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How China Compares Internationally In New GDP Figures

Jeffrey Frankel profile picture
Jeffrey Frankel


  • World Bank recently released its International Comparison Program, which measures price levels and GDPs across 176 countries.
  • The new results are striking.
  • For the first time, it shows China’s total real income as slightly larger than the US.

The World Bank on May 19, as it does every six years, released the results of the most recent International Comparison Program (ICP), which measures price levels and GDPs across 176 countries. The new results are striking. It is surprising that they have received almost no attention so far, perhaps overshadowed by all things coronavirus.

For the first time, the ICP shows China’s total real income as slightly larger than the US. It reports that China’s GDP was $19,617 billion in 2017, in Purchasing Power Parity (PPP) terms, while the United States’ GDP stood at $19,519 billion.

Income per capita

On the other hand, when China’s income is divided by its population, it is revealed to be still far from a wealthy country: its income per capita has pulled ahead of Albania and Egypt, but remains behind Brazil, Thailand, Mexico, and Botswana. China’s standard of living is still below the global mean, $10,858.

The two concepts — the total size of the economy and the level of income per capita — each have major possible implications. One must be careful to keep them apart, however, and to use the right measure for the right purpose.

China wants to be considered a developing country. For example, although the country had to give up many of the concessions traditionally accorded developing countries when it acceded to the WTO, it has not given up all of them. The ICP statistic for income per capita indicates that China is indeed still a developing country.

Total GDP

But it is the total size of the economy that matters for topical questions of great power rivalry and China’s appropriate weight in international institutions. Here the right answer is less clear. The contribution of the ICP enterprise is to compare countries’ incomes on a PPP basis. This is the right

This article was written by

Jeffrey Frankel profile picture
Jeffrey Frankel is Harpel Professor of Capital Formation and Growth at Harvard University’s Kennedy School of Government. He is a Research Associate of he National Bureau of Economic Research, where he is also a member of the Business Cycle Dating Committee, which officially declares recessions. Appointed to the Council of Economic Advisers by President Clinton in 1996 and subsequently confirmed by the Senate, he served until 1999. His responsibilities as Member included international economics, macroeconomics, and the environment. Before moving East, he had been professor of economics at the University of California, Berkeley, having joined the faculty in 1979. Other past appointments include the Federal Reserve Board, Institute for International Economics, International Monetary Fund, and Yale. His research interests include international finance, currencies, monetary and fiscal policy, commodity prices, regional blocs, and global environmental issues. He graduated from Swarthmore College and received his PhD from MIT. Visit Jeffrey Frankel's Weblog (http://www.jeffrey-frankel.com/)

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