Hi everybody,
I wonder why everybody is always using that indicator which is absolutely non-sense, when we think about it?
Let me explain:
1) It doesn't take into account THE NUMBER OF PEOPLE living in a country...
I mean, that totally doesn't make sense right? The more there are people, the more they have the chance to create value and produce things (if they a smart enough).
If you pick a country with 5 habitants, and a country with 20 habitants, and if you need at least 5 people to build a car, then the next happens:
In country 1 everybody is working to produce one car,while in country 2 everybody is working to produce either 4 cars or 1 car and 1 plane.
How can you possible compare these 2 countries?
Then you understand how unproductive are the Chinese, when everybody is saying "OMG China they're sooo good"... Man, come on, China is 1,3 Billion people. US is 250 million. There are 5 times more people in China than in US. And US still has a GDP 3 times higher.
So that's the opposite, actually. Chinese suck.
People are like "Damn, China became the 2nd economy in the world... wow..." Yeah. They've done a little bit more than Japan, with a population 7 times bigger.
And what about EU? Do we count EU as one signle area, or country by country? Etc. etc.
This is why I think every GDP indicator should be brought down to a base denominator of population.
2) It doesn't take into account where the production comes from:
Take for example Saoudi Arabia, Russia, and Libya... of course you've all understood what they have in common: oil.
And that's all what they have and what they can do: pump oil. They are unable to build something from scratch and sell it. They have the chance to have such a resource on their lands but we all know that it will soon be over, firstly because of the green energies, and secondly because by 2050 the oil resources will end anyway.
Then what will these countries do? Their GDP will sink and the whole countries with it.
This brings us to the 3rd point.
3) In doesn't take into account the distribution of this value among the population.
Taking the same examples as in point 2, those who pump oil and possess the lands have looooots of money, while the populations are still in mid-misery.
With China you have to take GDP-PPP, which stands at 10 Trillion $.
If war breaks out, and China is hindered to trade with the world, China is fully capable to compensate it's foreign trade imports with in-country production. Without much transition period.
If a country is highly dependent on Imports, you have to take nominal GDP values of the trading countries which reside in different currency-zones.
For example:
If Iran buys an oil rig on world-market or components for oil-refineries, which Iranian companies can't produce, the International supplier gives a shit about Iran's GDP-PPP values. Iranians have to pay with $.
GDP-PPP is only of interest for truly self-sufficient and independent countries, which procure or have the ability to procure all goods from within their own currency-zone. This is exactly what China is capable of, if tomorrow war breaks out.
GDP per Capita is not really a factor in International politics. Look at Luxembourg and Qatar. It only becomes relevant if the citizens use their wealth to engage in philanthropic work outside of the country.