# China overtakes the US as world's largest economy (in PPP)

**URL:** <https://boards.straightdope.com/t/china-overtakes-the-us-as-worlds-largest-economy-in-ppp/700807>\
**Category:** Miscellaneous and Personal Stuff I Must Share\
**Created:** [October 9, 2014, 12:04am UTC](https://boards.straightdope.com/t/china-overtakes-the-us-as-worlds-largest-economy-in-ppp/700807 "2014-10-09T00:04:05Z")\
**Posts on this page:** 3\
**Page:** 1

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**Author:** ![Wesley\_Clark](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/wesley_clark/32/20581_2.png) [@Wesley\_Clark](https://boards.straightdope.com/u/Wesley_Clark)\
**Post date:** [October 9, 2014, 12:04am UTC](https://boards.straightdope.com/t/china-overtakes-the-us-as-worlds-largest-economy-in-ppp/700807/1 "2014-10-09T00:04:05Z")

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> **[China Just Overtook The US As The World's Largest Economy](https://www.businessinsider.com/china-overtakes-us-as-worlds-largest-economy-2014-10)**
>
> It's official: The Chinese economy has more spending power than the US.

[http://rt.com/business/194264-china-surpass-us-gdp/](http://rt.com/business/194264-china-surpass-us-gdp/)

> [@](#):
>
> In 2014 China reached $17.6 trillion or 16.48 percent of the world’s purchasing-power-adjusted GDP, while the US made slightly less, 16.28 percent or $17.4 trillion, the FT reported citing IMF data.

Neat. I thought they were at about 14 trillion in PPP, no idea where the other 3-4 trillion came from.

In USD they are still at about half of what latin american countries are regarding per capita income.

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**Author:** ![Shalmanese](https://avatars.discourse-cdn.com/v4/letter/s/45deac/32.png) [@Shalmanese](https://boards.straightdope.com/u/Shalmanese)\
**Post date:** [October 9, 2014, 1:54am UTC](https://boards.straightdope.com/t/china-overtakes-the-us-as-worlds-largest-economy-in-ppp/700807/2 "2014-10-09T01:54:58Z")

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Total GDP in PPP terms never made sense to me, except as an excuse to pump out news stories like this. GDP per capita PPP makes some amount of sense since it’s useful to get an understanding of what relative living standards are between two countries. But at the size of entire economies, there is no real purchasing power differential that would justify a PPP adjustment.

In non-PPP adjusted terms, China is barely half the size of the US but that makes for much less sexy headlines.

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**Author:** ![Shodan](https://avatars.discourse-cdn.com/v4/letter/s/9f8e36/32.png) [@Shodan](https://boards.straightdope.com/u/Shodan)\
**Post date:** [October 9, 2014, 2:16pm UTC](https://boards.straightdope.com/t/china-overtakes-the-us-as-worlds-largest-economy-in-ppp/700807/3 "2014-10-09T14:16:33Z")

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Does the PPP calculation take into account the fact that a lot of things that are easily available in the US are not so easily obtained in China? And the fact that China has an unfortunate habit of ignoring copyright and thus selling goods for cheaper than in economies that enforce such laws?

Anyway, if and when the US economy continues to recover no doubt the rather small differences will disappear, and so will stories like this.

I get the same feeling that I do about studies that the UN puts out - sometimes it seems like they are deliberating looking for some factor to include just so the US doesn’t come out no. 1.

Regards,  
Shodan