China to overtake U.S. as world's largest economy this year
Getty Images
The U.S. — the world's largest economy since the 1880s — is on the verge of losing its status as the world's largest economy, and is likely to slip behind China this year, says the International Comparison Program, part of the World Bank.
In 2005, the World Bank estimated China's economy was less than half the size of America's, equaling just 43 percent of America's total output. But in 2011 the research placed China's GDP at 87 percent of the U.S., reflecting China's staggeringly enormous economic growth, as well as an updated methodology on purchasing power parity (the amount of goods and services money buys) that recognizes that money goes much further in developing economies than it does in wealthier economies.
With China's economy now expected to have grown 24 percent between 2011 and 2014 while the U.S. is expected to expand only 7.6 percent in that period, China is on course to overtake the U.S. this year. China has already overtaken the U.S. as the world's largest trading nation.
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
The new measurements dramatically change the shape of the global economic landscape, emphasizing the importance of developing economies. For example, India becomes the world's third-largest economy having previously been in tenth place. The size of its economy also dramatically expanded from the equivalent of 19 percent of the U.S. economy in 2005 to 37 percent in 2011. Russia, Brazil, Indonesia, and Mexico have also grown significantly.
Of course, the U.S. remains vastly ahead of China in terms of economic activity per person. The U.S. has just 4.44 percent of the world's population, while China has 19.1 percent, so it is unsurprising to see China catch the U.S. in terms of total activity. But in terms of economic activity per person, the U.S. is further down the list, in sixth place behind Qatar, Luxembourg, Norway, Singapore, and Brunei.
Sign up for Today's Best Articles in your inbox
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
John Aziz is the economics and business correspondent at TheWeek.com. He is also an associate editor at Pieria.co.uk. Previously his work has appeared on Business Insider, Zero Hedge, and Noahpinion.
-
'The Hum': the real-life noise behind The Listeners
In The Spotlight Can some of us also hear the disturbing sound that plagues characters in the hit TV show – and where is it coming from?
By Chas Newkey-Burden, The Week UK Published
-
The Week Unwrapped: Are we any closer to identifying UFOs?
Podcast Plus, will deals with Tunisia and Kurdistan help Labour? And what next for the Wagner Group?
By The Week Staff Published
-
Quiz of The Week: 16 - 22 November
Have you been paying attention to The Week's news?
By The Week Staff Published
-
US charges Indian tycoon with bribery, fraud
Speed Read Indian billionaire Gautam Adani has been indicted by US prosecutors for his role in a $265 million scheme to secure solar energy deals
By Peter Weber, The Week US Published
-
Boeing machinists approve contract, end strike
Speed Read The company's largest union approved the new contract offer, ending a seven-week strike
By Peter Weber, The Week US Published
-
US economy still strong in final preelection report
Speed Read It grew at a solid 2.8% annual rate from July through September
By Peter Weber, The Week US Published
-
Boeing machinists reject deal, continue strike
Speed Read The rejection came the same day Boeing reported a $6.2 billion quarterly loss
By Peter Weber, The Week US Published
-
Ports reopen after dockworkers halt strike
Speed Read The 36 ports that closed this week, from Maine to Texas, will start reopening today
By Peter Weber, The Week US Published
-
Empty-nest boomers aren't selling their big homes
Speed Read Most Americans 60 and older do not intend to move, according to a recent survey
By Peter Weber, The Week US Published
-
Brazil accuses Musk of 'disinformation campaign'
Speed Read A Brazilian Supreme Court judge has opened an inquiry into Elon Musk and X
By Rafi Schwartz, The Week US Published
-
Disney board fends off Peltz infiltration bid
Speed Read Disney CEO Bob Iger has defeated activist investor Nelson Peltz in a contentious proxy battle
By Rafi Schwartz, The Week US Published