History in making - China Just Overtook The US As The World's Largest Economy

[Kompromat]

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China Just Overtook The US As The World's Largest Economy​

REUTERS/Shannon Stapleton Sorry, America. China just overtook the US to become the world's largest economy, according to the International Monetary Fund.


Chris Giles at the Financial Times flagged up the change. He also alerted us in April that it was all about to happen.

Basically, the method used by the IMF adjusts for purchasing power parity, explained here.

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 Explorer Adjusted for purchasing power, 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:

China Just Overtook The US As The World's Largest Economy

China Just Overtook The US As The World's Largest Economy - Yahoo Finance

 

[Usama78]

All I can say is Good Job!

 

[Max Pain]

This has got to be the Biggest news of the Decade, This was bound to happen.
Congratulation China, may you guys prosper more.
y'all Deserved it.

 

[Jf Thunder]

OMG, Congrats to you all my Chinese Brothers and Sisters
@Chinese-Dragon

 

[LonE_WolF]

this indeed is a big news
Congrats to China

 

[Jf Thunder]

ad suddenly all the Chinese members have disappeared, what gives?

 

[Mercenary]

I still don't think it has happened. They had move around a lot of numbers to justifiy it.

Its going to happen eventually but it hasn't yet.

 

[Nova2]

This was bound to happen. No matter what one fells ,they hv all worked hard as nation to achieve it. It jus for the time being that they would surpass US in nominal terms aswell ,say in 2022-24.

 

[Basel]

If the news is true then Congrats to China

 

[shashikant]

And perhaps in a decade or two they will surpass American in nominal terms too.

 

[Inqhilab]

GREAT GREAT JOB CHINA.

China is now 16.7 Trillion economy. While India is has passed 7 trillion$. Going by this trend India should do the same in next 10-12 years. Cant wait

India and china have always been the two richest countries so no history in making. India and China are merely regaining the title that they have held for much of recorded human history.

 

[Schutz]

You have that many people of course you will have more wealth, even if your people earn poorly your combined wealth isnt going to be small. A large denomination note might be appealing but a jar full of change is worth more.

 

[Saradiel]

 

[twocents]

ad suddenly all the Chinese members have disappeared, what gives?

This is measured in PPP terms, something that is not endorsed by either the government or the people of China. China measures its GDP in nominal terms only. The news does not make the headlines or the front page in China.

 

[INDIC]

China Just Overtook The US As The World's Largest Economy​

View attachment 121070

REUTERS/Shannon Stapleton Sorry, America. China just overtook the US to become the world's largest economy, according to the International Monetary Fund.


Chris Giles at the Financial Times flagged up the change. He also alerted us in April that it was all about to happen.

Basically, the method used by the IMF adjusts for purchasing power parity, explained here.

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):

View attachment 121071

IMF, Google Public Data Explorer Adjusted for purchasing power, 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:

View attachment 121072

China Just Overtook The US As The World's Largest Economy

China Just Overtook The US As The World's Largest Economy - Yahoo Finance

Its GDP Purchasing Power Parity and India at 3rd place $7 Trillion, little less than half of China or America.