The NYT reports today that "fueled by soaring exports and huge investments in infrastructure, factories and energy supplies, China could soon overtake Germany to become the world�s third-largest economy, behind those of the United States and Japan." It is incredible that our country's preeminent newspaper doesn't have any idea how large the world's second biggest economy is. The CIA Factbook reports that China's economy in 2006 was $10 trillion on a purchasing power parity basis. Given its 10+ percent growth rate over the last year, its economy is now close to $11 trillion. In fact, if China sustains a 10 percent growth rate, it will pass the U.S. as the world's largest economy some time in 2010. Measurements of PPP are very imprecise, but China already dwarfs the U.S. as a producer of steel, gives out more college and advance degrees in science and engineering each year, has more cell phone users and almost as many Internet users. Does this sound like an economy that is one fifth the size of the U.S. economy (the relative GDPs using the exchange rate measure)? It is scary to think that many of the people who design U.S. foreign policy may be no more informed about the size of China's economy than the NYT.
--Dean Baker
