China'S GDP Should Be Calmly Treated By "First".

Recently, the International Monetary Fund released comparative data show that according to the purchasing power parity, China's total GDP in 2014 will reach $17 trillion and 600 billion, more than the US $17 trillion and 400 billion level in 2014, ranking first in the world.

Similar statistics are also given by the world bank, the three largest international organization in the world.

If in practice

The total amount of GDP in China in 2014 was about 10 trillion and 400 billion dollars, only 60% of the total GDP in the United States.

Why is the result of the two conversion methods so different? Which method is more scientific? I think it is very important to clarify the concept between the two exchange rates.

The so-called real exchange rate is

Based on the nominal exchange rate used in the paction, the exchange rate obtained after the influence of the price level is excluded.

That is to say, unless the price gap between the two countries is very large, the real exchange rate is only a correction of the nominal exchange rate.

Purchasing power parity principle is based on the actual purchasing power of a country's currency to goods and services, and thinks that the same commodity should have the same price in different countries.

At this point, the price ratio of the commodity in different countries is the level that the exchange rate should achieve.

It can be said that the exchange rate level calculated by purchasing power parity is an appropriate standard, that is, the level of exchange rate should be, and the real exchange rate is a real standard, that is, the actual exchange rate level of the current supply and demand equilibrium for the market.

The most interesting

The parity index is a big Mac index published annually by the Economist magazine since 1986.

The magazine uses McDonald's Big Mac hamburger as the target commodity to calculate the exchange rate level between the two countries based on the principle of purchasing power parity.

It should be said that the calculation and construction of this index reflect the essence of the principle of purchasing power parity: paying attention to the actual goods and services produced and consumed by a country, and taking this as the basis for comparing the total wealth of the two countries.

From this perspective, it is more convincing to compare the two countries' economic aggregate with the principle of purchasing power parity.

However, the cost of production factors, the tax level of a country and other factors will have an impact on the final price of the product.

What's more, economic development does not produce hamburgers, but the theory of purchasing power parity can hardly reflect the differences in economic structure.

In other words, the difference between purchasing power parity and real exchange rate is probably an external reflection of the differences in economic structure between the two countries.

However, even if we can find a basket of suitable target commodities, the comparison based on the purchasing power parity principle still stays at the actual output level, but does not reflect the difference of productivity.

Furthermore, no matter what exchange rate method is used to calculate and compare the total GDP of the two countries, it can only reflect the total output of two countries in a certain year.

This comparison can not see the inherent structural differences of the economy, and can not see the resource cost of output input, and the technological level and innovation ability behind output can not be seen.

It is true that without continuous investment and technological innovation, it is difficult for a country's GDP to maintain its high speed growth for a long time.

China has experienced 30 years of rapid growth and has made remarkable achievements in the world.

But overly concerned about GDP, ignoring the economic structure and development mode behind GDP, to a large extent, is putting the cart before the horse.

At present, China's economy is in a critical period of strategic pformation, economic development has entered a new normal, the task of economic restructuring is still grim, the level of energy consumption per unit GDP needs to be further improved, and the income distribution mechanism is also facing major reforms.

More importantly, with the disappearance of demographic dividend, environmental dividend and resource dividend in China, the development of GDP in the future can only rely on the further improvement of productivity level.

Even if we can continue to invest a lot of labor and resources in the short term, we will produce many commodities with exchange value, but this is just like drinking poison to quench thirst.

As Lester, a representative of the school of history, said when he rebutted Adam Smith, "what matters is not value, but productivity."

Therefore, we should not only focus on GDP as a representation and result, but also closely monitor the core goal of productivity.

This is precisely what our country should take the initiative to reduce the target of GDP growth.