A view on China from Chile

Strange to pull something for my China notes from a post about economist Scott Sumner’s trip to Chile and Argentina, but here we are. I’d noticed recently that Sumner had not posted in awhile, but three posts popped up yesterday all of a sudden. He’s on a trip to South America and wrote about some of the things he’s encountered.

Most of his post was about his failed attempt to cross the border from Chile into Argentina, but at the bottom there were some brief notes about his time in Chile. Among them was this comparison:

BTW, that’s why I’m skeptical of China GDP skeptics. China also looks almost exactly like you’d expect a country to look with its reported GDP/person (which is well below Chilean levels.) These things cannot be faked; it’s easy for any tourist to observe a country’s general level of economic development.

Speaking of China, it’s obvious that Chile has a close relationship with that manufacturing powerhouse. You see lots of Chinese cars on the road, and lots of trucks hauling natural resources that are likely being exported to China.

It’s an interesting way to view development, and one that should be obvious, I suppose. Go to a country, travel broadly, and observe. I’ve done this myself: The city of Calgary has a very high GDP per capita (nominal) at $58,659 USD. When I compare different markers of development with other places I’ve lived in Canada such as roads/highway infrastructure, public transit, parks, and public amenities, it becomes clear that there’s more money here than, say, London, Ontario ($35,635 USD).

Here in Calgary, each area of the city has at least one fantastic recreation centre, featuring an indoor pool, gymnasium, fitness centre and other amenities. London has one public indoor pool. In Ottawa ($42,478 USD), which is a comparable to Calgary in population (London is not), things are a bit better, but only newer neighbourhoods have indoor pools, and the overall scale of the facilities is much smaller.

The thing I find interesting about the China/Chile comparison, is that Chile is the developmental superstar of South America with GDP per capita of $17,283 USD. When a comparison, and not entirely favourable one, is made with China it makes one pause and remember how long it takes for countries to develop. China has developed a great deal, especially in the past 30 years, but outside of Beijing (GDP per capita $28,258 USD), Shanghai ($26,693 USD) and the Hong Kong ($49,700 USD)/Guangdong area, development is still a long way off from countries further along the development curve. The northern coastal city Tianjin, with nearly 14 million people, has a GDP per capita of $17,754 USD, only a bit higher than Chile.

Using gross domestic product as a measurement of development is debatable, but there’s something to Sumner’s eye test. It also gives us a potential guide to understanding how an ascendant China is fitting into broader global community.