However, economists contend that these figures are very misleading. Purchasing Power Parity and GDP Size

Economists have attempted to factor in national price differentials by using a purchasing power parity (PPP) measurement, which converts foreign currencies into a common currency (usually the U.S. dollar) on the basis of the actual purchasing power of those currencies (based on surveys of the prices of various goods and services) in each respective country. The ICP's New PPP Estimates of China's GDP

Prior to December 2007, data from the ICP and various private economic forecasting firms all seemed to agree that China's economy, measured on a PPP basis, was close to $9 trillion in 2005, ranking it as the world's second-largest economy, after the United States. Based on these estimates, and projections of continued rapid economic growth, many analysts predicted that China's economy would surpass that of the United States within a few years. The revised data indicate it will likely take many more years than previously thought before China's GDP and living standards reach U.S. levels. Although the estimated size of China's economy decreases under the PPP revisions, other aspects on China's economy remain significantly large.
China's rapid economic growth since 1979 has transformed it into a major economic power. Over the past few years, many analysts have contended that China could soon overtake the United States to become the world's largest economy, based on estimates of China's economy on a "purchasing power parity" (PPP) basis, which attempts to factor in price differences across countries when estimating the size of a foreign economy in U.S. dollars. However, in December 2007, the World Bank issued a study that lowered its previous 2005 PPP estimate of the size of China's economy by 40%. If these new estimates are accurate, it will likely be many years before China's economy reaches U.S. levels. The new PPP data could also have an impact on U.S. and international perceptions over other aspects of China's economy, including its living standards, poverty levels, and government expenditures, such as on the military. This report will not be updated.