PRC GDP/capita in 2012 at the Prefecture level

[jaichind]

I found this map which shows GDP/capita of PRC at the prefecture level in US dollar in 2012


 

Anything blue is is below average (around $6000) and anything brown is above average.  Note the PRC, correctly in my view, also show Taiwan Province.  We on ROC also, correctly, in my view, also claim all of Mainland China.  Here is our map.



In PPP terms Taiwan Province GDP/capita would have it about 2 times what is on the map.  As for the Mainland China, for backward areas, it should be around 3 times what is on the map.  More urban and advanced areas is would around 1.5 times what is on the map.

The map shows things we always know.  Guangdong, Shandong, Zheijiang/Jiansu/Shangai, and Liaoning regions on the coast are the advanced areas.  Inner Mongolia is also getting pretty wealthy due to the mineral and herding boom.  Interior provinces  Hunan and Hubei also has wealth areas. Xinjiang diversity in prefectures in terms of income is quite vast as Han area are quite wealthy and Uygur areas poor.  Some of the racial tensions there obviously has economic background as well.  None of this  surprises me as I been to all these provinces other than Xinjiang.  My mom has visited Xinjiang and pretty much reported information similar to what we see on the map.

[opebo]

Are you quite sure that's not in 'PPP' nonsense already?  The figures look outrageously high.

[True Federalist (진정한 연방 주의자)]

According to the IMF, China's GDP/capita for 2012 was $6,076 nominal and $9,233 PPP.

By comparison Thailand was $6,572 and $10,849 respectively and Taiwan was $20,328 and $38,749 respectively.

[jaichind]

According to the IMF, China's GDP/capita for 2012 was $6,076 nominal and $9,233 PPP.

By comparison Thailand was $6,572 and $10,849 respectively and Taiwan was $20,328 and $38,749 respectively.

Yep.  I was about to say that. This map uses $6000 as average for PRC.  The fact is in richer parts of Mainland China is now significantly more advanced than rural parts of Taiwan Province ROC. I read stories starting in the early 2000s of rural residents of Taiwan Province, who were more likely to think of Mainland China as a bunch poor bums and filled with Bubbas and Billy Bobs even though they themselves fit that description,  visiting Mainland China for the first time and came back shell shocked on how advanced some parts of Mainland China were when compared their own counties.   

Understand that in PPP terms the backward areas of PRC would be a good deal higher than what is on the map.  It s not as extreme as it was in the early 1990s when I visit visited Mainland China and observed that in backward rural areas the price levels are about 1/8 of USA and in advanced urban areas about 1/3 of USA.  The last 20 years the internal prices of PRC has converged a lot toward world prices mostly via large relative inflation plus appreciation of the RMB.

In my view (and many other people's views) the PRC GDP/capita PPP of around $9000 is too low.  It mostly stemmed from a 2005 World Bank PPP study which adjusted downward PRC GDP/capita in PPP terms.   The problem with that study is that it weighted too much in its survey toward urban areas which due to different price levels between PRC urban and rural areas overestimated the PRC pricing levels.  See

http://users.ox.ac.uk/~econ0211/papers/pdf/Feenstra_Ma_Neary_Rao.pdf

For an analysis of this.    I for sure observed the large price gaps between advanced areas of PRC and backward areas.  In fact this affect also overestimates the GINI and income inequality of PRC where an analysis of what income can buy in different parts of the economy revealed a very large but not as large income inequity.  The same is going on in Taiwan Province ROC.  Back in the 1980s the price levels of Taiwan Province were pretty consistent between wealthy areas like Taipei and backward areas like Yunlin County.  Back then Taiwan Province ROC has a very low GINI conefficient and had a very "equal" distribution of income.  As the economy advanced over the last 30 years, the income gap has grown within Taiwan Province ROC and the price levels also diverged between different parts of the Province.

[opebo]

According to the IMF, China's GDP/capita for 2012 was $6,076 nominal and $9,233 PPP.

