The International Comparison Program (ICP) is the world’s largest global statistical initiative for estimating purchasing power parties (PPPs) to compare economic outputs, standards of living, and relative price levels across economies. The full participation of China in the 2011 ICP cycle benchmark is a key milestone for the international comparison of the expenditure-side GDP and has made the ICP become a real worldwide economic statistical program for cycles 2011, 2017, 2021, and the next cycle benchmarked to 2024.

The methodology embodied in the ICP during the last decades seems complete and perfect and has been stabilised for the program implementation since the 2011 cycle. However, the current methodology is only suitable for homogeneous economies with similar products and economic development levels, especially for developed countries. There still exist underlying issues rooted in the methodology that appeared when a lot of emerging economies participated in the program. This has led to uncertain and unreliable estimations of previous cycles which may impact the use and applications of PPPs and ICP results. For example, the national annual average prices for a selection of items chosen from a common basket of precisely defined goods and services must be nationally representative for these goods and services, but China, the largest emerging economy with vast variations in sub-regional economic structure and level of development, uses the simple weight average method for the estimation of national average prices cannot effectively reflect the spatial price differences across Chinese regions and the real price level in significantly unbalanced regions and induce serious impacts on the reliability of PPPs.

To this end, this session will explore and uncover the underlying methodological mechanics of the ICP, aiming to improve the estimation of purchasing power parties (PPPs) for comparing economic outputs, standards of living, and relative price levels across economies. The session invites Professor Dong Qiu from Jiangxi University of Finance and Economics, China and Professor Prasad Rao from the University of Queensland, Australia, two members of the ICP Technical Advisory Group (TAG) for the cycles 2011, 2017, and 2021, to chair and discuss the methodological issues presented by the four papers. The four papers organized in the sessions are as follows: (1) An improved chain method of multilateral price comparison; (2) Measuring the contribution of the Chinese economy to world economic growth over the past Fifty Years; (3) Measurement of influencing factors of rental price and PPP of dwelling services across China’s cities; (4) Key issues identified in the ICP methodology system.