Friday, December 4, 2009

Ignorance or confusion?

Dan Drezner talks about a recent Pew Research poll with a general theme of foreign policy. According to the poll, 44% of the population view China as "top global economic power" (only 27% think so about the U.S.) Drezner wonders (and I with him) how anyone could think that; there is absolutely no reasonable measure of economic power by which China can be regarded as the very top one. China's GDP is about two times smaller than the U.S. GDP; its output per capita is roughly eight times smaller.

It could be ignorance. Some respondents who see China as the world's biggest economic power may simply have no idea what the world's economies look like right now. Or it could be confusion: perhaps there are other respondents who aren't careful enough to distinguish between stock and flow. After all, for about a decade now, we keep hearing about China's amazingly fast GDP growth rate. That rate is in fact much higher than in the U.S. (for example, in the last three years, the average annual output growth rate in the U.S. was under three percent, whereas in China it was over eleven). But income growth rate and wealth are two completely different things.

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