China’s Purchasing Power Economy is 30% Higher Than Official Numbers

The official purchasing power parity (PPP) statistics say that China’s PPP GDP is $24 trillion, but people can buy 30% more than those figures indicate. Reviewing cost of living data and living in China videos indicates that China’s PPP GDP is $31 trillion. There are now comprehensive online comparisons of costs between global cities. This makes it far easier and faster to compare basket of goods prices in different places. It also means the official purchasing power numbers can be checked.

The official PPP claims money goes 1.56 times further in China than in the USA, but internet cost comparisons show money goes 2.0 times further in China.

China’s local currency GDP in 2020 will be about 100 trillion rmb. The currency exchange rate is 6.53 RMB to one US dollar. This means China has nominal GDP of $15.3 trillion for 2020.

The Big Mac conversion indicates that people in Shanghai and Beijing have 2.2 times the purchasing power of the average US city. Comparing purchasing power in different US and China cities it appears the purchasing power appears to be 1.9 to 2.1 times greater in China.

It appears that the correct purchasing power GDP in China is $31 trillion for 2020.

At the end of 2020, China has 280 million cars and 380 motor vehicles. China has generated 7200 TWh electrical power in 2020 which is more than the electrical power generation the US and Europe combined.

There are sources like Numbeo to compare costs of living between cities. Below are many youtube videos of expats and locals in China describing their lifestyle and you can see apartments and homes. China has generally updated the buildings and infrastructure. Definitely, China cities appear to be developed and are comparable to western European cities.

China is officially 61% urbanized. However, this is also understated.

China has about 870 million living in cities (with over 100,000 people) in 2020. This was 850 million in 2019. China is adding 22 million people each year to its cities. There are now 530 million people living in rural areas. China’s definition of rural does not count towns and small cities with 100,000 inhabitants or less. Over half of China’s “rural population” are in what would be classified by world definitions as urban. This would be people in living in towns with over 2500 people which is the US definition. China is more like 80% urbanized based on the US definition.

China implemented Hukuo registration reform which improved the services and rights of migrant workers in cities with less than 3 million people. This improves the rights and living standards of about 100 million people in the cities. This means more of China’s city residents have access to full medical and other services.

The US median price for a one-bedroom apartment was $1,216 as of June 2019.
The median rent in average non-tier one Chinese cities was $250 per month for a one-bedroom apartment and $600 per month in Shanghai.

Summary about cost of living in Shanghai, China:

Family of four estimated monthly costs are $2,597 (¥16,988) without rent, with rent $4,097-5,597
A single person estimated monthly costs are $703 (¥4,596) without rent, with rent $1306-1,903
Cost of living index in Shanghai is 46.97% lower than in New York.
Rent in Shanghai is, on average, 60.84% lower than in New York.

Shanghai Rent Per Month
Apartment (1 bedroom) in City Centre ¥7,679 (US$1200) [range ¥5,000-13,000]
Apartment (1 bedroom) Outside of Centre ¥3,961 (US$600) [range ¥3,000-6,000]
Apartment (3 bedrooms) in City Centre ¥19,000 (US$3000) [range ¥12,000-30,000]
Apartment (3 bedrooms) Outside of Centre ¥9,071 (US$1500) [range ¥6,000-15,000]

Summary about cost of living in New York, NY, United States:

Family of four estimated monthly costs are $4,826 without rent, with rent $8308-10,436
A single person estimated monthly costs are $1,314 without rent, with rent $3,320-$4,716
Cost of living index in New York is 21.36% higher than in Los Angeles.
Rent in New York is, on average, 35.49% higher than in Los Angeles

New York Rent Per Month
Apartment (1 bedroom) in City Centre $3,402 (range 2,500-5,000)
Apartment (1 bedroom) Outside of Centre $2,006 $ (range 1,600-2,700)
Apartment (3 bedrooms) in City Centre $6,610. (range 4,614-10,000)
Apartment (3 bedrooms) Outside of Centre $3,482 $ (range 2,400-5,000)

Summary about cost of living in Chongqing, China:

Family of four estimated monthly costs are $2,024 (¥13,239) without rent, with rent $2400-2600
A single person estimated monthly costs are $553 (¥3,619) without rent, with rent $743-882
Cost of living index in Chongqing is 57.51% lower than in New York.
Rent in Chongqing is, on average, 90.83% lower than in New York.
Apartment (1 bedroom) in City Centre ¥2,150 (US$329)
Apartment (1 bedroom) Outside of Centre ¥1,242 (US$190)
Apartment (3 bedrooms) in City Centre ¥3,460 (US$575)
Apartment (3 bedrooms) Outside of Centre ¥2,450 (US$375)

Summary about cost of living in Nanjing, China:

Family of four estimated monthly costs are $2,110 (13,806¥) without rent, with rent $2500-2800
A single person estimated monthly costs are $578 $ (3,782¥) without rent, with rent $900-1200
Cost of living index in Nanjing is 55.54% lower than in New York.
Rent in Nanjing is, on average, 83.47% lower than in New York.

Summary about cost of living in Phoenix, AZ, United States:

Family of four estimated monthly costs are $3,058 without rent, with rent $4619-5,110
A single person estimated monthly costs are $877 without rent with rent $1874-2162
Cost of living index in Phoenix is 33.44% lower than in New York.
Rent in Phoenix is, on average, 61.97% lower than in New York.

Phoenix Rent Per Month
Apartment (1 bedroom) in City Centre $1,285
Apartment (1 bedroom) Outside of Centre $997
Apartment (3 bedrooms) in City Centre $2,052
Apartment (3 bedrooms) Outside of Centre $1,561

Summary about cost of living in San Francisco, CA, United States:

Family of four estimated monthly costs are $4,372 without rent (using our estimator).
A single person estimated monthly costs are $1,205 without rent.
Cost of living index in San Francisco is 6.67% lower than in New York.
Rent in San Francisco is, on average, 8.70% higher than in New York.

Summary about cost of living in Taipei, Taiwan:

Family of four estimated monthly costs are $3,118 (NT$87,172) without rent (using our estimator).
A single person estimated monthly costs are $845 (NT$23,647) without rent.
Cost of living index in Taipei is 32.68% lower than in New York.
Rent in Taipei is, on average, 76.41% lower than in New York.

SOURCES -Numbeo, youtube videos, urban transition, China Statistics
Written by Brian Wang, Nextbigfuture.com

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