Russia, US, the West vs ??? WWIII! (Part I)

[iNow]

China is to surpass the U.S this summer economically.

When you paint with such a broad brush you tend to miss some very important details. Yes, China's GDP is likely to surpass the US this year if you look only at a GDP measured using purchasing power parities, but that should be seen in context of some other rather critical economic caveats.

 

Since you said "economically" and did not focus your pretentious (and IMO entirely too arrogant and self-righteous) post on the more specific concept of "GDP as measured by PPP," I'll provide some important supplemental information and explain some of those caveats here for you and others.

 

http://www.washingtonpost.com/blogs/wonkblog/wp/2014/04/30/everybody-chill-out-chinas-economy-is-still-only-half-the-size-of-ours/

Is China's economy really set to overtake the United States this year, as many news outlets reported Wednesday morning? Not exactly.

Those headlines come from a new World Bank report that looks at the purchasing power parities (PPP) of world economies. It's a way of standardizing GDPs across different currencies and economies by "the number of units of a country's currency required to buy the same amounts of goods and services in the domestic market as U.S. dollar would buy in the United States," according to the Bank's definition.

On that measure, China is looking pretty good.

<...>

But there's a reason that standard measures of GDP don't use the PPP conversion. As the Wall Street Journal's Tom Wright explains:

 

"China can’t buy missiles and ships and iPhones and German cars in PPP currency. They have to pay at prevailing exchange rates. That’s why exchange rate valuations are seen as more important when comparing the power of nations."

 

Standard GDP measures take these exchange factors into account. And here, China is doing about as well as one would expect. They're still the world's second-largest economy, but their GDP is less than half the size of the U.S. GDP. You can see how these measures compare in the chart below.

 

http://time.com/82225/china-world-biggest-economy/

 

The study recalibrates GDP statistics based on updated estimates of purchasing-power parity a measure of what money can actually buy in different economies. In the process, the economy of China comes out far larger than we had previously thought. Its GDP surges to $13.5 trillion in 2011 (the latest year available), compared with the $7.3 trillion calculated using exchange rates. That catapults Chinas economy much closer to that of the U.S. at $15.5 trillion. Forecasting ahead, these figures show that China could overtake America as the worlds largest economy as early as this year.

<...>

Yet we shouldnt get ourselves too worked up. These new figures dont mean as much as many people think. Leaving aside the obvious statistical questions the report raises about the value of GDP figures generally, where the U.S. and China rank misses the more important point: bigger isnt necessarily better.

 

Even if China does become No. 1, that would just be a mask covering up the reality of the economys weaknesses. Some of the factors that have been driving GDP upward are also signs of Chinas deteriorating economic health investment in excess capacity, the construction of wasteful real estate projects and the buildup of crazy levels of debt. China is losing its cost competitiveness but still lags badly in the managerial expertise, technology and financial professionalism necessary to develop a truly advanced economy.

 

Beijings leadership is embarking on an ambitious program of reform to make the state-led economy more market-oriented and give private business greater sway. But the challenges of implementing these reforms are huge and could cause a dramatic economic slowdown, or even worse. Many economists and analysts (myself included) have openly wondered if China is heading toward a full-blown financial crisis.

http://globalpublicsquare.blogs.cnn.com/2014/05/12/is-china-really-about-to-overtake-the-u-s/

 

In 2005, the ICP estimated China's economy was 43 percent the size of America's. But their latest report, which uses 2011 data, puts China's GDP at $13.5 trillion. That accounts for 87 percent of the U.S. economy, which is $15.5 trillion.

Now, given that China's economy is growing 3 times as fast, it is fair to project that China will surpass the U.S. by year end. So, are we bracing ourselves for a big power shift from West to East, for a new Pacific era?

 

Well, not exactly. The International Comparison Program based their rankings on a measure called purchasing power parity. PPP, as it's called, estimates the real cost of living in other words, what money can actually buy you in each country, not how much money you have.

<...>

But using PPP as the sole metric can be problematic. While some goods and services may be cheaper in the developing world, many things cost the same whether you are in Beijing, Washington, D.C., or New Delhi.

 

The Wall Street Journal's Tom Wright, perhaps, puts it best: "China can't buy missiles and ships and iPhones and German cars in PPP currency. They have to pay at prevailing exchange rates."

National power is best compared on the basis of the standard measure market exchange rates. And by that measure, the U.S. economy is still nearly twice the size of China's. In fact, by these standards, the American economy is larger than China and Japan's combined.

 

So, China won't regain its spot as the world's biggest economy for some time.

<...>

Also, keep in mind that China is still a relatively poor country. When you look at per capita GDP, China doesn't rank first, second, or even 30th. On that criteria, China is behind Peru.

http://blog-imfdirect.imf.org/2014/03/26/china-size-matters/

 

 

I agree that China is large and is an important economic player. I agree that they will continue to grow, that attention must be paid to what they are doing, and that their growing middle class will have a sizable impact on global economic dynamics, but to argue in a one-dimensional myopic bloviating manner in the way you have here (and have so often done in other threads on other topics) is to really miss the point and IMO betrays your deep ignorance on the topic (an ignorance that would be forgivable if it weren't so embedded with arrogance and certainty).

