Wealth Accumulation and Distribution in Traditional China: A Study of Social Wealth in the Yangtze River Delta in the 1820s 

Wealth Accumulation and Distribution in Traditional China: A Study of Social Wealth in the Yangtze River Delta in the 1820s, written by Zhang Xiaojing, director and research fellow from the Institute of Finance and Banking at the Chinese Academy of Social Sciences (CASS), and Wang Qing, an assistant research fellow from the Institute of Economics at CASS, is the first exploration by Zhang and his team to apply the national balance sheet method to Chinese economic history.

The authors estimate the status of social wealth in the Yangtze River delta in modern China, prepare the social wealth statement, and systematically analyze the accumulation and distribution of wealth in traditional China from the perspective of international comparison.

Instead of using economic theory to derive data, the book bases the approach of national balance sheets on solid historical data collected from vast historical literature. Economic historian Bozhong Li’s An Early Modern Economy in China: A Study of the GDP of the Huating-Lou Area, 1823–29 collected and examined massive historical data in the process of estimating the historical GDP of the area, which became a “rich mine” to exploit.

The book adds new materials and new data along the line of Li, such as those on Huating and Lou’s financial markets, money stock, as well as military facilities, water facilities, and shrines, and other assets of the public sector. In addition, it also makes great expansions in terms of data estimation, adding new estimates “in the process of converting from flow data to stock data,” and calibrating previous parameters with new parameters.

The authors expand the research thinking of China’s economic history from historical GDP to historical national balance sheets. They conduct research on stock assets on the basis of fully referring to flow and income research, which comprehensively displays China’s historical asset structure and socio-economic development, broadening the scope of international comparison. Just as knowing a company needs to focus on its balance sheet, profit statement, and cash flow statement (as well as statement of changes in owners’ equity, financial statement notes, etc.), what we need to gain a more comprehensive understanding of the traditional Chinese economy not only includes the data of GDP and assets and liabilities, but also the cash flow of residents, enterprises, and governmental departments, which requires more nuanced data.

Chang Xu is an associate research fellow from the Institute of Contemporary China Studies at CASS.