How Badly Overstated Are China’s and America’s GDPs?
China’s GDP unexpectedly cooled again, but to an amazing six percent. It’s likely way overstated. What about the US?
Unexpected Slowdown
China’s economic growth slowed more than expected in the third quarter. GDP grew at 6% in the period from a year ago, the slowest pace since the early 1990s and weaker than the consensus forecast of 6.1%. https://t.co/7gsynHSNu6
— Lisa Abramowicz (@lisaabramowicz1) October 18, 2019
Similarly, CNBC reports China says its economy grew 6% in the third quarter, slower than expected
Worse Than It Looks
Funding Non-Productive Activity
Pettis objects to China’s GDP numbers based on “non-productive activity”.
By that measure, what about the US dropping bombs, fighting wars all over the word, keeping troops in Germany and Japan, and overpayment of government employees and their bloated pensions?
And that’s just for starters.
Source: Mish Talk
Ah yes. Mitch Shedlock quoting Michael Pettis on China’s economy.
Both of them have been making the same claims about inflated GDP for 12 years and have never been more wrong. Not only have wages grown 300% in that time but so has everything else. To wit:
A new report by Credit Suisse shows that the number of rich Chinese people has surpassed the number of wealthy Americans for the first time as both countries continue to produce millionaires at fast rates. “This year, for the first time, China recorded more members of the global top 10 percent (100 million) than the United States (99 million),” the Swiss bank reported in its annual wealth survey released on Monday.
Out of a total of 494 global unicorns, categorized by a valuation of over $1 billion, 206 were Chinese, compared to 203 from the United States, according to the latest Hurun Report on unicorn companies. Hurun researchers confirmed that this is the first time the number of Chinese unicorns has surpassed that of the United States. Beijing is the global unicorn capital, with 82 company headquarters while San Francisco has 55, Shanghai has 47 and New York has 25.
Exactly. Exports have risen massively, and in line with GDP claims. Imports the same. wealth for rich, middle and poor has improved likewise.
If the Chinese were lying about GDP now, why weren’t they lying about it before?
living in USA I can confirm USA’s GDP is way overstated, because USA’s government is under-reporting US inflation.
The price of food is through the roof, the price of rent too, dont even mention health care and or education. US inflation is clearly running at at least 12-15%, maybe even more. Factor in the real inflation into USA”s GDP and USA will be in severe depression.