April 30th is the release date of the 2011 ICP series. It is the largest such exercise conducted by the World Bank, which is responsible for it, ever made.
So what is the ICP series? It stands for International Comparison Program. You can read more here.
Why is this relevant? Because the ICP series is the basis for the PPP, or power purchasing parity, which all major economic organizations use to compare countries.
The last ICP series was done in 2005. It was seriously flawed. You can read more here: http://blogs.worldbank.org/developmenttalk/end-long-era
The new series is going to increase China's GDP by a significant amount. Nobody quite knows for certain, but I pinged Branko on Twitter and asked him for his opinion. His estimate was slightly lower than Maddison and slightly higher than Penn, so around 30% or so.
But even if it was "only" 20%, it would still be the largest economy in the world. Of course, China has been the world's largest economy in the world for some time now, but it simply becomes official.
After over a century on the throne, America is no longer #1.
And even more than that, China's per-capita GDP is also going to be substantially higher, hitting a PPP-adjusted 15,000 dollars or so per person this year and over 20,000 when the decade is over. And for the Eastern Coast, it's already at Western European levels.
China's military budget, when adjusted for PPP, is about 35% of America's, but it is growing over 10% per year while America will shrink its budget to the lowest post-WWII, so within no more than 7-8 years, China will have a budget at parity with the U.S. too.
In many ways this is just a return to the old way of the world, which China dominated economically for many centuries. And it will also, likely, reduce America's ability to intervene on an ad hoc basis in the world, especially in the Middle East which is already China's #1 source for oil. No more Iraq adventures. So it might not be a terrible thing, after all, at least initially. Over a decade or two, China will become to America as America is to Russia today.
Only India has the capacity to seriously challenge China this century, but that is still decades away.
So what is the ICP series? It stands for International Comparison Program. You can read more here.
Why is this relevant? Because the ICP series is the basis for the PPP, or power purchasing parity, which all major economic organizations use to compare countries.
The last ICP series was done in 2005. It was seriously flawed. You can read more here: http://blogs.worldbank.org/developmenttalk/end-long-era
The new series is going to increase China's GDP by a significant amount. Nobody quite knows for certain, but I pinged Branko on Twitter and asked him for his opinion. His estimate was slightly lower than Maddison and slightly higher than Penn, so around 30% or so.
But even if it was "only" 20%, it would still be the largest economy in the world. Of course, China has been the world's largest economy in the world for some time now, but it simply becomes official.
After over a century on the throne, America is no longer #1.
And even more than that, China's per-capita GDP is also going to be substantially higher, hitting a PPP-adjusted 15,000 dollars or so per person this year and over 20,000 when the decade is over. And for the Eastern Coast, it's already at Western European levels.
China's military budget, when adjusted for PPP, is about 35% of America's, but it is growing over 10% per year while America will shrink its budget to the lowest post-WWII, so within no more than 7-8 years, China will have a budget at parity with the U.S. too.
In many ways this is just a return to the old way of the world, which China dominated economically for many centuries. And it will also, likely, reduce America's ability to intervene on an ad hoc basis in the world, especially in the Middle East which is already China's #1 source for oil. No more Iraq adventures. So it might not be a terrible thing, after all, at least initially. Over a decade or two, China will become to America as America is to Russia today.
Only India has the capacity to seriously challenge China this century, but that is still decades away.
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