Date
26 September 2017
China could topple the US as the world's biggest economy on purchasing power parity basis as soon as this year. Photo: Bloomberg
China could topple the US as the world's biggest economy on purchasing power parity basis as soon as this year. Photo: Bloomberg

China set to pass US as biggest economy on PPP basis

China is poised to overtake the United States as the world’s largest economy, while India has leaped into third place, ahead of Japan, based on purchasing power parity (PPP), Bloomberg News reported Wednesday.

China’s economy was 87 percent of the size of that of the US in 2011, using calculations that take exchange rates into account, the International Comparison Program was quoted as saying in a statement in Washington Tuesday. The program, which involves organizations including the World Bank and United Nations, had put the figure at 43 percent in 2005.

Changes in methodology contributed to the speed of China’s rise and India’s ascent to the third place in 2011 from 10th in 2005. Purchasing power parity seeks to compare how far money goes in each country. Using market rates, US gross domestic product was US$16.2 trillion in 2012, compared with China’s US$8.2 trillion, the report said.

– Contact HKEJ at [email protected]

RA/RC

EJI Weekly Newsletter

Please click here to unsubscribe