 

If you're going to act like such a douchebag toward other members here, I recommend that you at least try to ensure that your position is unassailable and accurate prior to doing so and that you should avoid posts like this:

 

Captain, all I can say is you either need to google better or get up with the times. <...> Like I said, less google, more research. Everyone can google. But sometimes it is better to data mine on your own. Instead of expecting a service to do it for you! <...> And most of it has to do with Obama. The timing is right. Considering the weak president we have in office.

Or, you know... ignore this input and keep acting like an ill-educated blowhard not to be taken seriously. That's your choice. It's a free country, after all.

Edited May 20, 2014 by iNow

[jduff]

Or, you know... ignore this input and keep acting like an ill-educated blowhard not to be taken seriously. That's your choice. It's a free country, after all.

Considering it takes multiple people like you Inow(Intellectual fakes) to actually come up with a answer or keep a attack argument going. I will take that as a compliment. And really your answer is nothing more than what I put into perspective. In fact one of your links is one I shared.

 

The difference between me and you Inow, and it will always be a difference. Is I spend very little time actually making posts here.With very little effort. While I waste alot of your time and effort because you actually have to look things up just to get a argument!

Edited May 20, 2014 by jduff

[iNow]

The difference between me and you Inow, and it will always be a difference. Is I spend very little time actually making posts here.With very little effort.

I'd never have guessed.

And really your answer is nothing more than what I put into perspective. In fact one of your links is one I shared.

Which one, exactly? I'm not seeing it, and wonder if perhaps you're mistaken.

[jduff]

Update again. For our Naysayers! Russia and China announced they are no longer using the U.S currency for trade. Rather they are going to use they're national currencies. Guess that shoots whatever argument you guys thought you had with me over the Russian/China economies! By the way! Told you it was coming!

 

http://en.ria.ru/russia/20140520/189968566/Russia-China-Plan-to-Expand-Payments-in-National-Currencies.html

 

Also, things are changing in a big way for U.S/China relationships. http://www.reuters.com/article/2014/05/20/us-china-usa-espionage-idUSBREA4J03D20140520

 

Man ohh man.. All the debate theorists here. Good luck with that!

Edited May 21, 2014 by jduff

[DimaMazin]

Update again. For our Naysayers! Russia and China announced they are no longer using the U.S currency for trade. Rather they are going to use they're national currencies. Guess that shoots whatever argument you guys thought you had with me over the Russian/China economies! By the way! Told you it was coming!

 

http://en.ria.ru/russia/20140520/189968566/Russia-China-Plan-to-Expand-Payments-in-National-Currencies.html

 

Also, things are changing in a big way for U.S/China relationships. http://www.reuters.com/article/2014/05/20/us-china-usa-espionage-idUSBREA4J03D20140520

 

Man ohh man.. All the debate theorists here. Good luck with that!

Still all economic calculations are in dollars. And at all a barter of goods isn't currency.

[jduff]

Still all economic calculations are in dollars. And at all a barter of goods isn't currency.

Only in the west

[iNow]

Update again. For our Naysayers! Russia and China announced they are no longer using the U.S currency for trade. Rather they are going to use they're national currencies

So, just to be sure I'm tracking this...

 

You first claimed that China's economy would be larger than the US economy by the end of this year.

 

You were corrected and shown that this is only true when viewed in context of one very particular (and limited) metric, GDP as measured by purchasing power parity, and you had it explained to you that PPP has important limitations and that various other insights into the Chinese economy must also be considered when making claims like this.

 

Then, in response you're arguing that China's economy will surpass the US this year, because... because they're going to start trading with Russia in a different currency.

 

Are you familiar with the concept of a nonsequitur? Do you care that that does not follow?

 

 

Unrelated: Here's a helpful primer for you - http://www.grammar.cl/english/there-their-they-are.htm

[jduff]

So, just to be sure I'm tracking this...

 

You first claimed that China's economy would be larger than the US economy by the end of this year.

 

You were corrected and shown that this is only true when viewed in context of one very particular (and limited) metric, GDP as measured by purchasing power parity, and you had it explained to you that PPP has important limitations and that various other insights into the Chinese economy must also be considered when making claims like this.

 

Then, in response you're arguing that China's economy will surpass the US this year, because... because they're going to start trading with Russia in a different currency.

 

Are you familiar with the concept of a nonsequitur? Do you care that that does not follow?

 

 

Unrelated: Here's a helpful primer for you - http://www.grammar.cl/english/there-their-they-are.htm

Inow take your crap to most of the economists in the U.S and Europe and explain your case to them. For supposedly really intelligent people here. You guys are quite the dumbasses.

 

Get a CLUE ASSHAT! By the way, this is my last post at this site. Has to be the worst science site on the web. A bunch of political activists who use science as a means. Screw you! And all the libtards who hang here! Im DONE.. LATER ASSHOLES!

Edited May 21, 2014 by jduff

[swansont]

The difference between me and you Inow, and it will always be a difference. Is I spend very little time actually making posts here.With very little effort. While I waste alot of your time and effort because you actually have to look things up just to get a argument!

!

Moderator Note

 

 

jduff,

 

Admitting that you are trolling (posting, unfettered by facts) is not the way to stay in the good graces of the staff.

 

Insults are a way to actively make us upset.

 

[Phi for All]

By the way, this is my last post at this site.

 

!

Moderator Note

I think you're right.

[DimaMazin]

Only in the west

The east way to the out-of-date model of trade.