Russian President Putin once said in an interview that my country's total economic output has exceeded that of the United States. Everyone knows that he is based on GDP calculated based on purchasing power parity (PPP).
. We know that under normal circumstances, we will still use the exchange rate method to count the GDP of each country. If calculated based on the exchange rate , the total GDP of the United States in 2021 will be US$23039.6 billion (more than US$23 trillion), and my country's GDP will exceed 114 trillion yuan, equivalent to about US$17.73 trillion. In other words, China's GDP in 2021 is about 77% of that of the United States, not exceeding that of the United States.
A country's GDP can only have an accurate value, it cannot make people unable to find the truth like Rashomon . But in fact, the final GDP results obtained by different calculation methods are indeed different, and there are many ways to calculate GDP internationally, and each method has its own rationality. Like the exchange rate method, can you say there is something wrong with it? You want to export or import goods/services. Do you say you are calculated based on purchasing power parity? Will other Congress recognize it? Similarly, you can't say that purchasing power parity is meaningless. It's like if you use the same money to build a high-speed rail in China or the United States, the mileage you can build in China is four or five times that of the United States.
So, is there a way to combine the advantages of the exchange rate method and the PPP method so that we can better compare the GDP of each country?
Someone proposed the parity-to-exchange rate method, and is to combine the exchange rate method with the PPP method to obtain its average value. This method has both certain comparability and certain integrity, and seems to be more reference value than the separate exchange rate method or the PPP method. But simply taking the average is a bit too rough.
In fact, the correlation coefficient of of GDP and foreign trade in countries around the world is different, so the "exchange rate (USD) quantity (related to foreign trade)" of its GDP is also different. If the GDP containing the "exchange rate" is calculated separately and combined, it should better reflect the true situation of GDP.
Foreign trade dependence is also known as Foreign trade coefficient (traditional foreign trade coefficient), which refers to the proportion of a country's total import and export volume to the country's GDP or GDP . Among them, the proportion of total imports to GNP or GDP is called import dependence, and the proportion of total exports to GNP or GDP is called export dependence. The degree of dependence on foreign trade reflects a country's dependence on the international market and is an important indicator to measure a country's degree of opening up to the outside world.
Simply put, the GDP calculation method adopted in this article is to calculate the trade-related GDP according to the exchange rate method, the rest of the GDP according to the PPP method, and finally add the two, and the result is the actual GDP of each country.
What are the main GDP comparison methods in the world?
Currently, there are many international comparison methods for GDP. We mainly introduce the following: exchange rate method, PPP method, parity-to-exchange rate method and major power trade method:
exchange rate method is the most commonly used method in international comparison. It is to convert the GDP calculated by countries in their own currencies into a common currency unit (usually US dollars) at a certain exchange rate. According to maintaining exchange rate stability, the exchange rate method can be divided into the market average exchange rate method, the World Bank chart set method and the price adjustment exchange rate method. However, since the exchange rate is affected by many factors, such as savings investment, capital flows, political and military situation, psychological factors and speculative activities, etc., its continuous adjustments are not directly related to social development and progress, so it cannot truly reflect the economic development status of a country and the gap in the economic development level of each country. It is likely to be used as an auxiliary method in the future.
PP method is a more controversial method. It refers to the price ratio of commodities in different countries. That is, the amount of commodities that can be purchased in a unit of currency in the benchmark country. When purchasing in the comparison country, it requires the amount of currency in that country. According to the number of reference countries, there are bilateral and multilateral comparisons. Since it was adopted by the UN Statistical Commission in 1968, it has been undergoing 6 stages during the PPP-centric international comparison in 1968. More than 120 countries have participated in this comparison, but due to the large workload, it has not been widely used worldwide.
parity-to-exchange rate method is to combine the exchange rate method with the PPP method to obtain its average value. This method has both certain comparability and certain integrity. Due to the diversity of the world, the marketization level varies greatly from country to country. The price level of each country is incomparable in many fields. The exchange rate method is used to calculate, and there is a tendency to weaken the economic strength of countries with low marketization. The PPP method is suspected of strengthening weak countries (this reinforcement is derived from "calculation" and is not true). Therefore, the economic scale calculated using this method should be closer to the actual situation than the simple exchange rate method or purchasing power evaluation method. The physical quantity calculation method is a method of directly comparing the main products of each country based on physical quantity. It can intuitively reflect the economic strength of a country. Currently, China's output of major industrial and agricultural products such as grains, meat, cotton, fruits, steel, coal, cement, fertilizers, household appliances, automobiles, mobile phones, telecommunications equipment ranks first in the world; my country's textiles and clothing account for 13% of the world's total trade volume has ranked first in the world for many years; my country's oil consumption has jumped to the world's first; in 2020, my country's power generation in the United States is the second largest power generation country in the world after my country - the power generation in 2020 fell by 2.9% year-on-year, with a total of about 4009.085 billion kilowatt-hours, about 15.18% of the global power generation and about 54.05% of China's power generation. In other words, my country's power generation has risen to 1.85 times that of the United States in 2020. 7417.04 billion kWh (nearly 7.42 trillion kWh, or 7417.04 terawatt-hours), which is about 28% of the global power generation, continues to rank first in the world. .
