In an emerging economy with rapid productivity growth the real exchange rate should rise over time, through either higher inflation or a rise in the nominal exchange rate.Over the past decade annual inflation (as measured by the GDP deflator) has averaged 3.8% in China against 2.2% in America.But did you know that there are many different kinds of Monopoly? His collection is nowhere near complete since there are more than 2,000 different versions of Monopoly.At Catawiki, you’ll be surprised every week with the impressive selection of special objects we have on offer.If you disagree and think China's real growth rate will slow to an annual average of only 5%, then (leaving the other assumptions unchanged) China would have to wait until 2022 to become number one.Americans would still be much richer, of course, with a GDP per head more than four times that in China.Sign up today and explore our weekly auctions curated by our team of specialist auctioneers.
Then again, the relative paths of dollar GDP in China and America depend not only on real growth rates but also on inflation and the yuan's exchange rate against the dollar.
The Conference Board, a business-research group, recently predicted that China could become the world's largest economy as soon as 2012 on a purchasing-power-parity (PPP) basis, which adjusts for the fact that prices are lower in China. And America will only really be eclipsed when China's GDP outstrips it in plain dollar terms, converted at market exchange rates.
Since by that reckoning China's GDP is currently only two-fifths the size of America's, that day may still seem distant. When Goldman Sachs made its first forecasts for the BRIC economies (Brazil, Russia, India and China) in 2003, it predicted that China would overtake America in 2041. In November Standard Chartered forecast that it will happen by 2020.
And since China ditched its strict dollar peg in 2005 the yuan has risen by an annual average of 4.2%.
has created an online chart ( that allows you to plug in your own assumptions about future growth, inflation and the exchange rate.