GDP Update 2023: US ($27.5T) vs CHINA ($17.6T) [US up by $10 Trillion]

[NG Missile Vessels]

That is rich coming from you isn’t it. As I said even if Indian per capita income was 200 dollar more what difference it makes compared to LDC bd?

You can call bd poor once your per capita is 15k and bd is sitting at 2.5k. Like how Americans rightly say Mexico is poor. us per capita is 7 times higher then Mexico.

But Indians saying another fellow country poor is hilarious. specially when gdp is around 2.5k and barely suppress country like Bangladesh on per capita.

Luxembourg have higher GDP per capita than USA. Does it make them richer than USA?

 

[Bilal9]

Luxembourg have higher GDP per capita than USA. Does it make them richer than USA?

Yes it does. Both of their GDP per capita is way, way higher than either India or Bangladesh, so this hair-splittery and what-aboutery BS is waste of time.

Where India and Bangladesh both are on GDP per capita is a shame, so let's stop hijacking the thread and stay on topic.

 

[mmr]

Luxembourg have higher GDP per capita than USA. Does it make them richer than USA?

you are not serious are you lol

Luxembourg and usa vs India and Bangladesh lmao

You guys are something. No wonder ppl mock super power india for last 20 years.

 

[Broccoli]

Come back to talk in 20 years.

If i'm part of Xi's inner circle and steal money whats supposed to go for military... who's gonna stop me?

 

[The Accountant]

lol, how am I wrong? So, by saying I am wrong that mean you said EVERY, I will say again, EVERY Economist or Economic Policy, it doesn't matter anyone from the Fed looks at production as per their own currency and disregarding inflation? Sure, then go ahead and stop producing nominal number....

Because my point is it's depending on what you want to look at, Fed issue economic forecast based on Nominal number and issue interest rate and debt ceiling, because debt and interest rate (indirectly related) are unrelated to inflation, while organisation such as S&P and JP Morgan tend to looks at real value to issue forecast alert because that's the real value so that is a more clearer indication, say for example, for their credit rating, but that does not mean the Fed don't look at real value or PPP value or JP Morgan did not look at Nominal Value.

As for your question, does that means economy is double of China? Iin absolute term, yes, is relative term, no. That is like saying China have a better economic outlook because China has a better GDP growth rate than US, is it? Is it China grows at 5 or 7 or whatever % rather than the 2 or 3% of the US really mean that? You should know the answer.

I mean, since when did the health of an economy is being gauged by one factor and one factor alone? I don't know which school you went to or what type of economic sense you have or what economic theory you were taught, but if your point is Real GDP is more representative than nominal, then I would ask for my money back, because whoever taught you that is wrong, and that much I knew.

Which economic school do u went Mr. ?

i asked for one economist which says nominal GDP is better representative of economic situation then real GDP but rather than providing u start challenging my credentials.

Interesting you yourself that analyst such as JP Morgan use real GDP rather than nominal but you are still insisting that Nominal GDP is more representative.

Do you even know the meaning of GDP ? GDP means Gross Domestic Product. It is a representative of total production by a country within a year. Now for example, if a company produces 2 items and price them at 100 each whereas as another country produce just 1 item and price it at 200 each does this means both countries has same GDP ?

FED use nominal GDP yes because they will measure their production in their own currency at current price levels its easy for them but when you want to compare GDP of another country then it has to be on similar prices otherwise it will give an incorrect comparison of production.

Now comes to the real question is China's GDP is larger than USA? In terms of PPP yes it is much larger than USA but does that mean China is more powerful or or more prosperous than USA? No not even by a slight margin ? China is far behind USA in prosperity as well as power .

For prosperity GDP per capita is a more representative figure in which China is far behind furthermore there are lot of other metrics of person and human developments in which China is far behind but catching fast.

In terms of power, China is no match to USA as USA's defence budget is far higher than China as well its technology. Furthermore, alliances USA made and the grip on world economics, social and financial order USA has is far superior.

