Discrepancy between GDP and GNI of Asian countries

[William Hung]

Looking at the differences between GDP and GNI (aka GNP) is interesting and surprising.

Here are some 2013 figures from World Bank (GDP nominal per cap vs GNI per cap in $) :

China:
GDP: 6807
GNI: 6560

South Korea:
GDP: 25977
GNI: 25920

Japan:
GDP: 38492
GNI: 46140

Indonesia:
GDP: 3475
GNI: 3580

VietNam:
GDP: 1911
GNI: 1730

Thailand:
GDP: 5779
GNI: 5370

Philippines:
GDP: 2765
GNI: 3270

Here's the difference between GDP and GNI (note GNI is same as GNP) :

Gross Domestic Product (GDP) and Gross National Product (GNP) are closely related measures. GDP measures the total output of the economy in a period i.e. the value of work done by employees, companies and self-employed persons. This work generates incomes but not all of the incomes earned in the economy remain the property of residents (and residents may earn some income abroad).

So in countries like Japan and US, their GNI is higher than their GDP as expected because their companies have lots of offshore ventures or investmemt abroad. The revenue and profits from them goes back into the pockets of Japanese and US residents. Singapore will probably have similar discrepancy.

It is surprising to see that Indonesia and Philippines have higher GNI figures than GDP. Maybe from foreign remittance maybe?

China has a lower GNI figure than their GDP as expected because plenty of companies are foreign owned. But the discrepancy is not bad, GDP is only about 3% more than GNI figure. SK has a healthy figure too, GDP only slightly higher.

Vietnam is hilarious. Their GDP is almost 10% higher than their GNI. This mean that their GDP figure, which is already low, is not representative of their residents income because 10% of those revenue and profits, actually go into the pocket of foreigners residing outside their country, e. g. Samsung, LG owners or shareholders in SK etc.

Thailand is a bit high too (about 7% discrepancy), but not with the ridiculous discrepancy like VietNam.

Am I interpreting this right?
@LeveragedBuyout, etc.

 

[kankan326]

I'm in Beijing. Below are the prices here for foods.

rice $1/kg
pork $3/kg
beef $9/kg
cucumber $1/kg
tomato $1/kg
grape $1.7/kg
apple $1.7/kg

 

[William Hung]

I'm in Beijing. Below are the prices here for foods.

rice $1/kg
pork $3/kg
beef $9/kg
cucumber $1/kg
tomato $1/kg
grape $1.7/kg
apple $1.7/kg

The difference between GDP and GNI doesn't really say anything about about living cost, standard, etc (for that, you look at PPP, etc).

What the figures here say, is how much the revenues and incomes generated in an economy goes into the pocket of local residents, and how much goes into foreigner or entities residing in another country.

According to the World bank data for 2013, about 3% of revenue and incomes generated by your economy goes outside to foreigners. It is expected, as foreign owned companies have shareholders living abroad. But 3% is not bad. I expect this 3% figure to go down lower in the future as PRC is pushing hard to support their local companies. They are making heavy investment abroad. Also they are cracking down on clever games played by foreign owned companies so expect this to make an impact too.

It is surprising to see Indonesia and Philippines have higher GNI than GDP. I'm not quite sure how to explain this. Maybe they have higher offshore ventures and investments than I expected.

VietNam, I think is useless lol.

 

[Viet]

yeah we are useless and poor. let´s have a party
where are now all the chinese who claim vietnamese are actually chinese?

 

[FairAndUnbiased]

It is surprising to see Indonesia and Philippines have higher GNI than GDP. I'm not quite sure how to explain this. Maybe they have higher offshore ventures and investments than I expected.

Maids and laborers working overseas, black money bank accounts, etc. are all GNI.

 

[Cossack25A1]

You are right about the PH having higher GNP over GDP to an extent that one of the main exports of the PH is actually overseas workers. It has become an industry that we must find a way to reverse the trend.

 

[farhan_9909]

I'm in Beijing. Below are the prices here for foods.

rice $1/kg
pork $3/kg
beef $9/kg
cucumber $1/kg
tomato $1/kg
grape $1.7/kg
apple $1.7/kg

In Pakistan(Considering High Quality)

*Rice $1.5/Kg
*Beef $0.3/kg
*Tomato $0.6/kg
*grape $2/kg
*Apple $1.2kg
*Onion $0.5/kg
*Mutton $6/kg

 

[William Hung]

Maids and laborers working overseas, black money bank accounts, etc. are all GNI.

You are right about the PH having higher GNP over GDP to an extent that one of the main exports of the PH is actually overseas workers. It has become an industry that we must find a way to reverse the trend.

