*China Just Overtook The US As The World's Largest Economy* http://finance.yahoo.com/news/china-just-overtook-us-worlds-090801574.html
*[image: Business Insider] <http://www.businessinsider.com/> *By Mike Bird 8 hours ago China Just Overtook The US As The World's Largest Economy <http://finance.yahoo.com/news/china-just-overtook-us-worlds-090801574.html> [image: image] <http://finance.yahoo.com/news/china-just-overtook-us-worlds-090801574.html> China Just Overtook The US As The World's Largest Eco... <http://finance.yahoo.com/news/china-just-overtook-us-worlds-090801574.html> It's official: the Chinese economy has more spending power than the US View on finance.yahoo.com <http://finance.yahoo.com/news/china-just-overtook-us-worlds-090801574.html> Preview by Yahoo [image: Chinese US flags] REUTERS/Shannon Stapleton Sorry, America. China just overtook the US to become the world's largest economy, according to the International Monetary Fund. Chris Giles at the Financial Times flagged up the change <http://ftalphaville.ft.com/2014/10/07/1998332/moneysupply-the-new-world-economy-in-four-charts/>. He also alerted us in April that it was all about to happen <http://www.ft.com/cms/s/0/d79ffff8-cfb7-11e3-9b2b-00144feabdc0.html>. Basically, the method used by the IMF adjusts for purchasing power parity, explained here <http://www.imf.org/external/pubs/ft/fandd/2007/03/basics.htm>. The simple logic is that prices aren't the same in each country: A shirt will cost you less in Shanghai than in San Francisco, so it's not entirely reasonable to compare countries without taking this into account. Though a typical person in China earns a lot less than the typical person in the US, simply converting a Chinese salary into dollars underestimates how much purchasing power that individual, and therefore that country, might have. The Economist's Big Mac Index <http://www.economist.com/content/big-mac-index> is a great example of these disparities. So the IMF measures both GDP in market-exchange terms and in terms of purchasing power. On the purchasing-power basis, China is overtaking the US right about now and becoming the world's biggest economy. We've just gone past that crossover on the chart below, according to the IMF. By the end of 2014, China will make up 16.48% of the world's purchasing-power adjusted GDP (or $17.632 trillion), and the US will make up just 16.28% (or $17.416 trillion): <http://l3.yimg.com/bt/api/res/1.2/trGYhKiC68V4oKQLJ.Ppdw--/YXBwaWQ9eW5ld3M7cT04NTt3PTEyMDA-/http://static4.businessinsider.com/image/5434f54a6bb3f7fd5406f095-960/screen%20shot%202014-10-08%20at%2009.25.43.png> <http://l3.yimg.com/bt/api/res/1.2/trGYhKiC68V4oKQLJ.Ppdw--/YXBwaWQ9eW5ld3M7cT04NTt3PTEyMDA-/http://static4.businessinsider.com/image/5434f54a6bb3f7fd5406f095-960/screen%20shot%202014-10-08%20at%2009.25.43.png> View gallery. [image: China US economies] IMF, Google Public Data Explorer Adjusted for purchasing power, the IMF thinks China's economy is now the world's largest. It's not all sour news for the US. It'll be some time yet until the lines cross over in raw terms, not adjusted for purchasing power. By that measure, China still sits more than $6.5 trillion lower than the US and isn't likely to overtake for quite some time: <http://l1.yimg.com/bt/api/res/1.2/7un_IClAZFOv2gQmCNWf4Q--/YXBwaWQ9eW5ld3M7cT04NTt3PTEyMDA-/http://static2.businessinsider.com/image/5434f8f569beddfb2f06f089-960/screen%20shot%202014-10-08%20at%2009.40.31.png> <http://l1.yimg.com/bt/api/res/1.2/7un_IClAZFOv2gQmCNWf4Q--/YXBwaWQ9eW5ld3M7cT04NTt3PTEyMDA-/http://static2.businessinsider.com/image/5434f8f569beddfb2f06f089-960/screen%20shot%202014-10-08%20at%2009.40.31.png> View gallery . [image: US China economies] IMF, Google Public Data Explorter But in terms of the raw market value of China's currency, it still has a long way to go. -- Best Regards, *Khmer Forum* *A place for sharing community events and public news.* -- -- You received this message because you are subscribed to the Google Groups "Cambodia Discussion (CAMDISC) - www.cambodia.org" group. This is an unmoderated forum. Please refrain from using foul language. Thank you for your understanding. Peace among us and in Cambodia. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [email protected] For more options, visit this group at http://groups.google.com/group/camdisc Learn more - http://www.cambodia.org --- You received this message because you are subscribed to the Google Groups "Cambodia Discussion (CAMDISC) - www.cambodia.org" group. To unsubscribe from this group and stop receiving emails from it, send an email to [email protected]. For more options, visit https://groups.google.com/d/optout.
