China has overtaken Japan as the world’s second biggest economy.
Figures released by the Japanese government confirmed that its gross domestic product shrank in the last three months of 2010 compared with the previous quarter.
The root cause is a drop in exports and consumer demand.
Japan’s economy for 2010 was worth $5.47 trillion, while China’s was closer to $5.8 trillion. The United States remains by some way the world’s biggest economy.
This latest data reinforces China’s rapid ascent as an economic superpower as the country surpassed Japan last summer. Just five years ago, China’s GDP was put at around half of Japan’s.
But while China is expanding Japan is set to benefit from the fast-growing neighbour as Chinese demand grows for Japanese exports.