{"id":10924,"date":"2011-01-21T13:07:41","date_gmt":"2011-01-21T11:07:41","guid":{"rendered":"http:\/\/www.nationalturk.com\/en\/?p=10924"},"modified":"2011-01-21T13:07:41","modified_gmt":"2011-01-21T11:07:41","slug":"china-passes-japan-as-worlds-no-2-economy-21012011","status":"publish","type":"post","link":"https:\/\/www.nationalturk.com\/en\/china-passes-japan-as-worlds-no-2-economy-21012011\/","title":{"rendered":"China passes Japan as world’s No. 2 economy"},"content":{"rendered":"

\"\"<\/a>China has overtaken Japan as the world’s second-largest economy, but the rising power must overcome a number of hurdles if it intends to challenge the United States for the top position.<\/p>\n

China’s gross domestic product in real terms grew 10.3 percent in 2010 from a year earlier, the Chinese National Bureau of Statistics announced Thursday. It was the first double-digit year-on-year growth in three years.<\/p>\n

The country’s nominal GDP in 2010 reached 39.798 trillion yuan (about $5.881 trillion).<\/p>\n

In the first nine months of 2010, Japan and China were tied at $3.9 trillion in terms of nominal GDP, giving Japan a loose claim to the No. 2 position that it has held since 1968, when it surpassed West Germany.<\/p>\n

But China’s 9.8-percent year-on-year increase in GDP in the October-December period is certain to exceed the Japanese number, which will be released in mid-February.<\/p>\n

The World Bank predicts that China’s economic growth in real terms will slow to 8.7 percent in 2011, still well above the global average of 3.3 percent.<\/p>\n

Such predictions have led some economists to forecast that China will become the world’s largest economy in 2020.<\/p>\n

But the country is fraught with a host of challenges, including a wealth disparity that could limit personal consumption, soaring inflation and possible unrest from the millions of people who have not seen the benefits from the country’s economic rise.<\/p>\n

A 23.8-percent jump in spending on public works and other projects, which began after the global financial crisis, and an emphasis on exports fueled China’s expansion in 2010.<\/p>\n

The value of China’s exports topped all countries for the second straight year. In 2010, Chinese exports soared 31 percent, a huge turnaround from a 16-percent decrease in 2009.<\/p>\n

But China is aware that the current pace of its export expansion is unsustainable.<\/p>\n

Robust exports, buoyed by rampant development and a competitive edge attained by cheap labor costs, have created new problems, such as pollution, overuse of natural resources and trade frictions.<\/p>\n

In addition, industrialized countries are demanding that China stop keeping its currency artificially low to retain its advantage in exports.<\/p>\n

China plans to switch to economic growth led by domestic consumption, but the uneven distribution of wealth has become embedded in society and could limit household spending.<\/p>\n

Although personal consumption soared by 18.4 percent, the high figure has much to do with steep price increases.<\/p>\n

And the percentage of household income has actually declined over the past two decades even as the Chinese economy was expanding at an annual rate of about 10 percent.<\/p>\n

The ones that have benefitted the most from the country’s rapid economic ascent are the government and state-run enterprises, which have power and access to information.<\/p>\n

Farmers had seen a smaller rise in their income than that for urban residents, leading to a disparity that could spark social unrest and hinder personal consumption.<\/p>\n

In 2010, the increase in farming household income exceeded that for city dwellers for the first time in almost 10 years. But in terms of value, farmers’ income was only one-third of that for urban residents.<\/p>\n

China’s per-capita GDP is about one-10th of the Japanese figure and still has not cracked the global top 100.<\/p>\n

With this in mind, Beijing is instructing local governments to raise minimum wages to bring the pace of economic growth and household income to the same level under a five-year plan from 2011.<\/p>\n

But China will also have to deal with soaring inflation to achieve this goal.<\/p>\n

China’s market is awash with funds from huge government investments and speculative funds flowing in from advanced countries.<\/p>\n

The consumer price index rose 3.3 percent in 2010 from a year earlier, above the government target of 3 percent.<\/p>\n

China’s “golden period” is expected to run until around 2015, when the production-age population peaks. The country’s population, now at 1.3 billion, is forecast to decline after 2030.<\/p>\n

While tackling inflation, the Chinese government also needs to address the midterm issue of improving social security and upgrading industrial and social structures to grow into a mature economy.<\/p>\n

The fourfold expansion of China’s economy over the past decade has also caused friction with other countries.<\/p>\n

China’s military buildup, its passive response to tackling global warming and its de facto bans on exports of rare earth elements have infuriated countries around the world.<\/p>\n

Its spending spree on fuel and grain has also led to troubles with emerging economies.<\/p>\nError, group does not exist! Check your syntax! (ID: 7)<\/span>\n","protected":false},"excerpt":{"rendered":"

China has overtaken Japan as the world’s second-largest economy \/ World news<\/p>\n","protected":false},"author":29,"featured_media":10925,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[30,80,51,14],"tags":[],"class_list":["post-10924","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-asia","category-breaking-news","category-economy","category-world"],"_links":{"self":[{"href":"https:\/\/www.nationalturk.com\/en\/wp-json\/wp\/v2\/posts\/10924","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nationalturk.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nationalturk.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nationalturk.com\/en\/wp-json\/wp\/v2\/users\/29"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nationalturk.com\/en\/wp-json\/wp\/v2\/comments?post=10924"}],"version-history":[{"count":0,"href":"https:\/\/www.nationalturk.com\/en\/wp-json\/wp\/v2\/posts\/10924\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.nationalturk.com\/en\/wp-json\/wp\/v2\/media\/10925"}],"wp:attachment":[{"href":"https:\/\/www.nationalturk.com\/en\/wp-json\/wp\/v2\/media?parent=10924"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nationalturk.com\/en\/wp-json\/wp\/v2\/categories?post=10924"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nationalturk.com\/en\/wp-json\/wp\/v2\/tags?post=10924"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}