China’s economy could be the world’s number one of 2014
China could become the world’s largest economy within the year, suggests a new report by the World Bank
China's economy is growing quickly, and should overtake the US' to become the world's largest, suggests a report by the International Comparison Program (ICP) of the World Bank
China’s economy is catching up to the US’ quicker than anticipated, as it’s set to overtake the country as the world’s number one economy this year. That’s according to a new report from the International Comparison Program of the World Bank.
The 2011 ICP assesses economies based on purchasing power parity, an estimate of the real living costs. The results revealed a different picture of the global economy compared with the last update in 2005, with the ICP concluding that money goes further in poorer countries than previously suggested, prompting the statistical agency to increase the relative size of emerging market economies.
[T]he ICP figures based on purchasing power have caused economists and media such as the FT to predict that China could overtake the US as early as this year
The research puts China’s GDP at 87 percent of the US in 2011. In the 2005 study, the ICP believed China’s economy was less than half the size of the US (43 percent).
“The United States remained the world’s largest economy, but it was closely followed by China when measured using PPPs,” the report said, adding that China’s share of world GDP more than doubled relative to the US.
Rapid growth has led many economists to suggest that China, the world’s second biggest economy, would move into the number one position over the next few years. The latest findings from the ICP could fuel a debate on whether that is likely to happen sooner rather than later.
So far, regular GDP power rankings converting a country’s GDP into US dollars at market exchange rates, have emphasised that China’s economy would not overtake the US for another decade or so. In 2012, the US’s economy was valued at over $16trn, twice the size of China’s, according to the World Bank, suggesting that China, won’t be the world’s biggest economy until 2020 at the earliest.
However, the ICP figures based on purchasing power have caused economists and media such as the FT to predict that China could overtake the US as early as this year. This primarily comes down to the IMF expecting Chinese growth of 24 percent between 2011 and 2014, compared to a US expansion of only 7.6 percent.
