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:
companies just keep sending jobs over there THE COMPANIES THAT ARE SENDING JOBS OVER THERE REMEMBER THEY PUT 1 BILLION DOLLARS IN THEIR ARM FORCES SO YOU COMPANIES ARE HELPING THEM YOU ARE TRAITORS TO THIS COUNTRY
That’s what NAFTA has done to this country!!!!
only because our traitorus leaders sold us out but they will never get their NWO
Thanks too Obama
A sad day for America, thanks to Obama!
thats because of obamas vacations and giving our tax money to other countrys, and illegal aliens
But we’re still loaning and giving. I wish I could borrow money and the bank pay the loan plus interest.
Right on Stella.
Years ago
But our emperor just said the US is better than it was 6 yrs ago!
Did he lie?