Is this really true? China is number 1! US moves over to number 2.
The Chinese economy has apparently overtaken the United States to become the largest in the world. For the first time since Grant was the United States president, America is has moved over to second place.
The International Monetary Fund had recently released the latest numbers for the world economy. In terms of national economic output in "real" terms of goods and services, China had produced $17.6 trillion in 2014 compared to $17.4 trillion for the United States. Just four years ago, the numbers US produced were around three times more than China. China now accounts for around 16.5 percent of the global economy when measured in real purchasing-power terms as compared to United States with only 16.3 percent.
This latest economic follows last year's development when China surpassed the United States for the first time in terms of global trade. This was when China decided recently to bring gross domestic product calculations in line with international standards which has resulted to activities that were revealed and had previously gone uncounted for.
The calculations were based on the economic measure purchasing-power parity (or PPP), which actually measures the actual output as opposed to fluctuations in exchange rates. Taking the exchange rates aside, PPP is used to compare two different economies. IMF's official World Economic Outlook compared the countries by their share of world output using the same measure, PPP. This measure was not only used by IMF but also by consultancy firm McKinsey & Co. way back in the 1990s when they had a study of economic productivity on behalf of the British government.
However, when you look at international exchange rates, the U.S. economy still remains bigger than that of China by around 70 percent. It depends on what measure to follow.
