China has overtaken Japan to become the world’s second-largest economy, Yi Gang, China’s chief currency regulator, has claimed.
Depending on how fast its exchange rate rises, China is on course to overtake the United States and vault into the No. 1 spot sometime around 2025, according to projections by the World Bank, Goldman Sachs and others. China overtook Britain and France in 2005 and Germany in 2007.
According to IMF estimates as of April 2010, China’s GDP at current prices touched US$ 5,365 billion against Japan’s US$ 5,273 billion. US GDP stands at US$ 14,800 billion and India’s at US$ 1,367 billion.
China’s economy expanded 11.1% in the first half of 2010 from a year earlier, and is likely to log growth of more than 9% for the whole year, Yi Gang said. China has averaged more than 9.5% growth annually since it embarked on market reforms in 1978.
China has been encouraging the use of the yuan beyond its borders, allowing more trade to be settled in yuan and taking a series of measures to establish Hong Kong as an offshore centre where the currency can circulate freely. Although cruising past Japan in gross terms, China’s per-capita income of about US$ 3,800 a year is a fraction of Japan’s or America’s.