By comparison Thailand was $6,572 and $10,849 respectively and Taiwan was $20,328 and $38,749 respectively.

Wow!  So that says to me that Taiwan is truly very cheap - the ratio between PPP and nominal is almost double.. much bigger difference even that Thailand.

In my view (and many other people's views) the PRC GDP/capita PPP of around $9000 is too low.

Perhaps, but all the Thais I know who travel to China (nowadays there are many, as its a new fad in tourism) found the place astoundingly backward and undeveloped compared to Thailand.  They said they could hardly enter the toilets, much less use them.

[Ban my account ffs!]

According to the IMF, China's GDP/capita for 2012 was $6,076 nominal and $9,233 PPP.

By comparison Thailand was $6,572 and $10,849 respectively and Taiwan was $20,328 and $38,749 respectively.

Wow!  So that says to me that Taiwan is truly very cheap - the ratio between PPP and nominal is almost double.. much bigger difference even that Thailand.

In my view (and many other people's views) the PRC GDP/capita PPP of around $9000 is too low.

Perhaps, but all the Thais I know who travel to China (nowadays there are many, as its a new fad in tourism) found the place astoundingly backward and undeveloped compared to Thailand.  They said they could hardly enter the toilets, much less use them.

Yeah there tends to be a stank surrounding restrooms in China... it's about as unpleasant as the black snot you blow into tissues from the choking smog.

[jaichind]

According to the IMF, China's GDP/capita for 2012 was $6,076 nominal and $9,233 PPP.

By comparison Thailand was $6,572 and $10,849 respectively and Taiwan was $20,328 and $38,749 respectively.

Wow!  So that says to me that Taiwan is truly very cheap - the ratio between PPP and nominal is almost double.. much bigger difference even that Thailand.

Correct.  The cost of living for everyday things on Taiwan Province ROC is fairly low when compared to USA.  If one accepts that ones income will not afford any luxury items or live in a elite neighborhood, one can get by on $10,000 a year with some extra cash at the end to spare.   

In my view (and many other people's views) the PRC GDP/capita PPP of around $9000 is too low.

Perhaps, but all the Thais I know who travel to China (nowadays there are many, as its a new fad in tourism) found the place astoundingly backward and undeveloped compared to Thailand.  They said they could hardly enter the toilets, much less use them.

The impression I have visiting Thailand and Mainland China is they are about the same these days.  Thailand was for sure ahead about 5-10 years ago.  I would say that the Mainland China's economic diversity is quite large so I would expect the advanced parts of Mainland China to be more advanced than Bangkok (they are), and the backward areas of Mainland China to be even further behind Thailand rural hinterland.  While I never visited Thailand outside of Bangkok and I told by people there that rural Thailand does contain places which are quite backward.  So perhaps your friends are mostly from Bangkok and never really spent a lot of time in the Thailand rural hinterland.  In fact the population in Bangkok not knowing about what life is like in rural Thailand and vice versa is one of the main sources of political conflict there. 

[opebo]

Correct.  The cost of living for everyday things on Taiwan Province ROC is fairly low when compared to USA.  If one accepts that ones income will not afford any luxury items or live in a elite neighborhood, one can get by on $10,000 a year with some extra cash at the end to spare.

Very interesting jaichind.  I took a look at the websites, and making $25,000/year is the norm for English teachers there, so it maybe the number one place for saving money in Asia (for English teachers I mean, which are the vast majority of expats).  I don't know what the 'quality of life' is like, but that generally depends on social aspects such as the ease of getting.. companionship.

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In fact Thailand's provinces all contain superb infrastructure and 'advanced' capital cities.  I would say that Thailand now is not so much 'undeveloped' in the sense of lacking any infrastructure or social services as it is simply a typical capitalist country with fairly wide inequality (not as bad as the US, but fairly bad).  The phenomenon of political conflict in Thailand is mostly about this inequality rather than any lack of development.. another way to look at it is = development and an increase in GDP per capita has done nothing to rectify the problem (does it ever?)

