This Week's Forecasts & Trends E-Letter
China Surpasses America As World’s Largest Economy
May 26, 2015
For the first time in history, the People’s Republic of China’s Gross Domestic Product exceeded the GDP of America, as measured by purchasing power, in 2014. According to the International Monetary Fund, China’s purchasing power GDP hit $17.6 trillion last year versus $17.4 trillion in the US.
This was an important milestone for both countries, and China will almost certainly expand its lead over the US in the coming years and decades. Yet that is not necessarily a bad thing for the US, as I will explain below. You probably didn’t hear about this in the media, and that’s why we will talk about it today.
But before we get to our main topic, let’s look at a few recent economic reports of interest. The US economy has largely disappointed this year, with weaker-than-expected growth in sales, spending and production, with most of reports showing scant momentum.