According to an article in the Financial Times, ChinaEconomyIt has surpassed the United States to become the world's largestEconomyBody. However, this statement needs to be started fromPurchasing power parityperspective. Purchasing power parityIt refers to the actual comparison of the currencies of different countries according to the ** of a basket of goodsPurchasing power。Because of the distortions caused by exchange rate fluctuations, the traditional exchange rate method tends to overestimate the reality of the United States dollarPurchasing power。This year, for example, Japan's GDP grew by 17%, while Germany's GDP fell by 04%, however, due to the large depreciation of the yen, Germany's GDP surpasses that of Japan based on the traditional exchange rate method. This is clearly not realistic.
Purchasing power parityThe concept originated from:World BankThe International Comparison Project (ICP) was launched in 1968. The project established an integrated system between countries by comparing 500 items of goods and services in 151 categoriesPurchasing power parityexchange ratios to measure countries more accuratelyEconomyactual gaps. Calculations by ICP, ChinaRMBwith dollarsPurchasing powerThe exchange ratio is 418, that is to say, 4$18RMBofPurchasing powerEquivalent to $1. Using this as a benchmark, according toWorld BankAccording to the released data, China's GDP has surpassed that of the United States.
However, nominal GDP in US dollars presents a different result due to the effect of exchange rates. According to the latest data, China's GDP in 2022Purchasing power parityThe exchange ratio is 399 cases surpassed the United States. But under the traditional exchange rate method, China's GDP is only 64% of that of the United States. This is mainly because the US dollar is a strong currency, and the exchange rate can be regulated by some means, affecting different countriesCurrency exchangeinto the value of the dollar.
Purchasing power parityis a more accurate measureEconomyThe scale approach, which takes into account the price levels of different countries and avoids distortions caused by exchange rate fluctuations. In international comparisons,Purchasing power parityIt is possible to better show the reality of a countryEconomyCircumstance.
However,Purchasing power parityIt also has its limitations. First of all,Purchasing power parityIt can only provide a relative estimate and does not fully reflect countriesEconomyThe real gap. Secondly,Purchasing power parityThe calculation is complex and needs to take into account the large number of goods and services, and make a weighted average. This makes data surveys relatively time-consuming, often only once every few years.
AlthoughPurchasing power parityThere are certain limitations to the calculations, but the continued trend of China overtaking the United States is undeniable. As the world's most populous country, China has a huge domestic market and a strong manufacturing industry, which is for ChinaEconomyDevelopment offers great potential.
In recent years, ChinaEconomyThe growth rate is rapid, not only surpassing the United States in terms of total GDP, but also in some key areas, such as technological innovationDigital economyand other aspects have also shown strong competitiveness. Especially under the influence of the global new crown epidemic in 2020, ChinaEconomyhas recovered faster than many other countries.
However, it is only China that surpasses the United StatesEconomyAt a point in development, we can't just see the essence behind the numbers. China still faces a number of challenges, including:Economystructural adjustment, population aging, environmental pollution and other issues. At the same time, globalEconomyThe uncertainty of the pattern has also brought some uncertainty to China's development.
To sum up, China has surpassed the United States to become the world's largest countryEconomyBehind the body, exchange rate distortions andPurchasing power parityConsiderations cannot be ignored. Purchasing power parityprovides a more accurate measureEconomyThe scale method avoids the distortion of data by exchange rate fluctuations. However,Purchasing power parityIt also has its limitations. ChineseEconomyThe increase in strength has its own dynamics, but it also faces many challenges. For a country,EconomyGrowth in scale is only one aspect, what is more important is to achieve sustainable development and improve people's living standards. Therefore, we should seeEconomyThe deep-seated problems behind development, how to solve these problems and promoteEconomyHealthy and stable development.