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China overtakes Japan as world’s second-biggest economy

China overtakes Japan as world’s second-biggest economy

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
1. US
2. China
3. Japan
4. Germany
5. France
6. UK
7. Italy
8. Brazil
9. Canada
10. Russia
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
Source: IMF