What is the difference between GDP and GNP and the relationship between them?

GDP=Gross Domestic Product (Gross Domestic Product) \x0d\\x0d\GNP=Gross National Product (Gross National Product) \x0d\\x0d\GDP and GNP are two existing relationships There are different indicators. They are all aggregate indicators that calculate social production results and reflect macroeconomics. However, there are differences between the two because of their different calculation calibers. \x0d\\x0d\ Gross domestic product (GDP) refers to an indicator that reflects the results of the production activities of all resident units within a country or region. The so-called permanent residence unit refers to an economic unit with a center of economic interests within the economic territory of a country. The so-called production activities include all industries and departments including the three industries. In terms of value form, it is equal to the sum of added value produced by all departments of the national economy. \x0d\\x0d\ Gross National Product (GNP) refers to the original income actually received by all resident units within a country or region within a certain period (referring to labor compensation, net production tax, depreciation of fixed assets and operating surplus, etc.) total value. The income earned by residents of a country through investing or working abroad (called factor income from abroad) should be included in the country's gross national product. Income earned by non-nationals from investment or work within the country's territory (called factor income paid to foreign countries) should not be included in the country's gross national product. Therefore, the gross national product can be calculated by adding the net factor income received by the country's resident units from abroad (factor income received from abroad - factor income paid to foreign countries). To put it more intuitively, GDP is equal to GDP plus the net amount of labor compensation and investment income (including dividends, dividends and interest, etc.) obtained from abroad. That is: Gross National Product = Gross Domestic Product + Foreign Net Factor Income. Gross National Product is the concept of "income". \x0d\\x0d\The main difference between gross domestic product and gross national product is that GDP emphasizes the added value created, which is the concept of "production", while GNP emphasizes the original income obtained. Generally speaking, the difference between the gross national product and the gross domestic product of each country is not large. However, if a country has a large amount of investment and a large number of workers abroad, the country's gross national product will often be greater than its gross domestic product. \x0d\\x0d\American economist Samuelson believes that GDP is one of the greatest inventions of the 20th century. He compared GDP to a satellite cloud image describing the weather, which can provide a complete picture of economic conditions and help leaders determine whether the economy is shrinking or expanding, whether it needs stimulation or control, and whether it is in a severe recession or under the threat of inflation. Without aggregate indicators like GDP, policymakers would be overwhelmed by a sea of ​​disjointed numbers. \x0d\\x0d\Through the above introduction, we know that if a country has a large amount of investment and a large number of workers abroad, the country's gross national product will often be greater than its gross domestic product. For example, Japan has a large amount of investment overseas, so its GNP is larger than its GDP. In 2001, Japan's GNP was 8.5 trillion yen (approximately equivalent to US$80 billion) higher than GDP, equivalent to 2.5 percentage points of Japan's GDP. In other words, even Japan's domestic economic growth rate was zero. but. With net investment income of US$80 billion from abroad, it can also ensure that its GNP grows by about 2.5%. \x0d\\x0d\ Also, in the Philippines, for example, there are a large number of Filipino women working as domestic servants overseas (referred to as "Filipino domestics"). Their foreign exchange earnings remitted to the Philippines every year are as high as US$10 billion! In this way, the Philippines’ GNP must be higher than its GDP. \x0d\\x0d\Furthermore, the same is true from the perspective of the situation in different regions of a country. \x0d\\x0d\Pursuing more GDP or GNP in economic policy will lead to different economic growth models, namely endogenous economic growth model or imported economic growth model. \x0d\GDP, gross domestic product, refers to the sum of goods and services produced for final use by domestic and foreign residents within a country's territory in a certain period. GNP stands for gross national product, which refers to the sum of final goods and services produced by a country's citizens at home and abroad. Gross domestic product emphasizes the manufacturing location, that is, whether it is a domestic company or a foreign company, as long as it is located in the country. Gross National Product emphasizes manufacturing and pursues manufacturing by domestic enterprises and people. \x0d\The meaning of GDP and GNP is this. If a country or region pursues GDP or GNP more in economic policy, it will lead to different economic growth strategies. If a country or region values ​​GDP more in terms of economic policy, then its economic policy must be directed towards whether it is domestic enterprises or foreign-funded enterprises, as long as they can increase GDP. Of course, as GDP increases, the government will also have corresponding taxes. If GNP is more respected, then not only the economy must grow, but also enterprises in the country and region must promote economic growth. Not only tax revenue must be increased, but real profits must be made.

