World Bank Group

Hongkongers No 4 in world in material well-being

World Bank study also shows China closing in on US as the world's largest economy

PUBLISHED : Wednesday, 30 April, 2014, 2:46pm
UPDATED : Thursday, 01 May, 2014, 7:46am

Hongkongers are perched comfortably near the top of a global ranking of material well-being, a new World Bank study shows.

China, meanwhile, has made a huge leap towards overtaking the United States as the world's largest economy, the agency's International Comparison Programme found, based on 2011 data.

The study used purchasing power parity (PPP) calculations, which adjust for price levels and exchange rates to allow comparison of disparate economies.

Hong Kong ranked fourth in actual individual consumption per capita among 199 economies on a PPP basis.

Actual individual consumption refers to consumer spending by households and spending on goods and services for individuals, such as on health care and education, by government and non-profit institutions.

The figure for the city was 87 per cent of that in the US, which ranked second. Bermuda topped the list with 101 per cent, and the Cayman Islands ranked third with 91 per cent.

Rounding out the top 10 were Luxembourg, Norway, Switzerland, the United Arab Emirates, Germany and Austria.

Bank of East Asia economist Paul Tang Sai-on said Hong Kong's heavy consumption was closely related to a sharp jump in retail property rents. Rents for retail spaces had risen 55 per cent in the five years to February, he said.

"Retail-space supply lags behind demand, which creates more pressure on the Hong Kong government to offer more land to shopping malls at the border or develop underground shopping arcades in busy districts," he said.

China's gross domestic product on a PPP basis doubled to 86.9 per cent of US GDP from 43.1 per cent in 2005, the last time the study was done.

India also nearly doubled its ratio, to 37.1 per cent from 18.9 per cent, to emerge as the world's third-largest economy, overtaking Japan, whose GDP fell to 28.2 per cent of that in the US, from 31.3 per cent.

Britain, which ranked ninth, was the only other economy in the top 10 that shrank relative to the US, to 14.2 from 15.4 per cent.

The report cautioned that the latest findings were not strictly comparable with those from 2005, as there had been changes in methodology and the number of economies compared had increased from 146 to 199.