Archive for the ‘currencies’ Category

A Revisionist Tale: Why a Poor China Seems Richer

December 21, 2007
HONG KONG — Should China be treated differently because it may not be so rich after all? That is one of the central questions raised by new calculations from the World Bank that suggest the Chinese economy may not be as large as previously thought.To be sure, some economists question whether the new figures are more accurate than the old ones, but others argue that they paint a picture of a poorer China that warrants reconsideration of the West’s efforts to change Chinese currency policies.The World Bank issued preliminary figures on Monday that recalculated the economic output of 146 countries, including China, after excluding differences in domestic prices and currencies.

The calculations of so-called purchasing-power parity, which compare the buying power of citizens around the world, put China’s output at roughly 40 percent less than the bank’s previous estimates.

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