jhungary
MILITARY PROFESSIONAL
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Scaling GDP/cap (actual figures) and then comparing and scaling inflation (in percentage) ? No you cannot do that. That is such a colossal mistake.
Yes, US GDP/cap is more than 4X China. But cost of basic items are probably 4X less in China. I know in China if you are a peasant, the government will give or lease you a large piece of land to build a house and to grow whatever you want. Public Transport is efficient and cheap unlike in US where you might have to own and maintain a car. So each country is different and so the poverty line are different due to the local cost of living and conditions. I know a year ago China increased the poverty line and actually added more people to receive benefits. So as the country progresses and the poverty is reduced, the poverty line will move up. So the reason for the poverty line in US being much higher.
Boy, are you hard to understand.
So exporting deflate local market while exporting inflate domestic market ? What are you saying here ?
I am not an economist. But at least I know how to check if a country is doing OK.
First you look at the country current account (Mostly imports and exports and FDI). Ie is the country making money? For China the current account is positive. So China is making money, raking in about US$200 billion a year.
You also look at the budget. Is it balance ? For China it is actually positive.
Then inflation. China is 2.5% is low. Low inflation means you can use fiscal means to stimulate the economy (if needed).
Then GDP. For China it is positive. So China is still growing.
Then Check your external debt. See if your GDP growth is based just on borrowing (Like in US).
There are many other figures but I would start with the above.
China GDP is in very good shape. It is just not balance. Ie too much GDP is based on infrastructure. But then infrastructure are also long term investment which will bring future dividends. And if there are signs of slow down and China needs to stimulate the economy it has more than a few means.
Why do you think the Chinese RMB has increased 14% over the past 5 years. A stronger RMB will also help to control inflation too.
Dude, did you actually read my post or you just rant without even looking at other people post.
1.) % can and need to scale down, when you look at inflation, it represent purchasing power. And the purchasing power is differnet when you earn US$42000 and when you earn $12000
When you are talking spending power, you cannot talk about % like they do in mathematics. When you have $1000 in your hand, you are more incline to spend $100 (10%) of your money then you would when you have $10 in your hand and you have to spend $1 (10%) on something.
The basic purchasing power (or spending power) is depending on a scale, not the mathematical %.
2.) I never say I believe a "Healthy" inflation in the first place, you need to be clear about that
I said, IF an healthy inflation do exist. The case in the US would not be the case in China.
I never believe an healthy inflation can exist. So i don't understand why you want to say my point is incorrect on whatever ground. We simply have a different view.