[Tender Branson]

Interesting map Jaichind.

What's up with the areas with very high GDP/capita near Mongolia ?

Rare earth minerals mining, plus oil & gas, generating high profits for the local prefectures ?

Similar to the oil/gas/mineral boom in Wyoming or North Dakota pushing up the state GDP there as well ?

[2952-0-0]

Interesting map Jaichind.

What's up with the areas with very high GDP/capita near Mongolia ?

Rare earth minerals mining, plus oil & gas, generating high profits for the local prefectures ?

Similar to the oil/gas/mineral boom in Wyoming or North Dakota pushing up the state GDP there as well ?

Exactly that, and large coal deposits too.

The islands of red in Xinjiang are governed by military-like Production and Construction Corps and not Xinjiang local bodies, so are de facto not part of Xinjiang. The PCCs were formerly military units tasked with developing/settling the area and defending against Soviet invasion and Islamist infiltration during the Cold War. They formerly existed in Tibet as well, but were quietly shut down during the 1980s in order to reconcile with Tibetans.

The map shows regional wealth divides exist, but are vastly overstated. But it can't show the growing urban poor population, either.

[jaichind]

Exactly that, and large coal deposits too.

The islands of red in Xinjiang are governed by military-like Production and Construction Corps and not Xinjiang local bodies, so are de facto not part of Xinjiang. The PCCs were formerly military units tasked with developing/settling the area and defending against Soviet invasion and Islamist infiltration during the Cold War. They formerly existed in Tibet as well, but were quietly shut down during the 1980s in order to reconcile with Tibetans.

The map shows regional wealth divides exist, but are vastly overstated. But it can't show the growing urban poor population, either.

You make very accurate points about Xinjiang.  Although beyond those islands there are clear splits in income by prefecture which are really split along Han and Uygur lines. 

As for Innor Mongolia not only is it the coal and mineral boom that is lifting income, it is also the surge in demand for milk on Mainland China last decade which also has led to an increase in come for the hearding economy.

As for your last point about income disparty being overstated, I agree and that was the point I made about PPP are very different in different parts of Mainland China.  And I agree with you that within each prefecture where price levels are consistant all things equal income disparity is increasing.  Overall I still do feel that the very high GINI coefficient for Mainland China is overstated.

[jaichind]

Very interesting jaichind.  I took a look at the websites, and making $25,000/year is the norm for English teachers there, so it maybe the number one place for saving money in Asia (for English teachers I mean, which are the vast majority of expats).  I don't know what the 'quality of life' is like, but that generally depends on social aspects such as the ease of getting.. companionship.

In fact Thailand's provinces all contain superb infrastructure and 'advanced' capital cities.  I would say that Thailand now is not so much 'undeveloped' in the sense of lacking any infrastructure or social services as it is simply a typical capitalist country with fairly wide inequality (not as bad as the US, but fairly bad).  The phenomenon of political conflict in Thailand is mostly about this inequality rather than any lack of development.. another way to look at it is = development and an increase in GDP per capita has done nothing to rectify the problem (does it ever?)

Thanks for your info on Thailand as I have not been to urban areas of Thailand outside of Bangkok.   Of course infrastructure are path dependent.  PRC might have a GDP/capita in PPP terms close to Thailand but because over a significant period Thailand did have higher income for many years that still would mean better infrastructure, especially in backward areas, than the PRC.

As for Taiwan Province, yes, because of the low of of living I know for a fact that lots of Americans are coming over to teach English, making the $25K (or more).  The deal is not as good as some might think because in order to live a "good life" on Taiwan Province on that $10K budget (note that college graduates usually starts with about excatly $10K annual salary in Taipei which is a bit low and around $8K in rural Taiwan Province which is more than adequate) you have to live in a "normal" middle income part of town and not elite part which is very expensive even when compared to most of USA.  But outside elite parts of town, the number of people that can speak English well and socialize with are limited which impacts quality of life and "companionship."  Of course if said teacher knows Chinese Mandarin quite well then it could work with the natural cavat of people being more careful about socializing with foreigners.  Even with $25K I think it would be a strech to live in an elite part of town.  The price curve is very steep on Taiwan Province just like Mainland China.  The averge Joe gets by with very low price levels but in order to be in the 1% (or the 5%) one needs a lot of money which turns the system for them into a rate race.

