Economists are predicting that China will be beating the U.S. as the economic leader of the world in the next decade or so. Yet the World Bank’s International Comparison Program is proclaiming they may pass the United States in 2014 based on a system called PPP. Purchasing power parity is founded on the idea of how much an item would cost in various countries, making transparent how exchange rates influence buying and selling in different markets.
The International Comparison Program is organized ever six years in order to compare the living ethics around the world and the hugely fluctuating costs. Back in 2005 the ICP had predicted that Chinas economy would grow at a certain pace; yet by 2011 the Chinese economy had ballooned by 15 percent, resulting in an economy that was 87 percent as big as the United States was in the same year. The ICP is a great tool in measuring living standards for Chinese people, but its uses are limited. It does nothing to say where China stands in the economics of the world because it does not flex for exchange rates in the market.
The National Bureau of Statistics, a governing body in the country, does not agree with the numbers, expressing misgivings about how the study was done and refused to release the results in China. However, figures were released to the public which the government said it did not back. In the past, China has been opposed to allowing numbers of their growth to be known. It did not publicize the fact that it had passed the U.S. as the largest trader, or when it sailed by Germany to become the No.1 exporter. The country did not toot its own horn when it became the second largest economy, surpassing Japan in the process. And China is keeping mum about the fact that they may be beating the U.S. as a world economic leader.
It is thought that Chinese officials refrain from adopting a more serious label in order to negate on much more troublesome matters. Greenhouse emissions from China are the worst in the world, and are not well regulated due to the nations rating as a median country. Some people, even China itself, agree that the numbers may be skewed in beating out the U.S. as the economic world leader. The country has been known to double-dip when it comes to adding the figures for its economic enterprises. The information on how their economy is doing suffers from either negligence or incompetence, or plain misrepresentation.
With 1.3 billion residents, China is only now coming on par with the United States, and has the opportunity to be beating out the U.S. as the new world economic leader in the near future. Economists say that for a country this size, the per capita output is way off. China is only now catching up to the U.S., who has been holding sway over the title of world economic leader since 1872, when it passed the United Kingdom. As of today, the country hardly made it into the top 100 countries in terms of per capita growth. Yet the International Monetary Fund has foretold Chinas economic spurt in 2014 to be about 7.5 percent, almost triple of what the United States is expected to be.
Opinion by Korrey Laderoute