For a more nuanced discussion of the relative merits and drawbacks of PPP GDP (where China is about to become #1) vs nominal GDP (where China is not) see http:/

For a more nuanced discussion of the relative merits and drawbacks of PPP GDP (where China is about to become #1) vs nominal GDP (where China is not) see http://blogs.wsj.com/economics/2014/04/30/chinas-economy-surpassing-u-s-well-yes-and-no/ http://blogs.wsj.com/economics/2014/04/30/chinas-economy-sur... tl;dr traditional GDP ignores stronger effects of cheaper local currency like China can pay its military less than US can, PPP GDP ignores weaker effects of cheaper local currency like China can't import foreign goods as cheaply as US can