As Andrew Yang has pointed out, GDP is a pretty poor measurement, and at least in China's case, not transparent and most likely inflated by localities self-reporting to meet central government targets.
GDP is proportional to population, so if you have a larger population, your GDP can be proportionately larger. The question is, what's GDP per capita or GDP per capita PPP? China per capita GDP is 1/7th-1/8th of the US, and India per capita GDP is 1/30th of the US, will they make it up in 10 years? China could, if they can keep up their growth and not experience a major recession or depression, which seems unlikely.
But if current dominant country A has GDP of 100 units and rival country B is poised to get to 150 units, then won't country B be able to wield more economic power than country A even though country B's GDP/person is lower?
It's sort of like a company that has 100 units of revenue and 20 units of costs versus a company with 150 units of revenue and 90 units of cost, the one with greater revenue may still have more economic power (e.g. ability to leverage suppliers, etc) despite having lower profit margin.
Agreed, if you want some idea of quality of life, GDP probably isn't the best.
If you want to measure who has the most resources either to potentially trade with them, or decide if you have the resources to fight them, GDP becomes more useful.
If you look at it this way, there is no real measure to see which is a better place to live.
The only thing one can agree from this article is that some countries are expected to grow at a higher rate than others only due to a larger population. I think this only makes sense if everyone is educated and the unemployment rate is low.
> a company with 150 units of revenue and 90 units of cost
and this company isn't able to pay the employees with much compared to company A (read: country is poor even if GDP is high). But, with smart re-investment or debt structure, a country with high GDP low per-capita can rise out of poverty. But company A isn't just gonna sit idly by and let it happen.
It depends on what you are measuring, if you are comparing national power and influence then GDP is still an alright metric, while internally something like Andrew Yang's quality of life metrics or GDP per capita makes more sense.
By GDP per capita, Liechtenstein and Qatar is number 1 and 2
Wildly speculative. Turkey is predicted to have 9.1 [some unit], while Germany 6.8 [some unit]. There are two countries with similar demographic profiles, with Germany having 5x the [nominal] GDP of Turkey today. Short of nuclear war or an asteroid landing in Ruhrgebiet, it's hard to imagine what would lead to Turkey's economy overtaking Germany's in 11 years.
PS. "nominal GDP using purchasing power parity exchange rates" is nonsense. Not sure if the error lies with the journalist or with the source.
A lot of that speculative growth comes from Turkey's comparatively younger population (hence more productive hours worked each day), and their continued population growth. Germany's demographics are sliding the other way, with an aging and stagnating population.
Everything you said applies today to the demographic pyramids of the respective 2 countries, with only an 11 years delta. And yet Germany has 5x the GDP.
Germany had 10x the GDP of Turkey twenty years ago. That just proves that Turkey has caught up a lot. Demographics take a long time to have an effect on GDP, they're just forecasting that the tipping point is 2030.
In PPP (Purchasing Power Parity) they will, in real dollars China is forecasted to but India won't be close. As a US based tech company my customers pay me in real dollars so we use real vs. PPP for our market size analysis.
I suppose we could debate about if I'm paid in real or nominal dollars for my tech I sell to folks. Today I'm paid in nominal dollars, over my 10 years of history it's real ones.
The core point is I'm not paid in PPP dollars from India with a 17/1 PPP adjustment over the US.
Remember the huge geisha advert in the 1982 Blade Runner? People were extrapolating from decades of Japanese economic growth, and thought that Japan will leave everyone behind...
You don't even need to enter the realm of sci fi actually.
"Gung Ho" (1986) and "Die Hard" (1988) both feature Japanese corporate overlords doing things as core elements of the plot. Not necessarily evil, its just kinda assumed that Japan would take over large parts of even the US Economy back then.
Japan's "economic miracle", although it was cut short by the 1990s, was an incredible rise. Japan is still one of the major world economic powers, in large part due to its humongous growth.
