The fashion industry seems to be obsessed with China. Miuccia Prada has mined the country and culture for creative inspiration, while Versace has opened stores in Shanghai, Beijing and Hong Kong and now wants to expand into secondary cities. Meanwhile, companies such as L’Oréal view Russia as a growth opportunity. Based on purchasing power parity (PPP), Russia and China look like good bets. But underneath the strong PPPs are two economies with fundamental problems that must be addressed for sustained economic growth. Note: PPPs are theoretical exchange rates that take into account the cost of living differences between countries. For example, most goods and services are cheaper in China than they are in the U.S. As a result, $1,000 will be "worth" more to the Chinese consumer than one in the U.S. To reflect this difference, the OECD* calculates PPPs on the basis of periodic price comparisons and national inflation figures around the world. PPP estimates are usually shown on a scale of 1 to 100, where the U.S. is 100. They are multiplied by a country’s gross domestic product per head.
PPP $9.6 trillion
Like a morning-after hangover, the U.S. economy is paying the price for high times. By now it’s a well-known fact that the economy in recent years grew at a faster pace than the rest of the developed world by indulging in a consumer boom that had to be paid for with borrowed money. It was an unsustainable path that is now in the painful adjustment period. Experts are divided over whether the dollar will head higher or lower as worries about the possibility of a U.S. strike against Iraq continue to weigh on the currency.
PPP $4.9 trillion
Measured by purchasing power parity, China is the world’s second-largest economy after the U.S. China has experienced one of the fastest industrializations in history, growing like Japan did three decades ago: quickly and from a low base. Yet China’s policies inspire caution, which could make it vulnerable to any serious economic slowdown. In a country that’s obsessed with state power and control, the political pressures of restructuring state enterprises may be difficult to carry out.
PPP $3.4 trillion
China’s strength as a trading nation worries others in the region, especially Japan. The country’s minister of finance and other government officials have accused China of unfairly maintaining an undervalued currency to make exports more attractive. They’ve tried repeatedly to drum up international support by casting the value of the yuan as an issue at G-7 meetings. The yuan is too cheap, says Japan’s ruling elite, claiming that China is exporting deflation.
PPP $2.4 trillion
The PPP effect sharply shifts global economic rankings as evidenced by India and China overtaking the European countries and Russia and Brazil entering the top 10 economies. India’s gross domestic product for the year ending March 31, 2001 was $457 billion and its per capita GDP a paltry $450. But India is trying to make economic headway; it joined the OECD’s Development Centre and has been trying to improve structural deficiencies in its economy and revamp outdated competition laws.
PPP $2.04 trillion
The euro’s climb against the dollar has risen to such heights that its strength is starting to undermine exports, the one segment of the German economy that’s providing growth. The euro was artificially depressed after its debut, in part due to problems of the German economy — Germany accounts for more than 30 percent of the eurozone. While Germany has been leeching investment, particularly to the accession countries to the east, the rest of the zone has been holding its own.
PPP $1.43 trillion
The U.S. has been the world’s economic leader for more than a century and economic theory suggests that western Europe should be catching up. But average GDP per head in the EU, measured at purchasing-power parity, is only three-quarters of that in the United States. According to the Conference Board, Belgium, France, Germany, Ireland and The Netherlands now boast higher productivity output per hour than the U.S., but average productivity in the EU is dragged down by Britain, Spain, Greece and Portugal.
PPP $1.4 trillion
When it comes to the economy, the rivalry between France and the U.K. is even more bitter than the Franco-Italian battle over which country has supremacy in the areas of food and fashion. The French were practically dancing in the streets at the news that their country pulled ahead of Britain in the PPP stakes. Yet, while France’s purchasing power parity may be slightly higher than the U.K.’s, Britain has the faster-growing economy.
PPP $1.35 trillion
According to the OECD economic outlook, the Italian economy is expected to gather strength in 2003 and 2004, when a pickup in world trade will likely boost exports. In addition, inflation is expected to drop below 2 percent by 2004. "At the same time, there is a need to strengthen the underpinnings of growth through a more decisive action to liberalize product markets and to improve the functioning of the labor market," the OECD wrote in a preliminary report.
PPP $1.2 trillion
Chile, Brazil and Venezuela are examples of liberalizing markets in Latin America that are relatively fragile. The countries are heavily dependent on undiversified export sectors, making them highly sensitive to fluctuations in commodity prices. Brazil, which has Latin America’s largest population and one of the world’s worst income inequalities, is less poor than its $3,000 annual income implies. Incomes there are equivalent to $ 7,500 a year in PPP terms.
