Lewis in Grassman and
Lundberg (198l), p. 49, Maddison (1995a), pp. 235 and 237, and IMF, International
Financial Statistics.
Table 2.8. Leading Items in Chinese Commodity Trade, 1937
(000 yuan)
Wood Oil
Raw Silk
Eggs
Wolfram
Tin
Embroidery
Raw Cotton
Tea
Bristles
Wool
Silk Piece
Goods
Ground Nut
Oil
Coal
Hides
Antimony
Total Exports
Source:
Exports
Imports
89 846
56 598
54 382
40 759
39 917
36 900
31 301
30 787
27 921
19 427
Paper
Kerosene
Rice
Wool Goods
Gasoline
Timber
Cotton Goods
Sugar
Textile Machinery
Automobiles, Trucks &
Spare Parts
17 728 Leaf Tobacco
56 498
47 860
40 781
35 000
27 613
23 239
21 710
21 471
20 986
19 096
17 332 Liquid Fuel
14 968
13 044 Railway Equipment
12 602 Iron and Steel
11 446 Fishery Products
Electrical Machinery
880 010 Total Imports
19 449
13 946
17 096
13 823
4 681
953 386
Hsiao (1974). These figures exclude imports and exports of Manchukuo.
Western Apartheid in Colonial Shanghai
Western Apartheid in Colonial Shanghai
3. Fertile Ground for Marxist/Leninist Thinking
o Economic Stagnation happening at the same time as the opening of international
trade
o Opium Trade as example of the evils of trade with capitalist countries
o Political Imperialism by Japan, UK
o Aid from Moscow
o Income Inequality
o Cultural Imperialism (racial discrimination in port cities)