Friday 18 February 2011

CHINA SEEN BY INDIA

The Hindu

THE RISE OF CHINA

The Hindu, February 18, 2011

It is official. Measured in terms of nominal GDP converted to dollars at official exchange rates, China has, in 2010, overtaken Japan as the world's second largest economy. Figures from Japan released this week showed that Japan's nominal gross domestic product was worth $5,474 billion in 2010 compared with China's $5,879 billion. This is indeed a significant milestone. For many years before that China had been ahead of Japan only when GDP was measured in purchasing power parity terms. PPP is an indicator that takes into account relative prices and therefore the command over goods that a dollar of income provides. Since with lower wages and prices, a dollar in China when converted to RMB delivers more purchasing power, Chinese GDP measured in PPP dollars is significantly higher than at official exchange rates. Hence, becoming the world's second largest economy at official exchange rates does mark an important transition. There are only two features that seem to discount this achievement. The first is that while having overtaken Japan, China is far behind the U.S., with less than two-fifths of its GDP in nominal terms. The second is that with a population of more than 1.3 billion, compared with Japan's 128 million and the United States' 307 million, China's per capita nominal GDP in 2009 was less than a tenth that in both Japan and the U.S.

(...) [artículo aquí]

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