Skip to comments.
China overtakes US to be world's #1 economy: First time since President Grant was in office
American Thinker ^ | 12/05/2014 | Rick Moran
Posted on 12/5/2014 11:24:01 AM by SeekAndFind
According to figures published by the International Monetary Fund, China has surpassed the US in economic output of real goods and services - a measure widely accepted as a gauge of total economic activity.
It's an esoteric measurement, but important because it ignores exchange rates:
These calculations are based on a well-established and widely used economic measure known as purchasing-power parity (or PPP), which measures the actual output as opposed to fluctuations in exchange rates. So a Starbucks venti Frappucino served in Beijing counts the same as a venti Frappucino served in Minneapolis, regardless of what happens to be going on among foreign-exchange traders.
China recently changed the way it calculates gross domestic product, bringing the measure in line with international standards:
China will this year produce $17.6 trillion — compared with $17.4 trillion for the U.S.A.
As recently as 2000, we produced nearly three times as much as the Chinese.
To put the numbers slightly differently, China now accounts for 16.5% of the global economy when measured in real purchasing-power terms, compared with 16.3% for the U.S.
This latest economic earthquake follows the development last year when China surpassed the U.S. for the first time in terms of global trade.
[...]
Yes, all statistics are open to various quibbles. It is perfectly possible China’s latest numbers overstate output — or understate them. That may also be true of U.S. GDP figures. But the IMF data are the best we have.
(Excerpt) Read more at americanthinker.com ...
