5 ms·

China's GDP (PPP) is already ~22% higher than the USA's [1]. Arguably, isn't this a better measure of value? PPP measures the real value to the citizens in a na

by aylmao 1y ago

China's GDP (PPP) is already ~22% higher than the USA's [1]. Arguably, isn't this a better measure of value? PPP measures the real value to the citizens in a nation, and more closely measures actual economic activity. Say a bottle of wine costs $20 in the USA, and in total one bottle is produced and sold for a total of $20 GDP. France makes 10 bottles at $2 each, for a similar GDP of $20. It's cool that the USA manages to "extract more value" from its smaller wine production, but at the end of the day, France has the stronger economy. There's more wine to go around, more resilience to the loss of a bottle, arguably this higher production means more export capacity, more employment, more generation of wine expertise, supply chains, etc. The nominal GDPs might be the same, but the GDP (PPP) of France in this case would be $200 to the USA's $20. [1]: https://www.cia.gov/the-world-factbook/field/real-gdp-purchasing-power-parity/country-comparison/ https://www.cia.gov/the-world-factbook/field/real-gdp-purcha...

seanmcdirmid 1y ago
That bottle of wine is going to be at least 400 RMB in China, so I’m not sure how PPP can be argued here. You would need to focus on things that are less expensive in China than the UsA (services mostly, low end goods and food), but things get more expensive quickly if you go for something nice outside of a restaurant. PPP is oddly calculated given that services in china’s case are mostly what is driving its higher value, and that simply means people are paid less (and increasingly they aren’t, which means PPP will shrink closer to GDP unless their automation investments really pay off).
deaddodo 1y ago
> China's GDP (PPP) is already ~22% higher than the USA's [1]. Arguably, isn't this a better measure of value? PPP measures the real value to the citizens in a nation, and more closely measures actual economic activity. Only if the only things you purchase are exclusively domestic. Turns out, the vast majority of Chinese citizens with any means are interested in foreign products (like most people in the world).
- aylmao 1y ago
  > Turns out, the vast majority of Chinese citizens with any means are interested in foreign products (like most people in the world). Is there data that backs up this claim? Is this broadly the case? Cause I do know that local brands have been taking over foreign brands recently. Take for example Apple— sales in China plunged 50%, and reports are pointing at Huawei [1], which amongst other things has been making some impressive high-end phones. Tesla is falling to Chinese brands too [2]. Moreover, foreign brand != foreign product. Tesla manufactures in China, as does Apple, Louis Vuitton, etc. But regardless of specific examples, I'd imagine the vast majority of consumption in China isn't products of foreign origin given its massive trade surplus [3] and just how much of what it imports are materials, rather than finished consumer goods [4]. [1]: https://www.asiafinancial.com/apple-sales-in-china-plunge-50-huawei-back-on-top-fortune https://www.asiafinancial.com/apple-sales-in-china-plunge-50... [2]: https://carnewschina.com/2025/05/12/teslas-sales-in-china-down-nearly-9-to-28731-in-april/ https://carnewschina.com/2025/05/12/teslas-sales-in-china-do... [3]: https://tradingeconomics.com/china/balance-of-trade https://tradingeconomics.com/china/balance-of-trade [4]: https://oec.world/en/profile/country/chn?selector343id=Import&selector359id=HS4 https://oec.world/en/profile/country/chn?selector343id=Impor...
  - deaddodo 1y ago
    > Moreover, foreign brand != foreign product. Tesla manufactures in China, as does Apple, Louis Vuitton, etc. This has nothing to do with PPP, and the fact that you are making this argument means you have no idea what it consists of at all. If Chinese citizens purchase those products, they don't get them at an adjusted price because they are manufactured in China. They pay the same base price as worldwide, else they buy them secondhand (or, more frequently, bootleg). Your questions reinforce, rather than dismiss, why PPP is a useless metric outside of base domestic purchase economics (primarily rent and food).
- oblio 1y ago
  > Only if the only things you purchase are exclusively domestic. Turns out, the vast majority of Chinese citizens with any means are interested in foreign products (like most people in the world). Are they, though? China has its own huge software stacks, cloud providers, car manufacturers, etc? Is China really starving for anything not made in China, except for luxury goods? To which, I would point at Lexus (the archetypal example from Japan, a comparable country) and say that if you're a luxury good manufacturer in the Western world, I would not rest on my laurels, it's just a matter of time: either by development or acquisition, China will be making its own luxury goods and even exporting them, soon.

