Similarities and Differences Between GDP and GNI

Abstract

This chapter discusses the similarities and differences between gross domestic product (GDP) and gross national income (GNI), two common indices used to measure the economic scale of a country or region. After explaining these concepts, the authors introduce China’s GNI accounting system and analyze the differences between China’s GDP and GNI. In addition, this chapter also analyzes the quality of China’s GNI data from two perspectives: balance of payments and external data verification. Next, this chapter discusses the factors that affect the differences between China’s GDP and GNI, such as foreign direct investment and proportions of imports and exports of processing trade. Finally, the authors suggest several policy improvements that can potentially stimulate the lower participation of domestic enterprises in foreign trade.