XPost: alt.russian.z1, talk.politics.misc, alt.politics.economics
XPost: can.politics
<
https://archive.is/gLf3d> ft.com
<
https://www.ft.com/content/c406ef56-bc43-4cdc-8913-fbaced9b9954>
Sorry America, China has a bigger economy than you. Measures that
show the opposite have absurd implications and dangerous policy
prescriptions ..
[There is some] absurd way to compare economies, but it is
deeply fashionable among people who should know better .. On these
silly market exchange rate comparisons, many news organisations
have reported [nonsense] .. A basic requirement for international
comparisons is that domestic data and international data give
similar results. This is why the economics profession invented
purchasing power parity exchange rates, allowing (imperfect)
comparisons to be made based on the goods and services that money
can buy. This matters for economic size and even military power ..
Measured at PPP, the latest IMF data shows China's GDP exceeded
that in the US .. It is now 22 per cent larger.
It comforts both the US and China not to acknowledge the changing
shift in global economic power. Coming from the UK, which lost
its top economic dog status in the late 19th century but still has
some delusions of grandeur, I can understand American denialism.
For China, it is also easier to avoid responsibilities ..
But ultimately, bad comparisons foster bad decisions ..
...
I myself (I'm not an economist, but there's simply a common
sense) explaned it before <
https://tinyurl.com/26mbklb3>, seven
years ago, and now the Financial Times outlet, which is seen as
reputable in the "western" world, explains essentially the same
with a number of examples illustrating "absurd implications".
The primary reason why those "silly market exchange rate
comparisons" are really silly is that in typal cases of national
economies only a small part of their total product goes to
inter-national trade (that involves market exchange rates). Using
an analogy from simple math, comparison of national economies on
the basis of market exchange rates looks like an attempt to
extrapolate the value of a function over a distance much greater
than the segment over which the function is known. And no wonder
such an approach would produce a big error.
...
Specifically with regard to China, it's true that China officials
and Chinese mainstream analysts/commentators aren't enthusiastic
to emphasize the fact that the US economy has now become, in real
fact, only about 4/5 in comparison with the real size of China's
economy. I think it's not so about "avoiding responsibilities",
but there are two other main reasons. The first is, among Chinese
economic thinkers there is some excessive reverence for Advanced
Western this and that, so they tend to share "deeply fashionable"
concepts the FT is criticising above. The second is linked with
the Chinese historically traditional settings not encouraging a blusterous-cocky stance but preferring to coerce an opponent with
an overwhelming superiority (and until it's achieved, it's better
"to keep a low profile"). Besides, it seems more fair to conduct
the conversation about "responsibilities for climate change and
other global goods" in per capita rather than per nation terms.
--- SoupGate-Win32 v1.05
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