The Growth of China

Many news agencies reported today that China’s GDP (Gross Domestic Product) now exceeds Japan’s GDP and that China’s GDP will exceed US GDP over the next few decades.

This verdict is mathematically true, but it’s important to point out just how different the China and US are. China has a massive population but very low GDP person whereas the US has less than 20% of the population of China, but over 10x the GDP per person.

On this basis the economies are so radically different that comparing them is virtually meaningless. El Salvador, Tukmenistan and Nambia are better comparison for China on a GDP per person basis. It just so happens that China happens to be massive, and that bumps up its GDP substantially.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s