Trade Law of Major Countries is an international comparison based on the principle that the overall economic participation of a country in world trade is closely related to the size of its country (including population, area and other factors) and shows an inverse proportional relationship. Due to the needs of its own development, the economic sectors of major countries that participate in international trade are only part of their total economic output. Most of their economic sectors serve their own economies. The domestic demand economy is the economy. Therefore, generally speaking, the ratio of total import and export trade to GDP for a small country, such as the Netherlands, Singapore, , and other countries, can reach a very high; but for a large country, such as the United States, Japan, and Brazil, , and other countries, this ratio cannot be too high under the current economic and technological development level. For example: In 2003, although the internationalization level of the United States and Japan was relatively high, the ratio of import and export trade to GDP was about 20%. Therefore, as a big country, China's ratio cannot be too high, and the degree of internationalization of the economy should be significantly lower than that of the United States and other countries. In this way, this ratio can be used to estimate China's GDP. This method can also estimate the GDP of other comparative countries.
Among these methods, the exchange rate method and the PPP method are the two most important international comparison methods. They are also the most commonly used methods by the United Nations and various international organizations and institutions. Therefore, this article only compares and discusses these two methods in detail.
Purchasing Power Parity Theory can be traced back to the Spanish Salamance school in the 16th century. At the same time, the shadow of purchasing power parity can be seen in the 18th century Swedish scholar Chistienim's explanation of the reasons for exchange rate depreciation, as well as in the "Numbers Dispute" in the 19th century. Famous classical economists such as David Ricardo , John Mueller , Marshall , etc. also proposed similar ideas, but it was not until 1922 that Swedish economist Kassel truly proposed the purchasing power parity theory in the full sense. In his book "Money and Foreign Exchange after 1914", Kassel regards purchasing power parity as a theory of determining exchange rates. The basic idea is that the value of a currency depends on the amount of goods and services that the currency can purchase in the issuing country, and the exchange rate between the two currencies depends on the ratio of goods and services that they can purchase, that is, there is a direct connection between the exchange rate level and the price level of each country. Since its introduction, the purchasing power parity theory has caused a great sensation, and people have become extremely interested in it, and controversy about it is constantly being made. Since its introduction, the purchasing power parity theory has attracted the attention of many scholars. Various new inspection methods and technologies are constantly being introduced to examine whether purchasing power parity is valid.According to the development process of econometric and the inspection technology, it can be mainly divided into: early least squares method (OLS); real exchange rate random walk hypothesis and unit root inspection; cointegration technology; long-term data; group data method and nonlinear testing method.
Purchasing Power Parity (PPP) method, that is, by calculating the purchasing power of currencies of each economy, eliminating the price difference factors between each economies before comparing. According to the purchasing power method, the World Bank also calculated a ratio. This algorithm not only includes the ratio of various currencies to the US dollar in the trade of nationals by the exchange rate algorithm, but also includes the ratio of goods and services that are not traded within each country. Especially in terms of services, since modern and relatively developed countries generally account for the largest proportion of services, it is indeed unreasonable to not compare this part. According to the purchasing power algorithm of the World Bank, the ratio of RMB to US dollar is about 1 US dollar to 4.2 RMB.
