China surpasses Japan as world's second-largest economy

[Rii]

Mere months after wrenching the title of 'world's top exporter' from Germany, China has officially surpassed Japan as the world's second largest economy.

New York Times

SHANGHAI — 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.

[....]

Assessing what China’s newfound clout means, though, is complicated. While the country is still relatively poor per capita, it has an authoritarian government that is capable of taking decisive action — to stimulate the economy, build new projects and invest in specific industries.

That, Mr. Lardy at the Peterson Institute said, gives the country unusual power. “China is already the primary determiner of the price of virtually every major commodity,” he said. “And the Chinese government can be much more decisive in allocating resources in a way that other governments of this level of per capita income cannot.”

Perhaps anticlimactically, the world continues to turn. Now all that lies ahead for China in the realm of statistical economic masturbation is the long haul to overtake the United States. Might want to get a beer or two to pass the time.

For everyone in China’s region, they’re now the biggest trading partner rather than the U.S. or Japan.”

I was going to object to this and say that Japan is Australia's largest trading partner, as that was the case as of last year, but looking at the most recent data (June 2010) it appears that's no longer the case. Seems China displaced Japan as Australia's largest trading partner in the same quarter that it overtook Japan re: GDP. Nifty.

 

[Quinton O'Connor]

Not exactly surprising for anyone who's followed economics of the past several years, but it's still kind of surreal to finally read what we knew was on its way.

There's no sense sparking debates and whatnot, so I'll simply say this: it's certainly damned impressive.

 

[FordSVT]

Sure it's impressive, a lot can be done with a billion people you can order around like chattel without having to worry about pesky things like the environment or human rights, and you have the western world's money to pay for it.

Perhaps we should compare China's average income or GDP/person to the rest of the world, it's much less impressive.

 

[Geckothan]

Nuke 'em while we still can!

 

[Robert Maxwell]

Sure it's impressive, a lot can be done with a billion people you can order around like chattel without having to worry about pesky things like the environment or human rights, and you have the western world's money to pay for it.

Perhaps we should compare China's average income or GDP/person to the rest of the world, it's much less impressive.

Yeah, that's what I was thinking.

China is still around position 100 in terms of GDP per capita, which is pretty lousy. The US is roughly 7th, and Japan is about 25th.

The US has 300 million people and Japan has 127 million. Kinda easy to beat that when you've got over a billion people and no scruples.

 

[The Boy Who Cried Worf]

Nuke 'em while we still can!

How do we get all those bombs into orbit though?

 

[Rii]

In related statistical wankery, (American) Foreign Policy magazine recently came out with its updated Failed States Index, ranking nations by their level of instability as measured in various ways. No surprises at the 'unstable' end of the scale: Afghanistan, Iraq, Pakistan, and, well, most of central Africa. Results at the other end affirm the old line about comparative global statistics being an exercise in measuring how closely one's nation resembles Scandinavia.

The ten most stable nations as of 2010.

1. Norway
2. Finland
3. Sweden
4. Switzerland
5. Ireland
6. Denmark
7. New Zealand
8. Austria
9. Australia
10. Netherlands

Remarkably, Iceland manages to come in at #13 despite recording an 'economic stability' sub-category score reminiscent of central Africa.

Also coming from Foreign Policy recently is their updated Global Cities Index, subtitled 'Asia Rising'. I'll let them speak for themselves here: "We are at a global inflection point. Half the world's population is now urban -- and half the world's most global cities are Asian [....] and there's no question which way the momentum is headed: Just as more people will continue to migrate from farms to cities, more global clout will move from West to East."

The Top 10 global cities as of 2010:

1. New York
2. London
3. Tokyo
4. Paris
5. Hong Kong
6. Chicago
7. Los Angeles
8. Singapore
9. Sydney ()
10. Seoul

Fast movers to watch in future: Chongqing. And tying back to the OP, Foreign Policy offers the following re: China's rapid urbanisation: "Consider how aggressively Chinese cities have now begun to bypass Beijing as they send delegates en masse to conferences and fairs where they can attract foreign investment. By 2025, China is expected to have 15 supercities with an average population of 25 million (Europe will have none). Many will try to emulate Hong Kong, which though once again a Chinese city rather than a British protectorate, still largely defines itself through its differences with the mainland. What if all China's supercities start acting that way? Or what if other areas of the country begin to demand the same privileges as Dalian, the northeastern tech center that has become among China's most liberal enclaves? Will Beijing really run China then? Or will we return to a fuzzier modern version of the "Warring States" period of Chinese history, in which many poles of power competed in ever-shifting alliances?"

 

[Geckothan]

Nuke 'em while we still can!

How do we get all those bombs into orbit though?

We don't need to get them into orbit, just outsource the production of them to China. They'll build them so badly they'll probably detonate by themselves before they're exported.

 

[watermelony2k]

Will the 'mericans help Taiwan out when the time comes?

here's some pics of that emerging Chongqing

http://www.foreignpolicy.com/articles/2010/08/16/chinas_new_tomorrowland

 

[Rii]

Nuke 'em while we still can!

How do we get all those bombs into orbit though?

We don't need to get them into orbit, just outsource the production of them to China. They'll build them so badly they'll probably detonate by themselves before they're exported.

Yeah, like all those they've already built have done.

 

[FordSVT]

Fast movers to watch in future: Chongqing. And tying back to the OP, Foreign Policy offers the following re: China's rapid urbanisation: "Consider how aggressively Chinese cities have now begun to bypass Beijing as they send delegates en masse to conferences and fairs where they can attract foreign investment. By 2025, China is expected to have 15 supercities with an average population of 25 million (Europe will have none). Many will try to emulate Hong Kong, which though once again a Chinese city rather than a British protectorate, still largely defines itself through its differences with the mainland. What if all China's supercities start acting that way? Or what if other areas of the country begin to demand the same privileges as Dalian, the northeastern tech center that has become among China's most liberal enclaves? Will Beijing really run China then? Or will we return to a fuzzier modern version of the "Warring States" period of Chinese history, in which many poles of power competed in ever-shifting alliances?"

That's a very good post. We often imagine China as a single, indomitable mass of humanity while ignoring its history.