China has surpassed the US in terms of GDP based on purchasing power parity (PPP), becoming the largest in the world by this measure, International Monetary Fund estimates show.

In 2014 China reached $17.6 trillion or 16.48 percent of the world’s purchasing-power-adjusted GDP, while the US made slightly less, 16.28 percent or $17.4 trillion, the FT reported citing IMF data.

PPP is recognized as the best way to compare the size of economies rather than using volatile exchange rates, which rarely reflect the true cost of goods and services. Thus a trillion US dollars are worth a lot more in China than in the US.

On the purchasing power basis, China is overtaking the US right about now and becoming the world’s biggest economy, according to the forecast.

The US has been the global leader since overtaking the UK in 1872. Most economists previously thought China would pull ahead in 2019.

According to IMF estimates, in 2015 the gap between China and the US will increase to almost a trillion dollars: Chinese GDP PPP will amount to $19.23 trillion against $18.286 trillion in the US.

However in terms of a real GDP the United States remains the undisputed world leader with $16.8 trillion output, significantly outpacing China with $10.4 trillion.

READ MORE: Great Warldorf of China: Beijing buys legendary NYC hotel for $2bn