by aylmao 1y ago

seanmcdirmid 1y ago

That bottle of wine is going to be at least 400 RMB in China, so I’m not sure how PPP can be argued here. You would need to focus on things that are less expensive in China than the UsA (services mostly, low end goods and food), but things get more expensive quickly if you go for something nice outside of a restaurant. PPP is oddly calculated given that services in china’s case are mostly what is driving its higher value, and that simply means people are paid less (and increasingly they aren’t, which means PPP will shrink closer to GDP unless their automation investments really pay off).

deaddodo 1y ago

> China's GDP (PPP) is already ~22% higher than the USA's [1]. Arguably, isn't this a better measure of value? PPP measures the real value to the citizens in a nation, and more closely measures actual economic activity. Only if the only things you purchase are exclusively domestic. Turns out, the vast majority of Chinese citizens with any means are interested in foreign products (like most people in the world).

aylmao 1y ago
> Turns out, the vast majority of Chinese citizens with any means are interested in foreign products (like most people in the world). Is there data that backs up this claim? Is this broadly the case? Cause I do know that local brands have been taking over foreign brands recently. Take for example Apple— sales in China plunged 50%, and reports are pointing at Huawei [1], which amongst other things has been making some impressive high-end phones. Tesla is falling to Chinese brands too [2]. Moreover, foreign brand != foreign product. Tesla manufactures in China, as does Apple, Louis Vuitton, etc. But regardless of specific examples, I'd imagine the vast majority of consumption in China isn't products of foreign origin given its massive trade surplus [3] and just how much of what it imports are materials, rather than finished consumer goods [4]. [1]: https://www.asiafinancial.com/apple-sales-in-china-plunge-50-huawei-back-on-top-fortune https://www.asiafinancial.com/apple-sales-in-china-plunge-50... [2]: https://carnewschina.com/2025/05/12/teslas-sales-in-china-down-nearly-9-to-28731-in-april/ https://carnewschina.com/2025/05/12/teslas-sales-in-china-do... [3]: https://tradingeconomics.com/china/balance-of-trade https://tradingeconomics.com/china/balance-of-trade [4]: https://oec.world/en/profile/country/chn?selector343id=Import&selector359id=HS4 https://oec.world/en/profile/country/chn?selector343id=Impor...
- deaddodo 1y ago
  > Moreover, foreign brand != foreign product. Tesla manufactures in China, as does Apple, Louis Vuitton, etc. This has nothing to do with PPP, and the fact that you are making this argument means you have no idea what it consists of at all. If Chinese citizens purchase those products, they don't get them at an adjusted price because they are manufactured in China. They pay the same base price as worldwide, else they buy them secondhand (or, more frequently, bootleg). Your questions reinforce, rather than dismiss, why PPP is a useless metric outside of base domestic purchase economics (primarily rent and food).
oblio 1y ago
> Only if the only things you purchase are exclusively domestic. Turns out, the vast majority of Chinese citizens with any means are interested in foreign products (like most people in the world). Are they, though? China has its own huge software stacks, cloud providers, car manufacturers, etc? Is China really starving for anything not made in China, except for luxury goods? To which, I would point at Lexus (the archetypal example from Japan, a comparable country) and say that if you're a luxury good manufacturer in the Western world, I would not rest on my laurels, it's just a matter of time: either by development or acquisition, China will be making its own luxury goods and even exporting them, soon.