One Dropped Pebble Creates a Thousand Ripples

Abstract

This chapter introduces the 2014 World Bank report on purchasing power parities and the dispute over the results on China. It continues to discuss the historic background of the debate over China’s economic scale. The authors indicate that the reason that China’s economic scale is highly disputed lies in the difficulties in measuring economic scale. For example, each country has its own system to produce national statistics. Furthermore, two methods—the exchange rate method and the purchasing power parity method—are used in international comparison of economic scales, which can yield different statistical conclusions. Finally, this chapter introduces the World Bank’s two sets of rankings of the economic scales and suggests three questions that should be examined when discussing the case of China.