China Passes Japan as Second-Largest Economy

[frigidmagi]

NYTimes

[quote]After three decades of spectacular growth, China passed Japan in the second quarter to become the world’s second-largest economy behind the United States, according to government figures released early Monday.

The milestone, though anticipated for some time, is the most striking evidence yet that China’s ascendance is for real and that the rest of the world will have to reckon with a new economic superpower.

The recognition came early Monday, when Tokyo said that Japan’s economy was valued at about $1.28 trillion in the second quarter, slightly below China’s $1.33 trillion. Japan’s economy grew 0.4 percent in the quarter, Tokyo said, substantially less than forecast. That weakness suggests that China’s economy will race past Japan’s for the full year.

Experts say unseating Japan — and in recent years passing Germany, France and Great Britain — underscores China’s growing clout and bolsters forecasts that China will pass the United States as the world’s biggest economy as early as 2030. America’s gross domestic product was about $14 trillion in 2009.

“This has enormous significance,â€

[The Cleric]

I've always wondered what the source of these numbers is. You can't trust China to post accurate numbers, so is it just an aggregate of other counties? And how much of their economy exists based on government fiat, rather than actual sustainable industry?

[frigidmagi]

I assume they come from the World Bank and IMF. Keep in mind there are somethings even China will be more or less honest about. If they get a reputation for lying about economic conditions they'll lose investors and trade which will ruin them. So while China will likely fudge numbers and shade things, it'll be close enough to the truth.

[General Havoc]

Authoritarian economies, it has been shown, even before China are capable of generating enormous growth. Whether that extends to sustained economic affluence for the wider population is a much larger question.

The problem is that by liberalizing their economy, such nations often find themselves in the difficult position of having created their own opposition force. Eventually the middle class turns around and starts asking "What have you done for me lately?"