According to that IMF forecast, Chinas economy could overtake that of US to become the worlds biggest by 2023. That is much earlier than previous predictions, some of which called it for 2030 or as late as 2050. Now let me take you through the new forecast for the Chinese and the US economies. They are based on purchasing power parity, which is basically a way of comparing what people earn and spend in real terms. The IMF says Chinas economy will grow from $11.2 trillion this year to, in 2023, to $19 trillion. Thats a growth of about $8 trillion in total. Meantime, the US, well, that is forecast to go from about $15.2 trillion in 2011. In 2023, supposed to go up to $18.8 trillion. Thats only about $3.5 trillion there. So what does that mean as part of the world economy. Well, by 2023, well, China would be responsible for about 18% of total world output. And that would like to keep rising. The US for its part would only account for 17.7% of total world output. And you know, just remember, it was just last year that China overtook Japan as the worlds second largest economy. So if the IMF forecast holds, it would be a great economic leap forward for China going from No.3 to No.1, and of course toppling the US in just 6 years.

　　Extraordinary speed when you look at it like that, but as you point it out, there are around for when China will become the No.1 economy. That doesnt seem to be any doubt. It will. It is just a matter of when. So how credible is this 2023 deadline from the IMF. I mean they are talking about measuring in purchasing power parity, arent they?

　　Yeah, thats right. They are talking about that. And I did speak with Frederic Neumann just a short while ago. He is a HSBCs managing director of Asian Economics Research. He told me 2023 is actually a credible time frame, especially of course because its coming from the IMF itself. But he also said there are other ways and perhaps better ways to measure economies. The IMF here did use purchasing power parity. Lets take a listen.

　　For one is to measure an economys output in US dollar terms, not a PPP terms as the IMF has done, which is a measure of purchasing power that local households have, just to look at that in US dollar terms, and here it would take much longer for the Chinese economy to overtake the US, probably 2025 or thereabouts, when we see finally China coming close to the US. And thats a better gage for international purchasing power. But the other relevant measure is per capita income. And thats ultimately what everybody really counts on. And per capita time in China to catch up with US prosperity.

　　And Neumann said that on that measure by per capita income, China would overtake the US only in the 2040s or the 2050s. Regardless, Adrew, whether its then or in five years from now, its not a question of if China will surpass the US but when and we will be talking about this again and again until it does.

　　According to that IMF forecast, Chinas economy could overtake that of US to become the worlds biggest by 2023. That is much earlier than previous predictions, some of which called it for 2030 or as late as 2050. Now let me take you through the new forecast for the Chinese and the US economies. They are based on purchasing power parity, which is basically a way of comparing what people earn and spend in real terms. The IMF says Chinas economy will grow from $11.2 trillion this year to, in 2023, to $19 trillion. Thats a growth of about $8 trillion in total. Meantime, the US, well, that is forecast to go from about $15.2 trillion in 2011. In 2023, supposed to go up to $18.8 trillion. Thats only about $3.5 trillion there. So what does that mean as part of the world economy. Well, by 2023, well, China would be responsible for about 18% of total world output. And that would like to keep rising. The US for its part would only account for 17.7% of total world output. And you know, just remember, it was just last year that China overtook Japan as the worlds second largest economy. So if the IMF forecast holds, it would be a great economic leap forward for China going from No.3 to No.1, and of course toppling the US in just 6 years.

　　Extraordinary speed when you look at it like that, but as you point it out, there are around for when China will become the No.1 economy. That doesnt seem to be any doubt. It will. It is just a matter of when. So how credible is this 2023 deadline from the IMF. I mean they are talking about measuring in purchasing power parity, arent they?

　　Yeah, thats right. They are talking about that. And I did speak with Frederic Neumann just a short while ago. He is a HSBCs managing director of Asian Economics Research. He told me 2023 is actually a credible time frame, especially of course because its coming from the IMF itself. But he also said there are other ways and perhaps better ways to measure economies. The IMF here did use purchasing power parity. Lets take a listen.

　　For one is to measure an economys output in US dollar terms, not a PPP terms as the IMF has done, which is a measure of purchasing power that local households have, just to look at that in US dollar terms, and here it would take much longer for the Chinese economy to overtake the US, probably 2025 or thereabouts, when we see finally China coming close to the US. And thats a better gage for international purchasing power. But the other relevant measure is per capita income. And thats ultimately what everybody really counts on. And per capita time in China to catch up with US prosperity.

　　And Neumann said that on that measure by per capita income, China would overtake the US only in the 2040s or the 2050s. Regardless, Adrew, whether its then or in five years from now, its not a question of if China will surpass the US but when and we will be talking about this again and again until it does.