China now Number 2 in the world

China has now overtaken Japan as these second largest economy in the world behind the USA. However, despite the huge development in infrastructure and modern conurbations China is still a developing country. Its GDP/capita last year was US$3,600 compared with Japan’s which was US$37,800. Between 2000 – 2008 Japan’s economy grew 5% compared to China’s 261%. Astonishingly GDP growth in China was 11.9% over the last quarter and over the last few years it has weathered the financial crisis very well. Some economists are uneasy about China’s reliance on exports and there is a need to increase local consumption to keep industry and GDP moving. But wage growth has been limited relative to GDP so one wonders how domestic consumption can increase at the rate required. The video clip from Newsy.com is quite informative. They source news from all the main media outlets.

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