By Bloomberg News
China surpassed Japan as the worldâ€™s second-largest economy last quarter, capping the nationâ€™s three- decade rise from Communist isolation to emerging superpower.
Japanâ€™s nominalÂ gross domestic product for the second quarter totaled $1.288 trillion, less than Chinaâ€™s $1.337 trillion, the Japanese Cabinet Office said today. Japan remained bigger in the first half of 2010, the government agency said. Japanâ€™s annual GDP is $5.07 trillion, while Chinaâ€™s is more than $4.9 trillion.
China led the world out of last yearâ€™s global recession with aneconomy thatâ€™s more than 90-times bigger than when leaderDeng Xiaoping ditched hard-line Communist policies in favor of free-market reforms in 1978. The country of 1.3 billion people will overtake the U.S., where annual GDP is about $14 trillion, as the worldâ€™s largest economy by 2027, according to Goldman Sachs Group Inc. chief economistÂ Jim Oâ€™Neill.
Chinaâ€™s surpassing of Japan â€œis a marker of its increasingly dominant role in the global economy,â€ saidÂ Eswar Prasad, a senior fellow at the Brookings Institution and former head of the China division at the International Monetary Fund. â€œThe resilience of Chinaâ€™s growth during the crisis enabled a number of other countries, particularly commodity-exporting economies, to ride on its coattails.â€
The benchmark Shanghai stock index rose 2.1 percent at the 3 p.m. close today, climbing the most this month.
China overtook the U.S. last year as the biggest automobile market and Germany as the largest exporter. The nation is the worldâ€™s No. 1 buyer of iron ore and copper and the second- biggest importer of crude oil, and has underpinned demand for exports by its Asian neighbors.
While Chinaâ€™s output was also larger in the fourth quarter of 2009, Japanâ€™s GDP rebounded to exceed Chinaâ€™s in the first quarter, according to data compiled by Bloomberg News. According to IMF data using purchasing-power-parity calculations to adjust for exchange-rate differences, China overtook Japan in 2001.
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