6% growth would be the envy of many countries. For comparison, the last time the US did that was 1984, after back-to-back recessions and a flood of deficit-financed defense spending:
No, not exactly. It has to be contextualised. Growing 2% if you're already rich is fine. It's essentially a promise they'll stay rich, and get ever so slightly richer. But 2% growth for someone who earns next to nothing, is basically a promise that they'll be poor forever.
So let's compare the US in 1984 when it last had China's growth, and China today when it last had... China's growth.
https://ourworldindata.org/grapher/maddison-data-gdp-per-cap...
In 1984, US (inflation-adjusted, 2011 dollars) had a GDP per capita of $32k. China today is at $12k.
6% might be okay for the US. But for the almost 1.4 billion Chinese (who live on an income distribution, i.e. almost 700 million people living on less than that $12k, and hundreds of millions on quite very little), 6% may not be the promise they'll accept from their government for long.
Not saying it's low-growth, but you can't just compare it to rich countries. The standard is very different, and China will be anxious to crank it back up.
I'm not saying this is the case. I'm just saying -- it is possible to "grow" without improvement. See the Malthusian Trap that plagued humanity from the beginning of time until the Industrial Revolution.
It's probably better to just measure productivity & quality of life directly. It isn't easy. But it's not easy to measure GDP either. Measure what matters, you know?
If you have a GDP of $1 trillion, 2% inflation and 3% GDP growth, you'll have a GDP of $1.05 trillion after 1 year.
That 6% is concentrated in the "first world" part of China and should still be regarded as impressive.
No.
https://en.wikipedia.org/wiki/List_of_Chinese_administrative...
Scroll to: By share of national GDP per capita
It'll show you: List of Chinese provinces by share (%) of national GDP per capita 2000 - 2017
You'd expect if all provinces grew equally (e.g. doubled in size), that their relative shares would not change between 2000 and 2017. (A) If poorer provinces grew faster than richer provinces, they'd grow in relative share. (B) The same holds for if rich provinces grew faster than poorer provinces, then rich provinces would grow in share. (C)
So sort on the year 2000. You see Shanghai at the top with 374% of the nation's average GDP per capita. At the bottom is Guizhou with 35% of the nation's average. Shanghai goes down to 214% while Guizhou goes down to 64%. Both grew in absolute terms, but the poorer province grew much faster.
A bit more data. It tends to hold across the board with few exceptions.
top 3 Shanghai 374 -> 214 Beijing 304 -> 218 Tianjin 219 -> 201
bottom 3 Tibet 58 -> 66 Gansu 52 -> 48 Guizhou 35 -> 64
> isn't that 12k figure pulled down by the exchange rate
No, the measure is: GDP per capita adjusted for price changes over time (inflation) and price differences between countries. It should take this into account.
> the massive rural population
I'm not sure how it does... First I'd want to reiterate that, uplifting rural people from poverty, both by developing these areas and by creating jobs (causing population shifts away from rural areas) has been a huge part of the economic development in China. If you'd dismiss this growth, you'd have never reached $12k in the first place.
Second, dismissing the rural population is exactly one of the biggest problems you could imagine for China. One of their biggest fears is that they leave hundreds of millions of people behind, upset, in poverty. The only reason they can keep an orderly dictatorial system is because they deliver on the promise to the vast majority of the population, many of whom poor: lots of jobs, annual wage growth, hope and optimism. Low growth prospects for a massive rural population would be disastrous. As such, even if GDP per Capita was $100k in some small areas, if that $12k (or lower) figure is not rapidly developing for China's massive rural population, that'd be seen as a huge policy issue right there. The argument that the $12k figure may be pulled down by rural poor should underline how worrisome relatively low-growth is.
$12K in China-2019 is likely greater than $32K USA-1984??
Calculations and methodologies can be off, of course. Purchasing power is part objective, part subjective. (e.g. how to compare a computer that is 10% more expensive, can do has 500% more calculations per second, but also just runs MS Office mostly the same compared to last year's computer... you can have different methodologies, one which says prices went up by 10%, others prices went down by almost 80%). But in principle, if you believe the figures are correct, then buying power has been taken into account.
for example, Li Keqiang, the current premier of China (the #2 guy behind Xi) measures a different set of numbers [1] to approximate China's GDP growth because he doesn't trust the official GDP figures due to inaccurate local government growth data.
