How Does China's Higher GDP Translate Into National Power?

Depending on what exchange rate you use for comparing GDP, China either already has a larger GDP than the US (using a purchasing power parity exchange rate) or will soon have a larger GDP than the US (using a market exchange rate). Stepping outside the economic issues here to the subject of international relations, does this higher GDP translate into greater international power? Michael Beckley tackles this question in "The Power of Nations  Measuring What Matters," appearing in the Fall 2018 issue of  International Security (43:2, pp. 7–44)

Beckley argues that most scholarly studies of international power focus on overall gross indicators like size of GDP, but that this approach can be misleading. He argues instead for a measure of power that combines GDP and per capita GDP, where the second measure is a rough way of capturing the efficiency with which a society employs its resources. By this admittedly rough-and-ready measure, the US remains much more powerful than China, thanks to its much higher productivity levels. 

Here's a taste of Beckley's argument (footnotes omitted):

Unfortunately, however, most scholars measure resources with gross indicators, such as gross domestic product (GDP); military spending; or the Composite Indicator of National Capability (CINC), which combines data on military spending, troops, population, urban population, iron and steel production, and energy consumption. These indicators systematically exaggerate the wealth and military capabilities of poor, populous countries, because they tally countries’ resources without deducting the costs countries pay to police, protect, and serve their people. A country with a big population might produce vast output and field a large army, but it also may bear massive welfare and security burdens that drain its wealth and bog down its military, leaving it with few resources for power projection abroad. ... 
Standard gross indicators are not good enough; they are logically unsound and empirically unreliable, severely mischaracterizing the balance of power in numerous cases, including in some of the most consequential geopolitical events in modern history. ... The hype about China’s rise, however, has been based largely on gross indicators that ignore costs. When costs are accounted for, it becomes clear that the United States’ economic and military lead over China is much larger than typically assumed—and the trends are mostly in America’s favor.
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Gary Anderson 3 months ago Contributor's comment

The main point of disagreement I have with Beckley is regarding his idea that China is surrounded by hostile nations. Clearly, Asia is bonding. So he can't be right about that. Otherwise, fascinating article.