chinese p.jpgChina has overtaken Japan as the world’s second-biggest economy.

 

Japan’s economy was worth US$5.474 trillion at the end of 2010, figures from Tokyo have shown. China’s economy was closer to US$5.8 trillion in the same period.

 

Japan has been hit by a drop in exports and consumer demand, while China has enjoyed a manufacturing boom.

 

At its current rate of growth, analysts see China replacing the US as the world’s top economy in about  a decade.

 

Japan played down the significance of the shift in the economic league table, and the fact that it has been replaced as the second-largest economy for the first time in more than four decades.

 

China is now Japan’s main trading partner and is increasingly important to companies such as electronics firm Sony and carmakers like Honda and Toyota.

 

The yen has been strengthening against other currencies, recently touching a 15-year high against the dollar, and the fear is that the currency’s gains may hurt foreign demand for Japanese products.