PPP $1.16 trillion
The Russian government has used economic growth to eliminate budget deficits, increase financial discipline in the economy and make progress on structural reforms. While Russia’s economic revival has been aided by strong oil and gas prices and a weak ruble, the OECD reports that further reform is crucial for establishing conditions that would make the growth sustainable. The OECD’s Economic Survey of the Russian Federation warns of a possible future energy crisis in the absence of regulatory reform in the oil and natural gas industries.
SOURCE: THE ECONOMIST POCKET WORLD IN FIGURES 2003 EDITION; *Organization for Economic Cooperation and Development (OECD)
As one of the most recognizable models in the world, Christy Turlington Burns has an insider’s view of the fashion industry and the allegations of sexual harassment swirling around it. “I can say that harassment and mistreatment have always been widely known and tolerated in the industry. The industry is surrounded by predators who thrive on the constant rejection and loneliness so many of us have experiences at some point in our careers,” Turlington told WWD, along with her suggestions for how the modeling world should protect younger women and men. Read more on WWD.com. Link in bio. (📷: Tony Palmieri) #wwdnews
@asics America has tapped a new brand ambassador: famed DJ/record producer @steveaoki. This initiative is intended to set the tone for the new brand identity and philosophy and will include partnerships with influencers and in-store and off-line activations that will continue into next year. This is Asics’ most significant marketing effort in two decades, and is expected to attract younger consumers to the brand. #wwdfashion
24-year-old Jean Prounis is redefining the rules of jewelry. Formerly a studio assistant to Jemima Kirke and a design apprentice at Ghuran, she focuses on handcrafted subtleties and ancient goldsmithing techniques. “There was a really sterile feel in the environment and I wanted to have jewelry with character that shapes how you wear it everyday,” Prounis said. Each piece is hand made in New York, either by Prounis or three other jewelers in the district. #wwdfashion
“These collections continue to build on that vision, empowering differently abled adults to express themselves through fashion,” said @tommyhilfiger of his line of adaptive apparel, which launches today. The line consists of 37 men’s and 34 women’s styles based upon the pieces from the spring Tommy Hilfiger sportswear collection. #wwdnews
“Stranger Things” is getting a new cast member for season 2. Meet @sadiesink_, the 15-year-old who will be joining the Netflix series for its new season. You may recognize her from “The Glass Castle” with Brie Larson and Woody Harrelson, but the Texas native’s next role goes in an entirely different direction. She describes her character, Max, as “a rough and tumble skater girl [who] becomes friends with the boys at school.” The second season debuts on October 27. (📷: @jgreenery) #wwdeye
Amid the Harvey Weinstein controversy, there’s another sector that’s being put under the spotlight for sexual abuse: the modeling industry. While rumors about abuse and sexual harassment of female and male models — and the photographers, agents and others who perpetrated it — have circulated within the fashion world for years, model @cameronrussell started posting stories from models on Instagram last week about abusive situations they’ve encountered — from sexual harassment and molestation to attempted rape. Over 75 have weighed in so far. Read more on WWD.com. Link in bio. #wwdnews
To celebrate its 16th anniversary, @dylanscandybar tapped designers and celebrities to create mosaics out of candy. The mosaics will be auctioned off to support the philanthropic cause of each participant’s choice. Pictured here is the mural created by @aliceandolivia's Stacey Bendet. For a first look at some of the other artwork being unveiled tonight, go to WWD.com. #wwdeye
The annual Veuve Clicquot Polo Classic in Pacific Palisades this weekend drew Kate Hudson, Tracee Ellis Ross, Laura Dern and more. See pictures of the star-studded event on WWD.com. (📷: @chelsealaurenla) #wwdeye
In his new book “Hollywood Royale,” Andy Warhol’s Protégé Matthew Rolston celebrates the Eighties revival of Hollywood glamour. Featuring more than 100 portraits taken by Rolston from 1977 to 1993, the book contains photos of icons like Michael Jackson, Cyndi Lauper, and @drewbarrymore, pictured here in 1991. “Hollywood Royale,” out today, will be accompanied by an exhibition opening at Los Angeles’ Fahey/Klein Gallery on March 1. #wwdeye