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China's GDP in U.S. dollars based on purchasing power parity


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  • Ruoen, Ren
  • Chen Kai
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    China's gross domestic product per capita was only US$300 to $370 in 1980-91 in an estimate based on the World Bank Atlas approach used in the World Development Report. These estimates fail to capture the fact that in the 10 years since embarking on a program of economic reform aimed at rapid economic development, China has been one of the fastest growing economies in the world. Knowing what its true standard of living and productive potential is important not only for measuring the size of China's economy but for assessing its growth performance. The authors provide a detailed comparison of the GDP of China and the United States using the purchasing power parity approach formulated by the U.N. International Comparison Program (ICP), with 1986 as a base. Using this approach, which establishes a conversion factor based on prices for comparable items rather than on exchange rates, they find that: 1) China's per capita GDP in 1986 international dollars in between $770 and $1,044, depending on assumptions made about comparison-resistant service sectors and quality adjustments made in a number of selected ones in calculating purchasing power parities; and 2) China's per capita GDP in 1991 international dollars is between $1,227 and $1,663, allowing for the impact of inflation in the United States on the purchasing power parity and growth rates in China computed from national currency GDP data in constant prices.

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    Bibliographic Info

    Paper provided by The World Bank in its series Policy Research Working Paper Series with number 1415.

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    Date of creation: 31 Jan 1995
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    Handle: RePEc:wbk:wbrwps:1415

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    Keywords: Environmental Economics&Policies; Economic Theory&Research; Payment Systems&Infrastructure; Public Health Promotion; Health Economics&Finance; Economic Theory&Research; Environmental Economics&Policies; Health Economics&Finance; Access to Markets; Markets and Market Access;


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    1. Liu, Ta-Chung & Yeh, Kung-Chia, 1973. "Chinese and Other Asian Economies: A Quantitative Evaluation," American Economic Review, American Economic Association, vol. 63(2), pages 215-23, May.
    2. Bhagwati, Jagdish N, 1984. "Why Are Services Cheaper in the Poor Countries?," Economic Journal, Royal Economic Society, vol. 94(374), pages 279-86, June.
    3. Kravis, Irving B., 1981. "An approximation of the relative real per capita GDP of the People's Republic of China," Journal of Comparative Economics, Elsevier, vol. 5(1), pages 60-78, March.
    4. W.E. Diewert, 1985. "Microeconomic Approaches to the Theory of International Comparisons," NBER Technical Working Papers 0053, National Bureau of Economic Research, Inc.
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    Cited by:
    1. Shaohua Chen & Martin Ravallion, 2010. "The Developing World Is Poorer Than We Thought, but No Less Successful in the Fight Against Poverty," The Quarterly Journal of Economics, MIT Press, vol. 125(4), pages 1577-1625, November.
    2. Chen, Shaohua & Ravallion, Martin, 2008. "China is poorer than we thought, but no less successful in the fight against poverty," Policy Research Working Paper Series 4621, The World Bank.


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