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China rapidly moving to overtake US economy

 
 
 
 
 
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A new study has found that China is rapidly moving ahead to overtake the United States as the world’s largest economy as soon as this year.

The new finding by the International Comparison Program (ICP), which involves the World Bank and United Nations, said on Wednesday that China in 2011 closely followed the US that has been dominating the world economy for over a century.

“The size of the Chinese economy in 2011 was 87 percent of the US economy, up from 43 percent in 2005,” the ICP said.

It added the US accounted for over 17 percent of the global economy in 2011, while China stood next with nearly 15 percent.

The study, using Purchasing Power Parities (PPP), said this year could mark an overtaking point for China, as it has been catching up with the US for years.

“There’s a symbolic element to this, to China overtaking the US, and that seems to be happening,” said Arvind Subramanian, a senior fellow at the Washington-based Peterson Institute for International Economics.

The latest data “plays to the idea that China is very big and getting bigger. It’s not to be underestimated.”

The study also added that India overtook Japan to become the world’s third- largest economy with 6.4 percent of gross domestic product (GDP).

“India was now the world’s third-largest economy, moving ahead of Japan,” it noted.

The study added, “The results indicate that only a small number of economies have the greatest shares of world GDP. However, the shares of large economies such as China and India have more than doubled relative to that of the United States.”

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