China No. 1 Economy?

sharkboy1200

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Sep 11, 2013
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UNTIL 1890 China was the world’s largest economy, before America surpassed it. By the end of 2014 China is on track to reclaim its crown. Comparing economic output is tricky: exchange rates get in the way. Simply converting GDP from renminbi to dollars at market rates may not reflect the true cost of living. Bread and beer may be cheaper in one country than another, for example. To account for these differences, economists make adjustments based on a comparable basket of goods and services across the globe, so-called purchasing-power parity (PPP). New data released on April 30th from the International Comparison Programme, a part of the UN, calculated the cost of living in 199 countries in 2011. On this basis, China’s PPP exchange rate is now higher than economists had previously estimated using data from the previous survey in 2005: a whopping 20% higher. So China, which had been forecast to overtake America in 2019 by the IMF, will be crowned the world's pre-eminent country by the end of this year according to The Economist’scalculations. The American Century ends, and the Pacific Century begins.

http://www.economist.com/blogs/graphicdetail/2014/04/daily-chart-19

There's plenty of skepticism in the comments, but I wouldn't be surprised by it given how much business China gets from around the world. What do you guys think?
 
Well, what does "largest economy" really mean?
Are we basing it on the absolute amount of cash in circulation in that country?
Or how much that cash means to the people of the country?
Or how much they actually spend/consume/make?
 
Well, what does "largest economy" really mean?
Are we basing it on the absolute amount of cash in circulation in that country?
Or how much that cash means to the people of the country?
Or how much they actually spend/consume/make?
Honestly, I'm not entirely sure. It's part of why I put the title of this thread in a question mark. Personally, I always sort of assumed how much a country deals in exports/imports to be a key factor. I'd say China really is the industrial capital of the world at least. I mean, I could look around my house and see that there's quite a bit of Chinese made products in it. Around 80% I'd figure, taking into account other countries and the U.S. as well.
 
China's GDP is massively inflated with smoke and mirrors. The massive cities that China builds are part of GDP. Those cities aren't generating a lick of income because many go uninhabited or are inhabited by sqautters. I believe China is nearly wholly vertically integrated construction wise. These construction projects are just constant merry go rounds that artificially inflate China's GDP.
 
What I've never understood is how United States is so wealthy if we're what a trillion dollars in debt?
 
China's GDP is massively inflated with smoke and mirrors. The massive cities that China builds are part of GDP. Those cities aren't generating a lick of income because many go uninhabited or are inhabited by sqautters. I believe China is nearly wholly vertically integrated construction wise. These construction projects are just constant merry go rounds that artificially inflate China's GDP.
That's absolutely true. That said, the Chinese government does know that just throwing money into construction to boost the economy is basically unsustainable and stalling. That isn't to say they have a suitable solution, because it's not that simple. It's also f***ing up the housing market over here.

The make-work that they engage in is not only about boosting GDP, it's also trying to keep unemployment down, because the government really doesn't want half a billion disgruntled, uneducated, angry laborers kicking up dust.
So, while I don't really agree with all this BS and f***ery, there are also other factors involved.
The fact that they did this big stall during the 2008 global economic crisis, it might have been a good thing to spread out the effects of the crisis - if China had crashed big time at the same time, it may have been worse for everyone than it was. Of course they're still going to have to deal with it down the line, but if other economically interconnected nations have recovered more by then, and resume consumption of Chinese products, it could help soften the blow.
 
What I've never understood is how United States is so wealthy if we're what a trillion dollars in debt?
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I'm not a commie or a hippie, but this is one particular point that is quite true. Economics is like a big MMORPG - it's real to the people involved, but it's all virtual, really.
 
But does that really even mean anything?
if you spent 17k and it's already causing you problems do you think the 183k your wife and kids spent but haven't told you about is something to worry about? add to that that in a good year you make 4K a year
 
At a personal level obviously debt is bad. But I'm talking about America in general. Besides increased taxes does enormous debt do anything to America on a global stage?
 
At a personal level obviously debt is bad. But I'm talking about America in general. Besides increased taxes does enormous debt do anything to America on a global stage?
Well beside weakening the dollar which at this point is the reserve currency and the only thing keeping the country afloat it also creates inflation due to printing of more dollars to pay off the debt.
 
I'm not a commie or a hippie, but this is one particular point that is quite true. Economics is like a big MMORPG - it's real to the people involved, but it's all virtual, really.

a criticism of monetary economics shouldnt need to be prefaced with "i'm not a communist but.."
 
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Well, what does "largest economy" really mean?
Are we basing it on the absolute amount of cash in circulation in that country?
Or how much that cash means to the people of the country?
Or how much they actually spend/consume/make?

GDP. And as Plainview said, Chinese GDP is so much smoke and mirrors. Lots of quantity, no quality whatsoever. Aka, lots of cheap ass goods and manufacturing, which take advantage of now China's artificially inflated RMB, which lower its value so China can still remain the "factory of the world". The other big one is artificially inflated housing market that's now paper thin. ready to explode but propped up by the government cause it CAN'T explode.....When the average price in "tier 1" cities are $5000 per square meters (subtract the "none usage spaces") and then you add in around $25000 in "Remodeling Fees" , yeah, your GDP will explode, on the backs of your hardworking citizens!
 
OK, but then is that GDP per capita or GDP as an absolute total?

As an absolute, I would imagine it's very highly likely the most populous nation and the factory of the world would occupy that spot if not be steadily circling it.

Per capita, then it's something worthy of discussion.
 
TOTAL!

As so many, including my econ prof. said, total GDP is extremely misleading and anyone that can play with numbers can easily muddle it up...

Yeah, per capita GDP, now there is a number that the Chinese CCP is either trying to hide the truth or is desperately playing with numbers to hide it...........The Average Chinese earns $30,000 per year MY ASS!!!!
 
Were owe china so much money it isn't even funny. I just learned from my moms today, cause she keeps up to date with what's going on that. Is that the governor of California was tryin to sell California to china, cause china loves our weather so much it would help with our debt torwards them. I couldn't believe it when I heard it. USA is going down folks,We gotta make sure to vote and get Obama out of office. Before were all screwed.
 
Were owe china so much money it isn't even funny. I just learned from my moms today, cause she keeps up to date with what's going on that. Is that the governor of California was tryin to sell California to china, cause china loves our weather so much it would help with our debt torwards them. I couldn't believe it when I heard it. USA is going down folks,We gotta make sure to vote and get Obama out of office. Before were all screwed.

Not as you stated but there is some truth in there

http://usatoday30.usatoday.com/mone...04-03/us-homes-lure-chinese-buyers/53977638/1