China’s economy to overtake Japan

In next two years:

CHINA: China will overtake Japan to become the second largest economy in the next two years, giving Beijing greater clout on the world stage, analysts say.

Figures to be released this week in Beijing are expected to show the economy expanded 9.5 percent in the third quarter, further narrowing the gap with Japan which may only post one percent growth for the period, economists forecast.

China is expected to unseat its Asian rival from the position it has held for more than 40 years in 2010 or 2011, though analysts say the shift in the global economic hierarchy will be largely symbolic with little impact on trade.

“China is already close to Japan in overall size so becoming the world’s number two doesn’t really have any substantive implications,” Todd Lee, an analyst at IHS Global Insight, told AFP.

“Rapid economic growth will give China more weight in the global arena... and bragging rights and additional ammunition for the Chinese Communist Party to encourage national pride.”

Before the global crisis struck, China had posted double-digit annual growth from 2003 to 2007 and again in the first two quarters of 2008, pushing its gross domestic product to 4.3 trillion dollars, according to World Bank data.

Last year, US GDP was at 14.2 trillion dollars and Japan’s economy was worth 4.9 trillion dollars, the data showed. After slumping to 6.1 percent growth in the first quarter of 2009 — the slowest pace in 20 years — China rebounded in the second quarter, with 7.9 percent growth and it is expected to exceed eight percent for 2009 as a whole.

The turnaround in China — underpinned by a four-trillion-yuan (586-billion-dollar) stimulus package and 7.4 trillion yuan in bank lending in the first half — has been in stark contrast to the situation in Japan.

Beijing, Sunday, AFP