\x0d\If a country or region pays more attention to GDP in economic policy, it will pay more attention to the maturity and development of its own industries, regardless of whether domestic or foreign companies support the development of these industries. If more attention is paid to GNP in economic policy, not only will domestic industries be developed, but also domestic enterprises should support the development of domestic industries. Therefore, the former will be more interested in attracting investment and will regard investment promotion as the top priority of economic work, while the latter will attach importance to the development of domestic enterprises, including state-owned enterprises and private enterprises. \x0d\ Taking GDP or GNP as the main goal of economic policy, at a certain level of GDP, will lead to different levels of prosperity for the people of the country. If GDP is emphasized, there will be situations such as Sichuan migrant workers working in Shenzhen, leaving GDP in Shenzhen and bringing profits back to Sichuan; companies setting up factories in Shenzhen also leave GDP in Shenzhen and bring profits back to their home countries or this region. If GNP is emphasized, it means that the country's corporate citizens have actually made money for themselves at home or abroad. A typical case in this regard is the comparison between the new Southern Jiangsu model and the Wenzhou model. According to a report by China Business News on February 24, in 2004, as Suzhou's economy was booming and its GDP surpassed Shenzhen for the first time, the new Southern Jiangsu model seemed to have reached the commanding heights of China's economic development model. But these cannot cover up the shortcomings of the new Southern Jiangsu model, which has been likened to "growing only bones but not meat." Although GDP has increased and the government's fiscal revenue has increased, the people's pockets still cannot be filled, and the majority of profits have been taken away by foreign companies. , the locals only get a little wages. In 2004, Suzhou's GDP was twice that of Wenzhou, but the per capita income of Suzhou people was almost half that of Wenzhou. It seems that GNP, rather than GDP, is more reflective of the competitive strength of a country or a region. \x0d\Further in-depth discussion will reveal that advocating GNP implies an endogenous growth model. The source of power for the endogenous growth model comes from the private impulse to develop the economy. For example, some people compare Zhejiang's private economy to the God's economy (forced by natural conditions), the ancestors' economy (traditional in history), and the people's economy (from the universality of the people). Its distinctive feature is that there are many outstanding local people. entrepreneur. The promotion of GDP is actually an imported growth model. Its source of power comes from the government. It is local governments that are driven by the development of local economies, including political performance levers, to attract investment on a large scale with preferential conditions. The endogenous economic growth model is relatively solid, while the imported growth model is due to the mobility of capital. If there are better investment areas, capital will flow away. \x0d\The difference between GDP and GNP and the resulting differences in economic growth models will give us profound enlightenment in choosing economic growth models and formulating economic growth policies: \x0d\1. To a certain extent, industries or enterprises The international competition is GNP competition. Therefore, the superiority of the endogenous growth model over the imported growth model is obvious. From an international perspective, the competitiveness of Japanese and Korean industries is supported by domestic enterprises. It is impossible for a country or a region to rely on foreign-funded enterprises to enhance its competitiveness. It seems that in economic growth, we are not just simply growing bigger, but also making real profits. We must pay great attention to GNP in a timely manner. \x0d\2. Use imported economic growth strategies scientifically and strategically. The reason why developing countries or regions are underdeveloped is because of the shortage of capital, technology, entrepreneurs and business management experience. It is difficult to develop by relying on their own strength. Therefore, in the initial stage of development, making appropriate use of foreign capital and introducing its advanced management experience while introducing foreign capital can become an option in the initial stage of economic development. However, in the process of further implementation, attention should be paid to bringing into play the leading role of introduced enterprises, so as to ultimately cultivate endogenous economic growth forces. \x0d\3. The endogenous economic growth model comes from thousands of entrepreneurs and excellent entrepreneurs in the country and region, which are the fundamental source of economic competition. Our economic policy design should be conducive to entrepreneurs standing out and revitalizing their growth. \x0d\4. Since GNP is produced by domestic enterprises, policies for domestic capital, including domestic private capital, should be more relaxed for industry entry and regional mobility. For a long time, the policy of granting foreign investment in some fields has been superior to our country's policy of private capital, which requires necessary reflection.