This month the Japanese government admitted that China has stolen its thunder [en] becoming the second largest economy after the US, as official figures showed that Japan’s gross domestic product was US$1.28 trillion in the second quarter against China's US$1.33 trillion.
But this announcement hasn't surprised many Japanese people who had been expecting it to happen sooner or later.
The buzz that media created about Japan being beaten by its Asian neighbor has made many bloggers raise their eyebrows and say: so what?
Ampontan, for instance, warns that China becoming the second largest economy in the world is nothing but a bubble that will eventually burst.
Yesterday, the English-language print media was filled with stories declaring that China’s economy had at last grown to become the second-largest in the world, surpassing that of Japan. One newspaper said it had “seized” second place (as if economies can seize anything), while another reported that it had captured the “second-place crown”.
Perhaps they should be forgiven, for it’s obvious they know not what they do. Many people, more often on the left than not, view the dynamics of national economies as a zero-sum contest–as if they were spectators at a baseball, football, or hockey game. The economists remind us that the potential for win-win is always there, but few people listen.[…]
As Gordon Chang points out in Forbes [en], the Chinese property market has become the 500-lb bubble in the middle of the room. When it pops–and you know it will–investors will take a bath so large the media will be inundated with water sports stories 24/7.
Japan emerged as economic superpower in 1968, when it became the second largest economy in the world, surpassing West Germany.
The “economic miracle” as defined by some scholars [en] was caused by multiple factors including postwar reforms and a high level of industrialization fostered by ‘keiretsu’ [en], a partnership of Government and private industry.
Nowadays Japan, with a population which is only one tenth of greater China's population, has a public debt to GDP ratio of about 200% and a mere 0.1% economic growth rate.
Takaojisan thinks it’s natural that the Chinese GDP passes Japan's as the population is bigger. But he also shares with Ampontan the opinion that the story that China is going to be the largest economy in the near future may go up in smoke.
The Chinese GDP doesn’t depend on personal consumption but on the investments based on money that couldn’t be spent on anything else.
If those investments fail, China’s huge economy would evaporate. The reason why is that personal consumption, which may become the mainstay of its economy, is limited. The infrastructure is not well maintained and social services that support the citizens physically and socially aren’t organized at all.
In other words, the collapse if China’s investment bubble burst would be awful. An economy lacking a consistent base would vanish into thin air. […]
However, even if [China’s] economy passed the Japanese economy in scale, then what?
In addition to the figures that prove China’s economy being greater than the Japanese, experts forecast [en] that this growing power will eventually pass also the US by 2030, becoming then the largest economy in the whole world.
Blogger aen_ukon99 wonders what are the factors considered by the experts when examining a country's economic performance.
Also, China which has been providing a cheap labor force so far is starting to become aware of problems such as suicide and strikes which have made many companies move to India or Africa. This will become a sensitive issue for China won’t it?
More positive thinkers, like Bos, have taken the news as a reason to look ahead and help their country to utilize those values and strengths that made of it a world power in just a few decades.