Die Neue Zeit
31st December 2007, 07:06
China's Economy Smaller In New Study: World Bank (http://web.worldbank.org/WBSITE/EXTERNAL/NEWS/0,,date:2007-12-18~menuPK:34461~pagePK:34392~piPK:64256810~theSite PK:4607,00.html#Story2)
“The size of China's economy is overestimated by some 40 percent, but it remains the world's second largest using a ranking based on purchasing power, the World Bank said Monday.
In a report ranking the world's economies for 2005, the World Bank said its updated survey using ‘purchasing power parity’ (PPP) shows a much smaller value for China than earlier estimates…The [International Comparison Program] study carried out by the World Bank and other partners was ‘the most extensive and thorough effort to measure the relative size of 146 economies using the PPP method which strips out the effect of exchange rates, a Bank statement said. …” [Agence France Presse/Factiva]
...
AP writes that “The World Bank said the economies of China and India are about 40 percent smaller than earlier estimates after it revised calculations using consumers' relative purchasing power to measure economic might.
The new figures released by the World Bank on Monday differ from conventional GDP figures, which are calculated by simply converting local statistics into US dollars - but don't take into account the wide variations in the purchasing power of a dollar from country to country. …
And an LA Times opinion (whose title I took) here:
The great fall of China (http://www.latimes.com/news/opinion/sunday/commentary/la-op-mead30dec30,0,1035099.story?coll=la-sunday-commentary)
It is bad news that billions of people are significantly poorer than we thought. China and India are not the only countries whose GDP has been revised downward. The World Bank figures show sub-Saharan Africa's economy to be 25% smaller. One consequence is that the ambitious campaign to reduce world poverty by 2015 through the United Nations Millennium Development Goals will surely fail. We have underestimated the size of the world's poverty problem, and we have overestimated our progress in attacking it. This is not good.
There is more bad news. U.S. businesses and entrepreneurs hoping to crack the Chinese and Indian markets must come to terms with a middle class that is significantly smaller than thought.
“The size of China's economy is overestimated by some 40 percent, but it remains the world's second largest using a ranking based on purchasing power, the World Bank said Monday.
In a report ranking the world's economies for 2005, the World Bank said its updated survey using ‘purchasing power parity’ (PPP) shows a much smaller value for China than earlier estimates…The [International Comparison Program] study carried out by the World Bank and other partners was ‘the most extensive and thorough effort to measure the relative size of 146 economies using the PPP method which strips out the effect of exchange rates, a Bank statement said. …” [Agence France Presse/Factiva]
...
AP writes that “The World Bank said the economies of China and India are about 40 percent smaller than earlier estimates after it revised calculations using consumers' relative purchasing power to measure economic might.
The new figures released by the World Bank on Monday differ from conventional GDP figures, which are calculated by simply converting local statistics into US dollars - but don't take into account the wide variations in the purchasing power of a dollar from country to country. …
And an LA Times opinion (whose title I took) here:
The great fall of China (http://www.latimes.com/news/opinion/sunday/commentary/la-op-mead30dec30,0,1035099.story?coll=la-sunday-commentary)
It is bad news that billions of people are significantly poorer than we thought. China and India are not the only countries whose GDP has been revised downward. The World Bank figures show sub-Saharan Africa's economy to be 25% smaller. One consequence is that the ambitious campaign to reduce world poverty by 2015 through the United Nations Millennium Development Goals will surely fail. We have underestimated the size of the world's poverty problem, and we have overestimated our progress in attacking it. This is not good.
There is more bad news. U.S. businesses and entrepreneurs hoping to crack the Chinese and Indian markets must come to terms with a middle class that is significantly smaller than thought.