But in China even street vendors take alipay or wechat pay, which have a record of all transactions.
By how much is China's gdp underestimated?
American Economics Thread
- Thread starter Bernard
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By how much is China's gdp underestimated?
the dollar's hard money privilege has been grossly exaggerated. there is research on this topic, how much the privilege worth? basically by calibrating dollars circulation within and without America. as for printing, most advanced economies have done it recently, some of them are more brazen than America.
you need to learn a little bit of modern US monetary history. Jimmy Carter lost the presidency because he lost the battle against inflation. in the early days of Reagan, inflation hit 15%, while effective fed fund rate hit 19.1%.
the fed has messed up big this time. by now hike and taper are not enough. fed said they are going to run off its balance, that's the reversed QE:
selling the treasury they hold and take the printed money back.
Keep in mind the Soviet Union peaked at 55% of USD GDP on a PPP basis, while china has well exceeded 100% of US PPP GDP for years now. The best context is China's economy is 2.5x the soviet union economy at its height vs the US, but with a total military of 50% the Soviet Union's. To match Soviet Union levels of military intensity as a % GDP, China would need to increase expenditures by 500%. Thankfully China will never do something that stupid.
China just does not need to do that. USSR had to spend a lot of money on the military because most of their influence came from hard military power and their economy was small compared to the US, which led to very high military spending as a percentage of GDP and, of course, led to slower growth of other economic sectors. You can notice that even in the noticeable gap between Soviet military technology and consumer sector technologies. The military tech was very competitive with the US, while the latter was lagging far behind. Most of the Soviet-era consumer goods are pretty crude and simplistic, while a lot of the stuff was simply not produced. The most obvious example is Soviet dentistry which utilized mostly electromechanical dental drills with belt drives and had almost no anesthesia (shortage of both the thin needles and anesthetic). The former is basically a torture device due to its low RVM and extremely high level of vibrations which led to extreme pain and a chance that the drilling tip could just break (due to vibrations) & get stuck in the tooth.
The US had a massive head start though. Before the Soviet Union Russia was a third world country with very little industrialisation, let alone the ability to make high tech consumer products.
That's true. I would say that China started in an even worse position though.
not exactly a third world country when look at education standards. very close to west. but they didnot have the machine tool factories like Germany for mass production. similar situation with agriculture.
this guy founded aviation firm within 4 years immigrated to US. the others built foundation of computer science based on Russian education system. Didnot went to Germany and than create innovation.
That is just how the communist state capital system worked. Most resources were spent into what was perceived as being a need be it defense, basic food items, or construction. Other things were not prioritized nearly as much. In the 1920s and 1930s the Soviet Union spent a lot of capital licensing or hiring foreign technical expert for all sorts of things from regular pencils to aviation engines. This led a massive loss of capital reserves and, as the foreign capitalist nations only accepted basic goods or precious metals as payment, the Soviet Union hemorrhaged gold, platinum, wheat, etc to pay for this technical assistance. After WW2 the country was in ruins and they could not just fritter away resources like that. Much of their country was destroyed and they spent decades building new housing.
Imperial Russia had some highly qualified experts but their economy was just too feeble to support much industrial development. When most of your population is composed of mostly self-sufficient peasant farmers there isn't a lot of economic activity or capital circulating to justify investment into more advanced goods.
Imperial Russia had some highly qualified experts but their economy was just too feeble to support much industrial development. When most of your population is composed of mostly self-sufficient peasant farmers there isn't a lot of economic activity or capital circulating to justify investment into more advanced goods.
I live in Austin and I've just heard about this. This is terrible.