As early as the 1950s, my country had a material accounting system (MPS) in order to be suitable for internationally general methods, standards and caliber ranges, on the basis of widely absorbing the research results of SNA in the world and the practical experience of various countries, 1992 was promulgated and implemented. In 1994, the World Bank issued a special report "China Per Capita GNP", which significantly increased the 1992 GDP data obtained by China in 1992 (the range reached 34.3%). Expert of the National Economic Accounting Department of the National Bureau of Statistics, Xu Xianchun, , published articles in succession, pointed out that although China's National Economic Accounting does have many problems due to factors such as the imperfect statistical system, low quality of statistical data and institutional transition, based on his many years of statistical work experience, China's GDP is not as large as the World Bank pointed out. However, some places are overestimated. In the end, the total GDP does not change much or is slightly underestimated. Scholar Wang Xiaolu also believes: "There are quite a lot of loopholes in the statistics of China's GDP. There are many parts that are not included. But generally speaking, in the 1990s, we thought that false reports were more serious than underreporting." This shows that the general view of domestic scholars is still that China's official statistics can basically reflect the truth of GDP. In March 1999, the World Bank delegation came to China to conduct a comprehensive investigation of China's GDP accounting, related statistical work, and price system. Then it published an inspection report entitled "China Statistical System in Conversion" [27]. It believes that China has a high-standard statistical system. When publishing China's per capita GDP 1 in its publications, it directly uses China's official data for calculations. It basically no longer makes adjustments; at the same time, it uses China's official data to revise China's per capita GDP data in previous years. To sum up, my country's GDP data has gradually been in line with international standards and has been recognized by international organizations such as the World Bank and IMF. Even without permission from the National Bureau of Statistics of my country, it will never modify and publish my country's statistical data. International comparison of GDP is comparable and feasible. It has become an important means for my country's macroeconomic management departments to understand the economic operation. It also has certain practical significance for guiding the formulation of economic development strategies, medium- and long-term plans, annual plans and various macroeconomic policies. It has a large extent of serving the comprehensive national strength. It helps to safeguard our country's political rights and economic interests. We should provide more resources for achieving international comparisons to keep our statistical infrastructure following the pace of economic development.
After the abandonment of the dollar gold standard system in 1933, the exchange rate systems of countries around the world also changed. Specifically, they can be divided into three categories: official exchange rate system, floating exchange rate system, and managed floating exchange rate system. The formation and fluctuations of exchange rates are largely affected by the economic policies and expectations of various countries. For example, now, trade barriers and foreign exchange restrictions are everywhere. Especially the existence of official exchange rates. The situation reflected by the exchange rate is far from the actual situation.When used for comparison of the overall scale of the economy, all major commodities and labor of each country are required to participate in international trade and free competition. The exchange rate is free to float with the market supply and demand relationship. For countries that officially control the exchange rate, the exchange rate is not determined by the market supply and demand relationship, and therefore cannot accurately reflect the relationship between the country's currency and other countries' currencies. For countries that implement a floating or floating exchange rate system for , exchange rate changes are affected by a variety of factors, including economic factors and non-economic factors such as imported product prices, capital transfers, balance of payments, domestic interest rates, inflation, economic growth, foreign exchange management policies, and other economic factors, as well as non-economic factors such as speculation, emergencies, changes in political situations, psychological expectations, etc. Therefore, the exchange rate law cannot accurately reflect the actual situation of a country. Another big factor affecting exchange rate fluctuations is the international credit, international investment and other capital transactions in the international financial market, namely, the international hot money , which is known as "Flying Swallow Capital", which is irrelevant to the purchasing power of the currency. The exchange rate is in constant changes. Once the appreciation causes a country's GDP to grow actively. Otherwise, it can cause a country's GDP to fall instead of rising. The paradox of "the development becomes more and more backward". Sometimes a country can turn from a poor country into a rich country due to changes in exchange rates without a big change in GDP.
Since the exchange rate method cannot accurately conduct international comparisons, a more effective method is needed to replace the exchange rate conversion algorithm, thus opening the prelude to ICP. ICP is a cross-border comparative system that aims to provide internationally consistent prices and mass of GDP and its components, chaired by the United Nations Bureau of Statistics, the World Bank and other organizations. In 1945, Kravis analyzed the shortcomings in exchange rate-based international comparisons earlier. Started to use PPP to make a bilateral comparison of the total economic output between Europe (English, French, German and Italian countries) and the United States. Since the 1950s, international organizations such as the Organization for Economic Cooperation and Development (OECD) and Latin American Economic Commission have also begun to explore this aspect of theory and practice. In 1968, a panel of experts submitted a report entitled "International Comparison of Total Production, Income and Expenditure" to the fifteenth session of the United Nations Statistical Commission. Later, based on the summary of the international comparative experience of implementing international comparative organizations, it decided to implement global ICP. The commission of the United Nations Statistical Commission, Cravis, Hearst and Summers, co-chaired the development of this project plan. It created an international comparative method based on PPP theory.
