A recent Pew poll found that 47 per cent of Americans believe that China is the world’s largest economy, while only 31 per cent believe it to be the United States. Another instance of embarassing American ignorance?
Not according to Arvind Subramanian, senior fellow at the Peterson Institute for International Economics in Washington. Based on new economic data compiled by the University of Pennsylvania, Subramanian claims that China’s economy became bigger than the US’s in 2010.
In a research note published on Thursday, Subramanian calculates that in purchasing power parity (PPP) terms – that is, adjusting for the different costs of living in the two countries – the size of China’s economy was $14.8tn in 2010, compared to the US economy’s $14.6tn.