80 THE CHANGING WORLD ORDER TRANSITIONS ACROSS DIFFERENT TYPES OF MONEY IN CHINESE HISTORY Type 1 Type 2 Type 3 Tang 618– 907 Northern Song 960– 1127 Southern Song 1127– 1279 Early- Mid Qing 1644– 1800 People’s Rep of China 1949– Pres Yuan 1279– 1368 Ming 1368– 1644 Late Qing ~1800– 1911 Rep of China 1911– 1949 13 Inflation pre-1926 quoted in silver terms, post-1926 in RMB CHINESE INFLATION (Y/Y) -10% 0% 10% 20% 30% 1750 1775 1800 1825 1850 1875 1900 1925 1950 1975 2000 2025 Hyperinflation 13 I produced this diagram working with Professor Jiaming Zhu. 81 THE CHANGING WORLD ORDER CNY VS USD (INV) GOLD PRICE (IN CNY, INV) 0 2 4 6 8 10 1920 1970 2020 Up = stronger RMB 1920 1970 2020 0 4,000 8,000 12,000 16,000 Up = stronger RMB CHN INFLATION (Y/Y) CHN REAL GROWTH (Y/Y) -30% -20% -10% 0% 10% 20% 30% 40% 50% 1920 1970 2020 -30% -20% -10% 0% 10% 20% 30% 1920 2020 1970 82 THE CHANGING WORLD ORDER CHINA'S DEVELOPMENT SINCE 1949 AND 1978 1949 1978 2018 ∆ Since 1949 ∆ Since 1978 RGDP Per Capita* 348 609 15,243 44x 25x Share of World GDP 2% 2% 22% 12x 11x Population Below the Poverty Line ($1.90/Day)** — 96% 1% at least -96% -96% Life Expectancy 41 66 77 +36 Yrs +11 Yrs Infant Mortality Rate (per 1,000 Births) 200 53 7 -96% -86% Urbanization 18% 18% 59% +41% +41% Literacy 47% 66% 97% +50% +31% Avg Yrs of Education 1.7 4.4 7.9 +6.2 Yrs +3.5 Yrs *USD 2017, PPP-adjusted **The World Bank only has poverty data back to 1981 83 THE CHANGING WORLD ORDER UNITED STATES CHINA 1980 Today Change Change (%) 1980 Today Change Change (%) Average Years of Schooling 11.9 13.6 +1.7 +14% 4.6 7.9 +3.3 +72% Govt Spending on Education (% of GDP) 5.30% 5.50% 0.20% +4% 1.90% 5.20% 3.30% +174% Est Population w/ Tertiary Education (Mln) 25 60 +35 +140% 3 120 +117 +3,900% Population w/ Tertiary Education (% Working-Age Pop) 17% 28% 11% +68% 1% 12% 11% +2,272% Population w/ Tertiary Education (% World) 35% 15% -20% -57% 4% 31% +27% +590% STEM Majors (Mln) 3 8 +5 +141% 1 21 +21 +4,120% STEM Majors (% World) 29% 11% -18% -62% 5% 31% +26% +535% 84 THE CHANGING WORLD ORDER SHARE OF CENTRAL BANK RESERVES BY CURRENCY USD 51% EUR 20% Gold 12% JPY 6% GBP 5% CNY 2% Based on data through 2019 C H A P T E R 13 US-CHINA RELATIONS AND WARS 85 THE CHANGING WORLD ORDER GLOBAL POPULATION (MLN) 0 2,000 4,000 6,000 8,000 0 2,000 4,000 6,000 8,000 1500 1600 1800 1700 1900 2000 1900 1940 1980 1920 1960 2000 2020 GLOBAL POPULATION GROWTH (10YR CHG, EST) -5% 0% 5% 10% 15% 20% 25% 0% 5% 10% 15% 20% 25% 1500 1600 1800 1700 1900 2000 1900 1940 1980 1920 1960 2000 2020 Baby Boom WWII WWI Thirty Years’ War Collapse of Ming DynastyIndustrial Revolution Baby Boom WWII WWI C H A P T E R 14 THE FUTURE 86 THE CHANGING WORLD ORDER 14 10 20 40 60 80 30 50 70 10 20 40 60 80 30 50 70 1500 1600 1800 1700 1900 2000 GLOBAL LIFE EXPECTANCY AT BIRTH 1900 1975 1925 