Understanding Chinese GDP

Xuguang Song

• Publisher: Palgrave Macmillan
• Year: 2019
• Print ISBN:
  9789813297326
• eBook ISBN:
  9789813297333
• Topic: Business
• Subtopic: International Business
• Index: Business

This book provides in-depth analyses on accounting methods of GDP, statistic calibers and comparative perspectives on Chinese GDP. Beginning with an exploration of international comparisons of GDP, the book introduces the theoretical backgrounds, data sources, algorithms of the exchange rate method and the purchasing power parity method and discusses the advantages, disadvantages, and the latest developments in the two methods. This book further elaborates on the reasons for the imperfections of the Chinese GDP data including limitations of current statistical techniques and the accounting system, as well as the relatively confusing statistics for the service industry. The authors then make suggestions for improvement. Finally, the authors emphasize that evaluation of a country's economy and social development should not be solely limited to GDP, but should focus more on indicators of the comprehensive national power, national welfare, and the people's livelihood. This book will be of interest to economists, China-watchers, and scholars of geopolitics.

© The Author(s) 2019

X. SongUnderstanding Chinese GDPhttps://doi.org/10.1007/978-981-32-9733-3_1

Begin Abstract

1. One Dropped Pebble Creates a Thousand Ripples

Xuguang Song¹

(1)

Beijing Normal University, Beijing, China

Xuguang Song

Email: [email protected]

1.1 Dispute Arising from a World Bank Report

1.2 Long-Standing Debate

1.3 Difficulties in Measuring Economic Scale

1.4 Two Sets of GDP Statistical Data

1.5 Different Statistical Conclusions Can Be Reached Through Different Observation Perspectives

1.6 The World Bank’s Two Sets of Rankings

End Abstract

1.1 Dispute Arising from a World Bank Report

On April 30, 2014, the World Bank published the report Purchasing Power Parities and Real Expenditures of World Economies: Summary of Results and Findings of the 2011 International Comparison Program, a summary of the preliminary results of the Eighth Round International Comparison Program (ICP 2011). According to this report, China’s purchasing power parity (PPP) was 3.506 in 2011. Based on this statistic, China’s GDP in 2011 was 47.16 trillion Chinese yuan (CNY) or an equivalent of 13.46 trillion US dollars (USD) after conversion, accounting for 14.9% of the global share. The GDP in the United States was USD 15.53 trillion over the same period, accounting for 17.1% of the global share. China’s economic scale reached 87.0% of that of the United States in 2011, indicating that China’s economic scale was already approaching the United States then. Further data from the World Bank shows that China’s GDP in 2013 was USD 16.16 trillion, while that of the United States was USD 16.8 trillion (see Table 1.1); these numbers clearly indicate that only a small difference could be observed between two countries’ economic scales. In 2013, China’s GDP growth rate was 7.7%, while that of the United States was 1.6%.¹ China’s economic growth rate was significantly higher than that of the United States. Therefore, the World Bank predicted that in 2014, China was likely to surpass the United States and become the world’s largest economy.²

Table 1.1

GDP estimated by the World Bank using the purchasing power parity method (Unit: 100 million USD)

Year	China	United States	Japan	India
1990	11,427	59,796	23,780	10,200
1991	12,260	61,740	25,387	10,651
1992	13,691	65,393	26,179	11,491
1993	16,012	68,787	26,848	12,323
1994	18,637	73,087	27,656	13,424
1995	21,514	76,640	28,782	14,742
1996	24,301	81,002	30,072	16,144
1997	27,190	86,085	31,075	17,086
1998	30,040	90,891	30,783	18,339
1999	32,856	96,657	31,160	20,246
2000	36,163	102,897	32,898	21,502
2001	40,062	106,253	33,771	23,055
2002	44,372	109,802	34,717	24,300
2003	49,796	115,122	35,690	26,734
2004	56,321	122,770	37,534	29,643
2005	64,702	130,954	38,896	33,434
2006	75,145	138,579	40,649	37,655
2007	88,064	144,803	42,643	42,443
2008	98,435	147,203	42,895	44,955
2009	108,332	144,179	40,811	49,143
2010	121,098	149,583	43,227	54,841
2011	134,959	155,338	43,862	59,630
2012	147,827	162,446	45,048	63,546
2013	161,577	168,000	46,244	67,744

Data Source World Bank Database, 2014

One dropped pebble can create a thousand ripples. ...

Table of contents

• Cover
• Front Matter
• 1. One Dropped Pebble Creates a Thousand Ripples
• 2. Re-examining Some Problems in the Methodology of International Economic Comparison
• 3. Limitations of the Exchange Rate Method
• 4. Viewing and Applying the PPP Correctly
• 5. Understanding PPP Through Examples
• 6. Calculating China’s GDP
• 7. Confusion in the Service Industry Data
• 8. Similarities and Differences Between GDP and GNI
• 9. National Power and Processing Depth Coefficient
• 10. Comparisons of People’s Standard of Living
• 11. Rankings of Countries in Terms of Energy, Per Capita Arable Land, Water Resources, and Expenditures on Medical and Health Care
• 12. Changes in the GDP Rankings
• 13. Economic Scale, the United Nations Membership Dues, and Shares of the World Bank
• 14. ICP Shock
• Back Matter