China overtakes U.S. as World’s largest economy

[Martin Everson]

China overtakes U.S. as World’s largest economy

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China has now overtaken the US to become the world’s largest economy according to the IMF’s World Economic Output 2020 released recently.

The International Monetary Fund (IMF), using the more reliable and now widely accepted yardstick, called the Purchasing Power Parity (PPP), has determined China’s economy at $24.2 trillion compared to America’s $20.8 trillion.The PPP calculation method used by the IMF enables you to compare how much you can buy for your money in different countries. The economists have traditionally been using MER (market exchange rates) to calculate GDP, which doesn’t reflect the real figures. The MER method is being viewed with extreme suspicion because it underestimates the buying power of the currencies of many countries. As a result, the currencies of many nations are undervalued against the dollar.

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[sinos]

China overtakes U.S. as World’s largest economy

---- start quote
China has now overtaken the US to become the world’s largest economy according to the IMF’s World Economic Output 2020 released recently.

The International Monetary Fund (IMF), using the more reliable and now widely accepted yardstick, called the Purchasing Power Parity (PPP), has determined China’s economy at $24.2 trillion compared to America’s $20.8 trillion.The PPP calculation method used by the IMF enables you to compare how much you can buy for your money in different countries. The economists have traditionally been using MER (market exchange rates) to calculate GDP, which doesn’t reflect the real figures. The MER method is being viewed with extreme suspicion because it underestimates the buying power of the currencies of many countries. As a result, the currencies of many nations are undervalued against the dollar.

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True, but China is still an exporting country, its internal consumption and services industry isn't even comparable to US. PPP doesn't stand for anything, there are other factors to consider - population size, market access, currency float and capital controls. A much better gauge is Per Capita GDP (PPP based) - on that scale US is either 7th/8th & China is 73rd/78th world wide. Chinese Yuan is nowhere in competition to USD.

Source:

List of countries by GDP (PPP) per capita - Wikipedia

en.wikipedia.org

IMF 2020 report
World Bank 2019 report

 

[banafinfodafuggiano]

Basically, China is powerful and rich as long as capitalism and consumerism in the Western World exist (or until there is a third world war that will stop any item coming from China for daily use in the western world).

After that, China without exports will basically be almost worthless.

 

[VESTANON]

Basically, China is powerful and rich as long as capitalism and consumerism in the Western World exist (or until there is a third world war that will stop any item coming from China for daily use in the western world).

After that, China without exports will basically be almost worthless.

Strong points on both ends, the disparity based on the PPP (purchasing) could be countered if the US concentrates more on exports, revive its industry, bring back manufacturing into US, Trim chinese operations and significant chinese presence in north america,stop fighting/aiding uneccessary decades of Global conflicts...

The USD still has an edge over the Yen, at a heart beat, EUROS and STERLING would come to mind as an alternate currency than the Yen..

US on the other hand needs to clean up its act fast, if it does intend to The get the Green Back Bullish, retaining more dominance/confidence
.

 

[polonieth]

Basically, China is powerful and rich as long as capitalism and consumerism in the Western World exist (or until there is a third world war that will stop any item coming from China for daily use in the western world).

After that, China without exports will basically be almost worthless.

Look at where China is getting involved though, all over some of Eastern Europe, Serbia etc., they will continue to be a dominant force.

 

[VESTANON]

Look at where China is getting involved though, all over some of Eastern Europe, Serbia etc., they will continue to be a dominant force.

Yea But, I wouldnt Expect fomer USSR territories totally infiltrated by the Chinese, Mother Russia must be appeased, Most of Eastern Europe has the USSR stamped and dominant...