China's economy about to become No. 1, ahead of U.S.

WASHINGTON, April 30 (UPI) -- China is poised to overtake the United States as the world’s largest economy, a report by the World Bank’s International Comparison Program said, with India in third place, ahead of Japan.

The report, released Wednesday, assessed economies based on purchasing power parity (PPP), an estimate of real living costs. The research indicates that, as of 2011, China’s gross domestic product was 87 percent that of the United States, compared to 43 percent in 2005.

“The United States remained the world’s largest economy, but it was now closely followed by China when measured using PPPs. India is now the third largest economy,” the report says. “The shares of large economies such as China and India have more than doubled, relative to that of the United States.” The program added changes in its methodology help explain the estimates for China’s economic growth.

“It is true that China and India are certainly large in size," Frederic Neumann, Asian economic researcher for HSBC in Hong Kong, told CNBC. "These measures should not be the be-all and end-all of international comparisons. When we measure international purchasing power, expressed in dollars…the U.S., Europe and Japan continue to dominate economies in the world.”

China’s economy grew an annual 7.4 percent in the first quarter of 2014, compared to 1.2 percent for the United States.