China Overtakes Japan as No. 2 Economy:
Official
China has overtaken Japan to become the world's
second-largest economy, the fruit of three decades of rapid
growth that has lifted hundreds of millions of people out of
poverty.
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 came close to surpassing Japan in 2009 and the
disclosure by a senior official that it had now done so comes
as no surprise. Indeed, Yi Gang, China's chief currency
regulator, mentioned the milestone in passing in remarks
published on Friday. "China, in fact, is now already the
world's secondlargest economy," he said in an interview with
China Reform magazine posted on the website of his agency, the
State Administration of Foreign Exchange.
Cruising past Japan might give China bragging rights, but
its per capita income of about US$3,800 a year is a fraction
of Japan's or America's. "China is still a developing country,
and we should be wise enough to know ourselves," Yi said,
when asked whether the time was ripe for the yuan to become
an international currency.
In one important respect, however, China is still a
shrinking violet: anxious to shield itself from the
rough-and-tumble of global markets, it does not permit its
currency to be freely exchanged except for purposes of trade
and foreign direct investment.
And Yi said Beijing had no timetable to make the yuan
fully convertible. "China is very big and its development is
unbalanced, which makes this problem much more complicated.
It's difficult to reach a consensus on it," he said.
