According to the IMF’s World Economic Output Report 2020 which was recently released ‘China has now overtaken the US to become the world’s largest economy.  It is a hard to believe fact to which the world is now waking up.  The devastating pandemic brought everything to a juggernaut halt with the world still facing the resultant economic distress.  In this scenario, the rise of China, coincidentally the source of the virus, as the undisputed new economic superpower is the new result of a new world. The International Monetary Fund (IMF) using the more widely accepted and more reliable yardstick known as Purchasing power parity (PPP), has determined that China’s economy is at $24.2 trillion as compared to America’s at $20.8 trillion. The PPP method is used by the IMF to enable to understand how much one can buy for the same amount of money in different countries.

Economists have mainly used market exchange rates (MER) to calculate GDP which does not reflect the correct figure and this method is commonly viewed with suspicion because it miscalculates the buying power of the currencies of many countries. This results in the currencies of many nations being undervalued against the dollar. IMF estimates that the China’s economic output outsmarted that of the US by a huge margin. After the IMF, the CIA also decided to switch from MER to PPP in its annual assessment of national economies.

To overcome these inconsistencies with the measurements in the traditional method, The Economist had invented a new method called the BIG MAC INDEX to determine whether the currencies are at the correct level. China’s economic growth rate has been in the mind boggling range of around 10% for almost 30 years. The country has witnessed startling growth in every sector which has mainly been fueled by the country being the manufacturing giant in the world. It has made unstoppable advances in its military power, building and accumulating world-class defense equipments which have indirectly helped it to make smaller nations bow to it and take its loans in a phenomenon known as debt trap diplomacy.

Bloomberg’s calculation of the IMF data clearly suggested that the proportion of worldwide growth coming from China is expected to increase from 26.8% in 2021 to 27.7% in 2025. According to IMF estimation, China will grow by 8.2% next year lower than the IMF prediction by one percentage. But, this growth rate of China, given its current size, strengths and strategy would be enough for it to contribute more than 25 % of the global growth.

After analyzing all these, it becomes necessary to question why there is so much silence regarding this change of the economic centre of power of the world. Who might be gaining from the silence in the context of this world-changing event in the middle of a pandemic?

The author is a student member of Amity Centre of Happiness.