Crowning the dragon: Chinese GDP PPP will exceed America's by year's end.

[jimmy olsen]

Terrible article. First of all there is no way in hell that the Chinese economy was larger than Britain's in 1890. Secondly, GDP PPP is very overrated as a means of evaluating an economy. You can't buy goods on the world market with PPP dollars. Third, last I checked the US was on the Pacific.

http://www.economist.com/blogs/graphicdetail/2014/04/daily-chart-19?fsrc=scn/tw/te/pe/ed/dailychartppp

Crowning the dragon
Apr 30th 2014, 0:02 by J.M.F. and L.P.

    Timekeeper

China will become the world's largest economy by the end of the year

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's calculations. The American Century ends, and the Pacific Century begins.

[Razgovory]

Why?  The UK had less then 40 million people in 1890.  There was 10 times as many Chinese.

[Valmy]

Well by that same token, they have five times as many Chinese than Americans.  If a peasant economy could be larger than a global trade and industrial empire in 1890 just on population than this is hardly a big deal today when China actually has a modern economy.

[CountDeMoney]

Meh, it's all smoke and mirrors anyway.  And when it crashes, it's going to crash hard.

[Valmy]

Meh, it's all smoke and mirrors anyway.  And when it crashes, it's going to crash hard.

All I know is Japan already relegated the US to the scrap heap of history sometime around 1989.

[garbon]

Meh, it's all smoke and mirrors anyway.  And when it crashes, it's going to crash hard.

All I know is Japan already relegated the US to the scrap heap of history sometime around 1989.

[Josquius]

UNTIL 1890 China was the world's largest economy

And in the first sentence the article invalidates itself.

[Razgovory]

Man, I'm just going to be blunt.  You Aunt is ugly.  Really ugly.

[Ideologue]

Meh, it's all smoke and mirrors anyway.  And when it crashes, it's going to crash hard.

All I know is Japan already relegated the US to the scrap heap of history sometime around 1989.

Damn, that's a deep cut.

[DGuller]

Meh, it's all smoke and mirrors anyway.  And when it crashes, it's going to crash hard.

I think all Chinese investors just collectively breathed a sigh of relief.

[mongers]

Meh, it's all smoke and mirrors anyway.  And when it crashes, it's going to crash hard.

Man, do you ever tire of slating the US economy. 

[Sheilbh]

UNTIL 1890 China was the world's largest economy

And in the first sentence the article invalidates itself.

Don't see how it's that mad. Wasn't China's economy between 30-40% of the global economy at the start of the 19th century? I'd be amazed if Britain was able to overtake her even as China was declining (again my understanding is only precipitously in the latter half of the 19th century) before the US had already taken over.

[Admiral Yi]

Secondly, GDP PPP is very overrated as a means of evaluating an economy. You can't buy goods on the world market with PPP dollars.

Only a minority of goods and services consumed are internationally traded.

[Valmy]

Don't see how it's that mad. Wasn't China's economy between 30-40% of the global economy at the start of the 19th century? I'd be amazed if Britain was able to overtake her even as China was declining (again my understanding is only precipitously in the latter half of the 19th century) before the US had already taken over.

I find that surprising given the disastrous Manchu policies of the 18th century.  And yes I would imagine the Taiping rebellion would cause some precipitous decline.  I just find it hard to believe that a de-industrialized peasant economy hammered by civil strife and war would be larger than India+Britain+everything which were industrializing and thriving.  I mean damn.

[Warspite]

Why is it so preposterous that China had a larger economy than the UK in the nineteenth century?