Yea that's the only thing I could think of, remittance from oversea workers.

yeah we are useless and poor. let´s have a party
where are now all the chinese who claim vietnamese are actually chinese?

It's not really a laughing matter. Remember that VietNam also send workers oversea and receive significant remittance from abroad. This will increase the GNI in reference to the GDP and offset the discrepancy.

So when I said 10% of your GDP goes to foreigners, it's not really accurate. The real percentage might even be more!

 

[ayachyan]

no surprise. The national balance sheet will tell you more.

 

[William Hung]

Dude,

GDP and GNI are two different parameters.

While GDP is the amount of economic output of a country produced by both Foreign, and Domestic residents and assets; GNI is the amount of economic output of a country's national, both at home and abroad.


For example: If an Indian migrates to US and creates a software program, his earning would be added in GDP of US while in GNI of India.

Asian countries have such a large discrepancy in GDP and GNI figures, because of large number of migrants from Asian countries.

Stats for India are even more lopsided:

GDP: $1.9 Trillion

GNI: $6.7 Trillion

GNI/GDP ratio =3.5 Indian NRI's earn 3.5 times than Indians combined.

Hmmm, where did you get those figures?

According to World bank data for India in 2013:

GDP (nominal) per capita = $1499
GNI per capita (Atlas method) = $1570

It's not so lopsided like your figures.

I'm not sure about your explanation about migration. I think we are talking about different calculation here.

If an Indian migrate and becomes resident of US (greencard or citizen, or whatever). His earning would be added to the US GDP, you're correct. But if he doesn't send remittance back home and his software company doesn't have oversea shareholders in India, it won't be added to India's GNI. Even if he has dual citizenship with Indian citizenship, so long as he reside in US and doesn't send anything back home, nothing will be added to India's GNI.

 

[Viet]

It's not really a laughing matter. Remember that VietNam also send workers oversea and receive significant remittance from abroad. This will increase the GNI in reference to the GDP and offset the discrepancy.

So when I said 10% of your GDP goes to foreigners, it's not really accurate. The real percentage might even be more!

I see you are happy with your higher GDP. Let see if you come to us again as have seen after the collapse of the Ming dynasty and after many periods of political and economic chaos in China. So I will see if you will seek asylum, ask for food and shelter if China collapses. I can tell you, we don´t take ungrateful people.

 

[anonymus]

Hmmm, where did you get those figures?

According to World bank data for India in 2013:

GDP (nominal) per capita = $1499
GNI per capita (Atlas method) = $1570

It's not so lopsided like your figures.

I have made a mistake of not checking data.GDP figures are for USD while GNI figures are for PPP

 

[William Hung]

I see you are happy with your higher GDP. Let see if you come to us again as have seen after the collapse of the Ming dynasty and after many periods of political and economic chaos in China. So I will see if you will seek asylum, ask for food and shelter if China collapses. I can tell you, we don´t take ungrateful people.

What the hell are you rambling on about??? this thread has nothing to do with what country has higher GDP.

 

[William Hung]

I have made a mistake of not checking data.GDP figures are for USD while GNI figures are for PPP

Yea I thought your figures were too lopsided.

Also I think we have different kind of calculation in mind. I was wrong to say that GNP is the same as GNI. Some say they are different calculation.

One calculation considers the total income/outputs of their nationals (or citizens). The GNI figures I quote were calculated in terms of the flow of outputs/incomes:

... Another measure, Gross National Income, accounts for these flows in and out of the country. For many countries, the flows tend to balance out, leaving little difference between GDP and GNI. But not so for Ireland, as outflows of profits and income, largely from global business giants located there, often exceed income flows back into the country. This means that in a GNI ranking, rather than being in the top five, Ireland drops to 17th. In other words, while Ireland produces a lot of income per inhabitant, GNI shows that less of it stays in the country than GDP might suggest. Japan’s GNI rank, in contrast, is a little higher than it is for GDP, at 13th, reflecting the effect of strong net financial inflows from firms and workers based abroad.

I think this calculation in terms of income flow is better. Since if one of your fellow national migrate abroad and don't plan to return or send anything back, theres no point in adding his incomes/outputs. Even if he still holds Indian citizenship, he should still be treated as a foreign national.

 

[zeronet]

In Pakistan(Considering High Quality)

*Rice $1.5/Kg
*Beef $0.3/kg
*Tomato $0.6/kg
*grape $2/kg
*Apple $1.2kg
*Onion $0.5/kg
*Mutton $6/kg

Beef $0.3/kg?? how about sheep?
u will be a rich guy if u can find a way to ship beef and sheep to China. Most of Chinese extremely love to eat sheep grill