October 8, 2014 – It’s official, China has surpassed the US when it comes to purchasing power parity, a measure of wealth the IMF uses to determine who gets more bang for their buck… or Yuan as the case may be.
From the article:
The simple logic is that prices aren’t the same in each country: A shirt will cost you less in Shanghai than in San Francisco, so it’s not entirely reasonable to compare countries without taking this into account. Though a typical person in China earns a lot less than the typical person in the US, simply converting a Chinese salary into dollars underestimates how much purchasing power that individual, and therefore that country, might have.
Don’t feel bad, America. We’re still number one when it comes to debt!