Some Basics on China
The comment thread on my piece on Tom Friedman’s authoritarian fantasies regarding China prompt me to point out some very basic data on China that often get ignored in general discussions of the country and its economy.
Yes, it is true that China has had remarkable growth in its economy in recent years. Indeed, in raw terms, it now has the second largest national economy in the world behind the US (third if one counts the EU as one economic unit).
Here are the top five:
per capita rank
However, a statistic that is better for comparative purposes is GDP per capita (or per person) noted also in the table. This takes the overall economic output of the entire economy and divides it by the population giving us a measure of the amount of economic output per person (recognizing that some people produce nothing, indeed are even net drains on the economy, while others produce quite a lot). As such, it rather easy to see why the US, Japan and EU are all clearly developed economies and why China and Indi are still developing. For example when a large percentage of one’s economy are peasants living more like it is the 19th, rather than 21st, century, it has a rather dramatic impact on one’s GDP per capita.
Much talk has floated around for a while about the emerging economies and how they are going to displace the US and the EU—specifically the BRIC countries (Brazil, India and China). For the sake of discussion, Brazil’s GDP is $ 2,025,000,000,000 (10th) and its GDP per capital is $10,200 (105th). Of the three BRIC countries, it is actually the most developed in overall terms, but still has a large amount of devastating poverty and has one of the world’s most mal-apportioned wealth distributions.
In all of the BRIC cases there is a severe disjuncture between sectors of their economies. Yes, the residents of Beijing, Shanghai, etc., live in the First World, but millions upon millions outside the urban centers still live in the Third (if not Fourth) World. This is true in India and Brazil as well, and really in all three cases, not all urban dwellers live in developed circumstances. This is especially true in India and Brazil (I am less certain of the situation in China).
In short: China is neither a good case for comparison to the USA (please note, Mr. Friedman) nor is it poised to Take Over the World, as some fear it is about to do.
Note: All figures are 2009 estimates in PPP (price purchasing parity).