|As China's economy continues to grow, the world will demand
that the Asian powerhouse assumes greater responsibility for
global economic stability, but China has little time to prepare
[GALLO/GETTY] Is China poised to surpass the United States to
become the world's largest economy? The International Monetary
Fund recently predicted that the size of China's economy would
overtake that of the US in terms of purchasing power parity
(PPP) by 2016. But a recent co-authored study by Robert
Feenstra, an economist at the University of California, Davis,
shows that global economic leadership would pass to China in
2014. And, even more radically, Arvind Subramanian of the
Peterson Institute of International Economics argues that China
actually surpassed the US in PPP terms in 2010. Purchasing power
parity measures a country's income using a set of international
prices applied to all economies. Prices in developing countries
are usually lower than in developed countries. Therefore, their
income could be underestimated