In a little-noticed mid-summer announcement, the Asian Development Bank presented official survey results indicating ChinaÂ’s economy is smaller and poorer than established estimates say. The announcement cited the first authoritative measure of ChinaÂ’s size using purchasing power parity methods. The results tell us that when the World Bank announces its expected PPP data revisions later this year, ChinaÂ’s economy will turn out to be 40 per cent smaller than previously stated.
Why such a large revision in the estimates of ChinaÂ’s economic condition? Until recently, China had never participated in the careful price surveys needed to convert accurately its gross domestic product into PPP dollars.
The ADBÂ’s announcement also indicates that the number of dollar-a-day poor in India is closer to 800m than the current estimate of 400m. |