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14 An Introductory Overview
Catch-up Growth: The Data Per capita GDP is generally taken as the best single measure of the level of economic performance. In 2010, Japan’s was $30,920 in PPP constant 2005 dollars, Korea’s was $27,027, and China’s was $6,810. Korea’s 2010 level slightly surpassed Japan’s 1990 level, but the world productivity frontier had continued to rise. China’s growth began from such a low base that despite 30 years of rapid catch-up growth, its per capita GDP in 2010 was still far below Japan’s. China’s future catch-up growth potential continues to be high. A Note on the Data In this chapter, comparable data from the databases of the World Bank, IMF, and United Nations are provided for each country. Comparisons of total and per capita GDP and rates of growth are fraught with measurement difficulties. The World Bank provides directly comparative data using international dollars at PPP rates. For all three countries the data on international trade and on finance are good, though inevitably they do not include transactions in informal financial markets. Other economic data for China are considerably less good than for Korea or Japan. This reflects its still much lower level of development. Expert opinion is that data on most economic variables for China are relatively good compared to other emerging economies at its same level of development.
Table 1.3 and figure 1.1 present data on growth in the three countries for 1980–2010. The differences are wide, reflecting the respective timing of the catch-up process. GDP growth has depended both on increases in the number of workers and rises in labor productivity. In all three countries the increases in labor input slow, and the growth gap between GDP and per capita GDP narrows, during the 1980–2010 period. Japan’s 1980 per capita GDP was 69 percent of the US level, increasing to a peak of 86 percent in 1991. Subsequent mediocre growth performance in the 1990s reduced this to 72 percent in 2000, where it has since more or less remained. Part of this decrease is because the share of the labor force in Japan’s population decreased, unlike the United States.