On that measure, China is looking pretty good. As of 2011 (the latest year data are available), its GDP stood at about 87 percent of the U.S. GDP, or 15 percent of the world's total economic output. This is a huge increase from 2005, when China's economy was less than half the size of ours.
But there's a reason that standard measures of GDP don't use the PPP conversion. As the Wall Street Journal's Tom Wright explains:
China can’t buy missiles and ships and iPhones and German cars in PPP currency. They have to pay at prevailing exchange rates. That’s why exchange rate valuations are seen as more important when comparing the power of nations.
Standard GDP measures take these exchange factors into account. And here, China is doing about as well as one would expect. They're still the world's second-largest economy, but their GDP is less than half the size of the U.S. GDP. You can see how these measures compare in the chart below.
And when you look at GDP per capita, another picture emerges: China is ranked 99th out of the world's countries even on the PPP-based measure that favors it.
So, no need to fret -- the United States is still No. 1. For now.