subhamoy.das wrote:I am sorry there is no conclusive evidence to believe that China under reports
There is every evidence that China under reports on its GDP.
When sales figures from the MNCs are the same for China as they are for the US then the Chinese market is every bit as big as the American one. Yet it's nominal GDP figure is half the US. Those figures hit anyone with the least knowledge of economics like a cricket bat to the head. You cannot generate American size sales figures for everything without an American sized economy. It is that simple.
Why do you think the US and Europe is hammering away at the chinis to raise the Yuan? The US thinks the PRC has undervalued its currency by 40% that's why. This is after it had already risen 33% over the last four years against the US dollar when every other currency in the world had fallen against the dollar.
Do you even understand why a currency is considered undervalued? An currency is considered under-valued only when people suspects that its GDP is under reported. And the chini currency is majorly undervalued. That should make the even densest economic layman understand the chini GDP is under reported.
Still JINGOISM and convulated logic?
Firstly, economics is not hard. Sales figures equals economic activity. The aggregate of economic activity is GDP. Only GDPs of American-sized economies can generate American-size sales for a comprehensive range of products.
That is why the USSR, Zimbabwe and North Korea could not generate 2.6m sales of GM cars no matter how much they are "skewed by autocratic rule" which is one of the pseudo economic theories you like to spew. Autocrats cannot produce a gain in consumer good sales unless they produce a large enough GDP.
Secondly, there is no economic advantage to over reporting in the real world. Just like no one over-reports on income so they can be taxed more. People like to be taxed less. Mercantilist countries are the same. China (and Japan, Taiwan, Korea) cheat by
undervaluing their currency and
under-reporting their GDP. You can not cheat by over-reporting. You give concessions in trade regimes if you are the stronger economy.
Jingos imagine that the chinis must be over-reporting because the reality does not fit with their jingo. This puts us at a complete disadvantage because the chini's game is to undervalue and under-report for trade advantages.
There is a reason why the US pressures China to re-value it currency upwards. If the Americans get their way, the official chini GDP would double overnight. American MNCs already treats China as a much larger economy no matter what the official GDP figures are.
The rest of the world look at economics with cold hard eyes and understand how the chinis cheat. Jingos don't and assume the complete opposite.
