China is New Second-Largest Economy

China has officially claimed the title as the world’s second-largest economy next to the United States after erstwhile no.2 Japan suffered a significant fall in gross domestic product in the second quarter compared to three months ago.

The Japanese government announced on Monday that the country’s annualized GDP growth in the second quarter was only 0.4 percent, a big drop compared to the first-quarter growth of 4.4 percent. Japan’s second-quarter numbers suggest that global recovery from recession is not yet in full swing despite the continuing surge of the Chinese economy.

China is likely to hold on to its new status at least up to the end of the year, as its annual growth is projected at about 10 percent compared to Japan’s 2 to 3 percent. Japan had been the No.2 economy since 1968, when it overtook what was then West Germany.

However, despite its emergence as an economic power, China is still far from Japan when it comes to per capita income. Japan boasts a per capita income of $37,800 a year as of 2009, making the country’s people among the wealthiest in the world. China, on the other hand, has a per capita of only $3,600 despite its booming economy.