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By PPP, 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):
Congrats to Chaina and it is great achievement and very proud that Asian country overtook U.S
It was pretty much a clerical change.
The IMF report is released every 6 months. In April China's GDP for 2014 was estimated at 62.8 trillion Yuan, and in October it was revised to 64.5 trillion Yuan (2.55% change).
As the exchange rate changed only slightly (6.26 Yuan/USD to 6.22 Yuan/USD) that is equivalent to just over $10 trillion dollars both times.
What changed is what the IMF believes is the "purchasing power" of the Yuan. In April the IMF believed that 60 plus trillion Yuan had the purchasing power of $14 trillion USD. Now they think it has the equivalent purchasing power of over $17 trillion USD. In other words they had a better estimate of prices in China. Suddenly the GDP of China (using PPP) went from $3 trillion less than the USA to slightly more.
Using the straight exchange rate it is still far behind. And as the population of China is 4.3 times the population of the USA, the GDP per person is still very low.
It is not the case that there was real expansion of the economy that much in 6 months.
The IMF report is released every 6 months. In April China's GDP for 2014 was estimated at 62.8 trillion Yuan, and in October it was revised to 64.5 trillion Yuan (2.55% change).
As the exchange rate changed only slightly (6.26 Yuan/USD to 6.22 Yuan/USD) that is equivalent to just over $10 trillion dollars both times.
What changed is what the IMF believes is the "purchasing power" of the Yuan. In April the IMF believed that 60 plus trillion Yuan had the purchasing power of $14 trillion USD. Now they think it has the equivalent purchasing power of over $17 trillion USD. In other words they had a better estimate of prices in China. Suddenly the GDP of China (using PPP) went from $3 trillion less than the USA to slightly more.
Using the straight exchange rate it is still far behind. And as the population of China is 4.3 times the population of the USA, the GDP per person is still very low.
It is not the case that there was real expansion of the economy that much in 6 months.
I agree with the understanding on this post.
Nothing to celebrate because large inequality still exist in China though it's commendable that with so many decades of high growth rate it expands the number of middle-income earners, but not enough to have significant change in its gini co ef
The chinese understand business and the cost of war
We are a Spendthrift nation and self appointed unwanted world savior
Individual strategy here for success is getting a $130000 MBA so u can get a job at Starbucks
International strategy is trying to make friends by dropping bombs on them
We are a legend in our own mind
Pointless comparison. China is huge and its economic development is uneven. There are First World cities and Third World areas across this huge nation. It has a 13 billion population, and so even if it is equal to the US in GDP size, so what? The individual Chinese family or person is significantly less well off than their counterparts in the US. China has far to go.
The PPP method is also problematic, as is the exchange rate method of measuring the GDP. China's economy can simply be termed "huge", and the benefit that really matters is that a larger economic pie will allow China to better fund education, social safety net like retirement funds, health etc and finally the modernization of the military, which was delayed for so long when China was dirt poor.
The measurement means very little, but it does mean that China is gradually attaining the means to give its people better social support and to protect itself (too bad for the US and Japan among others). This is what's important. The pissing contest about who's bigger is for insecure little boys, not major countries with rational governments.
Why doesn't China do something about ISIS, they (or you if applicable) can afford it.
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