The World Bank’s International Comparison Program takes account of international prices to give a more accurate measure of a nation’s real output.
The statisticians have just completed the exercise for 2011, and they found that China’s economy was 87 percent as large as the US – not the previously stated 47 percent, as output converted at market exchange rates would have you believe. Since 2011, China has grown much faster than the US. According to the World Bank’s figures, China’s economy will be the world’s biggest before 2014 is out, if it isn’t already.
However, these figures do not necessarily mean that China is now rich – its living standards will not be the same as the US for many decades – and the closer those standards get, the harder it will be for China to maintain its faster growth, says Bloomberg Business Week.
There is no doubt that China surpassing the US economy will become a historical milestone. As the global economy is changing faster than many are forecasting, these new rankings are a moment for reflection on the West’s century-long economic dominance; which can no longer be taken for granted.