China’s advance, in economic terms, has outperformed all other countries in recent times . China’s GDP, in Purchasing Power Parity terms (the favoured measure of both the IMF and the CIA) has overtaken the USA to become the largest in the world.
But perhaps the most astonishing comparison is with Russia. When Mr Putin first became President, the Russian and Chinese economies were both way down the global pecking order. The Russian economy has grown, but very slowly. China in contrast has powered ahead to become the primary engine of global economic growth. Over the past decade China has created almost one third of all global growth in economic output.
It is difficult to understand why the two economies have performed so differently, despite both being authoritarian regimes in western eyes. The World Economics database shows China to have had significantly better rankings in terms of levels of corruption, and closer adherence to the rule of law. But on these variables both countries appear some way from modern advanced country norms.
The exit of Hermitage Capital from Russia and subsequent and connected death of the lawyer Serge Magnitsky in a Russian prison exposed levels of corruption by Government officials that have probably been widespread and instrumental in preventing private enterprise from flourishing as it was allowed to do in China. However recent changes in China appear to suggest that the country is following Russia down the path towards greater suppression of political and economic freedoms. Which may impact on economic growth in future.
Whatever the cause, the difference in performance between China and Russia over the last quarter of a century, as shown in the chart, is astonishing.
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