Although long expected by many experts, Japan has finally issued data on Monday confirming that China has surpassed it as the World’s second largest economy.
The reactions to such news has been highly mixed.
In Japan, the moment is seen as another marker of an extended weakening. Before the bubble burst, many Japanese were once proud of their country’s growth in the 80s. Now, they are further saddened as their country continues its economic struggles. Others, welcomed China’s rise; seeing it as an opportunity for trade and growth.
In China, the ruling Communist Party was ever more cautious of such news. China’s growing economic supremacy might seem positive, but it is also becoming an increasing burden as the country is expected to shoulder more global issues (like reducing carbon emissions). The headline on a recent article on the website of the People’s Daily reads: “China Surpassing Japan to Become World’s Second Biggest Economy—But Not the Second Strongest”. This in fact is very true as the GDP per capita in China is still ten times lower compared to Japan. The World Bank estimates that more than 100 million Chinese citizens—nearly the size of Japan’s entire population—live on less than $2 a day. Many in China, are still waiting for the same level of success, their country has achieved economically, to be reflected in their daily lives.
The complex reactions in both countries reflect the fact that China still lags behind Japan in many respects—and the reality that their growing interdependence makes them partners as much as rivals.
But the news marks the end of an era. For nearly two generations, since overtaking West Germany in 1967, Japan stood solidly as the world’s No. 2 economy. The new rankings symbolize China’s rise and Japan’s decline as global growth engines.
It is interesting to note that Japan and China combined are still worth less than the U.S.’s 2010 GDP of $14.66 trillion. I wonder how many years it’ll take for China to surpass the U.S. in GDP…