WASHINGTON — The size of China’s economy is overestimated by some 40 percent based on most current measures, but is the world’s second largest, the World Bank said Monday. In a report ranking the world’s economies, the World Bank said a more reliable method of estimation using ‘purchasing power parity’ (PPP) shows a much smaller value than the traditional market value estimates which the Bank called ‘less reliable.’ The study carried out by the World Bank and other partners was ‘the most extensive and thorough effort’ to measure the relative size of 146 economies using the PPP method which strips out the effect of exchange rates, a Bank statement said. China participated in the survey for the first time and India for the first time since 1985. ‘These results are more statistically reliable estimates of the size and price levels of both economies,’ the Bank said. ‘The previous, less reliable, methods led to estimates of their GDPs (gross domestic product) that were 40 percent larger than the results of the new, improved methods and benchmark.’ China still ranks as the world’s second largest economy with over nine percent of world production, but that compared […]