December 17, 2017

China Passes Japan As Second Largest Economy

GraphChina passed  Japan to become the world's second largest economy behind the United States according to government figures early Monday. Japan's economy was valued at about $1.28 trillion slightly below China's $1.33 trillion. Unseating Japan and passing Germany, France and Great Britain underscores China's growing forecasts that China will pass the United States as the world's biggest economy as early as 2030. America's gross domestic product was about $14 trillion in 2009.

For Japan, whose economy has been stagnating for more than a decade the figures reflect a decline in economic and political power. During the 1980s there was talk about Japan's economy some day overtaking that of the United States.

China is in the throes of urbanization and far from being developed with a much lower standard of living. Five years ago, china's gross domestic product was about $2.3 trillion -about half of Japan's. Per capita China's income is on par with the more impoverished nations of Algeria, El Salvador and Albania being close to $3,600 rather than that of the United States where it is about $46,000.

Japan has benefited from a booming China  by businesses moving production there to take advantage of lower wages and an increasingly lucrative market for Japanese goods.

While the United States and European Union are struggling to grow, China has continued to climb up the table by investing heavily in infrastructure and backing a $586 billion stimulus plan with the biggest impact on commodity prices in Russia, India, Australia and Latin America.