25 years ago China retained political oppression, chose more market economy and more globalization and for now it has worked

Wilson Quarterly describes China’s economic transformation since 1989. In 1989, China made the choice to go with political repression, a market economy and globalization.

China’s economy has grown to 24 times its size in 1989. The U.S. economy, by contrast — despite robust economic growth over the past 25 years — is slightly less than three times its 1989 size.

NOTE – The Wilson Quarterly data is for the overall economy and does not adjust for population growth in China or the US. There are other figures at Wilson quarterly for purchasing power parity and for per capita.

Economists previously thought China would pull ahead by 2019, but the glacial US recovery has allowed the gap to narrow more quickly.

Wikipedia list of GDP figures based on China’s NBS statistics.

US gross domestic product in trillions of current dollars (not inflation-adjusted).

Dec 31, 2013 17.08 trillion
Dec 31, 1989 5.76 trillion

US Gross Domestic Product per capita — current dollars (non-inflation-adjusted).
Oct 1, 2013 53,259.33
Jul 1, 1989 22,803.73

US Population
Nov 1, 2013 316.98 million
Jul 1, 1989 246.82 million

A renowned Chinese economist Li Yining refuted the notion that China’s economy is in decline while noting that the previous high growth rates were “not normal.” Li said that China’s current GDP growth should be higher than the released figure, citing that housing construction in rural areas, the significance of which is growing fast in China, is not included in the country’s GDP calculation while it usually is in developed countries.

According to Li, other fast-developing fields such as the incomes of maids and nannies as well as rural roads and bridges built in charity programs were not encompassed by China’s GDP either.

China’s ‘extreme poverty’ rate, defined as the rate of people living on $1.25 per day, has fallen from 60 percent in 1990 to less than 12 percent in 2009, according to the World Bank (more recently, a Gallup survey suggested that by 2012, the rate fell to only 7 percent).

China’s percentage of people living on the equivalent of $2 a day (a common measure of poverty) has fallen from almost 85 percent to about 27 percent.

The number of Chinese people with more than $1 million in disposable assets (high net worth individuals) has increased 60 percent over the last five years. In 2013, there were 758,000 Chinese millionaires, the fourth largest amount in the world, according to a study by Capgemini Financial Services Analysis and the Royal Bank of Canada.

China’s economy is the second largest in the world (after only the U.S., which it is projected to eclipse by 2019 at the latest)

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