Who Has the World’s Largest Economy?
Once again, new economic readings from the World Bank's International Comparison Program have fed into the long-going debate over whether China is surpassing the United States as an economic and financial power. And once again, the answer to that question is a qualified "no."
CAMBRIDGE – The World Bank’s International Comparison Program has just released its latest measures of price levels and GDP across 176 countries, and the results are striking. For the first time ever, the ICP finds that China’s total real (inflation-adjusted) income is slightly larger than that of the United States. In purchasing-power-parity (PPP) terms, China’s 2017 GDP was $19.617 trillion, whereas the US’s stood at $19.519 trillion.
Of course, when China’s total income is divided by its massive population, the picture changes. Although China’s per capita income has pulled ahead of Egypt’s, it remains in the middle of the pack globally, behind Brazil, Iran, Thailand, and Mexico.
In any case, the two concepts – total and per capita income – each have distinct implications for geopolitics, so one must consider them separately. China wants to be treated like a developing country (at least in trade negotiations), and the ICP’s per capita income figure shows that it is precisely that. But when it comes to power politics and China’s influence in international institutions, total income matters more.