How many years will it take for China to add another India's nominal GDP? 3, 4 or 5?

[AndrewJin]

Now let's get this sorted out.PPP is more or less taking a basket of products and services and comparing their aggregate costs in different countries.It seems like a fine way of measurement until two things crop out-
1-Decline in quality: While a meal,taxi,massage etc etc may cost you less due to the low labour costs in third world countries,there is a sharp drop in quality to make up for the "cheapness".As soon as you start to set the bar higher the costs shoot up and there is no price advantage left to speak of.In some cases,the products and services may get far more expensive.So when one balances the reduced cost but lack in qulaity,the PPP benchmark is inherently flawed as it fails to account for the difference in quality of same product across different countries.

2-PPP is useless for purchase of manufactured products and services requiring expensive infra and highly skilled labour: The main reason why countries score higher in PPP is because the lower labour costs drag down the price of many products and services at a disadvantage mentioned above.But as soon as it is a service or product requiring highly trained labour and extensive resources to produce,the PPP advantage goes out the window.In many ways,the lack of the mentioned two things in third world countries even makes products and services far more expensive than the developed world.So the PPP advantage is mainly for basic needs like food,clothing and untrained and unskilled labour.
Case in point-manufactured goods and their costs in India versus those imported from China.A classic case is the Indian toy industry.Toys made in India are of an inferior quality and more expensive as compared to ones imported from PRC even after the costs of shipping and paying sky high customs and excise.The Chinese toys are of a superior build and more effective pricing.Same case for almost every other service or product requiring highly skilled labour and infra.

BTW-If US and Pakistan were considered two poles,China would be the middle ( for now).India is right there with Pakistan a snail's pace ahead but more or less the same.

I see and so does everyone how carefully you avoided a very simple question as it blows several holes in your facetious arguments.

"So let me get this-If I buy a laptop for 1500 dollars in US,in India I can buy it for as low as 500 dollars because of PPP advantage?"

Let me come at you another way.Say a gallon of gasoline costs $3 dollars in US.Can I buy the same quantity in India for $1.Since you know PPP??

If u travel in South Asia and compare to traveling in China or SEA, u will find that, to ensure the SAME level of comfort and cleanness, it's much cheaper to travel in China or SEA. Same traditional A/C trains, bedding in China is cheaper than that in India but here traditional trains are faster, cleaner, safer and more comfortable. (and u don't have to lock your suitcases).

 

[Abotani]

If u travel in South Asia and compare to traveling in China or SEA, u will find that, to ensure the SAME level of comfort and cleanness, it's much cheaper to travel in China or SEA. Same traditional A/C trains, bedding in China is cheaper than that in India but here traditional trains are faster, cleaner, safer and more comfortable. (and u don't have to lock your suitcases).

True,when one factors in quality only nominal benchmark should be used

 

[sherin616]

By your theory where usa stands
it had 11 trillion in 2004 its self
and adding one china from then on but usa only reached 18 trillion

 

[EAsian]

If you want to compare the quality of lives in different country，HDI will be a better measurement than gdp ppp.But yes HDI is seriously biased too，evwn more biase than GDP ppp.

 

[Obambam]

By your theory where usa stands
it had 11 trillion in 2004 its self
and adding one china from then on but usa only reached 18 trillionView attachment 263443

Chalk and cheese my friend. One is a developed country, the other a developing country (still is). China is still crashing rapidly, at 7% of its current total gdp. India on the other hand is already a supa powa, you won't see crash per annum anywhere like China's. That would be totally unthinkable.

 

[AndrewJin]

Chalk and cheese my friend. One is a developed country, the other a developing country (still is). China is still crashing rapidly, at 7% of its current total gdp. India on the hand is already a supa powa, you won't see crash per annum anywhere like China's. That would be totally unthinkable.

Next time, we should really avoid such comparison.
I am sorry for all.
India cannot even compare to western China which is a 2 trillion US dollars economy with annual growth more than 8% in H1 of 2014.

 

[Jacob Martin]

But you see-
A- Gasoline/petroleum is the price determining item of this age.Any item and it's price are hugely impacted by the price of at the pump and hence it's hardly " very small".
B-So do tell us how both vary?Let me answer that.Both are more expensive in India.Hence,PPP advantage is more of a disadvantage
C-Further illustrates my point.A huge part of cost in constructing that multiplex was labour.That is dirt cheap and untrained in India.That lavish meal?Most probably made and served by people who don't wash or bathe their hands or their body often using materials procured at dirt cheap prices at whole sale from some poor farmer who has barely anything.Such people usually don't even need a school diploma to be at their jobs in India.So not very "highly trained or skilled".
As I said,lower labour costs and lack of quality.

Here as both I and of course,unwittingly you, have demonstrated PPP is useful for measuring the poverty levels as poor people usually have one requirement-food.PPP is very useful for that i.e, to measur poverty and the prices for basic needs like food and water.
however as soon as one moves up the ladder a bit,the PPP advantage starts disappearing and in many ways turn into a disadvantage.

