Interesting NYT article today about a re-evaluation of Chinese Purchasing Power Parity.
Few people noticed, but China got smaller the other day. According to new
estimates, the colossal Chinese economy that has been making marketers salivate
and giving others an inferiority complex may be roughly 40 percent smaller than
previously thought: worth $6 trillion rather than $10 trillion. That means it
lost a chunk roughly the size of Japan’s output....
This is not a mere technicality. Suddenly the number of Chinese who live
below the World Bank’s poverty line of a dollar a day jumped from about 100
million to 300 million, roughly the size of the United States population. And if
you thought China’s energy consumption was dismally inefficient, consider that
it still uses the same amount of energy to produce 40 percent less stuff. The
reassessment does not just involve China. India is also likely to be downsized.
And, by the way, global growth has very likely been slower than we
You can read the whole thing here.