Posted on 12/18/2007 6:16:08 PM PST by Kaslin
Competition: The common wisdom is that China's large and fast-growing economy could overtake the U.S. as soon as 2012. Not so fast. New data suggest China's not quite as big as economists once thought.
At $5.3 trillion based on 2005 data, China's economy is still No. 2. But it has considerably more ground to make up before passing the U.S. in absolute size — if, in fact, it should ever do so. Total world output in 2005 was $55 trillion. The U.S. produced $12.4 trillion of that — with a population only one-fourth the size of China's.
How did these new data come about? The World Bank uses what's called Purchasing Power Parities — PPP for short — to figure how big an economy is. Basically, it surveys a market basket of some 1,000 goods and services, and sees how much of each people in those countries can actually buy in their own currency.
Doing this around the world, the bank discovered that 12 economies make up more than two-thirds of the world's GDP. Seven of those are so-called high-income economies — the U.S., Japan, Germany, the U.K., France, Italy and Spain.
Five are "transitional" economies — Brazil, Russia, India and China (the so-called "BRICs") plus Mexico. Together, they make up about 20% of output.
(Excerpt) Read more at ibdeditorials.com ...
With regard to "inbreeding," simply this: it's the opposite of the melting pot that was/is America, wherein, combined with a robust faith and a relatively free economy, we became, in very short order and to the amazement, benefit and chagrin of the world, the prime earthly mover in world events.
Recall that my post was a continuance of the theme of juxtaposing the US and China that was theme of the post I responded to.
Chinese ringneck pheasant [in the U.S.]
Fine game bird.
How about some Chinese for dinner, honey?
This means that the Chinese economy has been growing much less rapidly than thought. So now for the big question: which is growing faster, India or China?
Do the Indian economic growth statistics have the same tendencies to be exaggerated, or does its more open society prevent such ridiculous nonsense?
Actually what this means is that price inflation in China has risen faster than previously estimated, in fact it has risen faster nearly everywhere. If anyone actually bothered reading the preliminary world bank report instead of being the usual slack jawed drooling idiots they are, they would have realized that most nations surveyed also had revisions. China is highlighted because a) “China Threat” scenario b) it sells newspapers c) Idiot journalists don’t know where other countries are. Despite the constant railing against the MSM here at FR, most people still don’t seem to be able to read critically.
For the Asia pacific region, major developing economies were revised downards thus:
China - 39.8%
Bangladesh - 42.7%
India - 37.4%
Indonesia - 20.4%
Pakistan - 4.7%
Phillipines - 41.6%
Vietnam - 30.5%
Malaysia and Thailand were the exceptions in that both gained slightly from the revision, 3.7% each in fact.
If you will notice the trend, those countries with higher PPP multipliers were adjusted far more(Bangladesh and India have the highest, 5.5:1 and 4.5:1 respectively), while those with lower multipliers of around 2:1, such as Pakistan and Malaysia and Thailand were barely touched. These of course are only preliminary figures and a more finalized report is coming out in February 2008.
Regarding your question, India most certainly does “touch up” it’s figures.. For example, India’s CPI does not take into account rent pricing when factoring inflation. Considering that this is the single largest household expenditure and it has expanded dramatically in recent years, omitting it from the CPI lowers the inflation level. Housing price growth has exceeded income growth significantly in India. For example, prices in Mumbai are nearly that of first world cities such as New York, despite average income being some 40x lower.
Seems to be a chink in the armor of common wisdom.
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