The global GDP data for the first three quarters of 2025 shows interesting changes, but the truth behind it may not be what most people think.

Starting with the comparison between China and the US. The nominal GDP gap is widening, and many believe it's due to China's slowdown, but it's not that simple. US inflation is much higher than China's, which directly boosts GDP measured in USD. More importantly—exchange rates. The RMB is relatively undervalued, which is an intentional result. In a trade war environment, lowering the exchange rate can indeed "artificially" reduce GDP on paper. One sentence: exchange rates determine rankings.

The stories of Japan and India are even more interesting. The media has been hyping that India’s GDP will surpass Japan, with the IMF predicting it will happen in 2026. But looking at the latest third-quarter data, India's lead is actually narrowing. Why? The rupee is depreciating. If this trend continues, whether India can surpass Japan as expected is uncertain. Exchange rate fluctuations are rewriting the rankings.

In comparison, Germany’s relative advantage has expanded mainly due to the euro's appreciation, while actual economic growth has been sluggish. Russia moved from 11th place in 2023 to 9th in 2025, also due to exchange rate effects—after Trump took office, the ruble appreciated. Mexico’s story is the opposite: the peso depreciated, dropping from 12-13 to 15 in the rankings.

Finally, let's talk about Turkey as a "counterexample." The lira has been continuously depreciating against the dollar, falling 24.1%, 47.9%, and 22.0% in 2023-2025 respectively, but Turkey’s GDP ranking actually rose from 19th to 16th. This is Erdogan economics: higher inflation leads to higher nominal GDP growth rates, and deliberately devaluing the currency actually stabilizes the ranking. To some extent, the US is also using this logic, just without the pressure of dollar depreciation itself.