The Complexity of the Cold War

Unlike the Soviet Union, China is a full spectrum peer competitor. There's no simple model like the Cold War that if we just follow that playbook, it's going to work out okay. The logic of using PPP rather than market exchange rates is that it focuses on what Chinese can buy in China at China prices as compared to what they would be able to buy if they took that equivalent amount of RMB and exchanged it for dollars.