09 April 2012

Chinese City Dwellers More Productive

"Remarkably, in 2009 China generated some 40.9% of GDP from just 16.6% of its population living in the 35 largest cities."

From here.

Thus, the per capita GDP of big city dwellers in China is 358% of that of its other residents. Odds are the medium sized cities are intermediate in per capita GDP and that small town and rural China is even less productive per capita than this statistic would suggest.

Is the difference a big one? Yes. It is the difference between a $35,800 a year per capita GDP and a $10,000 a year per capita GDP, for example. To the extent that government isn't redistributing the production gap when it is transformed into purchasing power, it is an immense difference in affluence.

It also seems to be quite typical of how economies develop and have developed historically. Hot spots surge, other areas lag behind and catch up.

And, it is a bold embodiment of the fact that wealth production is a group activity, and that to the extent that it is an individual activity that it is driven by elites within the group. An average man is going to be much more affluent in the city than in the country, in a result that has almost nothing to do with his personal abilities. He is more productive in the city because he is part of a mode economically efficient urban economy as a whole, and because he is probably also working for more talented masters.

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