PPP is good for improving comparisons on standard of living but not for raw economic and financial power. Sure, bread and milk might be cheaper in China but if you want to buy an oil tanker or conductor foundry that still costs the same everywhere.
Its a fallacy that PPP applies just to bread and eggs. It applies to every sector of industry. That’s why it lowers cost of everything.
The Chinese built their high speed rail network and now the Indians are building one because their costs were under $30 million per km - barely $20m for the Indians now. Meanwhile the HS2 in UK has en estimated $200 million/km . And the land is expensive in relative terms for the Indians. So what did they do - they built a 350 km viaduct for the line - the longest bridge in the world - and it still comes out $20-25m/km.
Look at New Delhi - it has no mass transit as recently as 2002. Today it has a 400km network and growing - as large as London or NYC . It carries 2.5 billion people per year - more than either of those. The only city to reach that mark faster was Shenzhen. They built everything - the tunnels and viaducts, tracks, the train sets, the power, and do it all for a fraction of what it costs to do even a part of it in the US.
Now someone will say “oh we have OSHA etc and far higher standards” and that’s exactly the point - at their income and price levels they can get a hell of a lot more for the yuan or rupee , and that’s just not bread and milk.
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u/IAm94PercentSure 2d ago
PPP is good for improving comparisons on standard of living but not for raw economic and financial power. Sure, bread and milk might be cheaper in China but if you want to buy an oil tanker or conductor foundry that still costs the same everywhere.