I have earlier talked about the radical differences between the wealth in China's rural and urban centres and the discussion kicked along at Brad deLong's, with much bandying about of Purchasing Power Parity when comparing differences of wealth. Stephen Frost is working on an innovative Big Mac index to find how long it takes a McDonald's worker to buy a Big Mac as one alternative to the more academic PPP calculations.

Today's People's Daily has an editorial on the same subject. They seem to use it a stick to beat up on Japan (again), but it also asks the question how rich is China and has a welcome dose of reality compared to much of the Western media hype. Of course, there's an ulterior motive, but we'll get to that.

Based on World Bank and IMF figures, according to the article, Japan has 3 times China's nominal GDP but China's PPP-adjusted economic "power" is twice Japan's. That I doubt but the point remains that in 1990 China's per capita GDP was US$2,700; with a decade and a half of average 9% growth vs USA's average of 2.7%, so the gap should have closed, even allowing for population growth (which China's one-child policy has curtailed significantly). The article contends this does not represent the real situation: China has scored remarkable achievements for its economy but there is still a long way to go to have a powerful economy and an affluent population.

The article then finally reaches the nub of the matter before finishing in a confusing mess:

Any overestimation of China's GDP will bring nothing but damages to the country. By exaggerating China's national strength the truth is covered up. It will also unfairly bulge China's bills in international organizations in which China has a membership. And the access to international loans and special treatment with favorable terms will be more difficult for China.