China is a global economic superpower, yet much remains unknown about its economy. Here are five insights that stand out for me:
In current US dollar terms, China’s annual GDP is expected to be around $16 trillion in 2021, second only to the US’s $23 trillion. Moreover, if you adjust for cost-of-living differences between the two countries – that is, purchasing power parity – China’s economy is larger at $27 trillion.
However, when you divide this by the population size, the picture looks different. China ends up ranking at 75 – above Botswana but below Thailand and Mexico (Chart 1). Meanwhile, the US ranks eighth, and it is the only country with a population of over 10 million in the top 10. That said, China’s growth even on this metric is phenomenal. In 2010, in the per capita rankings, it ranked 111; in 2007, it ranked 135. No other large country has jumped the rankings like this.
China’s official GDP figures are notorious for their inaccuracy. A perennial issue is that both provinces and the national government target GDP, so it is unclear whether GDP measures a policy tool or policy outcome. Nevertheless, the accuracy appears to be improving. Under former President Hu Jintao, the sum GDP of China’s provinces was often 5% higher than the national number. A relatively decentralized economic planning approach probably drove this in part. However, with President Xi Jinping, centralization is the order of the day – and the provincial and national numbers are now back in line.
Since the end of 2017, China’s production of smartphones and cars has fallen. And its production of steel products and computers has risen by ‘only’ 34% and 46%, respectively (Chart 3). However, its production of integrated circuits and electrics has almost doubled, and its production of industrial robots is up over 120%.
Fossil fuels remain the dominant source of electricity production in China. However, nuclear, wind and solar power production have surged in recent years (Chart 4). Solar has almost doubled.
If there is any measure of normality, it is moviegoing. And in China, box office receipts are at $1.8 billion so far this year. That is more than the whole of 2020 and higher than the same period in 2019 (Chart 5). It helps that the Chinese buddy comedy film Detective Chinatown 3, released in February, smashed all records with the largest opening weekend ever in any territory (even beating Avengers: Endgame in the US). It has cumulatively grossed $685 million. But another Chinese time-travel film, Hi Mom, has cumulatively grossed an even-better $821 million.
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