China GDP surpasses Japan, now world's 2nd largest

August 02, 2010 | Posted by Chris

Pudong in Shanghai, above, is a symbol of China's rapid development.

In a new milestone of the country's rapid development since the 1970s, China's economy is close to overtaking Japan as the world's number 2 largest, if it hasn't yet done so already, major news outlets report. Eclipsing the Japanese economy in terms of aggregate size means that China for the first time since the 18th century is poised to be the largest economy in Asia -- but analysts are quick to point out key details that should not be overlooked. For example, while there are dozens of billionaires in China, much of the countryside lives in poverty: its national wealth spread over its population, China's per capita GDP is just $3,600 per year, which ranks 124th in the world, according to the World Bank.

China's GDP in 2009 was $4.98 trillion and Japan's was $5.07 trillion -- and in the second quarter of this year, China's GDP was $1.335 trillion. "On that basis, the crossover probably happened last quarter," says one London-based analyst. The Chinese, meanwhile, have already accepted this, according to comments made Yi Gang, a deputy Chinese central banker, who said this week, "China already is the world's second-biggest economic body."

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