A new finding by the Conference Board, a not-for-profit group in the United States, forecasts that the Chinese economy will soon surpass the American economy with respect to a key economic measure, PPP (purchasing power parity).
This measure attempts to gauge the size of an economy according to the number of transactions of particular types that occur within that economy. This type of analysis allows economists to look beyond the relative strength of a countrys currency to gauge the size of the countrys economy in a different way.
According to the Conference Board, the purchasing power within the Chinese economy will pass that within the American economy in 2012. By 2020, the Conference Board projects that Chinas purchasing power will account for 24% of the worlds purchasing power, compared to a projected 15% for the United States. (Source: Headlines News, Nov. 10., 2010).