This was the case in Germany before the outbreak of WW II. High debt ratio, high inflation and high income of people only exist in nominal terms. So the United States is in danger now. They may be preparing for a world war.
Is it 2040 already? Isn't it lovely how clearly you can see the future.
You are comparing China's after tax income ($458 per month) with America's pre tax income ($4000 per month). This is obviously wrong.Not this again. I've seen this argument made in Chinese 自媒体 countless times by people who know little about economics.
The truth is almost all if not all countries include imputed GDP from owner-occupied dwellings, including China.
I will repost.
The ratio of owner-occupied to rented dwellings can vary significantly between countries and even over short periods of time within a country, so that both international and intertemporal comparisons of the production and consumption of housing services could be distorted if no imputation was made for the value of own-account housing services.
Eg; without imputation from owner-occupied dwellings, a country with higher home ownership would have lower GDP because lesser residents rent. Or a country would see their GDP drop if they built more housing for their residents to purchase. Doesn't make sense.
The difference is that different countries calculate their imputed owner-occupied GDP differently. The US with a robust rental market calculates owner-occupied GDP by benchmarking to similar dwellings that are actually being rented out, while China uses a property cost-amortized basis. Eg; all else being equal, the higher the rent the higher the nominal GDP in the US; the higher the construction cost the higher the nominal GDP in China.
China:
US:
Singapore:
The actual and imputed rent for ownership of dwelling as a share of GDP is around 11% for the US, 7% for China, and 3.8% for Singapore.
But it would be simplistic to just look at the figures for the US and thus conclude that their figures are more inflated than China's and Singapore's, because the quality of housing may vary between the countries. Eg; Americans generally live in houses and their housing are much more spacious/comfortable than apartments in China or Singapore.
If you believe only their GDP figures include imaginary imputed numbers, you can compare the median income or household income between the two countries.
The US's nominal GDP per capita is around 5x of China's. The US median income (from wages and salary) is around $4K per month, or around RMB 29K.
View attachment 891959
Assuming the same ratio of 5:1, China's median income should be around RMB 5800.
Does the average Chinese make RMB 5.8K? I don't know.
View attachment 891968
Based on latest data, the per capita disposable income in China is around RMB 18463 / 6months = ~RMB 3K, median is around ~RMB 2.6K. If we take income just from wages and salary like from the US above, it's around RMB 1.8K, far lower than RMB 5.8K.
Granted the figures for China is disposable income, which has accounted for personal income taxes. But does the average Chinese pay 70% in income taxes? Obviously no.
View attachment 891969
所以谁家 GDP 的含金量更高？
American middle class live beyond their means while Chinese middle class live within their means.If only disposable income is compared, then various implicit welfare income will be ignored.
I suggest comparing the median household net worth. Because the real income can be displayed through the expenditure surplus.
American Families Only Half as Rich as Those in Chinese Cities
www.yicaiglobal.com
The gap between cost method and virtual rent has been shown in the data you provided. The GDP of real estate is only 1893 billion CNY (259.3 billion USD). The average person has only 1352 CNY (185 dollars) of housing expenses. Is there such a cheap house on earth?Not this again. I've seen this argument made in Chinese 自媒体 countless times by people who know little about economics.
The truth is almost all if not all countries include imputed GDP from owner-occupied dwellings, including China.
I will repost.
The ratio of owner-occupied to rented dwellings can vary significantly between countries and even over short periods of time within a country, so that both international and intertemporal comparisons of the production and consumption of housing services could be distorted if no imputation was made for the value of own-account housing services.
Eg; without imputation from owner-occupied dwellings, a country with higher home ownership would have lower GDP because lesser residents rent. Or a country would see their GDP drop if they built more housing for their residents to purchase. Doesn't make sense.
The difference is that different countries calculate their imputed owner-occupied GDP differently. The US with a robust rental market calculates owner-occupied GDP by benchmarking to similar dwellings that are actually being rented out, while China uses a property cost-amortized basis. Eg; all else being equal, the higher the rent the higher the nominal GDP in the US; the higher the construction cost the higher the nominal GDP in China.
China:
US:
Singapore:
The actual and imputed rent for ownership of dwelling as a share of GDP is around 11% for the US, 7% for China, and 3.8% for Singapore.
But it would be simplistic to just look at the figures for the US and thus conclude that their figures are more inflated than China's and Singapore's, because the quality of housing may vary between the countries. Eg; Americans generally live in houses and their housing are much more spacious/comfortable than apartments in China or Singapore.
And even so, it's only a ~4% difference in GDP. The US will still have a higher nominal GDP than China which disproves your claim that China's GDP will be higher with imputed GDP (truth is China already included imputed GDP).
If you believe only their GDP figures include imaginary imputed numbers, you can compare the median income or household income between the two countries.
The US's nominal GDP per capita is around 5x of China's. The US median income (from wages and salary) is around $4K per month, or around RMB 29K.
View attachment 891959
Assuming the same ratio of 5:1, China's median income should be around RMB 5800.
Does the average Chinese make RMB 5.8K? I don't know.
View attachment 891968
Based on latest data, the per capita disposable income in China is around RMB 18463 / 6months = ~RMB 3K, median is around ~RMB 2.6K. If we take income just from wages and salary like from the US above, it's around RMB 1.8K, far lower than RMB 5.8K.
Granted the figures for China is disposable income, which has accounted for personal income taxes. But does the average Chinese pay 70% in income taxes? Obviously no.
View attachment 891969
所以谁家 GDP 的含金量更高？
I suggest comparing the median household net worth. Because the real income can be displayed through the expenditure surplus.
American Families Only Half as Rich as Those in Chinese Cities
www.yicaiglobal.com
www.statista.com
The reality begins to set in for the Chinese that they may never surpass US GDP so the excuses and bitterness start flowing.
China's "per capita disposable income" is after tax data. And you don't know the actual situation in China, which is seriously underestimated.Elaborate.
There are too many variables for household net worth. Savings rate, housing prices, veracity of figures collected for each asset class etc.
For the above reasons especially the last one, such figures are never objective enough and really depends on the study made. I can easily find another study made which is more commonly referenced, and is much more comprehensive than a random opinion article on a state media.
View attachment 892045
View attachment 892033
View attachment 892034
View attachment 892056
List of countries by wealth per adult - Wikipedia
en.wikipedia.org
Infographic: Which Countries Are Really the Richest?
This chart shows the countries/regional economies with highest per-capita average and median wealth in 2022.
HK probably has one of the highest household wealth because a 50sqm apartment can cost USD1mil. But so what? They have among the highest income? They have among the highest quality of life?
Back to your claim on China's GDP will be higher than the US. If we want to compare the 含金量 of GDP, salary income is still the best measure. Fact is the US still have higher nominal GDP currently and their people have much higher median income than China.