Japan grew until they roughly matched the GDP per capita of the successful western nations, then slowed down. Anything even close to same result with India or China would overtake the US economy.
To overtake the US, each Japanese worker would have had to produce twice as much value as an American worker, but each Chinese or Indian worker only needs to produce a quarter as much as an American worker.
This article is somewhat misleading. Although the image caption says Nominal GDP, the bottom of the image says the GDP is in PPP terms.
AFAIK the most optimistic estimates make India the second largest economy in nominal terms measured by exchange rate no earlier than 2050.
India is expected to be growing pretty fast. But nowhere close to the rate which would be needed for this to be true in currency exchange rate terms. PPP terms really doesn't mean much.
I know I'm in the minority, but in terms of household income, most of my peers are already at American levels in absolute dollar figures (> $85-100k) here in India.
I've also found that US-based clients are far less skeptical of my skills than they used to be half a decade ago, and that they are also willing to pay US rates for quality work (as opposed to expecting third world rates)
I have heard the same horn be tooted in India over the last 2 decades, and India is no closer to the that goal than it was 2 decades ago.
The problems India faces can't be solved in 20 years. 1 generation for that is too little.
I do however think that India will undergo a massive push ahead the second we have a few cities where expats can return to without incurring a major loss in QOL or effective wages.
==> I have heard the same horn be tooted in India over the last 2 decades, and India is no closer to the that goal than it was 2 decades ago.
I think the article is too optimistic in India's favor, but it is incorrect to say "India is no closer". As per the following link, India was #12 in GDP just 10 years back, and now India is #6 or #7 knocking at #5.
Yes you are right the problems will not be solved in 1 generation. It probably will take longer, but there has been significant change in the past 1 generation, and there will be similar significant change in the next 1 generation.
> where expats can return to without incurring a major loss in QOL or effective wages.
I’m moving back to India soon (NYC -> Mumbai). My quality of life will likely increase; wages will not even be close (savings rate might be the same though). Which cities are on your mind for this?
This is a bit like mine rationality of going to China. Any income above $3k gives you a lifestyle you can't imagine in any Western tech hub, but more importantly ability and talent is more important here (don't laugh.) In overall, the industry is in better shape here, and the tech scene is not just a stock/bond market extension yet.
I'm not a Western nation national, so for me, going to the West again (I lived in Canada for 6 years,) will involve going through visa troubles, and be looked upon like on an idiot by every official for the duration of my stay. And not to say, you will have that "cheap labourer" stigma on you.
Quality of life is not only income. It's also infrastructure, environment, many other things. I had only briefly visited Mumbai, but visited many big cities in India. They're extremely noisy, congested, air quality is poor. Power and Internet outages are frequent. There no parks in most Asian cities so if you're tired and want to relax in a quiet place under the trees you should drive for hours out of the city.
Exactly; quality of life isn't income (if that was the case, I wouldn't be bothering to move). It's all you say; it's also food you're used to, the people around you, family ties, the freedom to have multiple income streams without your visa blocking you, and also the lack of worry that you'll be thrown out of the country.
There is a tradeoff I am making, and weirdly India is better off in it. I will miss the good air and the incredible work environment in the States, but apart from that, Mumbai can offer everything else (not many power outages from what I know, I grew up there), and quite frankly, I like the bustle.
I also hate obtaining visas and other bureaucratic issues, worrying if you'll obtain the visa next year, not being able to speak your own language when you want to relax and hang up with the friends, etc.
I feel 90% of the quality issues can be handled by being more proactive. Stay at a community with good trees, buy only organic, drink only mineral water, etc.
Yes, every problem has a solution but a solution also has a cost. For example, you may return back to India from Western country and try to keep the same level of income, but you'll find out soon that a community with good trees is more expensive compared to the same quality of life in the West.
Asia can be cheap, but if you want the same quality of life, same level of education, etc, it actually cost more than in the West.
