Home > China, International Trade > Is China Adding or Subtracting to World GDP Growth?

Is China Adding or Subtracting to World GDP Growth?

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Derek Scissors makes an interesting but somewhat contradictory point:

There’s this:

The key is the idea of “contribution.” This sounds like China is helping the rest of the world grow faster. In fact, if we are talking about gross domestic product (GDP), China is only helping itself grow faster. It’s reducing everyone else’s GDP.

And later, this:

GDP certainly understates China’s economic contribution to the world

Both are correct.

How can that be? Students, I would like to hear your analysis!

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  1. Albin
    January 16, 2013 at 9:08 pm

    In my opinion, China is only helping itself grow faster because as u mentioned, GDP primarily deals with productivity of that particular country……a high GDP for China means higher productivity among the Chinese, thus a higher standard of living FOR the Chinese population…….the punch line here, i think, is this…..that particular high GDP figure(carrying faster growth and better SOL to the Chinese) when added to the world GDP shows particular high figures, that are not a true reflection of the the vast divides in SOL between lets say China and a majority of the African countries.

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