林中斌 部落格 / Blog Chong-Pin Lin

But much as counting warships or troops often provides a misleading measure of military might, tallying up gross domestic product — the figure behind the latest headlines — yields a warped picture of China’s economic rise.

By most meaningful yardsticks, China is still less economically powerful than the United States. The problem with the new numbers starts with how they compare economies’ sizes. The World Bank tables that show China passing the United States compare the two countries using “purchasing power parity,” which measures national incomes in terms of what they can buy at home.

Because domestic spending is dominated by items such as food and housing that aren’t traded internationally, and because most goods and services are cheaper in China than in the United States, this comparison boosts China’s apparent economic strength.

Yet compared using market exchange rates, which measure incomes in terms of what they can buy on international markets (where every country pays the same price), the United States’ economy remains nearly twice as big as China’s. Indeed it is this latter measure that matters most when comparing economic power.

After all, one would never compare two countries’ military strengths on the basis of how well each could suppress a domestic rebellion rather than fight a foreign war, and one should not compare countries’ economic power on the basis of what a worker in each country can buy at home.

When American and Chinese companies bid against each other to acquire resources or companies abroad, what matters is their wealth as measured by the global market. Oil suppliers, for example, don’t care if the $100 they get for a barrel sold to China can buy more rice in a Beijing market than at a shop in New York — they care about what their revenues are worth in the world market.

Similarly, the attractiveness of the Chinese and American markets to foreign firms depends on the profits to be made in international terms, not as measured by purchasing power.

The alarmism about China surpassing America also ignores the critical role of political and institutional strength and flexibility. One wouldn’t compare countries’ arsenals while ignoring their different states of disrepair — yet Chinese G.D.P. numbers ignore severe pollution problems that are driving successful Chinese abroad. Nor would one compare numbers of aircraft or troops without asking about the training, doctrine and organization necessary to mobilize them effectively in combat. China faces real challenges translating its economic resources into international influence.

The need to maintain political stability and the Communist Party’s grip on power constrains what the Chinese government can do to capitalize on the country’s economic heft. The difficulty of getting recalcitrant provincial and local governments to enforce Beijing’s edicts can make it tough for China to take full advantage of its economic power. The Chinese government, for example, has tried to forge packages of infrastructure and resource investment in strategically attractive developing countries, only to have the Chinese companies that would need to implement the schemes refuse to participate.

Continue reading the main story Write A Comment The American market may be larger than China’s, but China’s is growing more rapidly, often creating more new opportunities for international firms. And Washington faces political and institutional constraints just like Beijing does. America’s economy can’t compete with a state-dominated behemoth when it comes to rewarding favored partners with economic opportunities. And the United States is less able to direct its outward commerce toward political ends than China is: Beijing is more capable, for example, of persuading Sinopec to pursue geopolitically attractive investments than Washington is of mobilizing ExxonMobil.

Twenty-first century rivalry between the United States and China will be as much about economic might as military power. Judging the economic balance correctly will be as essential a foundation for effective international strategy as proper assessment of the military balance was during the Cold War. Avoiding overreaction in the face of the latest headlines about China’s economic triumph would be a great place to start.

Michael A. Levi, a senior fellow at the Council on Foreign Relations, is co-author of “By All Means Necessary: How China’s Resource Quest is Changing the World.”