China might have already surpassed the US as the world’s largest economy according to a UN effort to calculate spending power in 199 countries. But according to the Atlantic’s James Fallows, that doesn’t mean a thing. And he’s right. All it mainly does is make China number one on paper, but in reality, its GDP per capita remains low, many people earn very little, home prices have surged out of reach for many young people, and it has a range of big problems (regional inequality, rural poverty, and widespread air, ground and water pollution etc) that will cost much to fix. Much like how Nigeria’s recount of its economy made it Africa’s largest economy but doesn’t have a single effect on its poor and serious internal violence.
As Fallows writes, “But the differences not captured by such figures -freedom to or restrictions on travel within a country, who can and cannot go to school, the still unfolding effects of mass urbanization, the nature and availability of health-care systems, above all the country’s environmental catastrophe- are also part of any serious attempt to understand how “rich” or “poor” China is.”
Besides Fallows, there are other intelligent observers like these people who temper and describe the not-so-impressive ramifications of China’s hypothetical surpassing of the US.
And Fallows is also right when he pours scorn on other media outlets that attempt to hype up China based on this statistical bonanza with headlines proclaiming China’s century has begun. It’s a particular peeve of mine. Over the years, there’ve been all kinds of articles and books that portray China as a superpower and this is China’s time, but a lot of it is empty hype based on enormous statistics.
Younger people in Beijing are relying more on their parents to buy homes. This isn’t surprising, given the high costs of homes, the salaries that most people get, and that young people don’t save much. I’d even be willing to wager that this is true for much of the mainland, Hong Kong and Taiwan.
Things aren’t so rosy in the US as well. This article about poverty in the US features a really telling graph that shows why it’s hard for poor people to move up in society. Basically, consumer goods such as clothing, electronic appliances and phones, have become significantly cheaper over the past decade, while healthcare, education and childcare costs have surged. It’s a bad tradeoff and a terrible irony- that the most important things are expensive while the worthless are cheap.