With all those superiority USA has over China, in terms of GDP China GDP in PPP terms is higher than USA and its a fact and it is the true measure of production capacity and economy of China which is currently bigger than USA in terms of PPP.

 

[jhungary]

Which economic school do u went Mr. ?

i asked for one economist which says nominal GDP is better representative of economic situation then real GDP but rather than providing u start challenging my credentials.

Interesting you yourself that analyst such as JP Morgan use real GDP rather than nominal but you are still insisting that Nominal GDP is more representative.

Do you even know the meaning of GDP ? GDP means Gross Domestic Product. It is a representative of total production by a country within a year. Now for example, if a company produces 2 items and price them at 100 each whereas as another country produce just 1 item and price it at 200 each does this means both countries has same GDP ?

FED use nominal GDP yes because they will measure their production in their own currency at current price levels its easy for them but when you want to compare GDP of another country then it has to be on similar prices otherwise it will give an incorrect comparison of production.

Now comes to the real question is China's GDP is larger than USA? In terms of PPP yes it is much larger than USA but does that mean China is more powerful or or more prosperous than USA? No not even by a slight margin ? China is far behind USA in prosperity as well as power .

For prosperity GDP per capita is a more representative figure in which China is far behind furthermore there are lot of other metrics of person and human developments in which China is far behind but catching fast.

In terms of power, China is no match to USA as USA's defence budget is far higher than China as well its technology. Furthermore, alliances USA made and the grip on world economics, social and financial order USA has is far superior.

With all those superiority USA has over China, in terms of GDP China GDP in PPP terms is higher than USA and its a fact and it is the true measure of production capacity and economy of China which is currently bigger than USA in terms of PPP.

First of all, I never said Real GDP is a better or worse measure than nominal, again, going back to my original point.

The argument here is, Economist preferred REAL GDP than nominal GDP as per this guy's post

View attachment 943529

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Government, Corporation such as S&P and JP Morgan don't just look at ONE SINGLE FACTOR on a given economic situation. You look at every aspect of the GDP, not everything is inflation related and sometime you need to make decision based on nominal value (again the example I use is setting interest rates and setting national debt ceiling.)

Real GDP is used to compare the actual value growth between 2 data, however, is that the totality of the entire economic situation? Again, I had used the question of China growth are more than US at 5 to 7% compare to US 2-3%, does that mean China economy is more stable than the US? And now, tell me you can give me a solid and valid answer without looking at nominal value.

My point is, in case you still don't get it ,depends on which aspect you are looking at, sometime economist looks at Nominal GDP and sometime economist look at REAL or PPP, again, as I said before, if whoever taught you economy said economist ONLY looks at one single aspect, be it nominal or real or PPP, you should ask for a refund.

And I got my master from Macquarie University offered by International College of Management Sydney. Do you want to look at my diploma? I wasn't interested in where you went to school before, now I do. So, where's yours?

 

[OIO]

U.S. power generation, imports and exports, consumption, tax are all down significantly, GDP and jobs are growing, hehe

 

[The Accountant]

First of all, I never said Real GDP is a better or worse measure than nominal, again, going back to my original point.

The argument here is, Economist preferred REAL GDP than nominal GDP as per this guy's post




Government, Corporation such as S&P and JP Morgan don't just look at ONE SINGLE FACTOR on a given economic situation. You look at every aspect of the GDP, not everything is inflation related and sometime you need to make decision based on nominal value (again the example I use is setting interest rates and setting national debt ceiling.)

Real GDP is used to compare the actual value growth between 2 data, however, is that the totality of the entire economic situation? Again, I had used the question of China growth are more than US at 5 to 7% compare to US 2-3%, does that mean China economy is more stable than the US? And now, tell me you can give me a solid and valid answer without looking at nominal value.

My point is, in case you still don't get it ,depends on which aspect you are looking at, sometime economist looks at Nominal GDP and sometime economist look at REAL or PPP, again, as I said before, if whoever taught you economy said economist ONLY looks at one single aspect, be it nominal or real or PPP, you should ask for a refund.

