According to PPP, India is a 13 trillion dollar economy and is the 3rd biggest in the world and several times bigger in size and importance compared to Japan and Germany. This is simply not true.
Except it is tho. We clown on India because it is very far behind even the number 2, and most of that Indian gdp goes towards keeping the country itself afloat.
But India is surely a lot more useful than fucking Germany lol. Germany which has a miniscule army that can donate at the most a few hundred T72 equivalents, their supposed strong point being their industrial sector, which is comparable in quantity and quality to a single Chinese province.
Yes, India is undeniably more powerful than that, and the real, adjusted, comparative gdp is needed in order to represent that reality.
PPP is not a good measure of GDP since it overinflates service GDP of poorer countries. Which is why GDP PPP is so high in India.
GDP nominal of US is obviously also inflated by its high cost of services, but there is a reason why service in US is so costly. Its because it has enough exports in strategic sectors that it dominates high tech sectors and finance. Because of this it has huge number of high paying jobs in those sectors and thus labor is costly enough to allow even low skilled service jobs like flipping burgers provide so much income. Its a sign of American economic strength and dominance.
GDP nominal is the only objective measure of economic power since it takes into account the power of its exports and imports. If a country cannot export enough high quality goods then its GDP nominal will be lower since its currency cannot sustain a high value.
Absolutely wrong. There is no such thing as comparing nominal GDP between 2 different currencies.
The reason is simple, if you do not calculate inflation, you're using 1 country's standards to calculate everyone else's.
If you forget to calculate inflation, what you're looking at is an alternate reality where for example Chinese people pay 100 000$ for a simple surgery, or pay 10$ for a carton of eggs. What your measure is saying is that in this alternate reality, China would be a smaller economy than the US. But that is wrong and not reflecting of reality.
If China's yuan is undervalued, then its a sign of China's weakness that its economy is still not strong and dominant enough to allow its currency to have its true value. China still has ways to go before it is the true number 1 economy in the world.
No, that is just how the central bank believes is most conductive to growth.
To provide you of an example of why not normalising for inflation will give you shit results: consider the following, China can simple decide to massively hike the RMB and conduct several big "transactions" which do not affect the economy (if you normalize it out), that way, the gdp nominal of China would hike by trillions within 1 day. Using that method, China can have a nominal GDP of 40, 50 trillion, really the sky is the only limit.
But if you normalize for inflation, China would still fall back to the 32.9 trillion that their economy actually is.
You do not evaluate how someone looks based on photoshop picture, because that is temporary and prone to personal fluctuations. You look at them based on what they actually look like, because that is a non quickly unalterable product.
China is humble enough to know its place. It knows no point trying to boast by using shortcuts like PPP. Once China becomes truly rich enough that its own brand of cars, microchips and software dominate the world, then it will not need to boast about it using GDP figures. Before that time, its still much weaker than the west.
Per the word's definition, China is the largest economy and market in the world. This isn't a subjective measure that can be avoided with humbleness or what not. It is simply based on the hard numbers and economy sizes.
But just being the largest economy does not mean it can dictate global economy alone. China must still work in collaboration with smaller economies that together make up a larger share than China does.
