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.

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

Overnight Avg Rate Latest Change Last Week
30 yr fixed3.85%4.04%
15 yr fixed3.02%3.15%
5/1 ARM3.05%3.13%
30 yr refi3.93%4.15%
15 yr refi3.06%3.26%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Index Last Change % Change
Dow 17,598.20 -91.66 -0.52%
Nasdaq 5,115.38 -12.90 -0.25%
S&P 500 2,098.04 -5.80 -0.28%
Treasuries 2.15 -0.06 -2.49%
Data as of 1:55am ET
Company Price Change % Change
Apple Inc 118.44 -2.86 -2.36%
Bank of America Corp... 17.77 -0.11 -0.62%
Frontier Communicati... 5.15 0.43 9.11%
Micron Technology In... 19.00 0.49 2.65%
General Electric Co 25.87 -0.23 -0.88%
Data as of Aug 3
Sponsors

Sections

Five major retailers have agreed to stop selling realistic-looking toy guns in New York state, attorney general Eric Schneiderman said Monday. More

The island's economy is a mess. Now its people are suffering from a major drought and water rationing. More

Represented by Teamsters, workers servicing some big Silicon Valley firms demand higher wager and better benefits. More

Candle-Lite is committed to manufacturing in America -- which is a good thing because it contributes more than $300 million to Ohio's economy. More

You can't blame it on the economy anymore. More Millennials now have jobs, but are still living at home. More