China overtakes Japan
China is now the second largest economy in the world, after overtaking Japan.
At the end of 2010, the Chinese economy was worth around $5.8 trillion compared to $5.474 trillion for Japan at the same time.
The Chinese economy has enjoyed strong growth recently, particularly in manufacturing. This contrasts with Japan where a drop in exports and consumer demand has hit the economy hard.
Economists are now forecasting that China will move into the top spot ahead of the US in about a decade.
In dollar terms, the US economy is currently around three times to the size of the Chinese economy. Moving into first place in ten years time will require continued strong economic growth from China during this time.
By way of comparison, the UK economy is the world’s sixth largest.
Of course a booming Chinese economy could be good news for Japan. China is the main trading partner for Japan, so a stronger economy in China should result in greater demand for Japanese goods and services.
Photo credit: Flickr/Philip Jägenstedt