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GLOBAL RANKINGS

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.

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whymak
This World Bank report only ranks which country consumes more. It doesn't say whether the consumers are living within their means. The US has a majority with strong propensity to consume by borrowing. So unless this dollar denominated global financial architecture is broken, the Fed could still print money like there is no tomorrow. We all have no choice but keep on financing American deadbeats.
A few readers complain about the rabbit hutch size HK flats. They have a strong point that economic data are not always relevant to both individual's perception and reality.
I am under the impression that the numbers used are based on GDP per capita by country adjusted for purchasing power parity, which in turn assumes the "law of one price" applied to a comparable basket of goods/services for each and every country. As our readers opine here, the standard basket used in indexing prices in a country is neither similar nor comparable, or both.
whymak
dunndavid:
I disagree with you and with the economist Paul Tang quoted in the article.
The spending by tourists in GDP accounting using the expenditure method is categorized as (service) exports, not consumption. You misunderstood this.
Mr. Tang is a professional economist. So his error might be a result of speaking in haste. He should have given double entry accounting a little thought.
Another method of GDP accounting is by income categories: wages, rental income, proprietors' income, corporate profits plus others.
Except for small statistical discrepancies, sums using either method should yield the same result.
Obviously, World Bank refers to consumption as an expenditure category.
It seems Mr. Tang got rental income in the second method mixed up with consumption in the first.
A little thought says a property owner receiving rent will spend some (consumption), save some to buy property (investments) and pay taxes (government spending) -- categories in the first method.
HKers may be rich on the "average," but the wealth distribution is "inequitable." While the definition of the word average is easy, I am not smart enough to define inequitable. So I will kill two birds with one stone with the following statement.
If your head is in an oven and your feet are in ice, the AVERAGE ambient temperature for your entire body is now a comfortable 25 degrees, but you won't consider this to be an EQUITABLE arrangement.
dunndavid
This ranking is terribly misleading. Bermuda and the Cayman Islands are tourist destinations. Much of the high consumption is do to the high consumption of tourist not residents. Luxembourg is similar, as in fact is Hong Kong. Much of the consumption is from non-residents. The only two locations on the list where it is likely that non-residents don't much skew the results are the U.S. and Germany.
maecheung
This kind of ranking is meaningless, if you consider the size and cost of their living space!
Masako Owada
Material well-being doesn't bring happiness. Happiness is more important.
johnfra
Er, does that include the cage-dwellers? Where do you put all the luxury goods you buy in your 250 sq feet home?
pangkf
Yes, HK is not bad about well-being. Not sure it it should rank No 4 even higher than those North European countries where are the places I dreamed for ?
cheungly
Seems like u have a very myopic view of Europe. Hong Kong is a lot better than it, living standard wise. Travel there and you will know what I mean.
kongshan2047
Fully agree with you. In fact many people in HK who live in public housing estates would probably have a better living standard than many middle-class dwellers in Europe.
535bfa19-89e8-4e44-918d-35090a320969
What happened to the Japanese, the Brits, the Aussies or the Canadians?
 
 
 
 
 

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