Thanks to much slower than expected second quarter growth of 0.4 percent, Japan has lost its place as the world’s second-largest economy to China.
Even just five years ago, China’s economy was half the size of Japan’s. But although this isn’t the first time China has overtaken Japan, the regular double-digit growth made possible by the opening and reforms initiated by Deng Xiaoping has led many analysts to believe that this time China is likely to hold onto second spot.
The figures have inevitably had writers breathlessly projecting growth out to the point when China will surpass the United States (in about a decade, according to some estimates including those of the World Bank) although frankly such projections are a little silly at this point, especially when considering that the country China has just overtaken was itself at one point projected by many to surpass the United States.
Those interested in some of the factors that might stall China’s seemingly inexorable growth could do worse than start with an opinion piece published here yesterday by leading China scholar Minxin Pei, who looks at China’s real estate bubble (and also who’s responsible for it).
In the meantime, though, as the China Daily itself notes, China is still a developing country that has a great deal of growing to do if it wants to improve the standard of living of hundreds millions of its people (China’s per capita income is currently about $3,600, compared with Japan’s $37,800 and less than half that of the Seychelles and Gabon). And the wave of violent protests that swept parts of the country in 2008, when growth dropped to less than 10 percent (but still well over a 5 percent rate that most countries would be proud of) is a reminder of how much is expected of the Chinese leadership, and what it risks if it fails.