These are just the numbers from three years ago:
So it’s only a matter of time before China overtakes the US as the world’s largest economy – and by one measure, it may be there already:
The World Bank’s International Comparison Program takes account of international prices to give a more accurate measure of real output. The statisticians have just completed the exercise for 2011, and they found that China’s economy back then was 87 percent as big as the U.S.’s — not 47 percent, as output converted at market exchange rates would have you believe. Since 2011, China has grown much faster than the U.S. According to the new numbers, its economy will be the world’s biggest before 2014 is out, if it isn’t already.
But Christopher Ingraham deflates the excitement, noting that Purchasing Power Parity isn’t a useful way to compare economies:
On that measure, China is looking pretty good. … But there’s a reason that standard measures of GDP don’t use the PPP conversion. As the Wall Street Journal’s Tom Wright explains:
China can’t buy missiles and ships and iPhones and German cars in PPP currency. They have to pay at prevailing exchange rates. That’s why exchange rate valuations are seen as more important when comparing the power of nations.
Standard GDP measures take these exchange factors into account. And here, China is doing about as well as one would expect. They’re still the world’s second-largest economy, but their GDP is less than half the size of the U.S. GDP.
Drum also downplays the new numbers:
I don’t want to pretend to some kind of faux naivete here, but can someone tell my why there’s suddenly a big frenzy about whether China is now the biggest economy in the world? China has 1.3 billion people. Of course they’re eventually going to eventually be bigger than the US. If not this year, then next year or the year after. Everyone knows this. Everyone has always known this. It’s no surprise, and it’s no big deal. They’ve still got about the per capita GDP of Albania, and it will be decades before they become even a middle-income country.
The Dish 