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The U.S. no longer boasts the world’s largest economy.
China, the world’s most populous country, has overtaken America to claim the title of world’s number one economic powerhouse, according to the International Monetary Fund (IMF).
By year’s end, China’s economic output will reach $17.6 trillion – the U.S. will slide down to second with a mere $17.4 trillion.
Just over a decade ago, in 2000, the Americans produced three-times as much as the Chinese, MarketWatch noted. The Chinese economy was one-tenth the size of the U.S. in 1980, according to the Financial Times (FT).
China’s growth means it now accounts for 16.5 percent of the world’s economy, according to the financial news site. The U.S. is holding down 16.3 percent.
The IMF made the calculations by measuring purchasing-power parity (PPP), which does not account for fluctuations in exchange rates when measuring economies.
Similar goods cost the same in both Shanghai and New York, as far as PPP is concerned.
Experts have predicted this monumental shift in economic power for years. It was never a question of if, but rather when.
The U.S. sat atop the world economic perch since 1872, when it passed Great Britain. The Brits only held the title for a handful of years, though, according to FT.
Who did Great Britain surpass to claim the temporary perch? China, of course. The Chinese had the world’s largest economy as late as 1870, an economic historian told the paper.
Despite the inevitability of the world’s most populous country assuming the top of the economic food chain, China’s ascension carries a rather large caveat.
The per-person Gross Domestic Product (GDP) is less than one-quarter that of the U.S., according to FT. It is still far from being the world’s wealthiest nation.
That distinction remains American.