Chinese Economy Overtakes Japan
The Wall Street Journal reports:
China passed Japan in 2010 to become the world's second-largest economy after the U.S., a historic shift that has drawn mixed emotions in the two Asian powers: resignation tinged with soul-searching in long-stagnant Japan, pride but also caution in an ascendant China wary of shouldering new global responsibilities.
The Japanese government made official the long-expected flip Monday morning in Tokyo, reporting that the economy shrank at a 1.1% annual rate for the last three months of the year, a period when China's gross domestic product surged 9.8% from a year earlier. With those figures, Japan's full-year GDP was $5.47 trillion—about 7% smaller than the $5.88 trillion China reported in January.
Both still remain considerably smaller than the American economy. Japan and China combined are still worth less than the U.S.'s 2010 GDP of $14.66 trillion. But the news marks the end of era. For nearly two generations, since overtaking West Germany in 1967, Japan stood solidly as the world's No. 2 economy. The new rankings symbolize China's rise and Japan's decline as global growth engines.
For the U.S., while Japan was in some ways an economic rival, it also has been a geopolitical and military ally. China, however, is a potential challenger on all fronts.
China's ascent has been the main source of popular legitimacy for the ruling Communist Party. But Beijing worries that the mantle of economic titan comes with unwanted obligations for a country still in many ways poor. "China Surpassing Japan to Become World's Second Biggest Economy—But Not the Second Strongest," said the headline on a recent article on the website of the People's Daily, the party's flagship newspaper.
In Japan, the moment is seen as another marker of an extended weakening. "It's only natural that Japan would be overtaken considering China's ballooning GDP and larger population," Tokyo Gov. Shintaro Ishihara told reporters recently. The outspoken nationalist was once the proud voice of a cocky nation, co-authoring the bubble-era 1989 book, "The Japan That Can Say 'No.'" Now, he talks about his country's standing with a tinge of sadness. "It's just unfortunate that various other signs of Japan's decline stand out so much against that backdrop."
