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Unformatted text preview: Clipping the dragon's wings Published 12/20/2007 | Featured Articles and Highlights The Economist Dec 19th 2007 | HONG KONG From The Economist print edition China's economy is smaller than was thought AMERICANS may well be delighted by new figures that show China's GDP is 40% smaller than previously thought. Has the devious Beijing government been massaging the numbers, as communist planners are wont to do? Hardly. China's GDP in yuan terms remains unchanged. What has happened is that the World Bank has changed the calculations it uses to make international comparisons of the size of economies. Converting a poor country's GDP into dollars at market exchange rates can understate the true size because a dollar buys much more in an emerging market such as China than it does in America. The IMF and the World Bank therefore prefer to convert GDPs into dollars using...
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This note was uploaded on 11/10/2011 for the course ECON 4310 taught by Professor Staff during the Fall '08 term at Kennesaw.
- Fall '08