China's economy leapfrogs Japan to No. 2

TOKYO, Feb. 14 (UPI) -- Japan yielded its place to China as the world's second-largest economy in 2010 after figures Monday showed its economy shrank in the quarter ended December.

It was Japan's first such decline in five quarters as its economy is burdened by export weakness and weak domestic consumption. But the economy for all of 2010 grew 3.9 percent.

The latest figures showed China moved up to the No. 2 spot after the United States in world economy rankings, Kyodo News reported.

The December quarter figures showed Japan's economy contracted 1.1 percent in annual price-adjusted terms. Japan's Cabinet office said private consumption fell 0.7 percent, blamed on the diminishing effects of the government's fiscal stimulus measures.

However, the contraction was slower than expected, which Kyodo said raised hopes the economy would bounce back given improving employment conditions and growing corporate capital spending.

Japan's gross domestic product in 2010 stood at $5.474 trillion. China's GDP last year was $5.8 trillion while that of the United States was $14.6 trillion.

CNN reported measured in per-capita terms, Japan's current GDP is about $40,000 while that of China is about $4,500.

China's Xinhua news agency quoted Japan's Economics Minister Kaoru Yosano as saying he welcomed China's new ranking.

At the current rate of China's growth of about 10 percent, Japan says China will surpass the United States in about 20 years to become the world's largest economy, CNN reported.