Difference between GNP and GDP

Hi

For the US business based in China, its profit would not be included in the US' GDP but would be accounted for in the US' GNP. I don't think get the Canadian business part. If a Canadian business is based in the US, then why would be the profit made included in Canada's GDP and subtracted from the GNP? I think it would be the other way around. Please help me with it. Thank you.

GDP (Gross Domestic Product) is a commonly used calculator of national income and measures the economic activity in a country. Essentially, the GDP is a figure which measures the value of the goods and services produced in a country in a given time period (usually one year).

GNP (Gross National Product) is also a calculator of economic activity. However, GNP also encompasses the value of net income made abroad. Moreover, when calculating GNP, the value of what foreign countries earn in the given country is subtracted from the value.

To clarify, let us use an example:

If a US business had a manufacturing plant located in China, any profit made by the plant would not be calculated in the GDP, but would be accounted for in the GNP.

If a Canadian business has a manufacturing plant located in the US, any profit made by the plant would be included in GDP, however it would be subtracted from the value of the GNP.

Consequently, those both GDP and GNP are measures of economic activities, the two values can be extremely different.

Reference: http://wiki.answers.com/Q/Difference_between_gnp_and_GDP