Chinese GDP is "made up" according to Li himself in an leaked memo in the mid 2000s. The context behind this statement is that Chinese GDP figures are irrelevant to the actual operations of the Chinese economy and calculated off low-effort and unreliable provincial measures to appease foreign audiences - the government understands the limitations of statistic reporting in China. They know any number derived would be largely meaningless, so here's some back of the napkin estimates for international audiences who clamor for it so much. Then people take it out of context and accuse manipulation or falsification when no one should take it seriously since garbage in garbage out. In addition to LKI, the government uses other internal measures like TSF (total social financing) [1] while ignoring the GDP to gauge economic health.
As for foreign commentaries and studies on Chinese GDP, they're as unreliable as the Chinese figures themselves because the data simply isn't there. The most rigorous western analysis of Chinese GDP I'm aware of was conducted by CSIS who comprehensively reverse engineered Chinese GDP reporting from ground up, sector by sector using a variety of official sources, and concluded China is (1 trillion USD) larger than official numbers purported to be: Broken Abacus? A More Accurate Gauge of China's Economy [2].
That's not to say it's anymore an accurate reflection of ground truths, but at least it tries to reconstruct from the bottom up. Unless people believe the Chinese government expends vast resources manipulating every bit of data to comport to their GDP estimates which by all accounts they don't even care about.
Yeah, so nothing can go wrong there...
¯\_(ツ)_/¯
Yes, but China on the whole is still fairly poor. It's much easier to catch up - many poor(er) countries that get their economy going again show immense growth until they get catch up with the rich countries. Much of the eastern bloc (that recovered well) are in a similar situation.
https://www.cnbc.com/2019/07/20/heres-why-so-many-americans-...
Declining life expectancy is not an indication that the population is poor either. Consider that obesity, which is linked to higher mortality rates, did not become an issue until the 1900s in countries that passed wealth thresholds allowing such a problem at scale. Similarly with allergies, car crash fatalities, lead poisoning in paint, any number of life-shortening effects come from wealth in a society and are counterbalanced by improving health care levels.
Given how small the US decline is, were China to stop the massive supplies of fentanyl they're intentionally allowing to pour into the US, that decline would probably arrest. The Chinese fentanyl is killing people at a young age, which hammers the life expectancy calculations.
Remind me how China feels about what was done to them in the Opium Wars.
The US isn't alone in this however. Britain is starting to see declining life expectancies. Is China better off than Britain? It's laughable.
"UK life expectancy drops while other western countries improve"
https://www.nhs.uk/news/medical-practice/uk-life-expectancy-...
https://www.theguardian.com/society/2019/mar/07/life-expecta...
Relative to whom exactly? Us engineers posting on HN? I'm not making light of anyone's circumstances here, but living paycheck to paycheck doesn't make you poor, and billions of people around the world would love to be that "poor" (and many of them live in China.) Very different definitions of "poor".
I'm fine with have a reasoned discussion, but you don't seem to want that, so you're not worth talking to.
https://markets.businessinsider.com/news/stocks/income-inequ...
Where are you coming up with this nonsense? Let's see the numbers.
>This is a well documented fact
Oh, well if you say so then.
Where do you think all the people working in Amazon gulags come from exactly. You think people work 12 hours shifts pissing in bottles because they enjoy it.
>Oh, well if you say so then.
It's like you're too stupid to use Google or something. Here you go little buddy:
>Here's another number that may surprise you – to be in the top half (50%) of all earners you need to earn more than $29,999.99 a year. The number of people earning less than $30,000 accounts for 48.06% of the population.
https://wallethacks.com/average-median-income-in-america/
here's another simple chart you might be able to comprehend https://i.redd.it/pg5w8ws3b0o31.jpg
With the median income in the US being 5x higher, I imagine $400 of unexpected expenses would be much worse for a Chinese citizen, assuming they don't have something saved up of course.
The 40% claim (regarding N% of Americans that can't afford a sudden ~$400-$500 expense) is entirely fraudulent, and repeated ad nauseam as an easy - and ignorant - hit on the US.
The real number is around 12%-14% at worst. The routine Fed survey that most people reference (while ignoring what the Fed actually said) makes this clear. Numerous well-written articles have been posted over the last several years pointing out the fraudulent nature of the claim.
Here's the money line from the Fed that buries this lie:
"The Fed also asks respondents how a $400 emergency expense that they had to pay would affect their ability to pay their other bills. Eighty-five percent report that they would still be able to pay all their bills. Only 14% say that the emergency expense would result in their not being able to pay some bills."
A Bloomberg writer recently demolished it as well:
> The question comes from the annual “Report on the Economic Well-Being of U.S. Households” by the Federal Reserve. The report finds, in 2018, that 61% of adults would cover a $400 unexpected expense using cash (or its equivalent).
