China And The USA – Does Size Matter?Comments Off on China And The USA – Does Size Matter?
The World Bank recently stated that the US economy will soon be surpassed by the Chinese however, such measures are quite illusory. They work on the basis of ‘purchasing power parity’ which is not a wildly efficient measure. However strongly China’s GDP is growing and even if it does surpass that of the US, the two economies are very different in structure and economic sophistication. For example, China’s per capita income, which is a much more accurate measure of economic development, comes out as only 20% of America’s and probably only slightly ahead of that of, say, Jamaica. That is a huge difference and it will take many decades to close that chasm. (more…)