China overtakes Japan as number 2 economy

From: http://www.bbc.co.uk/news/business-12427321

China has overtaken Japan as the world's second-biggest economy, figures out of Tokyo have shown.

Japan's economy was worth $5.474 trillion (£3.42 trillion) at the end of 2010. China's economy was closer to $5.8 trillion in the same period.

China has enjoyed a manufacturing boom, while Japan has been hit by a drop in exports and consumer demand.

At its current rate of growth, analysts see China overtaking the US as the world's top economy in about a decade.

"It's realistic to say that within 10 years China will be roughly the same size as the US economy," said Tom Miller of GK Dragonomics, a Beijing-based economic consultancy.

Slowdown

According to the latest figures from Tokyo, Japan's economy contracted at an annualised rate of 1.1% in the final three months of 2010. Growth declined 0.3% from the previous quarter.

It was the first time in five quarters that the economy shrunk and was caused by a dip in domestic and export demand, analysts said.

They added that demand has been picking up since the start of the year, and they expect expansion to return.