And I got my master from Macquarie University offered by International College of Management Sydney. Do you want to look at my diploma? I wasn't interested in where you went to school before, now I do. So, where's yours?

My point is simple when you are comparing any two economies or any two periods then nominal economy is wrong to look at. If you are of the same opinion then we are in agreement. As the thread is about comparison of USA economy v/s China therefore talking about Nominal GDP is useless infact in this case the only figure (with respect to GDP measurement only) that is to be used is GDP PPP.

The other economic indicators need also be considered and there is no argument or debate about it. But in this current discussion where comparing two economies nominal GDP of USA is meaningless.

With respect to my credentials; I am Fellow Member of Institute of Chartered Accountants of Pakistan, Associate Member of Institute of Chartered Accountant of England and Wales, Also doing Masters in Fintech from Karachi School of Business and Leadership - a university established in Pakistan with collaboration from Cambridge Judge Business School, London, to start my PhD next year.

 

[K_Bin_W]

Luxembourg have higher GDP per capita than USA. Does it make them richer than USA?

Better living conditions than US

 

[F-22Raptor]

My point is simple when you are comparing any two economies or any two periods then nominal economy is wrong to look at. If you are of the same opinion then we are in agreement. As the thread is about comparison of USA economy v/s China therefore talking about Nominal GDP is useless infact in this case the only figure (with respect to GDP measurement only) that is to be used is GDP PPP.

The other economic indicators need also be considered and there is no argument or debate about it. But in this current discussion where comparing two economies nominal GDP of USA is meaningless.

With respect to my credentials; I am Fellow Member of Institute of Chartered Accountants of Pakistan, Associate Member of Institute of Chartered Accountant of England and Wales, Also doing Masters in Fintech from Karachi School of Business and Leadership - a university established in Pakistan with collaboration from Cambridge Judge Business School, London, to start my PhD next year.

In terms of relative national power all that matters is nominal GDP. PPP only matters at the individual level. PPP is useless as a measurement of national power.

And most economic think tanks agree with me as previously proven in this thread.

Unless you believe India has greater economic power than both Germany and Japan combined.

 

[GWXP]

Economy of China is already 23% bigger than US economy, because the only measure of real output is GDP PPP and not Nominal GDP.

Prior to GDP and GNP, economic power of a country was measured by its industrial output. Economists and politicians compared steel output and coal output of different countries to measure their economic and potential military might.

Nominal GDP shows importance of Economy to international trade, business and investments and that is why it is the most commonly used indicator. Traders and investors don't care about GDP PPP, but care about the market size of the country in dollars (Nominal GDP).

However Nominal GDP, while showing market price of goods and services, doesn't show real output when adjusted for price differences for the same goods.

For example USA produced a Hamburger that costs 2$ and China produced a Hamburger that costs 1$. Both Hamburgers are same, but Nominal GDP of USA will be 2$ and China's Nominal GDP will be 1$....So you will say that US economy is 2 times bigger than China's economy but that will be wrong, because both countries produced one same Hamburger and must have same economy size.

GDP PPP captures that fact and PPP adjustment shows that US economy is 2$ and China's economy is also 2$.

So in the example when US produced one Hamburger and China also produced one Hamburger, but market price of US Hamburger is 2$, while China's Hamburger is 1$:
Nominal GDP of US will be 2$ vs China's Nominal GDP of 1$.
But GDP PPP of USA will be 2$ vs China's GDP PPP of 2$-the same economy size and this is fair because both produced one Hamburger each.

Nominal GDP depends on national currency exchange rate. You calculate Nominal GDP of China by dividing China's GDP in yuan by the official exchange rate of yuan to dollar (121trln yuans divided by 7,19= 17trln dollars)

When national currency appreciates due to foreign currency inflows Nominal GDP increases and when national currency devalues Nominal GDP shrinks.

For example, Russia's Nominal GDP in 2014 was 2,6trln$, but when Ruble depreciated in 2015 Nominal GDP fell to 1,4trln$. So you can say that Russia's economy fell 1,85 times in a single year, but you will be wrong because most Russians didn't feel significant decrease in their standard of living during that period and GDP PPP remained the same.

