Here’s Why China Is Not As Rich As America

April 21st

Article By: David McDonald

China ‘s balance of trade with the rest of the world was such that something like two-thirds of all the world’s silver coin had, by 1776, flowed into China. China also had more printed books at that time than the rest of the world combined. It was an enormous empire, with land area considerably larger than the current People’s Republic of China and a population of roughly 300 million.

China had of course been selling absurd amounts of tea, of porcelain, and silk—but mostly tea—for which it would only accept payment in silver. In the late 18th century, British merchants began introducing opium, grown in their Indian colony and shipped to Canton, the city to which trade was restricted.

This proved to be the one good for which there was any demand, and by the 1820s the balance of payments had shifted radically and opium addicts in China numbered in the millions.

When the Chinese court eventually dispatched one of its most attained courtly gentleman scholars, Lin Zexu, to end the opium problem, they had no idea that Britain would react with such force. They were unaware that British ships could move freely in the shallow waters of the Pearl River Delta; that their guns had such range and such accuracy; that their fortifications would be basically useless against the assault that followed in the Opium War of 1840. China had to sue for peace, signing the Treaty of Nanjing—the first of several “Unequal Treaties” opening several treaty ports to trade, establishing extraterritorial legal status for foreigners in China, and making China if not into a full-blown colony than at least into a “semi-colonial” state, as Mao would have put it.

The century that followed the Opium War saw no semblance of peace. From 1850 to 1963, China was torn apart by the biggest civil war probably in world history, the Taiping Rebellion, in which an estimated 20 to 30 million Chinese lost their lives when a failed scholar named Hong Xiuquan, believing himself to be the brother of Christ and son of God, commanded to expel the Manchu “demons,” went at it with gusto and a fuck-ton of followers.

Concurrently, a kind of brigand-cum-rebel force called the Nian raised hell in the North China Plain, in Jiangsu, Shandong, Henan and southern Hebei provinces. A second Opium War was fought in 1860, this time resulting in the utter destruction of the gorgeous Old Summer Palace in northern Beijing, which was sacked by French and English soldiers. The Qing court had to flee, only to return under more humiliating conditions.

The war lasted until 1945, the Chinese government pushed into Chongqing in the southwestern province of Sichuan, barely hanging on. And soon after the Japanese surrender in August 1945, there was of course the unfinished business between the Nationalists and Communists, so more war was inevitable, despite the best efforts of General Marshall.

Things don’t get any better after the Communist victory, or at least not for long. Mao’s zany collectivization scheme, which he began to put into effect in the mid-1950s, was an abject economic disaster, but it was nothing compared to the “Great Leap Forward,” which brought on one of history’s most horrific famines, with upwards of 30 million deaths according to fairly conservative estimates.

A brief respite from this during the period 1961 to 1965 saw relatively sensible leaders like Liu Shaoqi and Deng Xiaoping try at least to run a rational command economy. But Mao was back with a vengeance from 1966, when he launched the Great Proletarian Cultural Revolution, and threw the country back into virtual anarchy as he encouraged people to tear down all structures of authority: in the school, in the university, in the workplace, within the Party, you name it. Only thing that remained largely unscathed was the Army, which was able to restore some semblance of order.

And so “normal life” at which there’s any reasonable basis for comparison to the U.S. doesn’t even begin in China really until Mao’s death, or not until the end of 1978 with the inauguration of reform. The setbacks we’re talking about are mind boggling. Sure, the US had a few bad episodes during its what, 237 years of life to date: There was the Civil War of course. Any other major wars fought on American soil? Nope. American deaths numbered in the 10s of millions? Nope. Revolutionary overthrows? Nope. Massive political purges or terrors? McCathyism at its worst paled by comparison to Mao’s Anti-Rightist Movement.

The USA started with a virgin, resource-rich continent with vast oceans to either side and an indigenous population that had no resistance to common old world diseases like smallpox. And where they weren’t dying naturally, infected blankets—or Gatling guns—helped. Its late entries into two massive World Wars only increased its relative economic might. Remember, China has between one-fifth and one-sixth of the world’s population, but only about seven percent of the world’s arable land. Just one valley in USA, the San Joaquin Valley of Central California, produces something like one-eighth of the USA’s agricultural value.

CNpolitics,, a Chinese-language news website, recently released this infographic examining the differences between China and America’s wealthiest individuals as reported by Forbes Magazine. As the site notes, China’s relatively recent economic rise means its wealthy tend to be younger. Perhaps surprisingly for a country where all land legally belongs to the state, China’s rich are more likely than their American counterparts to have made their money in real estate. While the data may exclude individuals with undeclared assets — and thus potentially a number of contenders from both countries — it does reveal some unique differences between the world’s top two economic powerhouses.

America’s wealthy have more money

Total GDP (in 1 billion USD increments)

America’s wealth is distributed more evenly across the country

Entrepreneurs in China’s coastal regions have benefited from policies promoting development, and have climbed more quickly into the ranks of the wealthy. The top nine people on Forbes’ list of the wealthiest Chinese are from those provinces. In contrast, America’s wealthy are spread more evenly throughout the country. Excepting California and New York, there are few significant geographical differences.

The USA’s “Cultural Revolution” of the 1960s led to a true blossoming of culture. The litany of cultural changes that the US went through between 1949 and 1979—the years between the founding of the PRC and the beginning of the Reform period in China—are simply incomparable to China. China went backwards culturally during this period.

And in the USA? Be-bop, the Beats, the Civil Rights Movement, Lenny Bruce, Catcher in the Rye, Elvis, the Beatles, the whole British Invasion, Hendrix, Timothy Leary, LSD, the Pill, Philip Roth, Norman Mailer, Raging Bull, The Godfather I and II, the Anti War Movement, Watergate, disco, cocaine, Punk rock, and Saturday Night Live. In China, the most revolutionary thing was a Taiwan pop singer named Theresa Teng whose cassette tapes you could maybe get if you were lucky by 1979.

The odd confluence of factors that combined to create the Industrial Revolution in England (and later, other parts of Western Europe and North America) actually makes Europe and the west the historical outlier. People who ask the question “Why didn’t China experience the Industrial Revolution” are actually kind of asking the wrong question. The question is, why did England?