[jaichind]

On the topic of GDP in PPP terms

http://nextbigfuture.com/2013/11/next-month-new-international-price.html

The 2011 ICP results will come out in Dec which would most likely reverse a lot of the 2005 ICP findings on the price levels of Mainland China.  The 2011 ICP will most likely conclude that the overall price levels on the PRC is about 20% lower than what the 2005 ICP findings concluded (when it most likely oversampled Mainland China's urban areas.)  

Note that the Maddison series which I like to use never had this 2005 ICP problem since it uses the 1990 ICP.  

Anyway, after the 2011 ICP comes out, the IMF and World bank will most likely re-adjust the GDP PPP of all economies of the world and it is very likely that under this new methdology, the PRC will have the largest economy in the the world in PPP terms as per IMF and World Bank either in 2012 or 2013.  

BTW, I totally agree with these new findings if it ends up pushing down PRC price levels relative to the 2005 ICP findings.  My travels on Mainland China is that except for some megacities, the price levels are still fairly low and for sure lower than what the 2005 ICP PPP might imply.

The link points out that

"The GDP PPP boost will also mean that China's IMF/World bank per capita GDP PPP would not be $10,660 but about $12,800 in 2014.
China would have higher per capita GDP than Brazil in 2014 and would be around the level of South Africa in 2013. China would be around the level of Mexico and Turkey in per capita GDP PPP in 2020."
 

[opebo]

Does this please you, being a Chinese?

[jaichind]

Does this please you, being a Chinese?

Too some extent.  On the other hand per captia GDP the PRC lags far behind.  My metric tends to PRC GDP/capita as a percetage of world GDP/capita.  If ones uses the Maddison data set as of 1890 China's PPP GDP/capita was about 50% of world GDP/capita.  As of 1995 the PRC was in the same situation, 50%.  This is why I claim the Chinese Revolution of 1911 and 1949 were failures.  After all that unheaval we got ourselves in a state were even after 15 years of very good economic performance we are back to where we started.  Fast forward to today and PRC PPP GDP/capita is around world average and going forward will be above average.  That is to some extent some sort of accomplishment.  I think I take greater pride in that than biggest economy.

[opebo]

Does this please you, being a Chinese?

Too some extent.  On the other hand per captia GDP the PRC lags far behind.  My metric tends to PRC GDP/capita as a percetage of world GDP/capita.  If ones uses the Maddison data set as of 1890 China's PPP GDP/capita was about 50% of world GDP/capita.  As of 1995 the PRC was in the same situation, 50%.  This is why I claim the Chinese Revolution of 1911 and 1949 were failures.  After all that unheaval we got ourselves in a state were even after 15 years of very good economic performance we are back to where we started.  Fast forward to today and PRC PPP GDP/capita is around world average and going forward will be above average.  That is to some extent some sort of accomplishment.  I think I take greater pride in that than biggest economy.

That's good, because you know it isn't really the biggest economy.

[jaichind]

That's good, because you know it isn't really the biggest economy.

I guess you are not a fan of the PPP method.  While I would agree that there are many flaws in the PPP approach of measuring economies, I think it is superior to just straight nominal currency conversion method.  For example, under this method, in 1995 when for a couple of months the Yen/Dollar rate went below 80, in theory the largest economy in the world for those couple of months was Japan.  For sure there is a stronger argument for PRC being the largest economy today than Japan being the largest economy in 1995, even if the PRC argument relies on the PPP method which is by no means flawless. 