China is a currency manipulator according to the US Treasury Department. China artificially devalues its national currency for the purpose of boosting exports and improving trade balance and increasing domestic employment, despite the fact that such policy decreases China's Nominal GDP. China's Central Bank prints yuans and buys dollars on the foreign exchange market and this devalues yuan relative to dollar and allows China's Central Bank to accumulate huge Forex Reserves.

If China stops being a currency manipulator, yuan will appreciate maybe by 40% and China's Nominal GDP will increase by 40% in a single year from 17trln$ to 24trln$...But if they do that, exports will fall, imports will increase, trade balance can become negative and there will a recession and rise in unemployment.

So the point here is that exchange rate based Nominal GDP shows market size of the country in dollars to investors and traders, but doesn't show real economic output, which is showed by GDP PPP.

China's GDP PPP is 33trln dollars compared to 26,8trln dollars of US. It is like if China produces 33trln Hamburgers while US produces 26,8trln Hamburgers, so China produces MORE and its economy is bigger, even despite the fact that American made Hamburgers are more expensive when valued in dollars due to favorable dollar exchange rate.

Other indicators also show that China's economy is larger than US:

China generates 8.537bln Kwh, while US generates 4.381bln Kwh
China produces 27mln cars, while US produces 10mln cars,
China produces 48% of ships of the world, while US only 0,35%
China produces more steel and cement than the rest of the world combined
China holds 33% of global manufacturing compared to US's 16%

However 20% of US economy is healthcare compared to 6% in China.

Also regarding India's GDP. I have been in India in Delhi, Calcutta, Mumbai, Agra and Varanasi and fair to be empirical observations led me to believe that they are lying about their GDP and GDP per capita.

If you look at statistics India's GDP PPP per capita is 9000$ - not far from Uzbekistan's 10.000$, so you might assume both countries are at the same level of development.

However, if you compare other indicators you can see the difference:

India:
electricity production per capita: 1262 Kwh
urbanization: 35%
new car sales: 1 car sold per 294 persons

Uzbekistan :
electricity production per capita: 2000 Kwh
urbanization: 51%
new car sales: 1 car sold per 112 persons

How come Indians, who consume 60% less electricity, who are 1,5 times less urbanized and buy 3 times less cars have the same standard of living as Uzbekistan?

My feeling is that India is lying about its GDP and GDP growth rate and in reality their economy is much smaller.

Same for Egypt- been there and Egypt looked very similar to India:

Egypt 109mln:
electricity production: 218bln Kwh
per capita electricity consumption: 2000 Kwh
urbanization: 43%
new car sales: 250.000 cars

Iran 89mln:
electricity production: 353bln Kwh
per capita electricity consumption: 3966 Kwh
urbanization: 77%
new car sales: 1.050.000 cars

In no way, Egypt can have larger economy than Iran, when they produce 60% less electricity than Iran despite having larger population, have less urban population (47mln vs 69mln) and buy 4 times less cars.

So the point is that reality can be different from official statistics

 

[Menthol]

Economy of China is already 23% bigger than US economy, because the only measure of real output is GDP PPP and not Nominal GDP.

Prior to GDP and GNP, economic power of a country was measured by its industrial output. Economists and politicians compared steel output and coal output of different countries to measure their economic and potential military might.

Nominal GDP shows importance of Economy to international trade, business and investments and that is why it is the most commonly used indicator. Business, traders and investors don't care about GDP PPP, but care about the dollar market value of the economy (Nominal GDP).

However Nominal GDP, while showing market price of goods and services, doesn't show real output when adjusted for price differences for the same goods.

For example USA produced a Hamburger that costs 2$ and China produced a Hamburger that costs 1$. Both Hamburgers are the same, but Nominal GDP of USA will be 2$ and China's GDP will be 1$....So you will say that US economy is 2 times bigger than China's economy but that will be wrong, because both countries produced one same Hamburger and must have same economy size.

GDP PPP captures that fact and PPP adjustment shows that US economy is 2$ and China's economy is also 2$.

