China Overtakes Japan in Economic Size

China Overtakes Japan as the World's Second Largest Economy

China has overtaken Japan to become the world’s second largest economy, next to the United States. The economic powerhouse is set to change the global balance of power in terms of finance, political influence, and military might.

Some estimates already place China ahead of Japan in total economic production, which regains their top position in Asia in military, technological, and cultural terms, since the reign of the Middle Kingdom in the 18^th century.

"Japan was the powerhouse driving the rest of Asia," said Rob Subbaraman, chief Asia economist for Nomura Securities. "Now the tide is turning and China is becoming a powerful influence on the rest of Asia, including Japan."

Depending on changing exchange rates and different economic reports to be released by the two countries, the exact date when China overtakes Japan is yet to be determined.

The global influence of China is ever growing, as it has become the world’s biggest exporter, automobile purchaser, and steel producer. The fate of many companies from Detroit carmakers to Brazilian mining firms depend on China’s economy.

This burgeoning wealth has also created a larger political influence for China. The country exerted enough pressure to the World Bank and the International Monetary Fund to get them to listen more to developing countries.

Japan is currently mired in a prolonged economic slump for two decades, but its people are still among the richest in the world, with a per capita income of $37,800. China, meanwhile, is a nation of economic and social contradictions, with dozens of billionaires in modern cities, and the majority of its 1.3 billion population among the world’s poorest, often living in city slums and cave houses in the countryside.

Posted by James Fried on Sunday August 01 2010, 12:08 PM EST. All trademarks acknowledged. Filed under Featured News, Finance. Comments and Trackbacks closed. Follow responses: RSS 2.0