Purchasing Power Parity Theory Specific Contents
Purchasing Power Parity Theory is a very long-standing exchange rate decision theory . In 1922, Swedish scholar Kassel systematically expressed it as: the value of a currency lies in its purchasing power, and the comparison of the purchasing power between the two currencies determines the exchange rate between the two currencies, that is, there is a direct connection between the exchange rate and the price level of each country.
One-price law : A country's internal commodities can be divided into two categories: one is the price difference between regions, which can be eliminated through arbitrage activities, which is tradable goods; the other is the nature of the goods themselves, or the transaction cost of arbitrage activities is too high, and the price difference between regions cannot be eliminated through arbitrage activities, which is the non-tradable goods. If factors such as transaction costs are not considered, the prices of the same tradable goods are the same in various places. Therefore, the meaning of the law of monovalent can be expressed as the price of the same tradable commodity in different countries using the same currency should be the same.
Purchasing power parity theory mainly includes two types: absolute purchasing power parity theory and relative purchasing power parity theory.
The assumption of the absolute purchasing power parity theory is: ⑴ The law of one price is valid for any tradable commodity; ⑵ In the compilation of price indices between the two countries, the weights of various tradable commodities account for equal.
It means that the exchange rate depends on the ratio of the price level of tradable goods measured by different currencies, that is, the ratio of the purchasing power of tradable goods for different currencies.In modern analysis, some scholars believe that a country's untradable goods have various connections with tradable goods, so the law of one price is also valid for untradable goods.
Relative Purchasing Power Parity is also called weak Purchasing Power Parity , which is obtained after relaxing the relevant assumptions of absolute Purchasing Power Parity. This theory believes that the law of monovalent cannot always be true, and there are differences in the calculation methods of general price levels in different countries, so the general price levels of each country are not equal when calculated in the same currency, and there is a certain degree of deviation.
Its economic meaning is: the exchange rate changes of the currencies of the two countries depend on the fluctuations in the price levels of the two countries.
Nominal exchange rate is the price of a currency of one country relative to the currency of another country. The actual exchange rate is obtained by excluding the impact of the relative inflation level of the two countries by the nominal exchange rate. It reflects the relative prices of goods and services between the two countries. The principle of
Purchasing Power Parity Method ICP has gone through a development process from bilateral to multilateral to subregional comparison (multilateral comparison within the region and then combined into global comparison). However, the basic idea of its research is to use price surveys and use the expenditure method to calculate the true ratio between currency purchasing power in different countries (PPP is the currency conversion coefficient) to replace the exchange rate. Convert a country's GDP into GDP expressed in a certain benchmark currency or international currency. Its calculation steps are divided into the following steps:
(1) Determine a unified detailed classification of GDP according to expenditure method . Select appropriate "package" goods and service items. The classifications used in the current international comparisons are basically based on SNA. Some countries have made local adjustments. All final goods and service items are divided into five major categories: residents' final consumption expenditure, social final consumption expenditure, total fixed assets formation, liquid capital increase and net export . Then, subcategories are divided into each major category. There are 163 basic categories. Among them, residents' final consumption expenditure is divided into 128 categories. Social final consumption expenditure is divided into 3 categories. Total capital formation is divided into 31 categories. 1 International balance of payments difference 1 categories. For example, there are rice, other cereals, pasta made with salt, milk, eggs, beef, fish, seafood, milk, fruit, vegetables, oil, sugar, etc. in food. Each basic item must have at least 5 products.
(2) According to the above basic classification, the selected "package" products, namely goods and services, the basic data such as price, quantity and expenditure amount are collected, and the price ratios of each group of items, various types and comprehensive. When determining representative goods and services, the basic principles of their choice must be followed: identity, comparability, and identical representativeness. The identity and comparability of goods require that the product specifications, grades, models, packaging, materials, design and sales conditions of the country or region should be basically the same and the representativeness of the goods is comparable. The principle of representativeness of the goods required that the specifications investigated should have a higher representativeness between the comparison countries or regions. When determining prices, please note that some countries subsidies for certain commodities are excluded. If there is any, the actual cost price can be used. (3) After obtaining the parity of each basic classification, the expenditure data of each country is converted into a benchmark currency or a certain international currency unit. Then summarize and calculate the comprehensive price of each country and the PPP of the total GDP. In international comparison, according to the number of comparison objects, it can be divided into "bilateral comparison" and "multilateral comparison" according to the number of comparison objects. The former involves only two countries. The latter involves multiple countries. The calculation methods of "bilateral comparison" and "multilateral comparison" PPP index are different. The latter is more complicated.