I currently live and work in Cambodia and education here is extremely expensive, maybe more expensive than in Singapore. But quality of the education... I don't want to describe it because I'll be probably banned if I tried to describe it.
In 2014-2015, if you were a PM / SR PM at Amazon/Google/FB and moved to Bangalore, you would've gotten a Director (at large tech companies) or VP role (at mature startups) easily and would've made the about the same comp as you were making the US. Not sure what the situation is now.
People are going to say Bangalore, but Bangalore today is pain in the ass to stay in.
It has all the problems that India already faces (density, unsanitary conditions, rising pollution) and outdoes almost all other big cities on commutes. Easily the worst traffic in the country.
It does have a great tech industry and weather though.
If I had to go back, I would go to Mumbai (Western Suburbs or South Bombay), because that's where I grew up. Also, the new metro and road projects have potential to solve transportation in India. (though completion is maybe 10 yrs away)
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I personally, meant townships like Lavasa (or what it was intended to be. It became a holiday home / Indian cape cod instead).
A place where the city could be designed from ground up, and some of the common problems of every Indian city would be avoided by design.
They are much cleaner with better air and urban design. It legitimately feels like you are in a developed country.
Some photos:
https://image3.mouthshut.com/images/Restaurant/Photo/-66070_...https://magnificentmaharashtra.files.wordpress.com/2015/01/g...
IMO, Nagpur would have been well positioned to become that, had it not had such terrible weather.
It has decent amenities, excellent educational institutions (IIIT, NIT, IIM, AIIMS), Good public transport (with the metro and new roads), a new SEZ, a new airport and doesn't have any other major negatives.
Gurgaon's cyber-city and Noida were other totally botched attempts at this. Terribly bloated, copied the worst aspects of American urban design and left zero opportunities for any organic growth of culture in the area.
I can see Goa with BITS's presence, the weather and cosmopolitan nature being well poised for such a development. However, unlike Nagpur I've yet to see any attempt being made to urbanize that region.
Navi Mumbai and Powai had a similar opportunities to build themselves from the ground up, but both have become more natural suburbs of Mumbai rather than entities in and of themselves.
The article didn't go into much detail about how all this was calculated out. I don't think they took into account gov debt. that can be a huge factor. Japan for instance has not had any increase in GDP over the last 25 years and that doesn't look like it's going to change. So I don't see how their gdp can jump from 4.8T to 7.2T in just 11 years!
Japan is currently at 230% and it weighing very heavily along with their aging population. Their GDP hasn't been increasing at all in the last 25 years. The US is heading in the same direction with budget deficit of 4% every year whilst only growing 3.3% a year. US interest payments are expected to reach 25% of federal spending in 2028 if we continue with our current deficits. At that point, unfortunately US growth will be a complete standstill, for decades to come :(
Indonesia is an interesting one to watch, i keep forgetting how much people are in that country!
Don't know about china. India will overtake in population maybe but definitely not in other categories( education, innovation, discipline, military, health, agriculture, infrastructure). In 2001-2005 the story was about 2020. In another 10 years no way, in the present scenario in 100 years also no way.
Anyone do the math behind this the Pe^rt math. It would take if the US grew at 2% china would need to grow 6% YoY. Anyone believe that China will still grow at 10% in 10 years. Even with a economy that treats GDP at a input and not a output
PPP is and always will be a garbage metric. Don't compare my Pepperidge Farm 15-Grain bread, sold for $3 a loaf at the supermarket with steamed buns sold for ￥1 each on the street.
I want a "good cheese, good wine, good bread" price comparison metric. By that measure, my money in the US only goes like 1/2-1/3 as far as the same amount in France, since it takes about 2-3x the money to consistently match the quality of their bog-standard stuff in those categories. Usually a good bit of travel time, too, in the case of bread. :-(
[EDIT] actually 3x might be low on the bread. 3.5-4x, probably, around here, to get a baguette that's on par with your average Parisian one, for instance. You don't even hit "kinda OK" until $4 or so, and you're still not guaranteed to be getting something that tastes like a baguette at all, let alone a decent one, at that price. Croissants too. I've had exactly one in my city that was close to the real thing and it was crazy expensive. They burnt it, though. So close, yet so far.
