China poised to overtake US economy: World Bank ranking

China poised to overtake US economy: World Bank ranking
Above: A general view of Shanghai's financial district of Pudong.

PARIS - China is advancing rapidly to overtake the United States as the biggest economy in the world, new data shows, with the leader of the world economy since the 19th century possibly losing its top spot to the Asian giant from this year.

"The United States remained the world's largest economy (in 2011), but it was closely followed by China" once data was adjusted for comparison on a standard basis, the World Bank said on Wednesday.

"India was now the world's third largest economy, moving ahead of Japan."

In parallel, the OECD grouping 34 advanced economies and analysing the same data, said that "the three largest economies in the world were the United States with 17.1 per cent (of global output), China 14.9 per cent and India 6.4 per cent."

In 2011 "OECD countries accounted for 50.0 per cent of the world's gross domestic product" on a comparable basis, down from about 60 per cent in 2005.

"Large emerging economies, China, Brazil, India, Indonesia, Russian Federation and South Africa, accounted for about 30 per cent of global GDP in 2011, up from about 20 per cent in 2005," the OECD said.

The World Bank published a vast study on the rankings of national wealth creation on the basis of 2011 figures.

The study was carried out with several international organisations to compare national production figures in nominal terms, and also after adjustment to reflect varying buying power, a method knows as purchasing power parities (PPP).

Comparisons of the size of various national economies can be skewed heavily by the exchange rates used and how these change. They can also be affected by the reliability of input data.

The Organisation for Economic Cooperation and Development, a policy centre for 34 advanced democracies, said that PPPs were "the relevant currency conversion rates to make international comparisons of economic activity" since they compensated for differences in price levels across countries.

Gross domestic product by the United States in 2011 amounted to US$15.533 trillion, over twice of China's US$7.321 trillion.

But after a PPP-method adjustment, the figure for China rose to US$13.495 trillion, breathing down the neck of the United States which has dominated the world economy for over a century.

The World Bank said that its PPP calculations for 2011 could not be compared directly with calculations made in 2005, but the figures nevertheless showed the speed with which China was closing the gap.

In 2005, on a PPP basis, Chinese output amounted to about 43.0 per cent of US GDP, but in 2011 this had risen to nearly 87.0 per cent, doubling its relative performance.

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