Chinese takeaway

I'm not an economic doom-and-gloomer, but this is somewhat troubling.

After having rated China's GDP at close to $9 trillion in 2005(second only to the US), the World Bank had to revise things after they did the...what's it called again? Oh yeah...math.

As a result, one quiet mid-December day in 2007, about 40% of the value of China's economy was written off the books.

Steve Maich has an interesting piece in Macleans. Hit the headline for the link.

Sample:

The problem was, the World Bank's estimates were based on a study of Chinese prices that was 20 years old, and when Chinese authorities finally released updated figures late last year, the bank's estimates were wildly off the mark. When they re-crunched the numbers, it turned out China's economy was closer to US$5.3 trillion. On a per capita basis, that works out to just over US$4,000 per head, compared to US$41,674 in America. That one little accounting change meant there are as many as 91 million more people living in desperate poverty in China than previously believed.

Now some might say that it's just on paper, but paper can cover a lot of cracks, like those 90 or so million more people living in poverty. Recent unrest in Tibet and Western China may find unrelated fuel elsewhere.

In time, the market will take care of it, but time may be running out for China. Officially inflation is at 10%, but surging demand and scarce resources are applying upward pressure.

Then there's rice.

According to a story in the Sydney Morning Herald on April 7, the price of rice has doubled in the past year and quintupled since 2001.

It's probably nothing. Do they eat much rice over there?