While the IMF forecasts that China will surpass America as the world’s top economy in 2016, it may have already become dog top.

As Arvind Subramanian – former assistant director in the Research Department of the International Monetary Fund, and now senior fellow jointly at the Peterson Institute for International Economics – noted in January:

Some time in 2010, the Chinese economy overtook that of the United States. My calculations of GDP for … are based on new estimates of GDP that will soon be published by the Penn World Tables (PWT) under the guidance of Professor Alan Heston at the University of Pennsylvania.

 

According to the IMF’s latest estimates for 2010, the value of total US GDP was $14.6 trillion while that of China was $5.7 trillion.

 

But it has long been recognized by many economists that using the market exchange rate to value goods and services is misleading about the real costs of living in two countries.