So in the example when US produced one Hamburger and China also produced one Hamburger, but market price of US Hamburger is 2$, while China's Hamburger is 1$:
Nominal GDP of US will be 2$ vs China's Nominal GDP of 1$.
But GDP PPP of USA will be 2$ vs China's GDP PPP of 2$-the same economy size and this is fare because both produced one Hamburger each.

Nominal GDP depends on national currency exchange rate. You calculate Nominal GDP of China by dividing China's GDP in yuan by the official exchange rate of yuan to dollar (121trln yuans divided by 7,19= 17trln dollars)

When national currency appreciates due to foreign currency inflows Nominal GDP increases and when national currency devalues Nominal GDP shrinks.

For example, Russia's Nominal GDP in 2014 was 2,6trln$, but when Ruble depreciated in 2015 Nominal GDP fell to 1,4trln$. So you can say that Russia's economy fell 1,85 times in a single year, but you will be wrong because most Russians didn't feel significant decrease in their standard of living during that period and GDP PPP remained the same.

China is a currency manipulator according to the US Treasury Department. China artificially devalues its national currency for the purpose of boosting exports and improving trade balance and increasing domestic employment, despite the fact that such policy decreases China's Nominal GDP. China's Central Bank prints yuans and buys dollars on the foreign exchange market and this devalues yuan relative to dollar and allows China's Central Bank to accumulate huge Forex Reserves.

If China stops being a currency manipulator, yuan will appreciate maybe by 40% and China's Nominal GDP will increase by 40% in a single year from 17trln$ to 24trln$...But if they do that, exports will fall, imports will increase, trade balance can become negative and there will a recession and rise in unemployment.

So the point here is that exchange rate based Nominal GDP shows market value of the economy to investors and traders, but doesn't show real economic output, which is showed by GDP PPP.

China's GDP PPP is 33trln dollars compared to 26,8trln dollars of US. It is like if China produces 33trln Hamburgers while US produces 26,8trln Hamburgers, so China produces more and its economy is bigger, even despite the fact that American made Hamburgers are more expensive when valued in dollars due to favorable dollar exchange rate.

Other indicators also show that China's economy is larger than US:

China produces 27mln cars, while US produces 10mln cars,
China produces 48% of ships in the world, while US only 0,35%
China produces more steel and cement than the rest of the world combined
China holds 33% of global manufacturing compared to US's 16%

However 20% of US economy is healthcare compared to 6% in China.

Also regarding India's GDP. I have been in India in Delhi, Calcutta, Mumbai, Agra and Varanasi and fare to be empirical observations led me to believe that they are lying about their GDP and GDP per capita.

If you look at statistics, then India's GDP PPP per capita is 9000$ - not far from Uzbekistan's 10.000$, so you might assume both countries are at the same level of development.

However, if you compare other indicators you can see the difference:

India:
electricity production per capita: 1262 Kwh
urbanization rate: 35%
new car sales: 1 car sold per 294 persons

Uzbekistan :
electricity production: 2000 Kwh
urbanization rate: 51%
new car sales: 1 car sold per 112 persons

How come Indians, who consume 60% less electricity, who are 1,5 times less urbanized and buy 3 times less cars have the same standard of living as Uzbekistan?

My feeling is that India is lying about its GDP and GDP growth rate and in reality their economy is 30-50% smaller.

Same for Egypt- been there and it looked like Arabic India:

Egypt 109mln:
electricity production: 218bln Kwh
per capita electricity consumption: 2000 Kwh
urbanization rate: 43%
new car sales: 250.000 cars

Iran 89mln:
electricity production: 353bln Kwh
per capita electricity consumption: 3966 Kwh
urbanization rate: 77%
new car sales: 1.050.000 cars

In no way, Egypt can have larger economy than Iran, when they produce 60% less electricity than Iran despite having larger population, have less urban population (47mln vs 69mln) and buy 4 times less cars.

So the point is that reality can be different from official statistics

Amazing explanation!!!

It's very clear and straight forward!

