China's gross domestic product (GDP) has been undervalued by $1.4 trillion, according to the World Bank's latest survey on purchasing power parity (PPP). The survey reveals that China's 2022 PPP GDP, which measures the relative purchasing power of different currencies, has increased from 119% to 125% of the United States' GDP. However, the article from Asia Times argues that China's GDP and PPP GDP are still underestimated due to an incomplete transition from the Material Product System (MPS) of national accounts, which excludes services by design. The article suggests that China's GDP needs to be adjusted by 25-40% to align with the United Nations System of National Accounts (UNSNA) basis. The discrepancies between China's production and consumption levels compared to the US are highlighted, including electricity generation, steel and cement production, vehicle production and sales, smartphone sales, meat and seafood consumption, and luxury goods spending. The article concludes that an accurate adjustment of China's PPP GDP relative to the US would be twice the current estimate [44783242].
China's National Bureau of Statistics (NBS) has been criticized for providing data that underestimates the country's GDP. The NBS reported data has been accused of lowballing GDP for decades. The World Bank survey is limited by the data provided by the NBS, which has not fully accounted for the inclusion of services in GDP calculations. The article argues that adherence to the UNSNA has caused a breakdown in the meaning of GDP, as services become an increasingly significant part of Western economies. The article emphasizes the need for an accurate adjustment of China's PPP GDP to provide a more comprehensive understanding of the country's economic size [44783242].
The discrepancies in China's GDP calculations and the underestimation of its economic size have implications for global comparisons and assessments. Accurate GDP measurements are crucial for understanding the relative economic strength and influence of different countries. The World Bank survey highlights the need for a more comprehensive and accurate assessment of China's GDP, taking into account the full range of economic activities and services [44783242].
According to data from Rosstat, Russia's GDP at purchasing power parity (PPP) in 2023 was $6.45 trillion, $715 billion more than in 2021. The World Bank updated its estimates for 2021 and indicated that the Russian economy ranks 4th in the world in terms of GDP in PPP. The Russian economy in the first quarter of 2024 is estimated to have grown by 5.4% compared to the first quarter of 2023. The Bank of Russia upgraded its forecast for Russian GDP growth in 2024 to 2.5-3.5%. According to the IMF, Russia's GDP in purchasing power parity in 2023 amounts to $4989 billion, ahead of France but behind Germany.
The inclusion of Russia's GDP data in the story further emphasizes the importance of accurate GDP measurements for understanding the economic strength and influence of different countries. The World Bank's survey on China's GDP underestimation highlights the need for a comprehensive and accurate assessment of GDP, taking into account the full range of economic activities and services. This applies not only to China but also to other countries like Russia, where accurate GDP measurements are crucial for global comparisons and assessments [931d32aa].