Under the old calculation, China had a GDP of $8.8 trillion, about 15% of global GDP of $59 trillion. According to the new calculation, China’s economy shrank by 40% to $5.3 trillion, which is about 10% of global GDP of $55 trillion.
In this survey, China submitted price statistics from 11 cities, which still leaves out rural areas — and so may not be as accurate as possible. The report said it didn’t believe the estimate of China’s GDP was off by more than 5%.
Under the new calculations, India had 4% of global GDP, Russia had 3%. Their shares of global output were higher than they would be when measuring at market rates.
The $5.3 trillion PPP figure is still about 70% more than the straight exchange rate amount of about $3.1 trillion. The PPP exchange rate would be about 4.3 yuan to 1 USD. If the exchange rate were to head to the PPP rate then the yuan would continue to appreciate at 7.5% per year until about 2014/2015.
The study said the survey “should not be used as indicators of the under- or overvaluation of currencies.”