China (Sort of) Beats U.S. as World’s Largest Economy

China US Economy
China US Economy

The United States will lose its place this year as the world's largest economy to China, at least in terms of an important economic measure tied to the cost of living, according to International Monetary Fund.

According to IMF data based on the purchasing power parity, or PPP, China was expected to make up $17.6 trillion of its gross domestic product, or GDP, compared to the U.S. figure of $17.4 trillion this year. However, Bloomberg pointed out that PPP uses exchange rates that adjust for price differences of the same goods between nations.

"The U.S. remains the biggest by the more common, more widely accepted and in our view, more useful measure," said David Hensley, the director of global coordination at JPMorgan Chase & Co.

According to The Telegraph, wages in China are much lower than in the United States. However, earlier IMF calculations indicated that China was not expected to surpass the U.S. through the PPP measure until 2019.

China's share of the global economy is now a little bigger than the U.S. at 16.5 percent to 16.3 percent respectively, reported Huffington Post. However, based on measuring overall size and not taking into account the cost of living, the U.S. still has a GDP worth $17.4 trillion, while China only has $10.4 trillion GDP.

The United States still maintains the lion's share in terms of the raw value of its currency, according to Newsweek. China still lags behind the U.S. in that economic aspect.

"The view we encounter now is a more sobering reassessment," Hensley said, adding that he prefers projections based on market exchange rates. "The U.S. has cleaned up its act. China still has a lot of work to do."

Huffington Post speculated that the PPP figures may have been affected by China manipulating its currency to be lower than the U.S. dollar. While this means products from China are cheaper as compared to products from the United States, this manipulation, along with a booming factory sector, may have also helped China's economy to grow at a very rapid pace.

According to IMF forecasts in its latest World Economic outlook, China is projected to grow by 7.4 percent this year. Those same forecasts also noted that shadow banking was on the rise in China and that Chinese authorities must work harder to apply structural reforms, according to The Telegraph.

Hensley warned that a preoccupation with this "competition or foot-race" captures little of the reversal of fortunes currently happening. He told Bloomberg that "you really exaggerate the importance of these economies" when one looks at a PPP comparison.

    Most Popular
  • Is 'The Last Supper' worth watching? Audience and critics weigh in

    Is 'The Last Supper' worth watching? Audience and critics weigh in

    Faith-based films often receive mixed reactions, and The Last Supper is no exception. The movie attempts to bring a fresh perspective to one of the most iconic moments in Christian history, but does it succeed? Some reviews from critics and audiences provide insight into its strengths and shortcomings.

  • ‘The Chosen’ Season 5: The darkest season yet—What to know before watching

    The wait is over—The Chosen is back with its fifth season, and this time, things are getting intense. The new episodes dive straight into the final days of Jesus’ life, covering some of the most emotional and dramatic moments in the Bible. If you’ve been following the series, you already know that The Chosen isn’t just about retelling familiar stories—it’s about bringing them to life in a way that feels real.

  • Massacres in Syria: Over 1,000 dead, including Christians and Alawites

    Syria’s coastal regions have been devastated by a series of massacres, with reports indicating that over 1,000 people—many from Christian and Alawite communities—have been killed in brutal attacks. Entire families have been wiped out, and survivors are fleeing in search of safety as sectarian violence escalates.

  • Kim Sae-ron and Wheesung: The tragic irony of Korean society and the principles of happiness

    Not long ago, the media was in an uproar over actress Kim Sae-ron’s passing. Just months before, the same people who had relentlessly criticized her for her DUI incident were now expressing sympathy, saying, "The world was too harsh on her." The irony is impossible to ignore.

  • Newsboys move forward as a quartet after Michael Tait’s departure

    After more than a decade as the lead singer of the Newsboys, Michael Tait has officially parted ways with the band, marking a significant shift in the Christian rock group’s lineup. The remaining members—Jeff Frankenstein, Jody Davis, Duncan Phillips, and Adam Agee—have assured fans that they will continue forward, embracing a new season of music and ministry.