Living standards not a numbers game

According to the International Monetary Fund, China's gross domestic product (GDP) is projected to increase to $17.6 trillion this year, if calculated at purchasing power parity (PPP), whereas the United States' is expected to grow to $17.4 billion. In reality, China has not yet overtaken the US as the world's largest economy.

To compare the economies of different countries, you need data. That data, in turn, is reported by each country in its own currency, which must be converted into a common currency (usually in US dollars). There are two main methods for this conversion.

One method relies on market exchange rates - that is, the rates in the foreign exchange market. As every international tourist knows, foreign destinations exchange money only on the basis of hard cash.