China: It's Not As Big As You Think

IBD ^ | December 18, 2007

[the invisib1e hand]

I don't think I implied that China is "going away." Forgive me, I'll be more succinct: communism always fails. Since the point of the thread was that, yo, China might not be the economic powerhouse etc. etc. they've been telling us it was, is, and will be, my comment was to imply that no matter what sort of a "powerhouse" anyone imagines it to be, as long as it's communist, it's going to hit the wall. Or take over the world. And I doubt the latter.

With regard to "inbreeding," simply this: it's the opposite of the melting pot that was/is America, wherein, combined with a robust faith and a relatively free economy, we became, in very short order and to the amazement, benefit and chagrin of the world, the prime earthly mover in world events.

Recall that my post was a continuance of the theme of juxtaposing the US and China that was theme of the post I responded to.

[BlueDragon]

Chinese ringneck pheasant [in the U.S.]

Fine game bird.

[dangus]

How about some Chinese for dinner, honey?

[dangus]

This means that the Chinese economy has been growing much less rapidly than thought. So now for the big question: which is growing faster, India or China?

Do the Indian economic growth statistics have the same tendencies to be exaggerated, or does its more open society prevent such ridiculous nonsense?

[cmdjing]

Actually what this means is that price inflation in China has risen faster than previously estimated, in fact it has risen faster nearly everywhere. If anyone actually bothered reading the preliminary world bank report instead of being the usual slack jawed drooling idiots they are, they would have realized that most nations surveyed also had revisions. China is highlighted because a) “China Threat” scenario b) it sells newspapers c) Idiot journalists don’t know where other countries are. Despite the constant railing against the MSM here at FR, most people still don’t seem to be able to read critically.

For the Asia pacific region, major developing economies were revised downards thus:

China - 39.8%
Bangladesh - 42.7%
India - 37.4%
Indonesia - 20.4%
Pakistan - 4.7%
Phillipines - 41.6%
Vietnam - 30.5%

Malaysia and Thailand were the exceptions in that both gained slightly from the revision, 3.7% each in fact.

If you will notice the trend, those countries with higher PPP multipliers were adjusted far more(Bangladesh and India have the highest, 5.5:1 and 4.5:1 respectively), while those with lower multipliers of around 2:1, such as Pakistan and Malaysia and Thailand were barely touched. These of course are only preliminary figures and a more finalized report is coming out in February 2008.

Regarding your question, India most certainly does “touch up” it’s figures.. For example, India’s CPI does not take into account rent pricing when factoring inflation. Considering that this is the single largest household expenditure and it has expanded dramatically in recent years, omitting it from the CPI lowers the inflation level. Housing price growth has exceeded income growth significantly in India. For example, prices in Mumbai are nearly that of first world cities such as New York, despite average income being some 40x lower.

[N. Theknow]

The common wisdom is that China's large and fast-growing economy could overtake the U.S. as soon as 2012.

Seems to be a chink in the armor of common wisdom.