It's probable that the U.S. economy is no longer the world's largest. New World Bank figures, notes economist Arvind Subramanian of the Peterson Institute, suggest that sometime in 2014 China will overtake the United States in gross domestic product — the production of goods and services.
We knew this day was coming, but if the World Bank figures are correct, it has arrived sooner than many experts predicted. Using those figures — which stop at 2011 — I estimate that China's GDP in 2014 will hit $16.8 trillion compared with $16.1 trillion for the U.S. (All these figures are in "constant" 2011 dollars.)
This is a historic milestone, but its immediate significance is limited. It doesn't make the Chinese richer than Americans, because China's GDP is spread across many more people. Per capita GDP, a rough gauge of living standards, is about five times higher in the U.S. than in China, about $50,000 per person compared with $10,000.