India fastest growing major economy in 2018-19, will grow by 7.3%: World Bank

[AyanRay]

The problem here is that country B is too technologically backward to produce certain classes of product at any price. While PPP might be good for comparing local prices for basic agricultural products, it's not good for comparing local prices of semiconductors since country B can't produce them.

Agreed. But does not apply in India's case. India does has it's own semiconductor foundry and produces high tech products too. That's why it gets orders to launch 100s of sattelites because it's cheaper here. Medical tourism is booming, again because it's cheaper here. We sent a sattelite to Mars which cost us less than a Hollywood movie. That's PPP, we can do a lot more things using a $ that what US or China can do.

 

[Tauren Paladin]

They say China would grow 6.5% in 2017, but they grew 6.9% which was more than India.

 

[CHN Bamboo]

They say China would grow 6.5% in 2017, but they grew 6.9% which was more than India.

So it's better to look at the result rather than the forecast.

 

[Cobra Arbok]

They say China would grow 6.5% in 2017, but they grew 6.9% which was more than India.

India grew at 7.2 prevent in the last quarter of 2017. Not sure which numbers you are looking at
https://money.cnn.com/2018/02/28/news/economy/india-economy-gdp-7-2-growth/index.html

 

[Tauren Paladin]

India grew at 7.2 prevent in the last quarter of 2017. Not sure which numbers you are looking at
https://money.cnn.com/2018/02/28/news/economy/india-economy-gdp-7-2-growth/index.html

https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG

It shows China 6.9 and India 6.6 for 2017.

 

[GeraltofRivia]

https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG

It shows China 6.9 and India 6.6 for 2017.

Interesting, didn’t know that.

 

[Nilgiri]

So it's better to look at the result rather than the forecast.

Interesting, didn’t know that.

Sometimes there's issues though...given the same set of people are not measuring everything (globally, given countries obvious exist) in the exact same way....leading to further issues (past the extrapolation scale to begin with) concerning US GDP nominal like I was talking about earlier.

Would welcome what you have to share/discuss about this stuff (I of course acknowledge the broader picture of China success and scale of 2 way trade/investment....but I am just querying comparing GDP numbers in such absolute, specific way...that too a few tenths of percentage increment even):

https://www.bbc.com/news/business-46917562

https://www.bbc.com/news/business-46942524

============================

Measuring an economy's output is never easy but China's data comes with a bigger health warning than most.

Rather than 6.5%, independent economists say the GDP figure may actually be closer to 5% - or even lower.

Xiang Songzuo, a finance professor and former chief economist of China Agriculture Bank, has claimed that 2018 growth may have been as low as 1.7%.

His online video has since been censored by authorities.

The unreliability of the official figures is one reason why other indicators such as Apple's sales have the power to send shockwaves around global stock markets.

=================================

One important caveat: It's important to remember official growth figures from China should always be taken with a pinch of salt. Growth is thought to be much lower than what Beijing says it is.

A good guide, I've been told, is to discount 100 basis points from what the government says to get a more realistic sense of how the economy is doing.

With the latest figures that means China's annual growth rate could be as low, if not lower, than 5.6%.

=================================

@Joe Shearer

 

[Joe Shearer]

Sometimes there's issues though...given the same set of people are not measuring everything (globally, given countries obvious exist) in the exact same way....leading to further issues (past the extrapolation scale to begin with) concerning US GDP nominal like I was talking about earlier.

Would welcome what you have to share/discuss about this stuff (I of course acknowledge the broader picture of China success and scale of 2 way trade/investment....but I am just querying comparing GDP numbers in such absolute, specific way...that too a few tenths of percentage increment even):



============================

Measuring an economy's output is never easy but China's data comes with a bigger health warning than most.

Rather than 6.5%, independent economists say the GDP figure may actually be closer to 5% - or even lower.

Xiang Songzuo, a finance professor and former chief economist of China Agriculture Bank, has claimed that 2018 growth may have been as low as 1.7%.

His online video has since been censored by authorities.

The unreliability of the official figures is one reason why other indicators such as Apple's sales have the power to send shockwaves around global stock markets.

=================================

One important caveat: It's important to remember official growth figures from China should always be taken with a pinch of salt. Growth is thought to be much lower than what Beijing says it is.

A good guide, I've been told, is to discount 100 basis points from what the government says to get a more realistic sense of how the economy is doing.

With the latest figures that means China's annual growth rate could be as low, if not lower, than 5.6%.

=================================

@Joe Shearer

You may remember, and other members also may do so, the time that was called the Great Leap Forward. We had divergences between what was published at that time with what emerged ultimately. That problem existed with Soviet Russian trade and industry figures as well.

Neither fact makes a difference to the actual huge progress that both economies made in their years of constructive activity. These discrepancies need to be kept in mind when dealing with responses to the figures, and conclusions drawn from those figures.

 

[GeraltofRivia]

Sometimes there's issues though...given the same set of people are not measuring everything (globally, given countries obvious exist) in the exact same way....leading to further issues (past the extrapolation scale to begin with) concerning US GDP nominal like I was talking about earlier.

