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:
scarey
We need to end the sanctions against Russia and get China and Russia to help us eliminate the ISIS.
Bible says we are not to be a slave to the lender. Here we are!!
Thanks again to the false laws of the EPA ! Thanks to every POS. That passes bills into laws without doing your job to read it , understand it and question it , and prove it righteous or wrong . Global warming environmentalist that have a liberal hatred for American industry .
Guess China is the worlds largest economy all the billions of dollars we pay in interest!! All the products we buy from them!!!Thanks to all the hight taxes,regulations and unions it is hard to have a business in America!!
You people are so incredibly ignorant. You are so uneducated, you have no right to make comments. China has been on the rise for decades. It is NOT Obama’s fault!!!
Yeah, but Obama sure hasn’t made our situation any better! Maybe it is you who are ignorant and uneducated, Mary!
Dah
That’s what happens you pay a dollar a day for labor. China has suicide nets around their factories.
That’s what happen when congress KILLED the PRIVATE SECTOR – with 35 % tax – the highest in the world and all the regulations and more are being piled on businesses – all the time WHY ??????