China’s GDP: Still Number Three

Jul 2, 2010 6:09 pm HKT

With China’s government publishing revised figures on the nation’s economic output, it’s time once again to check in on a closely-watched statistical horse-race with Japan.

Fast-growing China is expected to soon surpass Japan as the world’s second-largest national economy after the U.S. -- in terms of annual output measured in U.S. dollars at market exchange rates. (There are other ways of ranking economies that would produce different results: in terms of purchasing power parity, China has been the world’s second-largest economy for a long time. And if you count the European Union as a single economy, it is the world’s largest, pushing the U.S. to second place.)

In its latest regular revision (in Chinese here) of its estimates of gross domestic product, China’s National Bureau of Statistics on Friday upped its estimate of 2009 output to 34.051 trillion yuan from the initial estimate of 33.535 trillion yuan. The revision mostly reflected an increase of the estimated output by the service sector, which China’s statistical system has long had difficulty capturing.

That boosts the size of China’s economy in 2009 by about 1.5%. So where does China stack up internationally? At last year’s average exchange rate of 6.831 yuan to the dollar, its GDP would be equivalent to $4.985 trillion in U.S. dollar terms. (Using the average exchange rate for a given year is the standard practice for calculating a dollar figure.)

But according to the latest figures from the Cabinet Office of Japan, the island nation’s 2009 GDP in the U.S. dollar terms was a cool $5.068 trillion.

So close, but no cigar. China is still likely to have to wait until the end of 2010 to pass this symbolic milestone.

-- Andrew Batson
cecon chart