China Overtakes US as World's Single Largest Economy

China has overtaken the United State to become the world’s largest economy, according to new data and an analysis by the International Monetary Fund.

Calculated by looking at gross domestic product (GDP) alongside cost-of-living data, the IMF announced Tuesday that China is now larger economically than the U.S. for the first time in history with an adjusted GDP of $17.6 trillion compared to a U.S. GDP of $17.4 trillion.

The milestone has been forecast for some time, but the conclusion of the IMF—presented in its 2014 World Economic Outlook report—comes as other economic indicators suggest a global shakeup in the world economy may be upon us. As the Financial Times reports, “the speed of [China’s] transformation” is what’s most” breathtaking” considering that  “as recently as 2005, China’s economy was less than half the size of America’s.” Additionally, the IMF now projects that “China’s economy will be 20 percent bigger than that of the U.S. by 2019.”

The BusinessInsider explains how the IMF’s announcement is only based on a certain set of calculations and does not translate to a direct, side-by-side comparison of the two economies:

As the relative size of world’s largest economies are shifting, so too, are some of the world’s most important economic alliances and institutions. Though the U.S. dollar continues to be the world’s dominant currency and the World Bank and International Monetary Fund both maintain formidable influence on monetary policies, their singular hold on global financial is shifting in numerous ways.

On Wednesday, USA Today reports on ongoing Chinese efforts to have its currency, the renminbi, allowed into the IMF’s Special Drawing Right (known as SDR), a global composite currency system that fosters international trade and maintenance of the world’s top currencies —which currently includes only the U.S. dollar, the British pound, the Japanese Yen, and the Euro. According to the paper:

As Conn Hallinan, an analyst who writes for Foreign Policy In Focus, wrote on Tuesday, the rise of emerging of economies—with China the largest and most striking example—the global economic picture is changing in interesting, though not widely understood, ways. According to Hallinan:

Given the deeply intertwined nature of the economic relationship between the American consumer-based economy and China’s role as the world’s leading manufactuter, the narrative about overall financial strength is never straight-forward.

However, as Hallinan concludes, “the days when the IMF, World Bank, and U.S. Treasury could essentially dictate international finances and intimidate or crush opponents” is swiftly “drawing to a close.”