Note: that's the origination of the error. The propagandists then remove the 61% and magically claim that everyone left (~40%) can't cover the expense.
> Instead, as the Fed report makes clear, though “the remaining 4 in 10 adults” “would have more difficulty covering such an expense,” many of them would be able to make it work by carrying a credit card balance or borrowing from friends and family.
> The report states: “Twelve percent of adults would be unable to pay the expense by any means.”
> The report also goes out of its way to make clear that some of the 39% who wouldn’t use cash might still have $400 in the bank: “It is possible that some would choose to borrow even if they had $400 available, preserving their cash as a buffer for other expenses.” In a footnote, the report even cites a 2016 study finding that 76 percent of households had $400 in liquid assets, even after taking into account monthly expenses.
> The common misinterpretation of this finding in the study is particularly strange in light of two other questions on the same survey. The Fed asks respondents whether they are able to pay all of their bills in full. Only 17% say they can’t pay some bills. Again, 17%, not 39%."
https://www.bloomberg.com/opinion/articles/2019-06-04/the-40...
https://www.federalreserve.gov/publications/report-economic-...
https://www.nationalreview.com/2016/04/middle-class-doing-ok...
https://www.cato.org/blog/it-true-40-americans-cant-handle-4...
There's also that the other cases rely on being indebted, which means that they cannot afford it with their current means. Sure they can cover expenses, but the example of the debt-adverse Germans wouldn't see it as being able to afford them.
No, its rich but insecure. That's not the name thing as poor, though it can feel like it.
Don't know if it's true though.
Edited: Used poor numbers for GDP ranking. Trying numbers from here: https://pophealthmetrics.biomedcentral.com/articles/10.1186/... but it's not that fast.
PS: Of note the 1950’s GDP was after a long civil war.
If they have fallen in ranking, that is only because a number of countries became independent after WW2, especially in Europe.
After Mao's death the government was pragmatic enough to realise that if they did not kick start the economy the regime would collapse (as it did in the USSR), and they rightly concluded that socialist economic management does not work.
Beyond that, it's difficult to compare with South Korea (since someone else mentioned that country) just due to the population difference.
A better way to look at that same data is that Chinese GDP per capita went from being 6% of the American value in 1950, to 16% of the American value in 2010. Relative to American growth, China has grown about 2.5x as much.
Alternatively, Taiwan makes an interesting case study as it’s the other side of that civil war and had much better Per capita growth while starting slightly higher.
Considering the debt they had to pay back.
Look up: Wirtschaftswunder
https://www.nippon.com/en/in-depth/a04003/lessons-from-the-j...
https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?conte...
You can play around with that to see
More seriously, every indicators points to a general improvement. In term of economy, China went from representing 4% of the world economy to the 18% mentioned previously.
On a more "individual quality of life" side of things, life expectancy went from 45 years in 1950 to 65 at the end of Mao Zedong era (1975) to 76 years today.
> PS: Of note the 1950’s GDP was after a long civil war.
That's a bit of an understatement... China basically spent over a century in turmoil, starting with the First Opium War then the Second, various revolts, the Boxers Rebellion, the 2 sino-japanese wars (with the second far from a pretty story...) and in the end, a civil war (and that's a very incomplete list). This period is remembered as the Century of Humiliation.
Basically China is regaining its natural place in the world order.
Economically they are 18% of world GDP and 1.7/7.7 = 18% of world population. So, it’s going to get increasingly hard to improve.
0: https://www.nationmaster.com/country-info/stats/Economy/GDP-...
1: https://www.nationmaster.com/country-info/stats/Economy/GDP/...
Edit: Why the downvotes? The parent comment wrote "Communist Party China".
Addendum: CCP can be interpreted as the Chinese Communist Party.
It means C preprocessor.
And the population is aging fast.
How is it that Chinese people age faster than Western people? Is it the health care system? Nutrition? Lack of access to preventative medicine?
The 1 child policy is leaving China with a low birthrate and hence an increasing smaller population of young people. The problem is further compounded when Mao encouraged Chinese people to have as many children as possible, which lead to ~6 childbirths per women in the 1960's.
This means that, at some point, there will be too many old people to be supported by too little young people. Japan is facing similar population issue for example.
Now, with the population index slowly inverting, China is running out of time to grow rich before it grows old. Otherwise, its social infrastructure will at some point become overburdened by old people who require care/safety net and not enough young people to to provide that care/safety net (either directly as children taking their aging parents or indirectly by paying taxes).
Also, China needs to figure out how it can overcome the middle income trap. Otherwise, its growth potential is severely limited, and could be more fuel being added to the rapidly aging population problem.