Welcome to Dr Lincoln's blog

Welcome for visiting my blog. Hope you enjoy the visit and always welcome back again. Have a nice day!


How much is China's per capita income?

Comments on Zhengjun Zhang and Sarah Du "China needs to turn its capital ideas into SOE reform", 30/07/2015

Are the facts in the following paragraph all correct?

"China has several quite unique characteristics. It has a large population (close to 1.4 billion); it is a middle income country with US$3200 per capita disposable income in 2014; and it is a transition economy that is still developing its market mechanisms and institutional systems. With these characteristics, China needs to keep a large toolbox to deal with potential challenges on its development path."

I just had a look at the China section of the CIA's World Facebook that states the Chinese economy was $10.36 trillion in 2014. With the population less than 1.4 billion, that would imply a bit over $7,000, more than double of the $3,200 used by the authors in this post.

How can the difference be so large? One of the two must be seriously incorrect.

My impression of memory is that China's per capita income was more likely greater than US$5,000 in 2014.

PS: Sorry, I didn't realise the authors were talking about disposable income as opposed to per capita income when I questioned its use. My apology.

But, why did they use disposable income in such context? Isn't it strange? Isn't per capita income better and more in line with most discussions?  It certainly caused confusion to me, at least, because many people may naturally think it was per capita income as an indicator of the income level there.

PPS: In the wake of the previous post titled "Is China a market economy?" by Gary Clyde Hufbauer and Cathleen Cimino-Isaacs, China should probably consider the potential of its SOEs and particularly its governance and public disclosure of relevant information to make the Chinese a market economy, if the argument that it is not a market economy has merits.

Only domestic consideration is not enough and any international implications must be taken into account. Otherwise, China may encounter more problems in trade and investment, including anti dumping against its SOEs exports as well as overseas investment by SOEs.

Having said that, I am personally not sure the argument that China is not a market economy is meritorious.

No comments:

Post a Comment