It’s official: America is now No. 2

[gambit]

So do you think China has a bigger economy than America already?

I don't. The Chinese government doesn't.

The PPP is one of many metrics to gauge one economy against another.

China Economy Surpasses US In Purchasing Power, But Americans Don't Need To Worry

However, PPP is less useful when measuring goods and services, like air-craft carriers or international shipping rates, that cannot be adjusted for cost of living. For a broader look at an economy's health, nominal GDP -- which represents the sum total of goods and services produced in a country -- is more useful. By this measurement, the U.S. continues to hold a significant advantage: In 2013 the U.S. GDP was $16.72 trillion, whereas China's GDP equaled a mere $9.33 trillion. Considering that China has used its growing wealth to, among other things, greatly improve its military capacity, conventional GDP remains significant.

If we look at an economy as a collection of many economies, such as the currently controversial health care economy or manufacturing economy, then just like the ibtimes article pointed out, the conventional GDP metric is more useful and perhaps closer to the true economic might and potential of a country.

 

[Chinese-Dragon]

The PPP is one of many metrics to gauge one economy against another.

China Economy Surpasses US In Purchasing Power, But Americans Don't Need To Worry

If we look at an economy as a collection of many economies, such as the currently controversial health care economy or manufacturing economy, then just like the ibtimes article pointed out, the conventional GDP metric is more useful and perhaps closer to the true economic might and potential of a country.

So you agree after all with the position of the Chinese government, that PPP should not be used to compare economies.

 

[500]

PPP per capita better shows quality of life than nominal per capita.

On the other hand total country GDP better count in nominal because it shows the real share of country in global economy.

 

[gambit]

So you agree after all with the position of the Chinese government, that PPP should not be used to compare economies.

I already said I disagree. The PPP is useful but it does have its limitations. For large countries like China and the US where there can be disparities in purchasing power for the same services and products between states/provinces or even cities, it can be difficult to produce an average for a particular service or product to make a comparison between two large economies like China and the US, nevertheless, the purchasing power of a people, current and potential, is a reasonable metric to explore. I just believe that China can still find the PPP valuable in some ways rather than to dismiss it out of hand.

 

[Hashshāshīn]

Not just that, all ideas come from America. All business, commerce, technology initiatives start from America. China is factory of the world. Tell me when East brings up ideas on par with West. Until then, numbers are just numbers. They dont mean much.

I agree apart from one exception; Japan.

 

[TheTruth]

Not just that, all ideas come from America. All business, commerce, technology initiatives start from America. China is factory of the world. Tell me when East brings up ideas on par with West. Until then, numbers are just numbers. They dont mean much.

Half or more of the "idea people" in America are from the "East". The West is just a parasite, the only thing is that the rest of the world doesn't realize it yet.

 

[meis]

According to Lee Kuan Yew (father of Singapore), it will takes 100 years to beat USA in terms of GDP (or technological advancement or whatever). And most thinkers in China probably know that if every Chinese in China (1.3B people) are consuming as much as the people in Murica were, we need more than just 1 planet. So, you're all talking from the rear and meaningless.

watch all parts

 

[haviZsultan]

This is good news. Especially good for Asia that an east asian nation has now surpassed the unbited states. This is great news.

 

[meis]

PPP as a measure does have some use.

For example, a barber in China and one in America give 6 haircuts a day. They have the same actual level of productivity, but the American barber adds FAR more to nominal GDP because their services are much more expensive. But is an American barber really that much more productive than a Chinese barber?

However the reason nominal GDP really matters, is because currency matters. Currency has power, look at how the American federal reserve has been printing money like no tomorrow. They can do that because they have the world's main reserve currency, which gives them an advantage called the "exorbitant privilege".

Exorbitant privilege - Wikipedia, the free encyclopedia

That's why the dollar is so strong. But China is making big moves to internationalize the Yuan, so maybe they will end up losing that privilege in the future.

Nothing will last forever. Including the current reserve currency. That's why we have BRICS bank, headquartered in Shanghai, a perfect location.

watch all parts and you'll see the bigger pic

 

[frequency]

yay! finally the asian dominates the white fokes

I disagree.

I already pointed out how economists have to endure the many jabs and jokes about their profession. The greater the scale of any economic modeling, the greater the risk of being wrong, as in 'eggs on face' wrong. But precisely because economic modeling and predictions are so hazardous that metrics like the PPP were created and used in hope of making sense of economics in general. I am not an economist by training but if all the yrs I spent in engineering taught me anything, it is that I should not discard a metric until I fully know its function and how it is inapplicable to what I am doing -- AT THAT TIME.

You're an Engineer gambit? Damn! in what field?

 

[applesauce]

The point here is that the PPP is a metric that is independent of how China feels about it and it will be used to make assessments and comparisons between countries. It does have its limitations, but that could also be said for any economic metric used in modeling and policy making.

its true that ppp calculations does not take into account "feelings" however that doesnt mean someone cannot disagree with one particular calculation done by one particular organization, who says china's disagreements with the finding is based purely on feelings anyways. and again, ppp is a metric with no agreed upon standards.

 

[TaiShang]

Economic crown matters less to domestic audience
By Su Li , Global Times

According to new figures from the International Monetary Fund (IMF), on a purchasing power parity basis, China has overtaken the US in terms of economic size to become the world's largest economy.

It's no surprise that this "official stamp" on Chinese economic volume has barely drawn any attention at home. Foreign organizations have tried to predict exactly when China would surpass the US to become the biggest global economy. Many analysts in China also admit that given the current growth momentum, it's probably only a matter of time before the Chinese economy ranks first. But the meaning of this ranking is apparently diminishing in the eyes of the Chinese public.

It's hard to tell what this crown can bring to China. National pride? Doesn't sound plausible nowadays. More pressure and trouble? Probably.

It is clear that public demand for economic growth has become much more comprehensive. Development is still the main priority, but the concept of development has been enormously enriched. The old mentality that sees GDP as a dominant performance indicator has been widely dismissed. Not many care about when China's GDP will surpass that of the US. People care more about concrete measures of modernization: living standards, social welfare and the wealth gap.

The government is fully aware that these demands must be channeled into the decision-making process, and new reforms must be initiated to touch not just economic, but also social and political fronts.

In recent years, whenever there is a report from the World Bank, the IMF or other organizations that claims China is the top economy, there are anxieties in the West. This time, there are voices saying that "For the first time since Ulysses S. Grant was president, America is not the leading economic power on the planet," and that "This is a geopolitical earthquake with a high reading on the Richter scale."

Although the Chinese government does not necessarily agree with the calculation methods adopted by these international organizations, their reports indeed influence the way the world views China. While ensuring steady economic growth, China needs to be farsighted and adapt to possible geopolitical changes.

A large economy and visible increase of people's purchasing power can boost social confidence to a certain extent.

But on the other hand, pressure from the public due to their demands for better social well-being will certainly mount.

Before China truly wins its economic crown, it needs to pass the test of maintaining a large, and at the same time, stable economy.

 

[frequency]

its true that ppp calculations does not take into account "feelings" however that doesnt mean someone cannot disagree with one particular calculation done by one particular organization, who says china's disagreements with the finding is based purely on feelings anyways. and again, ppp is a metric with no agreed upon standards.

you talk nonsense

 

[applesauce]

you talk nonsense

it would be helpful you if pointed out which part was nonsense and why. as oppose to a one liner that does nothing for anyone

 

[frequency]

it would be helpful you if pointed out which part was nonsense and why. as oppose to a one liner that does nothing for anyone

You're not capable of that.