China ranks as second largest economy: World Bank
WASHINGTON (April 12 2008): China ranks as the world's second-largest economy and India is fourth, according to new World Bank data on Friday, which uses new measurements of countries buying power in US dollars. China remained in the No 2 spot despite a downward revision by the World Bank in its purchasing power parity estimates.
The bank's new 2008 World Development Indicators showed that developing countries now produce 41 percent of the world's output, up from 36 percent in 2000. Combined, output of the world's economies reached $59 trillion in 2006. This year's data introduces new estimates of purchasing power parity based on price data on goods and services in 146 countries, and adjusted to reflect local costs and affordability and converted to dollars.
The data replaces benchmark estimates, many of them from 1993 and as far back as the 1980s, and allows more accurate comparisons of market size, the structure of economies and what money can buy. It is the first time that China fully participated. According to the bank's rankings, five of the 12 largest economies are in the developing world.
The United States remained in first place with $13.2 trillion of global output. China followed at $6.1 trillion. Japan was measured at $4.2 trillion, India at $2.7 trillion, Germany at $2.7 trillion, Britain at $2.0 trillion, France at $1.9 trillion, Russia at $1.6 trillion, Italy at $1.7 trillion, Brazil at $1.6 trillion, and then Mexico and Spain, both at $1.2 trillion.
China remained in second place despite a revision in December of its purchasing power parity that showed India and China's economies were 40 percent smaller than previously thought.
The revision put China's share of the global economy in PPP terms at 9.7 percent, down from a previous estimate of 14 percent. India's share dropped to 4.3 percent from a previous estimate of 6 percent. "There are a lot of implications. One of them is it helps us to see that the domestic market in China is really much larger than people might have thought when they were looking at the exchange rate data," said Eric Swanson, program manager for the World Bank's development data group.
"China will continue to have a vast domestic market that produces for it but it also suggests to other participants in the world economy that China is not just a producer of goods but also a vast potential market," he said.
Business Recorder [Pakistan's First Financial Daily]