China, India close gap with U.S. as world’s top economy
China isn’t the only Asian country challenging America’s status as the world’s largest economy.
By 2030, the U.S. will fall to third place behind China and India in a ranking of the leading global economies, while Indonesia rises to fourth place, according to a report this week by London-based Standard Chartered Bank. The study measures gross domestic product after adjusting for lower consumer prices and a lower standard of living in emerging markets such as China.
By that measure, known as purchasing power parity, China passed the U.S. as the world’s biggest economy in 2014, according to the International Monetary Fund. The IMF says China could top the U.S. even under the more conventional comparison that looks at nominal GDP by 2030.
The reshuffling of the world’s economic superpowers is already reverberating in the U.S. It’s at least partly behind President Trumps’ trade war with China. And China’s growing economic impact is increasingly affecting the earnings of American companies like Apple, as well as the broader stock market and economy.
“China’s rising economic and geopolitical influence poses important challenges to U.S. global dominance,” says Eswar Prasad, a professor of trade policy at Cornell University and former head of the IMF’s China division.
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