5 ms·

Whatever they're doing, it doesn't seem to be worse than the US. Chinese PPP has been growing faster[1]. [1] https://data.worldbank.org/indicator/NY.GDP.MKTP.P

Whatever they're doing, it doesn't seem to be worse than the US. Chinese PPP has been growing faster[1]. [1] https://data.worldbank.org/indicator/NY.GDP.MKTP.PP.CD?locations=CN-US https://data.worldbank.org/indicator/NY.GDP.MKTP.PP.CD?locat...

arcticfox 3y ago
That could be simply a function of having a lot of room for growth. I personally think their growth is not sustainable once they achieve ~US levels of PPP per capita. [1] https://data.worldbank.org/indicator/NY.GDP.PCAP.PP.KD?locations=CN-US https://data.worldbank.org/indicator/NY.GDP.PCAP.PP.KD?locat...
- bilbo0s 3y ago
  This. It's the natural progression of anything in this universe. Even people. Your rate of physical growth between the ages of 2 and 22 was enormous. Your rate of physical growth between the ages of 22 and 42 was likely minimal. (Unless you grew, um, laterally.) A 22 year old should not be comparing himself to a 2 year old and lamenting that he can't match the 2 year old's growth rate.
- oblio 3y ago
  It's super debatable if they can reach US levels of GDP PPP per capita. The US is at 80k, Germany is at 66k, Canada is at 60k, South Korea is at 56k, Romania is at 41k. China is at 23k. If Germany or South Korea can't reach the US, China getting there seems incredibly hard. Though if China reaches Romania's level (funny when presented this way :-) ), the nominal total GDP of China will probably be 1.5 - 2x the US one, just by virtue of them having 5x the number of people compared the US.
  - justsomehnguy 3y ago
    > Though if China reaches Romania's level Population • 2023 estimate Neutral decrease 1,411,750,000[7] Population • 2021 census Neutral decrease 19,053,815[3] I can bet my pumpkin latte what there are more people in China living better than Romanians, all Romanians.
    - oblio 3y ago
      Yeah... and how does that relate to what I was saying? Even the poorest country in the world has at least a multi millionaire in dollars.
alephnerd 3y ago
I'd be a bit cautious about using GDP PPP in isolation. It's a good metric for a rough comparison/transformation, but has relatively weak prediction power. That said, the same holds for any economic metric used in isolation (eg. HDI, GDP, GDP Per Capita, GDP Growth Rate, GDP PPP Per Capita, Debt Rate, Median Income, etc.) All metrics need to used together to gain a holistic view on economic development. It's the equivalent of driving and only concentrating on the odometer at the expense of the fuel gauge, speedometer, and tachometer.
- ImPostingOnHN 3y ago
  what specifically are the shortcomings of using GDP PPP to measure purchasing power in this specific example? to that end, what metrics would you use instead to compare purchasing power?
  - alephnerd 3y ago
    Well, in this case we are talking about the Photovoltaic Sector within the PRC. This implies that this is a microeconomics problem, not a macroeconomic one. This means that metrics like GDP PPP, HDI, etc are completely useless when investigating a subsegment of industrial production. If I was analyzing the Photovoltaic sector, I'd probably look at 1. Current TAM, Future TAM, TAM growth rate (both past and present) 2. The price of the inputs used (wafers, polysilicon, cells, modules, labor, R&D, tariffs, subsidies) 3. The growth of comparable manufacturers globally 4. Adjacent markets/segments (if I am specialized in solar wafer manufacturing tools, can I potentially pivot into tools for IC wafer manufacturing) This is a non-comprehensive list, but in general I'm not surprised with a collapse in the price of Photovoltaic Cells. This was kind of the whole point globally of spearheading the industry - it helped build domain experience or subsidize the adjacent semiconductors sector as well as helped countries like the PRC and the US pivot away from foreign ONG dependency, and is why countries like Vietnam, Malaysia, and India also invest heavily in the sector.
    - ImPostingOnHN 3y ago
      in this case we are talking about the comparative purchasing power between countries, so what metric(s) would you use for that?
seanmcdirmid 3y ago
China’s PPP is weird. It isn’t apples to apples, it is Chinese living standard to American living standard. Many things in China are actually more expensive than the USA, what is cheaper is generally related to food and services, otherwise you just go with cheaper alternatives in China instead, and they are cheaper for a reason. Housing is a good example: you aren’t going to fund the same standard f housing in China for cheaper than the USA, but you can find cheaper housing (I.e. not as nice as you would rent in the states). Cars are another good example: they have cheap cars, but if you want to buy say a Camry in china, you’ll pay more than you would in the USA (and we aren’t even talking imports, they are made in Chinese factories at a lesser quality standard than the USA or Japan).
- deleted 3y ago
  [deleted]

arcticfox 3y ago

That could be simply a function of having a lot of room for growth. I personally think their growth is not sustainable once they achieve ~US levels of PPP per capita. [1] https://data.worldbank.org/indicator/NY.GDP.PCAP.PP.KD?locations=CN-US https://data.worldbank.org/indicator/NY.GDP.PCAP.PP.KD?locat...

