Revising The Chinese Economy

"Many of the prices in China had not been accurately measured since
the late 1980s; in 2007, new data indicated that food, rent and other
items had become a lot more expensive than had been accounted for in
official measurements. Higher prices, of course, mean lower Chinese
real wages and a smaller size for the Chinese real economy.

China
is much further from world economic leadership than we may have
thought. Furthermore, poverty in China remains severe; the data
revisions imply that China has 300 million workers — about the size of
the entire United States population — earning less than a dollar a day.
Given these weaknesses in the Chinese economy, the yuan may not be so
undervalued after all."

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