Would welcome what you have to share/discuss about this stuff (I of course acknowledge the broader picture of China success and scale of 2 way trade/investment....but I am just querying comparing GDP numbers in such absolute, specific way...that too a few tenths of percentage increment even):



============================

Measuring an economy's output is never easy but China's data comes with a bigger health warning than most.

Rather than 6.5%, independent economists say the GDP figure may actually be closer to 5% - or even lower.

Xiang Songzuo, a finance professor and former chief economist of China Agriculture Bank, has claimed that 2018 growth may have been as low as 1.7%.

His online video has since been censored by authorities.

The unreliability of the official figures is one reason why other indicators such as Apple's sales have the power to send shockwaves around global stock markets.

=================================

One important caveat: It's important to remember official growth figures from China should always be taken with a pinch of salt. Growth is thought to be much lower than what Beijing says it is.

A good guide, I've been told, is to discount 100 basis points from what the government says to get a more realistic sense of how the economy is doing.

With the latest figures that means China's annual growth rate could be as low, if not lower, than 5.6%.

=================================

@Joe Shearer

My position on GDP has always been such that it is just one of the fuzzy economical indicators that provides us a broad sense of the level of economical activities. Instead of looking at it as a point, I tend to view it as an estimate with a +/- x% interval that the “true” value may sit. And the band could be dependent on how fast an economy is growing and size of the economy (ie difficulty of the data collection, internal variation, etc).

As to China’s growth rate, I will simply call it grow “solidly”, so would I interprete India growth rate. There is absolutely no point of bothering a couple of 10th percent difference. A nice way to put it would be statistically indifferent. If India starts to grow at say 7-7.5%, then I would conclude with confidence that it is growing “significantly” faster.

As to the question of credibility in China’s GDP, I wouldn’t even go there as I have not seen any international agency to openly criticize it and I take it as an endorsement of the figure. You can’t possibly bump your GDP figures higher year after year as other “hard” indicators like tax revenue will expose it. The same can be said to literally any country.

 

[Nilgiri]

You may remember, and other members also may do so, the time that was called the Great Leap Forward. We had divergences between what was published at that time with what emerged ultimately. That problem existed with Soviet Russian trade and industry figures as well.

Neither fact makes a difference to the actual huge progress that both economies made in their years of constructive activity. These discrepancies need to be kept in mind when dealing with responses to the figures, and conclusions drawn from those figures.

Yes hence my gold standard mostly rests upon that which is confirmed by 2 or more parties....foreign trade and investment is actually a great example where its done...thats why I dont go down the route of the people (especially if they havent visited China for themselves) saying everything China claims growth wise is false/overly-exaggerated etc. But I likewise do not care much for tiny percentage point comparison of nominal GDP (in many chinese members response) which is inherently itself a somewhat flawed process (like everything in macro-econometrics, the debate really becomes about the degree of the flaw in the end).

The application (of 2 way confirmed external stuff) more broadly to the internal.... inevitably gets fuzzier (especially when you factor in non-economic context), especially when you are not the issuing authority of the reference measurement (rather just treat it as an asset that you process/accumulate to some degree like any other) in the first place ...and then use this for specific points of a percentage comparisons even. In fact this basic thing done over a long enough period of time could theoretically lead to the lower PPP multiplier (to some degree) like is found in China compared to India...but of course little scope to prove this as it stands either way...since that needs massive transparency of all kinds of data chains...which most countries will not do (for fear of emperor's new clothes kind of situations bubbling up...rather than simmering down over time by the sheer bulk imposed on top).

I talked about this kind of stuff at much greater length (potential nominal GDP "laundering" with "inflation") with Bangladesh as you know for example (given they dont even use the same larger IMF standards as China and India do...and thus even more scope in their case imho if there is internal political benefit and external way to rebase their loan collateral a wee bit better than the credit ratings allow them to etc.). I should at some point do a similar extended analysis with Pakistan's case....but right now a lot more things are shifting around with them and are not so settled....and its somewhat less apt for me to reach the meaty parts in this forum like I can with Bangladesh and India case etc....given the politics/perceptions.

@Mage @Tanveer666 @VCheng @Hamartia Antidote @jhungary @Major Sam @farhan_9909 @Valar. @Marine Rouge @Vibrio @kmc_chacko @anant_s @lemurian

 

[VCheng]

The application (of 2 way confirmed external stuff) more broadly to the internal.... inevitably gets fuzzier (especially when you factor in non-economic context), especially when you are not the issuing authority of the reference measurement (rather just treat it as an asset that you process/accumulate to some degree like any other) in the first place

Now that there is pure gold, no pun intended!

and its somewhat less apt for me to reach the meaty parts in this forum like I can with Bangladesh and India case etc....given the politics/perceptions.

More golden wisdom here!

