According to that IMF forecast, Chinas economy could overtake that of US to become the worlds biggest by 2016. That is much earlier than previous predictions, some of which called it for 2030 or as late as 2050. Now let me take you through the new forecast for the Chinese and the US economies. They are based on purchasing power parity, which is basically a way of comparing what people earn and spend in real terms. The IMF says Chinas economy will grow from $11.2 trillion this year to, in 2016, to $19 trillion. Thats a growth of about $8 trillion in total. Meantime, the US, well, that is forecast to go from about $15.2 trillion in 2011. In 2016, supposed to go up to $18.8 trillion. Thats only about $3.5 trillion there. So what does that mean as part of the world economy. Well, by 2016, well, China would be responsible for about 18% of total world output. And that would like to keep rising. The US for its part would only account for 17.7% of total world output. And you know, just remember, it was just last year that China overtook Japan as the worlds second largest economy. So if the IMF forecast holds, it would be a great economic leap forward for China going from No.3 to No.1, and of course toppling the US in just 6 years.
Extraordinary speed when you look at it like that, but as you point it out, there are around for when China will become the No.1 economy. That doesnt seem to be any doubt. It will. It is just a matter of when. So how credible is this 2016 deadline from the IMF. I mean they are talking about measuring in purchasing power parity, arent they?
