China has overtaken Japan as the world’s second-biggest economy, a title Japan has held since 1968.
Although Japan grew 3.9 percent last year – its first annual growth in three years – this was not enough to hold off China’s booming economy. Japan’s nominal GDP was $5.4742 trillion in 2010, less than China’s total of $5.8786tn, according to official data released by Japan.
Japan has been hit by a drop in exports and consumer demand, while China has enjoyed a manufacturing boom.
At its current rate of growth, analysts see China replacing the US as the world’s top economy in about a decade.
“It’s realistic to say that within 10 years China will be roughly the same size as the US economy,” said Tom Miller of GK Dragonomics, a Beijing-based economic consultancy.
The US economy is currently almost three times the size of the Chinese economy in dollar terms.
The yen has been strengthening against other currencies, recently touching a 15-year high against the dollar, and the fear is that the currency’s gains may hurt foreign demand for Japanese products.
World’s 10 biggest economies
Source: IMF 2010
Japan has been struggling to come to terms with what many analysts call the “lost decade” of the 1990s when a property market and stock market crash turned the economy on its head.
Countries with highest GDP per head of population
1. Qatar: $88,232
2. Luxembourg: $80,304
3. Singapore: $57,238
4. Norway: $52,238
5. Brunei: $47,200
6. US: $47,123
20. UK: $35,053
24. Japan: $33,828
93. China $7,518