 

[Joe Shearer]

Very briefly, I would not extend the scope of enquiry at this moment. First, there is the factor you mentioned - of perceived major shifts in their economy. I think we need time for the dust to settle before enquiring into their numbers too closely. Second, it is a good idea for a consensus to build up among the Bangladeshi members about the need for 'good' data. As you may have seen, there are diverse elements in that cohort, as there are in every national grouping. Once that consensus is established, they themselves, the open-minded element, will police their cohort.

Yes hence my gold standard mostly rests upon that which is confirmed by 2 or more parties....foreign trade and investment is actually a great example where its done...thats why I dont go down the route of the people (especially if they havent visited China for themselves) saying everything China claims growth wise is false/overly-exaggerated etc. But I likewise do not care much for tiny percentage point comparison of nominal GDP (in many chinese members response) which is inherently itself a somewhat flawed process (like everything in macro-econometrics, the debate really becomes about the degree of the flaw in the end).

The application (of 2 way confirmed external stuff) more broadly to the internal.... inevitably gets fuzzier (especially when you factor in non-economic context), especially when you are not the issuing authority of the reference measurement (rather just treat it as an asset that you process/accumulate to some degree like any other) in the first place ...and then use this for specific points of a percentage comparisons even. In fact this basic thing done over a long enough period of time could theoretically lead to the lower PPP multiplier (to some degree) like is found in China compared to India...but of course little scope to prove this as it stands either way...since that needs massive transparency of all kinds of data chains...which most countries will not do (for fear of emperor's new clothes kind of situations bubbling up...rather than simmering down over time by the sheer bulk imposed on top).

I talked about this kind of stuff at much greater length (potential nominal GDP "laundering" with "inflation") with Bangladesh as you know for example (given they dont even use the same larger IMF standards as China and India do...and thus even more scope in their case imho if there is internal political benefit and external way to rebase their loan collateral a wee bit better than the credit ratings allow them to etc.). I should at some point do a similar extended analysis with Pakistan's case....but right now a lot more things are shifting around with them and are not so settled....and its somewhat less apt for me to reach the meaty parts in this forum like I can with Bangladesh and India case etc....given the politics/perceptions.

@Mage @Tanveer666 @VCheng @Hamartia Antidote @jhungary @Major Sam @farhan_9909 @Valar. @Marine Rouge @Vibrio @kmc_chacko @anant_s @lemurian

 

[Nilgiri]

I have not seen any international agency to openly criticize it and I take it as an endorsement of the figure.

Totally understand where you are coming from on it. Your post is definitely on the button.

I just differ with this part slightly. Global Agencies dont really have the mission statement to judge the GDP "quality" side of things...because it would need them to intervene hard and early and basically you would get nothing at all (if it were even possible...which it isn't given countries have governments and sovereignty and their own interests to put first...which may not coincide fully with 100% transparency etc). Thats why they largely just base what they rate stuff on etc...on whats projected externally undoubtedly....it is really somewhat like how the free market works in the end (i.e it can function well because it functions on that which can be measured well and explained well by multiple reference points....rather than seeking the absolute specifics beyond that functioning where reference points start to degrade...i.e when we enter the realm of human psychology etc.)

Thus, the more meaty "GDP quality measurement" issues (like you correctly mention are the case with every country in the world, and of course the major ones get the commensurate attention on it) are thus something where the individual economists/experts et al (arguing all different ways, with all different perspectives and bias) come in....and the degree we filter through it (using source credentials, logic, knowledge, debate) again depends on our own interest, intuition etc. on the subject.

Actually I will be posting and tagging some of you lot a bit later on a good article I found on what China did better than India on some crucial things (that I talked about in the IIT/IISc thread already....i might post it there...its uncanny how I brought up stuff, and then it more broadly almost word for word gets printed in the media somewhere lol...mind-melding stuff).

 

[SBUS-CXK]

The unreliability of the official figures is one reason why other indicators such as Apple's sales have the power to send shockwaves around global stock markets.

@Joe Shearer

This is evidence?？？
as I know. Sales of the iPhone in China dropped sharply in 2017. China's smartphone market is dominated by Huawei, xiaomi, OPPO and Vivo.

If Apple can prove that China's economic data are unreliable.
Oh, I can find more evidence...

Thanks to China, LVMH First Quarter Sales Grew 13 Percent

BCG: China to Drive 70 Percent of Global Luxury Growth by 2024

Chinese millennials dominate global luxury market

China luxury goods market to reach US$186 bn by 2024

Study: Chinese to account for half of luxury sales by 2025

 

[Nilgiri]

This is evidence?？？
as I know. Sales of the iPhone in China dropped sharply in 2017. China's smartphone market is dominated by Huawei, xiaomi, OPPO and Vivo.

If Apple can prove that China's economic data are unreliable.
Oh, I can find more evidence...

Thanks to China, LVMH First Quarter Sales Grew 13 Percent

BCG: China to Drive 70 Percent of Global Luxury Growth by 2024

Chinese millennials dominate global luxury market

China luxury goods market to reach US$186 bn by 2024

Study: Chinese to account for half of luxury sales by 2025

Please read the whole thing, not just the apple part. I could care less about Apple sales.