China tops Japan as world's No. 2 economy

China surpassed Japan as the world's second-largest economy last quarter, capping the nation's three- decade rise from Communist isolation to emerging superpower. China surpassed Japan as the world's second-largest economy last quarter, capping the nation's three- decade rise from Communist isolation to emerging superpower.

Japan's nominal gross domestic product for the second quarter totaled US$1.288 trillion, less than China's US$1.337 trillion, the Japanese Cabinet Office said [Aug. 16]. Japan remained bigger in the first half of 2010, the government agency said. Japan's annual GDP is US$5.07 trillion, while China's is more than US$4.9 trillion.

China led the world out of last year's global recession with an economy that's more than 90-times bigger than when leader Deng Xiaoping ditched hard-line Communist policies in favor of free-market reforms in 1978. The country of 1.3 billion people will overtake the U.S., where annual GDP is about US$14 trillion, as the world's largest economy by 2027, according to Goldman Sachs Group Inc. chief economist Jim O'Neill. [Bloomberg]

Bolstered by strong exports and a huge population, China has been growing at a staggering pace in recent quarters. In contrast, the export-oriented Japanese economy is being adversely impacted by an appreciating yen. An ageing population is also cause for concern. [The Economic Times]

The Japanese economy sputtered in the second-quarter, with GDP growing by a measly 0.1 percent quarter-over-quarter - far below expectations -- amidst fears of a strengthening yen which is hurting the key export sector and weakening domestic demand. [International Business Times]

Economic growth in Japan weakened significantly in the last financial quarter, official figures show.

Between April and June this year gross domestic product - the sum of the nation's goods and services - grew by 0.1 percent, much lower than expected. Analysts say the country's export-led recovery appears to be faltering as the value of the yen appreciates. World Bank figures show that in the first eight years of this century Japan's economy expanded by just 5 percent while China's grew by 261 percent. [BBC News]

Source: World Bank