What you seem very anxious to highlight the attention on are the products which benefit from a PPP measurement i.e, food and enough things just to keep breathing.However the focus of this thread is the middle class and it's lifestyles and the associated expenditures.Here,PPP doesn't exist for most intents and purposes and that is the reason I asked you the price that you paid for your computing device.If anyone has noticed ( which we have) you still haven't posted the prices

You started this conversation by pretending that you are an erudite scholar in economics. a couple of posts later, you are a trash-talking ignoramus. Quite a steep fall, I must say.

Your initial assertion was that PPP is no measure at all. Now you have modified it to the extent that it serves as a useful measure of poverty. That serves me fine. Lower wages translating into higher PPP might trouble you, but it also means that those earning low wages have to spend less on their own consumption basket. PPP may not be a very good indicator of what you can buy outside your country (say, it does not mean that India will pay less for the defence equipment that it imports from other countries) and hence does not impact the purchasing power of a country qua imports and purchases made abroad. But as for spending within the country, it is the benchmark.

You got yourself tangled up in just one example of the computing device, whereas the real issue, as I have pointed out, is purchasing power within and outside. Never complicate things more than they need to be.

Having noodle(without meat) in the cheapest eatery on the street, cost around 5 yuan（$0.78).
U may find cheaper one in India, but the eatery I mention on the street is equipped with A/C and wifi.
View attachment 263444

Ya but our food is delicious, whereas your food sucks.

 

[AndrewJin]

You started this conversation by pretending that you are an erudite scholar in economics. a couple of posts later, you are a trash-talking ignoramus. Quite a steep fall, I must say.

Your initial assertion was that PPP is no measure at all. Now you have modified it to the extent that it serves as a useful measure of poverty. That serves me fine. Lower wages translating into higher PPP might trouble you, but it also means that those earning low wages have to spend less on their own consumption basket. PPP may not be a very good indicator of what you can buy outside your country (say, it does not mean that India will pay less for the defence equipment that it imports from other countries) and hence does not impact the purchasing power of a country qua imports and purchases made abroad. But as for spending within the country, it is the benchmark.

You got yourself tangled up in just one example of the computing device, whereas the real issue, as I have pointed out, is purchasing power within and outside. Never complicate things more than they need to be.



Ya but our food is delicious, whereas your food sucks.

Hehe...Hindu food...to us looks like things on your street.
Pay attention don't step on it.

Chalk and cheese my friend. One is a developed country, the other a developing country (still is). China is still crashing rapidly, at 7% of its current total gdp. India on the other hand is already a supa powa, you won't see crash per annum anywhere like China's. That would be totally unthinkable.

With India's shining trade deficit and hot money, I'm sure it will surpass Shanghai in 2012.

 

[sherin616]

Chalk and cheese my friend. One is a developed country, the other a developing country (still is). China is still crashing rapidly, at 7% of its current total gdp. India on the other hand is already a supa powa, you won't see crash per annum anywhere like China's. That would be totally unthinkable.

All iam saying growing or grow it will stop at one point

 

[bolo]

A) Nominal value ignores/underestimates many intangibles.
B) PPP value is a much indicator for measuring standard of living as it measures purchasing power.
C) The dodgy math is on the part of the Chinese - neither their Nominal nor PPP numbers are deemed acceptable by economists.

A) Raw material purchases are based on nominal value not PPP
B) Not true. For example, you can rent an apartment in Mumbai for $100 USD/month or $1300 USD/month in beautiful Toronto. The Mumbai apartment is nowhere comparable to Toronto. Toronto apartment comes with clean water, great air, non slum view, good infrastructure, safe walking environment, and many more things.
C) Wrong. In fact IMF want us to use new method to calculate our GDP which would make it larger than it really is. IMF baby, not Indian math.

 

[bolo]

If you want to compare the quality of lives in different country，HDI will be a better measurement than gdp ppp.But yes HDI is seriously biased too，evwn more biase than GDP ppp.

It's best to go visit the country and travel around internally to get a real good idea on the situation. I have not gone back to China for a long time, but my friends who went there last year did not want to come back so soon.

 

[nForce]

Thanks @AndrewJin that inspires me a lot.
Ride your luck buddy

 

[Aepsilons]

Thanks @AndrewJin that inspires me a lot.
Ride your luck buddy

He's a bit strong minded these days. He normally isn't this aggressive.

I mean the small noodle restaurants. The photos you show is open food street, that's not the place where we eat breakfast.

Yup folks can do remote conferences nowadays.

 

[CHN Bamboo]

Sorry, when i think of street 'eatery', i don't think of this. I think of this:

In China:

In Japan:

In Philippines:

In Malaysia:

Maybe u have sth wrong.Why refer to street food?I will introduce after coming back from school.

 

[Jacob Martin]

A) Raw material purchases are based on nominal value not PPP
B) Not true. For example, you can rent an apartment in Mumbai for $100 USD/month or $1300 USD/month in beautiful Toronto. The ND apartment is nowhere comparable to Toronto. Toronto apartment comes with clean water, great air, non slum view, good infrastructure, safe walking environment, and many more things.
C) Wrong. In fact IMF want us to use new method to calculate our GDP which would make it larger than it really is. IMF baby, not Indian math.

A) Raw materials are not intangibles, services provided by care-givers and barter are.
B) Yes, you are right, but we are talking only about economic indices. Someone may like Indian festivals more?! Where does that end?
C)Don't Believe The Chinese Economic Statistics: Except The Ones About The Crash Perhaps