China overtakes US as world’s largest economy

09 October 2014, Lagos – The International Monetary Fund says China has overtaken the United States as the world’s largest economy, according to a report.

The IMF estimates that the size of the US economy is $17.4tr, while the Chinese economy comes in at $17.6tr, Business Insider reports.

China’s share of the global economy is 16.48 per cent, while the United States accounts for 16.28 per cent, the IMF said Tuesday as part of its outlook for the world economic growth.

Weak demand in China impacts oil prices

These figures are adjusted for the relative costs of living in both countries, known as “purchasing power parity.”

As recently as 2005, the Chinese economy was less than half the size of the US economy.

Moreover, the IMF projects that China’s economy will be 20 per cent bigger than that of the US by 2019.

China remains the biggest foreign holder of US government debt, holding an estimated $1.27bn in US Treasury bonds.

The United States accuses China of lowering the price of its exports by manipulating its currency.

Earlier this year, China and Russia agreed to a measure to undercut the domination of the US dollar as the international reserve currency by paying each other in domestic currencies.

– The Punch

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