China’s Economy is 60% smaller than we thought. At least, that is the implication, if we are to believe the research presented in this research paper by Professor Luis Martinez from the University of Chicago. This would mean that instead of soon becoming the largest economy in the world, China’s...

Introduction:

instead of soon becoming the largest economy in the world, China’s economy is only about a third of the size of the mighty U.S. economy.

having much lower GDP also means that China’s debt levels are actually much higher, relative to the size of its economy, meaning that its debt-fueled property bubble is much more dangerous than we thought.

Method:

Martinez looked at 184 countries between 1992 to 2008 and compared the growth of lights at night in each country to the growth of GDP that each country reported.

Autocratic countries typically reported a whopping 35% higher GDP growth numbers compared to night-time lights growth.

China’s GDP growth between 1992 and 2008 was likely 4.9% per year, rather than its average reported growth of 6.3%.

This is literally the dumbest measurement I’ve ever heard of.