Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

China says it tops Japan as No. 2 economy

chart_world_economies_2.top.gifChina's GDP was smaller than Japan's in 2009 but the IMF expects that wont be the case by the end of this year. But China still trails the United States by a wide margin. By Hibah Yousuf, staff reporter


NEW YORK (CNNMoney.com) -- China has surpassed Japan to become the world's second largest economy, lagging only behind the United States, a Chinese government official said in remarks published on Friday.

Yi Gang, China's chief currency regulator, broke the news in an interview with China Reform magazine, which was posted on the website of his agency, State Administration of Foreign Exchange.

Japan has yet to announce its gross domestic product for the second quarter, however. Many economists also are likely to base official rankings for world economies on annual data. But few doubt that China has already achieved the milestone of becoming the second-largest economy.

In 2009, China's nominal gross domestic product was worth $4.9 trillion, just 3% smaller than Japan's at $5.1 trillion. The United States still has, by far, the world's largest economy. Its GDP was $14.3 trillion in 2009.

China's economy grew at a pace of 11.1% in the first half of the year, Chinese officials said earlier this month, and for the full year, the International Monetary Fund expects the country to post a growth rate of 10.5%.

Meanwhile, the Japanese economy is only expected to rise at a rate of 2.4% for the current year.

"Japan is a mature economy. Like the United States, it is at a frontier of what's possible in terms of economic development and has to rely on innovation to grow," said Todd Lee, managing director of the Greater China division at research firm IHS Global Insight. "China has a lot of room for catch-up growth, which is what we've been seeing for the last 30 years."

Thanks to its significantly larger population and the decision to allow the yuan to trade freely against the dollar, China could eventually top the United States as the world's largest economy.

It will probably be at least a decade before that happens, though. Lee expects China to surpass the United States before 2025, but added that it could happen sooner rather than later if China continues to let the yuan appreciate. To top of page

Overnight Avg Rate Latest Change Last Week
30 yr fixed3.62%3.69%
15 yr fixed2.77%2.80%
5/1 ARM3.12%3.07%
30 yr refi3.61%3.69%
15 yr refi2.76%2.83%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Index Last Change % Change
Dow 15,973.84 313.66 2.00%
Nasdaq 4,337.51 70.67 1.66%
S&P 500 1,864.78 35.70 1.95%
Treasuries 1.75 0.10 6.33%
Data as of 7:29pm ET
Company Price Change % Change
Bank of America Corp... 11.95 0.79 7.08%
General Electric Co 28.26 0.81 2.95%
Cisco Systems Inc 25.11 0.43 1.74%
Chesapeake Energy Co... 1.59 -0.19 -10.67%
Freeport-McMoRan Inc... 5.53 0.64 13.09%
Data as of Feb 12
Sponsors

Sections

Investors need someone they can bring home to mother instead of bad boys (or girls) that may make their heart beat faster. Boring beats bold in this market. Here are 10 dependable stocks we love. Southwest (ticker symbol: LUV) is one. More

Cheap oil and slow global growth may not be the only culprits of the global market turmoil. There's growing concern that central banks are spooking the markets too. More

Eastern Illinois University laid off 198 staff members this week, and the college president is blaming the state government. More