According to the International Monetary Fund, when looking at purchasing-power, China is right now overtaking the US to become the world’s largest economy.
By the end of this year, China will constitute 16.48% of the world’s purchasing-power and the US will make up 16.28%.
This is according to ‘adjusted purchasing power’:
The simple logic is that prices aren’t the same in each country: A shirt will cost you less in Shanghai than in San Francisco, so it’s not entirely reasonable to compare countries without taking this into account. Though a typical person in China earns a lot less than the typical person in the US, simply converting a Chinese salary into dollars underestimates how much purchasing power that individual, and therefore that country, might have. The Economist’s Big Mac Index is a great example of these disparities.
So the IMF measures both GDP in market-exchange terms and in terms of purchasing power. On the purchasing-power basis, China is overtaking the US right about now and becoming the world’s biggest economy.
We’ve just gone past that crossover on the chart below, according to the IMF. By the end of 2014, China will make up 16.48% of the world’s purchasing-power adjusted GDP (or $17.632 trillion), and the US will make up just 16.28% (or $17.416 trillion):
IMF, Google Public Data ExplorerAdjusted for purchasing power, the IMF thinks China’s economy is now the world’s largest.
It’s not all sour news for the US. It’ll be some time yet until the lines cross over in raw terms, not adjusted for purchasing power. By that measure, China still sits more than $6.5 trillion lower than the US and isn’t likely to overtake for quite some time:
because America is dumb and greedy and ignorant and selfish it is nothing but a third world country China is the new empire
America is DEAD DEAD AND BURIED!!!!!!
transformation Obama style riches to rags
We gave them all our factories and manufacturing and put Americans out of jobs so the big wigs of industry could make more money. The bible is right. “The love of money is the root of all evil”.
I try to buy things made in the U.S., but they are hard to find. Bought a deer stand, trail cam, rifle scope and a kitchen faucet in the last few months, all made in China. The kitchen faucet, broke after the first week. Companies send jobs to China putting a lot of Americans worker out of a job. Is this necessary for them to survive are greed??
The rich just keep getting richer while the poor keep getting poorer
can we all say thank you obama
Stop buying everything made in china
The factories left because of over tax. Been going on for years..
This is reality today.. Vote