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Home Publications Blogs Beat the Press How Big Is China and How Ignorant Are They at the WAPO?

How Big Is China and How Ignorant Are They at the WAPO?

Sunday, 11 April 2010 10:12

Those are the questions that readers of the WAPO's Sunday Outlook section must be asking. The Post told readers that: "this year, China's economy is expected to produce about $5 trillion in goods and services. That would put it ahead of Japan as the world's second-biggest national economy, but it would still be barely one-third the size of the $14 trillion U.S. economy."

This reflects China's GDP measured on an exchange rate basis. However, economists typically use purchasing power parity measures of GDP for international comparisons. By this measure, China's economy is expected to be about $9.5 trillion this year. At its current growth rate, it will pass the size of the U.S. economy in about five years.

By many measures it is already larger than the U.S.. For example, it has more Internet users, college graduates in science and engineering, a larger car market, and about twice as many cell phone users.

The article also tells readers that the exchange rate will not have much impact on the trade deficit with China. Virtually all economists believe that an increase in the price of imports from China by 20-30 percent would substantially reduce imports. it is not clear why the author of this article believes otherwise.

Comments (2)Add Comment
Comarative Advantage Crack Pipe
written by Michael, April 14, 2010 10:48
I am thrilled to see any comment from economists that acknowledges the rape of the American middle class being perpetrated by the economics profession and the politicians based on the "Comparative Advantage" crack pipe. China has an "absolute advantage" in the cost of labor and it will remain so until the population of China decreases or the American people are disadvantaged to the same extent as the Chinese. As the population increases the labor necessary to survival also increases (Malthus). The redistribution of land rent can help, but the costs of overpopulation remain. All persons must labor for less because nature is fixed. Import duties are a way of collecting land rents. But the Americans did not create the population problems of China or Mexico or India or any of the rest.
U.S. cos. own 60 percent of China
written by upny67, April 16, 2010 4:29
U.S. companies own 60 per. of manufacturing exports from China. As far as the population problems the U.S. has a long history of nefarious direct and indirect involvement in China, India and Mexicos affairs. The principle cause of poverty is political corruption. The opulent can buy politicians to make they're conniving legal. Since these nations are spokes in the wheel of the of the U.S. business empire what does that make us?

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.