 

[jhungary]

My point is simple when you are comparing any two economies or any two periods then nominal economy is wrong to look at. If you are of the same opinion then we are in agreement. As the thread is about comparison of USA economy v/s China therefore talking about Nominal GDP is useless infact in this case the only figure (with respect to GDP measurement only) that is to be used is GDP PPP.

The other economic indicators need also be considered and there is no argument or debate about it. But in this current discussion where comparing two economies nominal GDP of USA is meaningless.

With respect to my credentials; I am Fellow Member of Institute of Chartered Accountants of Pakistan, Associate Member of Institute of Chartered Accountant of England and Wales, Also doing Masters in Fintech from Karachi School of Business and Leadership - a university established in Pakistan with collaboration from Cambridge Judge Business School, London, to start my PhD next year.

You didn't actually read my post didn't you? Already pointed that out in my original post

The problem is, a dollar is always a dollar, while the value can be inflated in term of purchasing parity, a dollar is always equal to 1 dollar, so the nominal value would represent the absolute growth, as in how much the economy is expanding, because it is the actual value the economy is expanded by, it doesn't matter if the cost of living or the cost of producing of any item is increased over time, because you aren't living in 1949 or 2001. On the other hand, if the economist wants to look at and compare the growth from a period to another, say if he/she want to look at and compare how the economy growth in 1943 and 2023, then looking at nominal value is pointless because the value of dollar is different in 1943 and 2023. That's when you use real GDP.

On the other hand, comparing 2 economies goes with a very board scope, you can't really just use real GDP or PPP for any solid indication. Real and PPP only show you a variable of differences, you don't always know the big picture of economy value between the two, say for example, what real GDP show how much is the actual gap, which is just a snapshot at that instant, problem is, nominal value is always going to be the same, just because inflation is not going to be 7% next year does not mean GDP will go down from 26 trillions, that is why nominal value is favored when you do long term forecast.

About credential, I have a bachelor's degree in international politics, then a MMgt in Interntional Business, then a MPhil in Strategic Studies, was in University of NSW Research Fellowship program (dropped out since I decided not to pursuit a PhD) and is currently working for a top 10 think tank in Australia and a Washington base political think tank.

 

[nibba]

I think china devalues CNY bigly in the near future. Theyve stocked up on grain and oil which makes me think its even more likely.

Deflation story is real.

Another Big Chinese Property Domino Is Wobbling

Bonds of Country Garden, China’s largest developer by contracted sales, have been in free fall.

www.wsj.com

Country garden looks ready to default.

 

[The Accountant]

You didn't actually read my post didn't you? Already pointed that out in my original post



On the other hand, comparing 2 economies goes with a very board scope, you can't really just use real GDP or PPP for any solid indication. Real and PPP only show you a variable of differences, you don't always know the big picture of economy value between the two, say for example, what real GDP show how much is the actual gap, which is just a snapshot at that instant, problem is, nominal value is always going to be the same, just because inflation is not going to be 7% next year does not mean GDP will go down from 26 trillions, that is why nominal value is favored when you do long term forecast.

About credential, I have a bachelor's degree in international politics, then a MMgt in Interntional Business, then a MPhil in Strategic Studies, was in University of NSW Research Fellowship program (dropped out since I decided not to pursuit a PhD) and is currently working for a top 10 think tank in Australia and a Washington base political think tank.

My friend we are saying the same thibg except one major difference. Nominal GDP is used to represent size of economy as of now. For any other purposes or analysis real GDP is used. As i have been doing this consistently i know this for a fact. My sister and my brother are PhD in economics so we have detailed discussions on every now and then.

Real GDP is not just for difference but all the planning is done on real GDP. For example if u r in current year and planning for next year GDP growth you will use current nominal GDP as base but all the projections and working for next year will be on the basis of real growth in output without givibg and consideration to price increase except for tax computations.

Furthermore if u r comparing two countries which is topic at hand then then in terms of GDP only PPP is the real matrix to compare. Nominal GDP do not give any comparative analysis as it is like comparing apple with orranges.

Anyways lets move on and lets agree to disagree ..