On a purchasing power parity basis, I believe that China has already passed the USA.
The World Bank/IMF figures for PPP are wrong based upon 2005 numbers that did not properly survey the rural areas. There are many academic studies and information from the University of Pennsylvania which supports the conclusion that the 2005 World Bank comparative study of PPP was very flawed.
On a nominal exchange rate basis I still believe China will pass the US by 2019 and possibly earlier.
Barrons - Credit Suisse lowered their growth forecasts for China to 7.7% in 2012 and 7.9% in 2013 from our prior forecasts of 8.0% and 8.2%, respectively. On a quarterly seasonally adjusted basis, they expect GDP growth to slow down further to 6.6% in the current quarter before quickening again in the second half.
Credit Suisse China economists expect an "L-shaped" growth projection despite a series of pro-growth measures recently launched by the government. They believe that China will be in a weak growth cycle (weak only by its own past standards, that is) for the next several years, featuring a weak credit cycle, a weak export cycle, and a weak property cycle.
China's GDP at the end of 2011 (including Hong Kong and Macau) was $7.8 trillion.
China has a hidden economy that is about another 10-15% of the economy. Hidden / unreported income is more common in China than in the USA.
China added GDP of 4% in the first half of 2012 and had 2% more inflation (which has the effect of altering the exchange rate conversion by boosting the GDP in RMB.)
China's GDP (including Hong Kong and Macau) is at about $8.26 trillion at the end of June 2012. The United states is at about $15.53 trillion at the end of June, 2012.
At the end of 2012, China should have moved from 50.9% (end of 2011) of US GDP to 55% of US GDP. this would not be including the hidden economies.
Urbanization of about 1% per year is shifting people over time from rural per capita GDP that is 3 times less than in the cities. Even if it takes ten or 20 years to shift people to the higher level. That is a steady stream that adds up to 3% per year of extra GDP growth.
China is willing to massively alter infrastructure and cities which can boost per capita GDP. Building cities to higher densities and increasing the connection of populations in groups of cities have per capita GDP boosting effects.
China's willingness to use high speed rail to connect cities and to build skyscrapers to up population density and economic activity have GDP and GDP per capita boosting effects.
The other big determinant of future GDP is how effectively education levels and population skill levels can be raised.
Shanghai, Beijing and Tianjin were all over the US$12,000 per capita level as of the end of 2011. The other provinces should clear the US$12,000 per capita levels 1 to 2 years after they clear the US$10,000 per capita levels.
By 2015, China should have provinces with a combined population of about 500 million with per capita GDP over US$12,000. I am projecting all of China to have a per capita GDP of about $9000-10000 in 2010 US dollars in 2015
Beijing announced a target of US$20,000 per capita GDP by 2017 (for the city of Beijing). This level of nominal per capita GDP would be about the level of Portugal or the Czech Republic.
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