An editorial in the Global Times (English, web edition)
Don’t read too much into PPP ranking
Source:Global Times Published: 2014-5-5 0:53:01
The International Comparison Program, a project coordinated by the World Bank, released a new report with data suggesting that the size of the Chinese economy, by the measure of purchasing power parity (PPP), will surpass the US to become the biggest sometime this year.
The data, once released, drew keen attention from Western mainstream media, some of which even reported that China, which strongly questioned the accuracy of the report, had tried to stop the World Bank from announcing it for a long time.
PPP is usually employed by economists as a supplementary measure to evaluate the size of economies besides market exchange rate. The size of developing economies will be usually bigger when assessed in PPP terms instead of market exchange rate.
The statement that Chinese economy tops the world is not nonsense, but such a vision is still too far away from what Chinese people can really feel. Although China has surpassed the US in certain economic spheres, the quality of the Chinese economy is far worse than that of the US.
It is a positive sign that the Chinese government has objected to the PPP-based conclusion, and the Chinese public cares much less than the Western countries about the top economic ranking. The mainstream society is aware of China's real economic conditions. China may lack confidence, but it won't sacrifice sense to acquire it.
The PPP-based statement, announced by Western economists and analysts, does not mean it is a conspiracy, as some alarmists think. What China should do is to keep calm, and know what exactly it means to the Chinese economy.
The report may serve as new catalyst for discussion in Western countries about China overtaking the US. It might be the start that they will discuss it in a serious way. The world will probably take new perspectives toward China's growth.
China also needs to adjust itself to avoid any false pride and self-centeredness. It has to keep a clear mind about what it really is, and minimize the impact caused by external forces.
For now, China cannot decide what image it has in the mind of the West, which still has a big say on this matter. But China has the initiative for its own actions. It doesn't have to wrestle with the West for image, but it must make sure the steps it takes for its own development are not dictated by the West.
China will become the No.1 economic power sooner or later, which is an irreversible trend. But China still needs foresight to guide its moves, and make sure the geopolitical changes in the Asia-Pacific area will generate more positive results.
China being the No.1 economic power is like a double-edged sword, which on the one hand will enhance the nation's confidence, but on the other hand pose great challenges to the improvement of people's wellbeing. Whether the crowning will produce more positive results instead of social problems will be a huge test for the Chinese society.
web-reference: http://www.globaltimes.cn/content/858392.shtml