China’s economy again beat Japan’s in the third quarter, and Asia’s rising giant remained on course to unseat Japan as the world’s No. 2 economy for the year as a whole, data showed yesterday.
Japan said that it remained ahead for the first nine months, thanks to strong growth in the first quarter, but since then, it has been outperformed by China, a trend that is expected to continue.
For July to September, China’s nominal GDP of US$1.415 trillion beat Japan’s US$1.369 trillion, the Cabinet office in Tokyo said, quoting average Japan interbank exchange rates and an IMF yuan-dollar rate.
China eclipsed Japan in the second quarter, as the archipelago nation was hit by cooling exports and flat domestic consumption from April to June.
However, Japan’s nominal GDP for January to September was US$3.959 trillion, while China’s was US$3.946 trillion, the official said. Beijing has been criticized for keeping the yuan artificially low, suggesting that China’s nominal GDP should be even higher, while the recent strength of the yen versus the dollar has pushed up Japan’s nominal figure.
Japan’s on Thursday revised its July to September growth higher to an annualized 4.5 percent from an initial estimate of 3.9 percent.
However, China’s trajectory in surpassing Japan as the world’s second-biggest economy this year will likely be strengthened by an expected Japanese slowdown in the fourth quarter as export growth cools.
Japan remains more than 10 times richer on a per-capita basis, according to the IMF.
While China’s leap forward reflects a shift in economic power as the country continues its transformation from poverty-hit communist state to global heavyweight, it also highlights the need for Japan to re-energize its economy, analysts said.
Despite it crawling out of a severe year-long recession last year, Japan’s recovery remains fragile, with deflation, high public debt, weak domestic demand, softening exports and a strong yen all concerns for policymakers.