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The GDP of China is 2 times bigger than the GDP of the US [Copy link] 中文

Rank: 4

Post time 2010-6-15 12:17:44 |Display all floors
Well, most people that I have talked to, they tell me that China already has the biggest economy in the world.

The definition of the GDP is the product of all the goods and services being produced in the country.

The problem with the current Chinese GDP calculations is that the calculations do not take into account the fact that many goods and services are free or have low subsidized prices in China. For instance, some Chinese people may get a free apartment rental, and that does not appear in the Chinese GDP calculations. Another example, a bottle of Qingdao beer costs 5 dollars in a restaurant in America, but a bottle of Qingdao beer may only cost 25 cents in a restaurant in China, which would cause the calculations of the Chinese GDP to be too low. You would need to calculate a bottle of beer in a Chinese restaurant to be worth 5 dollars to the GDP of China, and not to be worth 25 cents to the GDP of China.

If the GDP of China was calculated correctly on the basis of the real worth of all the goods and services in China, the GDP of China today should be nearly 2 times bigger than the GDP of the US already.

On that basis, the real GDP of China should be 3 times the GDP of America in about 5 to 6 more years.

In other words, by 2016, China should have reached the same level of development as South Korea in 1996, which means that the average GDP per capita in China should be two-thirds of the GDP per capita in the US.

As China has nearly 5 times the population of the US, you can calculate that 2/3 times 5 equal 3.33 times the GDP of the US.

The real GDP per capita of China should be 2/3 of the real GDP per capita of America by 2016, and the real GDP of China should be 3 times bigger than the GDP of America by 2016.

Of course, as for the GDP of China based on the nominal exchange rate of the Yuan, that may take longer than 2016 to become 3 times bigger than the GDP of the US.

It all depends on Chinese government policies. If the Chinese government had left the Chinese Yuan free to trade on the exchange market since 2007, the Chinese Yuan would now have appreciated to 3 Yuan to 1 dollar already, which would have more than doubled the GDP of China based on the nominal exchange rate of the Yuan.

And the Yuan being free to appreciate on the exchange market, eventually, the Yuan would appreciate to 1 Yuan equal 1 dollar before the year 2020, which would make the GDP of China based on the nominal exchange rate of the Yuan become 7 times bigger automatically without any real increase in the production of goods and services in China.

In other words, if the Chinese government let the Yuan appreciate in value to 1 Yuan equal 1 dollar, the GDP of China would automatically change from 4.7 trillion dollars to 32 trillion dollars without any real actual increase in the production of goods and services in China!

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Rank: 4

Post time 2010-6-15 12:39:50 |Display all floors
GDP (ppp) is used as a crude adjustment to take into account variances between domestic costs that are either far higher or lower then comparable countries.

The last estimate of China's GDP (ppp)  was around 6 trillion USD and that was about 2 years ago, so today I would expect it to be around 7 trilllion USD, not double the US economy is USD

(ppp) stands for purchasing power pariety, and generally tries to adjust the costs of things like a haircut which might cost $3 USD in China while a comparable hair cut in the US would be $20 USD

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Rank: 4

Post time 2010-6-15 12:57:04 |Display all floors
The ppp measure is a way to better explain or compare the quality of living standards across countries. Yes, Chinese products will cost less, so the 5 dollars will get you more real products in China than in the US.
However, it is really wrong to say the economy is already bigger. The reason for that is that you are ignoring the fact that international trade is very important in todays world. The US population needs to buy a lot of stuff at thier higher domestic prices, but they can also buy a lot of stuff very cheaply in/from China.

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Rank: 1

Post time 2010-6-16 15:33:54 |Display all floors
mychina you better read about criticism from Rothbard about GDP and other measures like that !! Ad2, : i want to tell you that from 300 k companies which in the 1978 belonged to your country most of them was privatized ( left around 119 k )  most of them have co-operations with westerns companies or they were bought by them !! all of profits made by them are send to Japan HK Europe US etc.etc.
Ad3 : Today we have global economy !! Chinese companies build highways at Poland , canadian Bombardier build underground at Shanghai , previous lines were made by Adtranz and siemiens from Germany !!! its global ECONOMY thats why today making such reports where the average GDP per capita is higher , or which country has higher GDP is sick !!
Ad4 Many companies which produce simple products escape more and more to poorer countries then China , like Vietnam , Bangladesh, Sri Lanka India Laos etc.etc.
Ad5 Necessary Tax Revolution !!
Your economy wont go foward as fast as it happen at South Korea until your government wont cut taxes !!
Ad6 black market ,   at Poland GUS ( Statistical Bureau)  said that around 30 % of polish GDP is made by black market ( means people who dont pay taxes and our government doesnt know anything about their business)  maybe real GDP of china can be much higher than you think !!!! i know at least 2 restaurants which owner doesnt pay tax its even at Shanghai LongBai :)

i belive that china will go this road which hongkong chose many years ago , means real capitalism !!!

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Rank: 4

Post time 2010-6-16 18:12:27 |Display all floors
You must be that pseudo-economist, Liang1a who advocates total freedom of the yuan currency.

Higher yuan value mean nothing but destructive if it has negative impact on its people now. Economic growth entails subjecting the people to go through a process or experience a course of event before they can move on the next level as one entity.

This is not about math. It is not as simple as 1 + 1 = 2.

The RMB will be revalued when they're ready for it
Malaysian-born Chinese

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Rank: 1

Post time 2010-6-16 23:22:56 |Display all floors
we got a big GDP but we also got a very tiny average income

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