The Chinese economy recently overtook the U.S. to become the largest in the world, in terms of national economic output.
The latest numbers pertaining to the world economy were released by the International Monetary Fund, showing that when national economic output is measured in “real” terms of goods and services, China will outproduce the United States.
According to the fund, China will produce $17.63 trillion this year, while the U.S. will only produce $17.42 trillion. As Market Watch put it, China now accounts for 16.5 percent of the global economy, beating out the U.S. by .2 percent.
The statistics are particularly shocking, given that a little over a decade ago, the U.S. produced almost three times as much as China did.
In terms of international exchange rates, the U.S. still remains substantially larger than China — but that may not be as important as it seems. “Yes, when you look at mere international exchange rates, the U.S. economy remains bigger than that of China, allegedly by almost 70%,” Market Watch reported. “But such measures, although they are widely followed, are largely meaningless. Does the U.S. economy really shrink if the dollar falls 10% on international currency markets? Does the recent plunge in the yen mean the Japanese economy is vanishing before our eyes?”
In many ways, economic output levels can be considered more telling than international exchange rates.
The newly released statistics could spell bad news for the U.S., Market Watch predicted. The U.S. has largely dominated the world, economically speaking, since the early 20th century.
If the current trends continue, that could all change in the not-so-distant future.
Follow Kristin Tate on Twitter @KristinBTate.