Proxies for GDP seem to imply that East Asian countries' per capita GDPs are systematically undervalued

[The Notorious SLAV]

Interesting . I've discovered this guy a couple of months ago, when there was a discussion on Twitter about Poland's GDP PPP per capita overtaking Japan's and Spain's. There, he brought up exactly this topic, though in what I thought was more Slavpill context, about how once you take into account other indicators of development (electricity production per capita, energy consumption per capita, car and truck sale per capita, scientific article production per capita and so on) which we know significantly correlate with that GDP metric, then Japan, and Spain as well, are still very much ahead of Poland, and in fact even China seems to be.


View: https://x.com/GuthmannR/status/1926665896585494864



View: https://x.com/GuthmannR/status/1933941208792838322



View: https://x.com/GuthmannR/status/1934385485532807555


Recently, he took a look at it again, and this time he tried estimating GDP per capita of OECD countries solely off of these highly correlated proxies, and then compared them with the actual, official GDP levels.


View: https://x.com/GuthmannR/status/2004565736107151643


Apparently, Western, Polish, and even Mexican GDPs were very strongly correlated with those estimates from the proxies, only varying by a couple of percentage points, but for Japan, China, and South Korea, the estimates were off by double digit figures. He explains it with East Asian way of computing GDP being different than that used in the West:


View: https://x.com/GuthmannR/status/1950193328844116453#m


And in fact, that's not the first time I've seen this idea pop up. At Asia Times, there's this pseudonymous author who has brought this idea up a few times and even wrote a bit in-depth on it. He's obviously a Chinese nationalist, but seems to be knowledgeable about this stuff:

Spoiler

China’s PPP GDP is only 25% larger than that of the US? Come on people… who are we kidding? Last year, China generated twice as much electricity as the US, produced 12.6 times as much steel and 22 times as much cement. China’s shipyards accounted for over 50% of the world’s output while US production was negligible. In 2023, China produced 30.2 million vehicles, almost three times more than the 10.6 million made in the US. On the demand side, 26 million vehicles were sold in China last year, 68% more than the 15.5 million sold in the US. Chinese consumers bought 434 million smartphones, three times the 144 million sold in the US. As a country, China consumes twice as much meat and eight times as much seafood as the US. Chinese shoppers spent twice as much on luxury goods as American shoppers.

It would be highly presumptuous of us to discount the 16,000 shop visits conducted by the World Bank and accuse them of grossly lowballing China’s PPP GDP. But that is exactly what we are going to do. It is prima facie ridiculous that China’s production and consumption, at multiples of US levels, can be realistically discounted for lower quality/features to arrive at a mere 125% of US PPP GDP.

It’s not that we think the World Bank has done a bad job. It’s that we believe China’s NBS, contrary to popular opinion, has been lowballing GDP for decades and the World Bank has to work within the confines of the NBS’s reported data. This was politically important decades ago for WTO concessions and it is politically important today to maintain developing economy status as China makes a play for leadership of the Global South. We believe China’s GDP and PPP GDP are lowballed by an incomplete transition from the Material Product System (MPS) of national accounts, which excludes services by design. The World Bank is likely dutifully doing its sums with goods consumption in China multiples of the US but measuring services consumption as a fraction of the US.

What's the real size of China's economy? - Asia Times

(Big time) I'm on my way, I'm making it (Big time) (Big time) I've got to make it show, yeah (Big time) (Big time) So much larger than life (Big time) I'm

asiatimes.com

That is a decent explanation of this, especially if Japan and South Korea measure GDP in a similar way, though I wonder if this isn't something more fundamental, and more like a result of their higher national IQs? Like, there being something about being higher IQ than other nations that makes them able to live "above their means", so to speak, and have car sales, energy production and consumption and so on, of higher GDP countries. But that's just me randomly spitballing.

TL;DR: GDP estimates from GDP proxies are much less accurate for NEA countries than Western ones, with the former living blatantly above what they should be given their official GDPs. The people who've noticed this and talk about it mostly chalk it up to different ways of calculating GDP, and I just pretty much on the spot came up with the idea that it may be their IQs giving them a cheatcode to do so.

 

[plastic chewer]

GDP is not a measure of productivity or quality of life, it is a measure of economic activity on a year-to-year basis
Just because a country has higher energy consumption doesn't make its economy more vital, the highest value added sectors are in services

However, many Western societies, especially the US, are living on borrowed time

Investment as a percentage of the Chinese GDP is at 40%, while the US is only at 17%
China's domestic consumption stands at about 40%, while the US is at 70% or so
When you take China's trade sufficit and America's deficit into account, it's clear where the productive forces lie as opposed to the rentiers

Not to say that the way GDPs are calculated is flawless, but it was never meant to be a measure of the standard of living

 

[IWWorkER]

GDP is not a measure of quality of life

 

[Shitskin=Shitlife]

PPP means Poor People's Points and is closely tied to issues of inequality. Third-world countries with high inequality have relatively decent purchasing power because services are cheaper there. Nominal is more important but the correlation between GDP and quality of life is increasingly diverging.

Many Western nations are living on borrowed time and are surviving on debt. They don't deserve the level of wealth they have in a highly competitive global economy. The UK, France, Canada, New Zealand, and Belgium are a few but the entire West is overvalued. A massive corrective recession is coming which will transfer wealth from the West to China.

 

[jorkinitatwork]

compelling arguemnt with a lot of stats and graphs i dont understand and didnt try to

I think chinas population numbers are overestimated - no source of course

 

[The Notorious SLAV]

GDP is not a measure of productivity or quality of life, it is a measure of economic activity on a year-to-year basis
Just because a country has higher energy consumption doesn't make its economy more vital, the highest value added sectors are in services

Not to say that the way GDPs are calculated is flawless, but it was never meant to be a measure of the standard of living

True, though while it was never meant to be so, it's hard to deny that GDP per capita does correlate pretty strongly with a lot of said measures of well-being.