Seems like an unbelievable headline, doesn't it? But that's essentially what the New York Times's Eduardo Porter is reporting today about the Chinese economy. Thanks to a massive statistical error, and correction, the Chinese economy turns out to be substantially smaller than previously thought:
"According to new estimates, the colossal Chinese economy that has been making marketers salivate and giving others an inferiority complex may be roughly 40 percent smaller than previously thought: worth $6 trillion rather than $10 trillion. That means it lost a chunk roughly the size of Japan’s output."
Porter goes on to note some of the consequences of this revision, including a tripling of the Chinese poverty rate. I can understand the generally difficulties in estimating the economic output of a relative closed country, but, in light of over-estimation of the USSR's economic output in the 1980s, I wonder if there's a tendency to over-estimate communist nations' economic output...
1 comment:
im not sure it would be fair to make that generalization.
one of the problems with emerging markets in general is understanding the formal v. informal sector size
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