China’s economy smaller in new measure, still number two

WASHINGTON (AFP) – The size of China’s economy is overestimated by some 40 percent based on most current measures, but is the world’s second largest, the World Bank said Monday.

In a report ranking the world’s economies, the World Bank said a more reliable method of estimation using “purchasing power parity” (PPP) shows a much smaller value than the traditional market value estimates which the Bank called “less reliable.”

The study carried out by the World Bank and other partners was “the most extensive and thorough effort” to measure the relative size of 146 economies using the PPP method which strips out the effect of exchange rates, a Bank statement said.

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