For me this is one of the biggest draws of New York: the food. New York has just an amazing breadth of food available at all price points. You can find very decent $1 slices of pizza (people lost their shit when DiFara started charging $5/slice). The Bay Area as well has a ton of excellent food options as well but prices tend to be higher across the board. And if you're using food costs as a metric, that's just one of a few different areas in which the Bay Area has become dramatically more expensive than other expensive metro areas (NY, HK, Singapore) and it's infuriating.
I've seen some complaints that there's no real bread culture in the Bay Area compared to Europe (and especially France), and to that I said (and will continue to say) bullshit. There are still a ton of bakeries in most areas, and you can find the more mass produced stuff for about $4/1lb loaf (a baguette would be around half the price). And the diversity blows any typical European city out of the water. You can find good sour dough, sweet French bread, Italian bread, rye, etc. in nearly any supermarket. Sure, there were many more bakeries in San Francisco about a century ago (r.i.p. Parisian), but you can walk into a Trader Joe's and get a loaf of sourdough bread that is right up there with anything from my childhood. You can find good (great if you have the patience) croissants too (and, honestly, finding a truly great croissant in Paris is a bit of a challenge these days anyhow). The only thing we really lack out here bread-wise is a good bagel.
I think this is more related to the respective climates and local tastes than anything else.
For example I can't for the life of me find any good potatoes, apples or bread in Italy - or anything even remotely sour that isn't wine - apparently it's not something the locals particularly enjoy.
Really? Not apples or bread? We have valleys known only for their unique apples, like the Mela Renetta from Friuli. Don't let me started talking about the apples from Trentino. So, maybe you are talking about apples in the south of Italy. About bread: I see where you are coming from, best breads I eaten are coming from bakeries on the mountains. They just taste so good. But please, remember that bread in Italy is just a support for the main tastes, like the olive oil.
I've only ever been to the north and what I found is that leavened bread is not a thing there.
As for apples: they're mostly okay but nothing special comparing to the varieties found around the Baltic sea.
Case in point: you can't expect to just walk into any store and find apples suitable for apple pie. Also apple juice exists in one variety and is fairly hard to find.
Exactly it's a weird measurement. Quality matters. And now that we have a global economy where everyone has iPhone. Everyone wants a Tesla. It makes since to say everyone has the same basket.
As concerns about US competitiveness in the global economy are ramping up, they are placing import tariffs promoting an "America First” strategy with the express goal of protecting domestic production from cheap imports! Sounds an awful lot like "closing off your market". Maybe both US & China just like the idea of free trade when it benefits them, not so much when it doesn't. Like every other country.
If history is any indication, once countries start becoming net exporters of IP, and net importers of low-skilled labour, they very quickly adopt the same neo-liberal trade and IP policies that are currently championed by the developed world.
Edison was the biggest thief of IP during his time. Of course when western societies steal it is not theft but "manifest destinty" "braveness" and a lot of other BS. But Chinese company's rise is purely because of theft. Is it ?
Edison himself was stealing ideas from others. Not to mention the slave labour and free natural resources of a new continent that americans used while enforcing chinese exclusion act. Ip theft from china is western imagination.
Is it that surprising that a nominally communist government wouldn't put much stock in the concept of "intellectual property," which is even more vague and questionable than the concept of private property?
GDP is proportional to population, so if you have a larger population, your GDP can be proportionately larger. The question is, what's GDP per capita or GDP per capita PPP? China per capita GDP is 1/7th-1/8th of the US, and India per capita GDP is 1/30th of the US, will they make it up in 10 years? China could, if they can keep up their growth and not experience a major recession or depression, which seems unlikely.