1950 2000 2025 COVID-19 WWII Baby Boom WWI, Spanish flu pandemic Thirty Years’ War Baby Boom WWII WWI, Spanish flu pandemic HIV/AIDS epidemic COVID-19 Flu outbreak & famine 1557 influenza pandemic Third Plague pandemic GLOBAL RGDP PER CAPITA (LOG) 8 7 9 10 11 0 30,000 40,000 10,000 20,000 1500 1600 1800 1700 1900 2000 GLOBAL RGDP PER CAPITA (2017 USD) 1900 1980 1940 2020 Inflection during the Industrial Revolution Invention of capitalism (founding of Amsterdam Stock Exchange) 14 Importantly, a number of the charts shown on these pages rely on the record from fewer countries further in the past, due to limited reliable data history. Life expectancy prior to the 1800s is solely based on Great Britain (marked by the dotted line). Global RGDP is primarily a mix of European countries before 1870. And there are not good records of total wealth prior to the 1900s, so I can’t show you the picture before then. 87 THE CHANGING WORLD ORDER GLOBAL REAL WEALTH PER CAPITA (ROUGH ESTIMATE, 2017 USD, LOG) 1900 1920 1940 1960 1980 2000 2020 1,000 10,000 100,000 Collapse of Qing, WWI, Russian Revolution, and Spanish flu Roaring ’20s Great Depression WWII PRC founded Peak of American Empire Great Leap Forward, famines Deng Xiaoping reforms Digital Revolution Dot-com bubble 2008 financial crisis COVID-19 GLOBAL RGDP PER CAPITA DRAWDOWNS -25% 10% -20% -10% -5% 0% 1500 1600 1700 1800 2000 1900 1900 1920 1960 2000 1940 1980 2020 -16% -12% -8% -4% 0% 2008 crisis COVID-19 WWI WWII Great Depression Panic of 1819 Anglo-French War Dutch Revolt against Spain WWI WWII COVID-19 2008 financial crisis Great Depression GLOBAL REAL WEALTH PER CAPITA DRAWDOWNS -40% -30% -20% -10% 0% 1900 1920 1940 1960 1980 2000 2020 Great Depression 1970s stagflation Collapse of Qing, WWI, Russian Revolution, and Spanish flu WWII 2008 financial crisis 88 THE CHANGING WORLD ORDER GLOBAL DEATHS BY CATEGORY (RATE PER 100K PEOPLE, 15YMA) Famines Natural Disasters Pandemics 0 50 100 150 200 250 300 Indian famine Spanish flu HIV/ AIDS Indian and Chinese famines China’s Great Leap Forward Series of Indian famines Cocoliztli epidemics Russian famine French famine COVID-19 1500 1600 1700 1800 1900 2000 89 THE CHANGING WORLD ORDER ESTIMATED DEATHS FROM CONFLICT (MAJOR POWERS, %POP, 15YMA) Internal Conflict External Conflict Total 1400 1500 1600 1700 1800 1900 2000 0.0% 0.1% 0.2% 0.3% 0.4% 0.5% Wars of Religion in France European monarchic wars Chinese border wars, religious wars in Europe Collapse of Ming Dynasty, religious wars in Europe WWII, Holocaust, communist revolutions Time of Troubles in Russia Seven Years’ War in Europe Napoleonic Wars Ethnic wars in China WWI CURRENT INNOVATION AND TECHNOLOGY SCORE -1.5 1.0 0.0 2.0 0.5 -0.5 1.5 2.5 -1.0 USA JPN GBR CHN DEU EUR NLD ESP RUS FRA IND 15 15 Arrows denote the 20-year change in the gauge.