China Officially World's Second-Biggest Economy
A late-year downturn was Japan's first quarterly contraction in more than a year, and is partly the reason for the change in international economic hierarchy.
Japan's real GDP expanded 3.9 percent in the calendar year in the first annual growth in three years, but it wasn't enough to hold off a surging China. Japan's nominal GDP last year came to $5.4742 trillion, less than China's total of $5.8786 trillion, the Japanese Cabinet Office said.
"It's realistic to say that within 10 years China will be roughly the same size as the US economy," Tom Miller of GK Dragonomics, a Beijing-based economic consultancy, told the BBC.
Gross domestic product in Japan shrunk at an annualized rate of 1.1 percent in the October-December quarter, a sharp reversal from a revised 3.3 percent expansion in the third quarter, the government said.
A slowdown in exports and weaker consumer demand at home led to the unsurprising downturn, which is expected to be temporary. The result was better than Kyodo news agency's average market forecast of an annualized 2.2 percent decline.
China's boom has largely been supported by funding for its long-running manufacturing boom, the BBC reports. That, in turn, has led to a rapid expansion of domestic industries and infrastructure.
While China's economy is massive and growing at staggering rates, it is not entirely right to compare it to Japan's economy because of China's massive rural, poor population. China's per-capita income is about $3,600, less than one-tenth that of the United States or Japan, reports the New York Times.
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