China is set to overtake the U.S. as the world’s largest economy in U.S. dollar terms over the next decade, according to a new report by IHS Economics.
IHS measured the size of China’s economy in U.S. dollar terms, rather than using purchasing power parity – a technique used to determine the relative value of different currencies – which other research houses have used in the past.
Last month, the International Comparison Program – backed by the World Bank and the United Nations – forecast China could overtake the U.S. as soon as this year, based on the PPP measure. The research puts China’s gross domestic product (GDP) at 87 percent of the U.S. in 2011, compared to 43 percent in 2005.
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