It’s Official: China is the World’s Second Largest Economy

On Monday Japan released their nominal GDP figures for the 2010 year, and with that dropped to the third largest nominal GDP country in the world.  China moved into the second slot after posting an economic value of $5.88 trillion dollars, compared to $5.47 trillion, CNN Money reports.

As stated in the report, Japan still managed to grow 3.9% over the past year; however, China estimated a growth at a blistering 10%.  Japan predicts that it will be less than 20 years before China surpasses the United States as the top GDP country in the world.

While it may seem concerning that China’s growth rate is so high, there are numbers that should be noted in both China and Japan.  Japan’s GDP per capita still remains close to 9 times higher than China ($40,000 to $4,500).  With this stated, and the combination of the structure of the political system in China, Japan can be looked at as having both a higher standard of living and level of well-being. 

As we continue to watch China grow at an exponential rate, it brings wonders into when the Chinese economy may show signs of slowing down.  With the recent rising wages in China, perhaps it may take a hit on for what they can offer to other nations. 

What do you think of the recent swap of the 2^nd and 3^rd largest economies in the world?  What effects might cause a road block, or even a bump, in the rising Chinese economy? 

References: “China Overtakes Japan as World’s Second-Largest Economy”.  CNN Money.

Post By Evan Amano