Learn English Lesson #7 (Read + Speak + Study Questions)
China overtakes Japan as worlds #2 economy Japan posted anaemic 0.4% growth in the second quarter, which allowed China to overtake it as the world's second largest economy. Currently, the United States is the only economy larger than China (as measured by GDP). China has produced GDP surpassing Japan previously, but this time it looks permanent. With Japanese growth in the area of 2-3% and Chinese growth surging 10%, it is clear that China will be dominant in 2010 and beyond. Despite the overall GDP numbers looking great, GDP per capita for China is only $3,500 as compared to $37,000 for Japan and $42,000 for the United States. Granted, Japan and the US have huge debt loads and China has huge cash hoards. Despite the Japanese economy lagging China, the Japanese Yen has been very strong recently and is at 15-year highs. On the other hand, the Chinese government has been intervening in the capital markets to prop up the US dollar. This move will probably end in problems because the Chinese cannot hold the US dollar up forever. Questions: Compare the growth rates between Japan and China Japanese growth is in the area of 2-3% and Chinese growth is upwards of 10%. What does GDP per capita mean? GDP = Gross Domestic Product. Per capita = per person. GDP per capita means how much economic activity per person happens in one year. Explain what is happening in the currency markets. The Japanese Yen is at 15-year highs against the US dollar. By contrast, the Chinese government is propping up the US dollar.