Its calculation steps are divided into the following steps:
(1) Determine a unified detailed classification of GDP according to the expenditure method. Select a suitable "package" of goods and services. Currently, the classification used in international comparisons is basically based on SNA. Some countries have made local adjustments. All final goods and services are divided into five major categories: residents' final consumption expenditure, social final consumption expenditure, total social final consumption expenditure, total fixed assets formation, increase in liquid capital and net export. Then there are 163 basic categories in each major category. Among them, residents' final consumption expenditure is divided into 128 categories. Social final consumption expenditure is divided into 3 categories. Total capital formation is divided into 3 categories. Balance of payments is divided into 1.For example, there are rice, other cereals, pasta made with salt, milk, eggs, beef, fish, seafood, milk, fruit, vegetables, oil, sugar, etc. in food. Each basic item must have at least 5 products.
(2) According to the above basic classification, the selected "package" products, namely goods and services, the basic data such as price, quantity and expenditure amount are collected, and the price ratios of each group of items, various types and comprehensive. When determining representative goods and services, the basic principles of their choice must be followed: identity, comparability, and identical representativeness. The identity and comparability of goods require that the product specifications, grades, models, packaging, materials, design and sales conditions of the country or region should be basically the same and the representativeness of the goods is comparable. The principle of representativeness of the goods required that the specifications investigated should have a higher representativeness between the comparison countries or regions. When determining prices, please note that some countries subsidies for certain commodities are excluded. If there is any, the actual cost price can be used. (3) After obtaining the parity of each basic classification, the expenditure data of each country is converted into a benchmark currency or a certain international currency unit. Then summarize and calculate the comprehensive price of each country and the PPP of the total GDP. In international comparison, according to the number of comparison objects, it can be divided into "bilateral comparison" and "multilateral comparison" according to the number of comparison objects. The former involves only two countries. The latter involves multiple countries. "Bilateral comparison" and "multilateral comparison" The calculation methods of PPP index are different. The latter is more complicated.
Although the PPP method has many advantages, its shortcomings cannot be ignored. More research should be done in the future to adjust and resolve.
(1) represents the contradiction between product representativeness and comparability [56l. When implementing the PPP method, since there are countless types of commodities in the real economy, it is impossible to investigate all commodities when calculating PPP, and can only select a part of the representative goods. When selecting representative specifications, we must follow the "central selection" and "commonity" standards, that is, representativeness and comparability. Representation means that the products investigated have sufficient market share. Therefore, it can fully represent the basic classification expenditure of this type; comparability means that the specifications, performance and quality of the representative goods investigated in different countries must be the same. Only in this way can it be meaningful to compare their prices. Without representation, it is impossible to measure the actual GDP level of the participating countries without comparability. However, due to the different levels of economic development, different social systems, natural conditions, resources, management systems, living customs, consumption levels and consumption structures, representative goods may not be comparable, and comparable goods may not be representative. Therefore, the larger the number of participating countries, the greater the difference, the more difficult it is to choose the specifications of goods and services.
(2) The problem of economic structure differences. Since there is a big difference between the economic structure of each country, especially the economic structure of developing countries, , and the economic structure of developed countries, therefore, using PPP as an evaluation benchmark may exaggerate the GDP of low-income countries. The reason is: First, the international average price of various expenditures used when calculating PPP is based on the price data reported by each country and the classified expenditure amount of GDP of each country. Since developed countries have a larger GDP share, the weighting role of developed countries is greater than that of developing countries, and the level and structure of international average prices will be biased towards developed countries. The performance of the product is affected to a certain extent. Secondly, the calculation of PPP must follow the principle of physical property. This principle ignores the differences in non-physical properties of goods such as purchase and sales environment and service level. In fact, even similar products have different sales environments and after-sales services. The value of additional services contained in them is different. The price of the same product sold in high-end shopping malls should be higher than the price sold in rural free markets. Overall, the overall economic quality (including service level) of low-income countries is far inferior to that of developed countries. The quality and price of representative goods are lower. If calculated according to the principle of physical property, PPP will overestimate the actual purchasing power of the currency of low-income countries.
