Government figures released Monday show China surpassed Japan in the second quarter to become the world’s second-largest economy behind the United States. Japan’s economy was valued at about $1.28 trillion in the second quarter, slightly below China’s $1.33 trillion, bolstering forecasts that China will pass the United States as the world’s biggest economy as early as 2030. Though Japan’s stagnating economy reflects a decline in political and economic power, China is in the throes of urbanization and is far from developed, meaning it has a much lower standard of living—and a lot more room to grow. There are challenges ahead for China: analysts say the country is too dependent on exports, and investment and state-run banks lend too aggressively, but the country’s rapid growth suggests that it will continue to compete fiercely with the United States and Europe for natural resources but also offer big opportunities for companies eager to tap its market.
Looking for more?
Get the best of Maclean's sent straight to your inbox. Sign up for news, commentary and analysis.