Of course one should not confuse the size of the economy and economic power.  There might be an argument, at least for me, that the PRC economy already or is close to exceeding the USA economy.  But no doubt the PRC economic power is significantly less than USA.  I tend to look at economic power as the size of the discretionary part of the economy.  For every person there needs to be some minimum economic output for subsistence.  Anything beyond that can we really count toward economic power since there will be a choice on how that output potential be used.   And since the value of economic output to reach subsistence is different across different economies depending on the price levels this is where I find a lot of value in PPP approach.  Anyhow, given that a significant part of the PRC GDP is for subsistence given its lower GDP/capita, even if its raw economic size exceeds that of the USA its economic power is significantly lower.  I would argue that for the PRC economic power to exceed the USA its raw economic size may need to be twice that of the USA which would be a couple of decades from now even with optimistic economic projections. 

[jaichind]

Of course once the 2011 ICP comes out and then IMF and World Bank adjust their numbers early 2014 there will be a bunch of headlines like "Shock: China now world largest economy" followed by all kinds of people running around like headless chickens talking about crisis of USA leadership in the world and USA decline etc etc.  When in fact nothing changed.  All that took place was the 2011 ICP fixes some 2005 ICP bugs in terms of PRC pricing levels.  The PRC always had a economy that was close to the USA last few years and it being the largest economy in PPP terms in no way mean its economic power has exceeded the USA.  USA being top dog will be intact for a couple of more decades. 

[TheDeadFlagBlues]

Great thread.

[Gustaf]

Personally, I don't think PPP makes much sense for comparing sizes of economies, but it's a superior measure when it comes to standard of living.

[Beet]

PPP measures quantities. Nominal GDP measures prices. Unfortunately, you can't consume prices. I see this as similar to the gold standard/fiat currency dispute. On one hand you have an artificial measure of value, on the other hand you (have an attempt to) measure real value. It's unsurprising that nominal GDP leads to some truly absurd results, such as 4/5 of the Indonesian economy disappearing in 1998. I mean, it's true they had a crisis and all but... that's extremely unrealistic.

[jaichind]

Of course once the 2011 ICP comes out and then IMF and World Bank adjust their numbers early 2014 there will be a bunch of headlines like "Shock: China now world largest economy" followed by all kinds of people running around like headless chickens talking about crisis of USA leadership in the world and USA decline etc etc.  When in fact nothing changed.  All that took place was the 2011 ICP fixes some 2005 ICP bugs in terms of PRC pricing levels.  The PRC always had a economy that was close to the USA last few years and it being the largest economy in PPP terms in no way mean its economic power has exceeded the USA.  USA being top dog will be intact for a couple of more decades. 

BTW, 2011 ICP came out.  Just like I said

http://www.cnbc.com/id/101626562

"China to overtake US economy"

[Simfan34]

PPP comparisons are useless. You can't adjust the price of international inputs- imported machinery or a ticket from San Francisco to Beijing, particularly in an export-oriented economy, the utility of PPP comparisons is virtually nil. The Chinese economy remains about half the size of the American.

[Beet]

PPP comparisons are useless. You can't adjust the price of international inputs- imported machinery or a ticket from San Francisco to Beijing, particularly in an export-oriented economy, the utility of PPP comparisons is virtually nil. The Chinese economy remains about half the size of the American.

Imports are never counted anyway in GDP- they subtract from it. And internationally traded goods are not price-adjusted for PPP calculations anyhow. That's a common mistake people make when critiquing PPP adjustments. Price index deviations are solely result of weighted non-tradable goods surveyed at different prices.

[Simfan34]

PPP comparisons are useless. You can't adjust the price of international inputs- imported machinery or a ticket from San Francisco to Beijing, particularly in an export-oriented economy, the utility of PPP comparisons is virtually nil. The Chinese economy remains about half the size of the American.

Imports are never counted anyway in GDP- they subtract from it. And internationally traded goods are not price-adjusted for PPP calculations anyhow. That's a common mistake people make when critiquing PPP adjustments. Price index deviations are solely result of weighted non-tradable goods surveyed at different prices.

Well of course imports are subtracted from GDP. That's obvious.