China has overtaken Japan to rank indisputably as the world's second largest economy, behind the US, a landmark moment in the return of the Middle Kingdom to global economic pre-eminence, the position it occupied until the 16th century. It is now the world's largest producer of shoes, cars, televisions, gold, coal and much else.
The release of the latest set of downbeat economic figures from Japan yesterday shows that, in US dollar terms, China is now fractionally ahead of Japan in the value of goods and services produced each year – by $5,8786bn (£3,400bn) in China to $5,474bn in Japan. Britain's national income is about £1,400bn.
But while the UK, Japan and the US will struggle to grow over the next few years by more than 2 or 3 per cent a year, China expects to expand at a rate of 10 per cent or so.
Even in the recession, when the established Western economies were shrinking in absolute terms, China, alongside Brazil and India, was still expanding at more than 5 per cent.
Many economists predict that the Chinese will overtake the United States to become the world's largest economy by 2020 or 2030. Japan had held the title of second largest economy since 1968, but the long stagnation since the collapse of its "bubble economy" in 1990 has seen it slip steadily against fast-growing China; the US overtook Britain in around 1890. Indeed, allowing for the distortions of exchange rates, China overtook Japan some years ago.
However, China still has a long way to travel before it outstrips its older rivals in terms of income per head – it stands at almost $34,000 in Japan, while in China it is just over $7,500. Despite their travails, the US still manages to generate $47,123 in national income per head and the UK $35,053.
Many experts say there are simply not enough resources on the planet to permit China to enjoy per capita living standards as high as the West's, let alone Qatar, the world's wealthiest per capita nation at just over $88,000.Reuse content