THE REBASED ECONOMY THAT MATTERS MOST: CHINA NOW THE WORLD'S LARGEST ECONOMY AS INDIA FOLLOWS! - dailymail.co.uk

A report out of the World Bank, according to www.dailymail.co.uk has it that rapidly expanding China is poised to overtake the once invincible United States as the world's largest economy by the end of 2014. The International Comparison Program looks at exchange rates to reveal purchasing power of different currencies and found that yuan in China will soon pack more punch than the mighty dollar.

Meanwhile, Chinese officials bashed the report as flawed, likely for fear of losing its status as a developing nation and the pollution-spewing perks that come with it.

China's biggest Asian competitor, India, leaps over Japan from its previous tenth place to become the world's third strongest economy, the report finds. The estimate says that, based on 2011 prices, the purchasing power of the yuan was much stronger than was reflected by exchange rates. By that measure, China's economy was 87 percent the size of the United States' in 2011, or 15 percent bigger than the previous estimate, according to a calculation by RBS economist Louis Kuijs.

Faster-growing China would pass the United States in purchasing power terms this year, though it still would be about 60 percent the size of the U.S. economy at market exchange rates.

China is on track to become the No. 1 economy by sheer size by the early 2020s and possibly sooner.  But its leaders downplay such comparisons, possibly to avert pressure to take on financial obligations or make concessions on trade or climate change.

China's National Bureau of Statistics, which took part in the study, rejected its conclusion, according to the World Bank report.

The statistics bureau ‘expressed reservations’ about the study's methodology and ‘did not agree to publish the headline results for China,’ the report said.

A figure was estimated anyway by researchers, but ‘the NBS of China does not endorse these results as official statistics,’ the report said. China's government has been reluctant to acknowledge previous milestones showing its economic rise when it passed Germany as the biggest exporter, Japan as the No. 2 economy and the United States as the biggest trader.

Its leaders have emphasized China's status as a middle-income country in resisting pressure to adopt binding limits on greenhouse gas emissions, for which their country is the biggest source.

The International Comparison Program, conducted every six years, is meant to allow comparisons of living standards in countries with widely varying prices. The results are a good tool for understanding living conditions for Chinese families but other uses are limited, said Mark Williams, chief Asia economist for Capital Economics. ‘It does bring home the sheer size of the Chinese economy, in the services and goods and that people in China are producing,’ Williams said. ‘Where it falls short is that it doesn't really tell us about China's economic standing relative to the rest of the world,’ he said. ‘When it comes to China's purchasing power abroad, we need to look at the figures adjusted for market exchange rates.’

The death knell for 142 years of American dominance came just as the U.S. economy slowed drastically in the first three months of the year as a harsh winter exacted a toll on business activity. A dailymail.co.uk report.