China’s rise redefines global economy, says EAC-PM
- Created On: 17 July 2026 10:13 AM IST
A new EAC-PM paper highlights China and India’s rapid rise in global GDP based on Purchasing Power Parity. Explore insights on global economic shifts since 1992 and projections for India’s future growth
The rise of China is the most dramatic economic phenomenon since 1992 as it now accounts for almost 20 per cent of the <a href="https://absafricatv.com/what-the-world-cup-can-teach-us-about-human-connection/” title=”What the World Cup Can Teach Us About Human Connection”>world‘s GDP in purchasing power parity, and 30 per cent of the world investment, the Economic Advisory Council to Prime Minister (EAC-PM) said in a working paper.
The EAC-PM in the paper titled ‘The World in Purchasing Power Parity (Trends since 1992)’, further said even if China’s per-capita income is still lower than that of developed countries, the sheer magnitude of China’s share in the world economic system is remarkable.
In contrast, India’s rise has been notable with it accounting for 8.2 per cent of world GDP in 2025, and more than 10 per cent of the world’s savings and investment.
The IMF expects India’s share of the world economy to rise to 9.7 per cent by the end of the decade, it added.
The working paper has been authored by EAC-PM member Sanjeev Sanyal along with Aakanksha Arora and Payal Sharma. Purchasing power parities (PPPs) are the rates of currency conversion that aim to equalise the purchasing power of different currencies by eliminating differences in price levels between countries.
According to the paper, the US continues to hold a very large share of the world economy, even though it is now in the second position after China. It said although the relative per-capita income of the US has declined, it is still more than three times the world average. Its share in the world investment and savings has also declined but remains very substantial, the paper said. Meanwhile, relative shares of major European countries have sharply reduced on four indicators of the paper. Even though the relative per-capita income of these economies has declined during the period of study, Europeans were still relatively rich compared to the world average even in 2025, it said.
Global EconomyPurchasing Power ParityIndian EconomyChina Economic GrowthEAC-PM
Next Story
