China Economy: Already Larger Than U.S.
When will China overtake the United States as the world’s largest economy?
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Takeaways
- US GDP stood at $16.8 trillion in 2013 —just about 4% larger than China’s economy.
- The IMF estimates that China’s GDP at purchasing power parity was $17.6 trillion at the end of 2014.
- Since price level in China is lower than in the US, a dollar in China buys more than a dollar in the US.
1. China has long been the world’s largest nation in terms of population.
2. China’s re-emergence as an economic superpower began in the late 1970s, when then leader Deng Xiaoping introduced a series of economic reforms.
3. By 2013, the Chinese economy had grown to $16.1 trillion, measured at purchasing power parity.
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4. That same year, U.S. GDP stood at $16.8 trillion at that time — or just about 4% larger than China’s economy.
5. Given China’s higher economic growth rate, at some point during 2014 China overtook the United States as the world’s largest economy when measured on a purchasing power parity.
6. The IMF estimates that China’s GDP at purchasing power parity was $17.6 trillion at the end of 2014 — or about 1% larger than the U.S. GDP of $17.4 trillion.
7. Measuring GDP at purchasing power parity takes into account the differences in prices that people pay for goods and services in different economies.
8. Since the price level in China is still much lower than in the United States, a dollar in China buys much more than a dollar in the United States.
