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Millennium Post

China world’s top economy... Western media silent

The United States has slipped to the number two position, a first in 142 years since it overtook Great Britain in 1872, and is currently worth USD 17.4 trillion, while its Chinese counterpart stands at USD 17.6 trillion.

The IMF says the figures are calculated as per a well-established and now increasingly used economic parameter called purchasing power parity (PPP), which, to paraphrase its website, and quote Brett Arends of www.marketwatch.com, ‘measures the actual output as opposed to fluctuations in exchange rates.’ For most of the leading economists, it is the PPP and not just the measure of gross domestic product (or GDP) or even gross national product (GNP), which is the real indicator of growth and robustness of the economy as well as a pointer towards its trajectory in immediate future.

According to IMF, and many China watchers, Beijing has made rapid strides in the last two decades riding a bevy of pro-industry policies and tripling its manufacturing volume. This is supported by the projection (again by the IMF) that Chinese economy will be worth just under USD 26.98 trillion in 2019, almost 20 per cent more than the US economy at that point, estimated to be at around USD 22.3 trillion.

However, the real question is this: except for a handful of analytic reports, such as one in The Economist, a tabloidish piece in The Daily Mail, a report in Business Insider and a sounding high-alert kind of an article in www.marketwatch.com, this major development in terms of economic milestone is hardly being talked about in the West-dominated global media. In fact, The New York Times, in its opinion page for the edition dated December 4, carried an article by Jim O’Neil titled ‘Who Defines the Next Economic Giants?’, where the former Goldman Sachs Asset Management chairman announced that the United States will easily stay at top of the financial world and drive global agenda for a good 20-30 years. Although, he qualified his argument saying that PPP is a better measure of understanding growth and China, as well as BRIC countries, including India, will show major progress in the years to come, there remained a hint of disbelief at the remoteness of the possibility.

Given that fetishisation of GDP has been the mainstay for decades amongst hardline economists, particularly in India and the United States, the latest figures definitely launch a bodyblow to that school of thought. While Arends calls this ‘a geopolitical earthquake with a high reading on the Richter scale’, there’s little acknowledgement on the part of Western media that we have witnessed a a major ecopolitical event that will shape national and international destinies, direct trade and capital flows. China’s recent decision to bring GDP figures in line with global standards and its relative openness in recent years has endeared it to many, making it the biggest trading partner for several countries, including of course India.  

Some fear that China’s inching past the US in PPP would be touted by neoliberal hawks as an argument against outsourcing, and while some are criticising the figures as a misguided conflation of factory output with real ownership (China still falls far below US in terms of per capita income), the deafening silence in Western media remains baffling.
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