WTF China?

[bobman0330]

http://www.marginalrevolution.com/ma...estimate-.html

apparently, China's economy is actually 40% smaller than usually stated, measured according to purchasing-power parity. I don't have any deep knowledge of this area, but this seems pretty shocking to me. Anyone have any insight into what this really means? Is China less of a threat to run amok and conquer the mid-21st century? More?

[adios]

Very interesting read. In Alan Greenspan's new book, he talks about how and why the economic power and the size of the economies in the Soviet bloc countries was vastly over estimated during the time of the cold war. The extent of the over estimation wasn't known completely until the Soviet bloc crumbled. Similar type reasons as enumerated in the linky.

[Felix_Nietzsche]

This is no surprise to me....
I was shocked to hear that China's economy was as big as publical stated. This news matches my instincts on China's economic development...

Free market economies always out preform centrally controlled economies. China is following Russia's hybrid experiment trying to mix free marlet ideas while maintaining some control. The nitwits running China are just as dumb as most US pols if not dumber...

A more interesting question is why the Chi-Coms would lie about the size of their economy? My guess is they are like a poker player with a busted draw trying to steal the pot at the river. By over stating their economic size, their gain many advantages like:
1. Encourages nitwit corporate executives like Mattel to invest in the 'world's biggest economy'.
2. Gives China the aura they are more powerful than they really are which the can use in diplomatic negotiations.
3. Helps to hide the % of GDP of China's military buildup. As a % of GDP, China's military buildup is even more astronomical than previously thought. Could China be planning their invasion of Taiwan? If so, the USA is obligated by treaty to go to war against China to defend Taiwan.... It is no accident that many Chinese waiters and busboys are giving HUGE amounts of money to Hillary Clinton's campaign. If the Chi-Coms can get 8 years of Hillary, then invading Taiwan will be much easier.... My personal estimate is China will THINK they will be ready to invade Taiwan in 4-5 years.

[ConstantineX]

Alot of people have been suspicious of the statistics that China has been been putting out for years. I think it's the relic of the authoritarian system that they can't get accurate survey data - apparently 20% of China's power stations come from unlicensed sources (people just plopping them wherever). In contrast, typically opaque and private financial companies like hedge funds in the US openly and truthfully self-report to the SEC. The authoritarian system combined with permissive capitalism has lead to a system where there are no effective reporting institutions.