Who was bigger in ancient times? China or India?

Richard Baldwin, @IMD, 11 August 2024, Factful Friday.

Introduction.

After a two-week holiday, Factful Friday returns with yet another comparison of the historical sizes of today’s biggest economies. That last one showed that the size of the US economy overtook China’s sometime in the late 19th century, but in antiquity, India had the biggest economy in the world.

This week, I look at when China surpassed India in terms of GDP on a PPP basis and in terms of population.

The cheat-sheet chart.

The chart below answers the question in the title (subject to the proviso about how inappropriate it is to use PPP-adjusted GDP to measure size).

• Up to 1500, India had the bigger economy, but it lost the crown by 1600, only to regain it by 1700 and lose it definitely by 1820.

In 1820, China’s economy was about twice the size of India’s.

Population comparison.

As all economic historians know, per capita incomes were not enormously different before the industrial revolution. The upshot is straightforward. The back-and-forth race on economy size was driven largely by the relative populations of India and China. The chart below shows the point. As with economic size, up to 1500, India had the bigger population, but lost the crown by 1600, regained it by 1700, only to lose it again by 1820. In 1820, China’s population was less than twice that of India.

Until the 19th century, the sum of the two giants’ economies amounted to about half of world output and population. Their world population share is today about a third while their share of world GDP is about a fifth.

Since 1820.

The next chart shows, on the left, a close up of the population shares from 1820 to 2020. In the early 19th century, the number of Chinese was much higher than that of Indians, but the gap had narrowed to almost nothing by 2020. India’s share continues to rise while China’s continues to fall.

The right chart shows that the two countries’ population shares together hovered around half up to 1870. After that, the sum fell to about a third and stayed there.

Potted history of ancient India & China.

I’m no historian, but I do find that history helps me think clearly about what is going on today and what is likely to happen in the future. Thus, I dare dip my toe into that vast ocean of knowledge—the histories of India and China. See Keay (2000, 2009) for what a real historian has to say on the topic.

Ancient China vs ancient India.

While China was one of the four early civilizations whose influences can still be seen in today’s world, its cultural development was quite distinct from the other three (Egypt, Mesopotamia, and India-Pakistan) as China was separated geographically from the three western hubs of civilisation for more than a thousand years.

The China-versus-the-west disjunction stemmed from geographic realities. China was separated by the Pacific Ocean to the east, impenetrable jungles to its southwest, and Tibetan plateau to the west and vast deserts to the northwest. This meant that Chinese culture evolved quite independently from the three western clusters.

India, by contrast, was in contact with Egypt and Mesopotamia since the earliest days. India-Pakistan traded with Egypt via the Red Sea and with Mesopotamia via the Persian Gulf. Egypt and Mesopotamia traded overland and via the Mediterranean. Of course, the three western hubs are quite distinct from one another, but innovations were shared. Alphabetic writing, for instance, developed in the eastern Mediterranean and spread to all three western hubs. ?

It was only after the Han Dynasty opened the Silk Road around 130 BCE that China started systematically exchanging ideas, innovations, and some goods with the three western clusters. Buddhism, for example, spread from India where it developed to China in the 1st century BCE.

Despite the exchange, China was already pretty set in its ways as were the civilisation on the western edge of Asia (this was a century before Caesar). Darius the Great started the western integration (by force) and Alexander the Great finished it, conquering all advanced civilisations from Greece in the north, to Egypt in the southwest, and to India in the east by 323 BCE. And then he died. His empire fell apart almost immediately, so the west that Han China met was fractured until the Roman Empire reconstituted much of the territory conquered by Alexander the Great (but not including India).

Potted history of ancient India: by an economist for economists.

The ancient history of India is quite different from that of China. In culture and economic matters, India was heavily influenced by exchanges with peoples further to the west. For instance, the Vedic Period, which was pivotal to the development today’s India, started with an in-migration of Indo-Aryans. The newcomers brought Sanskrit, which is the language of the Vedas (the sacred texts of Hinduism).

Northern parts of the subcontinent were conquered by Persians around 500 BCE and then by Alexander the Great around 300 BCE. Subsequently, the subcontinent was divided into kingdoms including the Maurya and Gupta empires. Later Indian innovations such as the concept of zero and the decimal system were exported to the west. From the 7th century, Islamic invasions of the subcontinent significantly influenced the shape of the modern economy and culture of the subcontinent.

Another key difference was that China’s current borders were shaped by the Qing Dynasty (1644-1912), while India was never unified in its current boundaries before the arrival of British colonialism.

References

(Warning: some of the details of some of these references may have been invented by ChatGPT, but the research behind them is real.)

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