Move over Japan: China is now No. 2 world economy

By Kyung Lah, CNN


TOKYO (CNN) -- Japan has slipped to the world's third-largest economy, falling behind the blistering speed of China's manufacturing growth, according to Japanese figures released Monday.

Japan's cabinet office released its nominal gross domestic product figures for 2010. Japan's economy was valued at $5.47 trillion dollars while China was at $5.88 trillion.

Japan's economy did grow in 2010, but only 3.9%, according to the government. China's is expected to grow more than 10%. At the speed China is growing, Japan's government predicts China will overtake the United States as the world's largest economy in less than 20 years.

China has expanded domestic industries and infrastructure, driven by a surge in exports. Multinational corporations have expanded there, taking advantage of low labor costs.

Japan, meanwhile, has been stuck in stagnation and deflation for two decades. Decisive economic policy has been lost in the revolving door of the country's top leader, with six prime ministers passing through in just five years. Looking ahead, Japan is facing a significant demographic shift, with the world's fastest aging population and one of the globe's lowest birth rates.

On the national debt issue, Japan's parliament is struggling to cap its GDP-to-debt ratio, which is nearing 200% -- the world's highest among developed nations.

The size of an economy does not tell the entire picture, however: Japan's GDP per head is around $40,000 while China's is $4,500. The standards of living remain remarkably different in the two countries. But the economic size of a country gives a snapshot of not just the financial influence of a nation, but its power in the world's political sphere. To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Overnight Avg Rate Latest Change Last Week
30 yr fixed3.95%3.98%
15 yr fixed3.08%3.04%
5/1 ARM3.43%3.30%
30 yr refi4.04%4.05%
15 yr refi3.17%3.11%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Index Last Change % Change
Dow 17,390.52 195.10 1.13%
Nasdaq 4,630.74 64.60 1.41%
S&P 500 2,018.05 23.40 1.17%
Treasuries 2.34 0.03 1.30%
Data as of 5:36pm ET
Company Price Change % Change
Bank of America Corp... 17.16 0.13 0.76%
Intel Corp 34.01 1.43 4.39%
Apple Inc 108.00 1.02 0.95%
Facebook Inc 74.99 0.88 1.19%
General Electric Co 25.81 0.14 0.55%
Data as of 4:05pm ET

Sections

AT&T adds two new 'value plans' with more data in response to similar deals from rival carriers. More

AT&T adds two new 'value plans' with more data in response to similar deals from rival carriers. More

Instead of flocking to sunny beach havens or downsizing to a condo in the city during their retirement years, a majority of Baby Boomers say they're just going to stay put in their current home. More

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.