bilbo0s 3y ago
This. It's the natural progression of anything in this universe. Even people. Your rate of physical growth between the ages of 2 and 22 was enormous. Your rate of physical growth between the ages of 22 and 42 was likely minimal. (Unless you grew, um, laterally.) A 22 year old should not be comparing himself to a 2 year old and lamenting that he can't match the 2 year old's growth rate.
oblio 3y ago
It's super debatable if they can reach US levels of GDP PPP per capita. The US is at 80k, Germany is at 66k, Canada is at 60k, South Korea is at 56k, Romania is at 41k. China is at 23k. If Germany or South Korea can't reach the US, China getting there seems incredibly hard. Though if China reaches Romania's level (funny when presented this way :-) ), the nominal total GDP of China will probably be 1.5 - 2x the US one, just by virtue of them having 5x the number of people compared the US.
- justsomehnguy 3y ago
  > Though if China reaches Romania's level Population • 2023 estimate Neutral decrease 1,411,750,000[7] Population • 2021 census Neutral decrease 19,053,815[3] I can bet my pumpkin latte what there are more people in China living better than Romanians, all Romanians.
  - oblio 3y ago
    Yeah... and how does that relate to what I was saying? Even the poorest country in the world has at least a multi millionaire in dollars.

alephnerd 3y ago

I'd be a bit cautious about using GDP PPP in isolation. It's a good metric for a rough comparison/transformation, but has relatively weak prediction power. That said, the same holds for any economic metric used in isolation (eg. HDI, GDP, GDP Per Capita, GDP Growth Rate, GDP PPP Per Capita, Debt Rate, Median Income, etc.) All metrics need to used together to gain a holistic view on economic development. It's the equivalent of driving and only concentrating on the odometer at the expense of the fuel gauge, speedometer, and tachometer.

ImPostingOnHN 3y ago
what specifically are the shortcomings of using GDP PPP to measure purchasing power in this specific example? to that end, what metrics would you use instead to compare purchasing power?
- alephnerd 3y ago
  Well, in this case we are talking about the Photovoltaic Sector within the PRC. This implies that this is a microeconomics problem, not a macroeconomic one. This means that metrics like GDP PPP, HDI, etc are completely useless when investigating a subsegment of industrial production. If I was analyzing the Photovoltaic sector, I'd probably look at 1. Current TAM, Future TAM, TAM growth rate (both past and present) 2. The price of the inputs used (wafers, polysilicon, cells, modules, labor, R&D, tariffs, subsidies) 3. The growth of comparable manufacturers globally 4. Adjacent markets/segments (if I am specialized in solar wafer manufacturing tools, can I potentially pivot into tools for IC wafer manufacturing) This is a non-comprehensive list, but in general I'm not surprised with a collapse in the price of Photovoltaic Cells. This was kind of the whole point globally of spearheading the industry - it helped build domain experience or subsidize the adjacent semiconductors sector as well as helped countries like the PRC and the US pivot away from foreign ONG dependency, and is why countries like Vietnam, Malaysia, and India also invest heavily in the sector.
  - ImPostingOnHN 3y ago
    in this case we are talking about the comparative purchasing power between countries, so what metric(s) would you use for that?

seanmcdirmid 3y ago

China’s PPP is weird. It isn’t apples to apples, it is Chinese living standard to American living standard. Many things in China are actually more expensive than the USA, what is cheaper is generally related to food and services, otherwise you just go with cheaper alternatives in China instead, and they are cheaper for a reason. Housing is a good example: you aren’t going to fund the same standard f housing in China for cheaper than the USA, but you can find cheaper housing (I.e. not as nice as you would rent in the states). Cars are another good example: they have cheap cars, but if you want to buy say a Camry in china, you’ll pay more than you would in the USA (and we aren’t even talking imports, they are made in Chinese factories at a lesser quality standard than the USA or Japan).

deleted 3y ago
[deleted]