 | Anlässlich des 70. Jahrestags der Volksrepublik China unter Führung der kommunistischen Partei habe ich einen wiiw-News-Artikel auf Englisch verfasst, der Vergleiche zwischen den drei größten Volkswirtschaften der Welt - China, EU und USA - für die über die letzten 20 Jahre anstellt: Measuring China's riseThe US, the EU and China are the world’s biggest economies. With the People’s Republic of China celebrating its 70th anniversary, we review their changing global economic positioning. |
The 1st of October constitutes the National Day of the People’s Republic of China. This year marked its 70th anniversary. Political topics were dominating public and private media responses in Europe, primarily related to:
The bubble size of the following charts is in relation to the world total (e.g. population) or the world average (e.g. CO2 emissions per capita). The bubbles are therefore comparable across China, the EU and the US, as well as in relation to the rest of the world over time, which is particularly interesting in light of the allegedly ongoing economic and military competition among the biggest economies in the world.
- remembering the millions of victims of the mass starvation during the ‘Great Leap Forward’ campaign led by the Communist Party leader Mao Zedong during 1958-1962;
- China’s massive military parade with 15,000 military personnel, feeding discussions on geopolitics referring to China’s initiatives in the South China Sea, or the suppression of minorities (such as the mostly Muslim Uighurs in Xinjiang);
- increasingly violent protests in Hong Kong, with a protester being shot by the police on China’s National Day and protestors setting metro stations on fire. The protests do raise questions on the future of the ‘one country, two systems’ scheme that applies to Hong Kong and Macao, and whether they might potentially affect provinces like Taiwan.
The bubble size of the following charts is in relation to the world total (e.g. population) or the world average (e.g. CO2 emissions per capita). The bubbles are therefore comparable across China, the EU and the US, as well as in relation to the rest of the world over time, which is particularly interesting in light of the allegedly ongoing economic and military competition among the biggest economies in the world.
A matter of size
China is often referred to as the second largest economy in the world. Is it? In population size it is definitely leading the world ranking with more than one and approaching 1.5 billion citizens, followed by India and – with a big gap – by the US. China and the US are more similar in land area, globally ranked third and fourth, respectively (after Russia and Canada), being more than twice as big as the EU.
The most frequently used indicator for economic size is the gross domestic product (GDP), showing the value of goods and services produced. It is worth taking a closer look at these bubbles: First, given that the European Union is one single market, the EU actually is the second largest economy in the world with respect to GDP. Second, the increase of the Chinese economy is stunning, yet, its size is still far off the US level, in particular when considering the four times bigger population size. Third, although the economic output of the EU and the US is growing, their bubbles (i.e. the shares in world GDP) are shrinking, with other developing countries and emerging markets growing faster.
The most frequently used indicator for economic size is the gross domestic product (GDP), showing the value of goods and services produced. It is worth taking a closer look at these bubbles: First, given that the European Union is one single market, the EU actually is the second largest economy in the world with respect to GDP. Second, the increase of the Chinese economy is stunning, yet, its size is still far off the US level, in particular when considering the four times bigger population size. Third, although the economic output of the EU and the US is growing, their bubbles (i.e. the shares in world GDP) are shrinking, with other developing countries and emerging markets growing faster.
Size does not imply wealth
The race for the status of the world’s biggest economy (or biggest GDP) relatively frequently pops up in the media. More seldom, total economic output is set in relation to its population. GDP per capita corrected by different price levels and thus costs of living (termed “at purchasing power parities”, PPP) for China was not growing as fast as its total GDP. Considering this indicator, even today the US is three times as wealthy as China.
GDP and income are important indicators, but obviously not sufficient to judge how well-off countries’ citizens are. The educational system, the health care system and related out-of-pocket payments, retirement schemes, people’s rights and public infrastructure are just a few dimensions which would have to be considered. One non-monetary indicator for wellbeing is life expectancy at birth, which has been above the world average for all three economies. In 2016, worldwide life expectancy averaged 72 years. In the EU we can consider ourselves lucky to live on average 9 years longer; 7 years in the US and 4 years in China.
GDP and income are important indicators, but obviously not sufficient to judge how well-off countries’ citizens are. The educational system, the health care system and related out-of-pocket payments, retirement schemes, people’s rights and public infrastructure are just a few dimensions which would have to be considered. One non-monetary indicator for wellbeing is life expectancy at birth, which has been above the world average for all three economies. In 2016, worldwide life expectancy averaged 72 years. In the EU we can consider ourselves lucky to live on average 9 years longer; 7 years in the US and 4 years in China.
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