Thought for the day

Russia’s Negligible GDP Growth Contrasts Sharply with China’s Massive Advance

China’s GDP has risen by over 685% in the last 25 years, compared with an increase of 113% in Russia.


 
26 September 2022
 
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.

Chinese and Russian GDP
(int$ Trillions)
Russia’s Negligible GDP Growth Contrasts Sharply with China’s Massive Advance
* GDP in Purchasing Power Parity terms with added estimates for the size of the informal economy and adjustments for out-of-date GDP base year data.

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 over 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 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 may have been widespread and instrumental in preventing private enterprise from flourishing as it was allowed to do in China.

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. See more data...


More perspectives using World Economics data