Today the Financial Times reports that China overtakes Germany as world’s third economy. The first is USA, the second Japan.
There are two methods of GDP calculation: nominal GDP attempts to compare countries using current exchange rates to give an assessment of their clout within the global market. Purchasing Power Parity or PPP GDP, on the other hand, tries to take into account that one dollar can buy more in some countries and less in others.
In the nominal GDP method, we can see that the developed world leads the pack, but that China has already broken into this exclusive club. When we look at PPP GDP, Brasil, Russia, India (BRIC) are all within the top 10.