>Tom Walker wrote:
>>/It was about you being right because I made some kind of mistake.
/
>Not really, though I suspect you'll accuse me of compounding the
>offense by denying it.
Me: Not at all, I take your word for it.
Doug wrote,
>I think it's pretty big news that China is
>more energy-efficient than the US. Most Americans wouldn't believe it.
>And I think PPPs are the right exchange rate to use, since we're
>talking use value, not exchange value, and the market yuan-dollar
>rate is ridiculous.
You'll have to walk me through that last one, Doug. What the discrepency suggests to me is that a given physical item may be manufactured more efficiently in China (PPP) but the physical volume of exports to the US is still far in excess of what it would be if they were priced, say, at some hypothetical PPP-based exchange rate. The discrepency between the World Bank chart and the EIA spreadsheet suggests a discrepency somewhere in the neighbourhood of 300% (although that may be a statistical distortion). That's big. So here we have perhaps an instance of the Jevons paradox corollary where Chinese energy efficiency (in PPP terms), paired with its ridiculous exchange rate (at "market" rates) leads to higher total energy consumption or at least to a huge off-the-books subsidy to indirect energy consumption in the US.
A simple illustration. Let's say that you can make a computer mouse in China using 90% of the energy that you would in the US but because they are so much cheaper (exchange rate discrepency) US consumers buy 50% more mice than they would otherwise, so total energy consumed in mouse manufacturing is 135% of what it would be if the less energy efficient mice were made in the US. Meanwhile, that energy consumption (not counting transport cost) is credited to China, not the US. So although the PPP rate might be more appropriate if we were talking about domestic consumption or even about production, if we're talking about US imports, the market rates might give us a better idea of the existence, if not the quantity, of a subsidy. What I said about the atrocious rate of energy consumption per unit of GDP holds whether it is the energy inefficiency or the distorted exchange rate that is the reason for that atrociousness. My original assumption based on the EIA table was the former, but with the additional information from the World Bank chart, I now would be inclined to attribute the imbalance to the latter. Same difference.
Show me where I'm wrong.
The Sandwichman