Saturday, May 17, 2014
China's rise to the top-2
This news came out using the Purchasing power parity (PPP) thing where a thing's cost is compared between countries. And obviously it will cost more in the U.S. than in China since the standard of living is higher in the U.S. than in China. But as I was reading, this news was not headlines in the Chinese media and it was not mentioned much in fact the Chinese disputed the claim and with good reason. As my reading went on I started to understand their reluctance, as mentioned further in that article. It said that they are reluctant because with being No. 1 comes responsibility. They still designate their country as being a developing one and any distinction or labeling them as No. 1 will make them have to contribute more the United Nations dues and programs and also take lead effort in maintaining peace in the world besides making the currency freely convertible and encouraging it to be the alternate reserve currency. Then they will also lose the leadership of the so called third world (developing world). And also the fact that they may become one day No. 1 but the per capita income is still very much lower than the U.S. due to the fact that all the GDP of the Chinese economy has to be spread among its more than 1 billion people as compared to the U.S. 300 million or so people. And people in China despite all the hype have millions of poor people which will take time to alleviate them to the middle class level. For this China has a long way to go from being No. 1 anytime soon as demonstrated above and also the reluctance of the Communist party to celebrate this achievement.