(3) The ICP data quality of each participating country is difficult to control.The quality of ICP data is affected by three aspects: First, the methods adopted by countries when collecting, aggregating and calculating data are not uniform, which leads to a large gap between the data used by countries for comparison. In addition, for most developing countries and countries with economies in transition, the data on the pricing and GDP expenditure required by ICP cannot be directly obtained from existing statistical data. Second, it cannot solve the problem of distortion of non-trade and labor prices in developing countries. Especially, it cannot solve the price problems of price control and disguised control countries. Third, the collection and processing of price data has great flexibility. The impact of artificial factors on the quality of ICP data is that the PPP coefficient may affect the interests of countries in the international community. This prompts participating countries to provide international organizations with ICP data that is beneficial to their own countries to international organizations based on their own interests, thus making the ICP data lack authenticity.
(4) is difficult to promote. Since the PPP law has high requirements for national accounting data, this is more difficult for developing countries with relatively weak national accounting, and its implementation requires a large amount of manpower, material and financial resources, so countries participating in ICP activities are still incomplete. There is relatively lack of global universality. Although the World Bank has made a lot of efforts to provide a considerable amount of funds for each stage of ICP work, the overall funding is still relatively insufficient. Only the "shortcut method" can be used for non-ICP participating countries to estimate the results are very inaccurate. Therefore, most developing countries have a positive negative attitude towards the PPP law. It is based on developed countries. It does not conform to the national conditions of developing countries. It often overestimates the economic strength of developing countries but underestimates developed countries.
(5)The more countries you participate, the greater the volatility of the calculation results. In ICP, the conversion factor has a high volatility. Even in the same comparison group, the results obtained will be inconsistent due to inconsistencies in the calculation methods. If different treatments of the two principles of comparability and representativeness of the priced samples will result in different results. If the comparability of specifications is emphasized in the PPP price survey, the comparability of specifications is ignored. The calculated PPP will reflect the price comparison relationship of traded products in the international market. This will be very close to the exchange rate. If representativeness is emphasized in the PPP price survey and comparability is ignored, for low-income countries, the calculated PPP will be seriously above the exchange rate. So in different countries, there are sometimes two opposite conclusions: countries with higher GDP in this group may be exactly the opposite in that group. Especially when comparing more countries together, there is a high possibility that the order of the relative GDP levels between two countries will change. (6) Price subsidy problem]. Both developed and developing countries have different levels of price subsidy systems. For example, many service goods such as medical care, education, housing, transportation, etc. are not provided at market prices. The government provides certain subsidies. Since the types of subsidies vary from country to country, the amount is also different. It is very difficult to figure out the market prices of these service goods in each country. Therefore, the factor of price subsidies will affect the comparability. (7) There are also some other defects, such as: long investigation time The data results are severely lagging The timeliness of the application The data lacks continuity The return rate of the
exchange rate, the return rate of the purchasing power parity
Let’s first look at the GDP data of each country in the top 10 calculated by the exchange rate method and the PPP method:
calculated by the exchange rate method:
� tml0GDP
in 2020 calculated by the exchange rate by countries in 2020 calculated by the ppp method:
GDP
GDP
in 2020 calculated by the PPP method by countries in 2020 calculated by countries in 2020 What should be the GDP of countries in 2020 calculated by countries in accordance with the PPP-exchange method (hereinafter referred to as the Trade Amendment Method) according to the provided trade dependence combined with the PPP-exchange rate method (hereinafter referred to as the Trade Amendment Method)?
China's foreign trade dependence trend in the past 20 years is as follows:
China's foreign trade dependence in 2020 was 31.6%, so it can be calculated that my country's trade revised GDP is:
24.27*(1-31.6%)+14.72*31.6%=16.6+4.65=21.25 trillion US dollars (international dollar)
And the United States' GDP in 2020 was 20.89 trillion US dollars
Therefore, China's trade revised GDP has indeed surpassed the United States in 2020.
The GDP of countries around the world calculated by the PPP method in 2021 has not yet been released, so we will not calculate it. Of course, since China's GDP growth rate in 2021 was 8.1%, while the US GDP growth rate was 5.7%, and the US trade dependence in 2019 was 19.4%, we can be sure that China's trade revised GDP will still exceed that of the United States in 2021.
In 2019, China's trade revised GDP was basically the same as that of the United States, so the specific figures were not provided.
Conclusion:
Trade correction GDP is a correction of the purchasing power parity GDP calculation method based on trade dependence. The basic idea is to calculate the exchange rate-related part of GDP at the exchange rate price, and add it to the exchange rate-independent GDP to obtain a GDP data that is both in line with its actual domestic purchasing power and in line with its international purchasing power.
Whether calculated based on purchasing power parity or trade amendment, China's GDP has surpassed the United States in 2020 and 2021. Therefore, China is undoubtedly the world's largest economy at present.
