Why China "overtaken" by the Japanese economy?

Japan Cabinet Office announced the morning 14/2 statistics show that the country's GDP has declined in the quarter 4/2010 due to consumer demand plummeted.Accordingly,  Japan had to give up the throne second largest economy world for China in 2010.

According to statistics, in 2010 GDP growth of 3.9% in Japan, reached 5474 billion, but still less Growth of China's GDP reached 5.8799 trillion US dollars. Analysts said that with the current growth rate, China will overtake the US to become the largest economy in the world within a decade. "We can say that in 10 years, China's economy will have the same scale as the United States, "Tom Miller from organizations GK Dragonomics economic consultancy based in Beijing, said. However, the Japanese economy officially surpassed China at the time was still a big debate. Some analysts said that this has occurred since Q3 last year. The official figures of the year showed a more comprehensive vision of "difference" and why China easily beat Japan in the race. According to the BBC, economic growth in China China is mainly based on industry and investment funds channeled to the domestic industry as well as the infrastructure is expanded. Accordingly, the array of strong export growth, while China has become the center of production for multinational brands want to benefit from cheap labor and from roads and railways were extended. "Base infrastructure has been focused, "said Duncan Innes-Ker from the Economist Intelligence Unit (EIU) in Beijing said. "China went ahead in the construction of infrastructure in places where people will demand arises. And the infrastructure is already there, the company was looking to invest". When growth, economic Central China creates new jobs that people leave rural areas and agriculture to urban centers to find work have higher incomes. "Urbanization is a significant step change in terms of social structure in China for 30 years," expert Tom Miller said. At the same time, foreign investment in China rose, helped raise prices stocks and real estate to follow. "The level of investment in China is staggering," said Innes-Ker of EIU comment. "This has never happened in any major economy." Contrary to the trend of soaring Chinese economy, Japan has struggled during a "lost decade". In the 1980s, Japanese products such as electronics and automobiles have attracted global demand. In this golden period, Japan's economy grew by more than 7% per year. However, by the 1990s, the bubble deflated in the stock market and real estate. "Real estate prices become unrealistic and the government had tried to escape, soaring debt and production efficiency of the economy really affected," Mr Innes-Ker from the EIU said. Currently there were many signs that Japan has managed to turn the economy, but still have to deal with the impact of the state's population is aging while demand is low. On 9/2, Deputy Director Executive International Monetary Fund (IMF) Naoyuki Shinohara warned the public debt and budget deficit of the Japanese giant, while urging Tokyo to conduct financial reform. The IMF issued a warning on only a few weeks after credit rating agency Standard & Poor's dropped the credit rating of AA to AA- from Japan, Tokyo citing lack of "clear strategy" in efforts to reduce the public debt ratio to 200 % of GDP, the highest among developed economies (OECD). Mr. Shinohara warned Japan will face immediate threat due to financial problems, although the majority of government debt Sponsored by domestic investment. According to him, if the Japanese to the current situation continues, it will lead to serious problems in the future. He stressed: "It is important to reach agreement on specific measures to restore financial system as soon as possible." IMF Deputy Managing Director said that to prepare for the possibility of the economy may decline after the implementation of fiscal austerity measures, the Government of Japan should also "promote growth through structural reforms." However, he dismissed the risk of head foreign bonds sold off by the Japanese Government released. Even more proof that China's economy has surpassed Japan, but most economists believe, the only comparable economic size International country with Japan will not provide a complete picture, exactly. "GDP per capita in China is about $ 4,500, but in Japan, this figure is about $ 40,000," Mr. Miller said. "Most Chinese people are still poor, many people living in rural areas than in the city. The average population in Japan is much richer than the average person in China, "he said.
(According vneconomy.vn)


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