Speaking of China, there has been a new study/index I've recently found that I've been meaning to share but keep forgetting. It regards the value of the American and Chinese economies.
In "The Once and Future Superpower: Why China Won't Overtake the United States," appearing in the latest issue of Foreign Affairs, the authors mention a new index that is used to appreciate a country's value, rather than the standard GDP index, which, the authors claim, is now largely antiquated. The authors claim that GDP gives an inflated sense of China's worth, while the UN's new "inclusive wealth" index represents economists' best attempt at assessing a nation's wealth and value. According to the UN, it counts the following three stocks:
"1. Manufactured capital (roads, buildings, machines, and equipment)
2. Human capital (skills, education, health)
3. Natural capital (sub-soil resources, ecosystems, the atmosphere"
Long story short, when you process these numbers through these valuations, the US's inclusive wealth is roughly $144 trillion, while China's is only $32 trillion. That's a long stretch from the GPP and Nominal GDP indices to which we're more accustomed.
That's interesting though, because this index seems to assess a country more like a piece of real estate, rather than simply upon its output or the value of its money within its own system. In other words, how much wealth, or wealth potential, will this nation produce for me long-term? It's kind of like asking which is the best investment for a long-term portfolio. According to the apparent figures, the answer isn't even remotely difficult.
