[Congressional Record Volume 160, Number 63 (Wednesday, April 30, 2014)]
[Extensions of Remarks]
[Pages E635-E636]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




ARTICLE FROM TODAY'S FINANCIAL TIMES ENTITLED, ``CHINA TO OVERTAKE U.S. 
                   AS TOP ECONOMIC POWER THIS YEAR''

                                 ______
                                 

                            HON. JIM COOPER

                              of tennessee

                    in the house of representatives

                       Wednesday, April 30, 2014

  Mr. COOPER. Mr. Speaker, I would like to submit the following article 
from today's Financial Times entitled, ``China To overtake U.S. as top 
economic power this year''.

[[Page E636]]

                 [From Financial Times, Apr. 30, 2014]

          China To Overtake US as Top Economic Power This Year

                            (By Chris Giles)

       The US is on the brink of losing its status as the world's 
     largest economy and is likely to slip behind China this year, 
     sooner than widely expected, to the world's leading 
     statistical agencies.
       The US has been the global leader since overtaking the UK 
     in 1872. Most economists previously thought China would pull 
     ahead in 2019.
       The data, compiled by the International Comparison 
     Programme hosted by the World Bank, and to be released today, 
     are the most authoritative estimates of what money can buy in 
     different countries and are used by most public and private 
     sector organisations, such as the International Monetary 
     Fund. This is the first time they have been updated since 
     2005.
       After extensive research on the prices of goods and 
     services the ICP concluded that money goes further in poorer 
     countries than previously thought, prompting it to increase 
     the relative size of emerging market economies.
       The estimates of the real cost of living, known as 
     purchasing power parity, or PPPs, are recognised as the best 
     way to compare the size of economies rather than using 
     volatile exchange rates, which rarely reflect the true cost 
     of goods and services: on this measure the IMF put US GDP in 
     2012 at $16.2tn, and China's at $8.2tn.
       In 2005, the ICP thought that China's economy was less than 
     half the size of the US, accounting for only 43 per cent of 
     America's total. Using the new methodology--and reflecting 
     the fact that China's economy has grown much more quickly--
     the research placed China's GDP at 87 per cent of the US in 
     2011.
       For 2011, the report says: ``The US remained the world's 
     largest economy, but it was closely followed by China when 
     measured using PPPs''.
       With the IMF expecting China's economy to have grown 24 per 
     cent between 2011 and 2014 while the US is expected to expand 
     only 7.6 per cent, China is likely to overtake the US this 
     year.
       The figures revolutionise the picture of the world's 
     economic landscape, boosting the importance of large middle-
     income countries. India becomes the third-largest economy 
     having previously been in 10th place. The size of its economy 
     almost doubled from 19 per cent of the US in 2005 to 37 per 
     cent in 2011.
       Russia, Brazil, Indonesia and Mexico make the top 12 in the 
     global table. In contrast, high costs and lower growth push 
     the UK and Japan further behind the US than in the 2005 
     tables while Germany improved its relative position a little 
     and Italy remained the same.
       The findings will intensify arguments about control over 
     global international organisations such as the World Bank and 
     IMF, which are increasingly out of line with the balance of 
     global economic power.
       When looking at the actual consumption per head, the report 
     found the new methodology together with faster growth in poor 
     countries have ``greatly reduced'' the gap between rich and 
     poor, ``suggesting that the world has become more equal''.
       The world's rich countries still account for 50 per cent of 
     global GDP while containing only 17 per cent of the world's 
     population.
       Having compared the cost of living in different countries, 
     the report also found that the four most expensive countries 
     to live in are: Switzerland, Norway, Bermuda and Australia, 
     with the cheapest Egypt, Pakistan, Myanmar and Ethiopia.

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