TOKYO - Japan Monday that China's economy outperformed his own as the world's second largest in 2010 and confirmed said an end year downturn was its first quarterly contraction in more than one year.
Japan's economy expanded 3.9 percent in the year - his first annual growth in three years. But it was not enough to keep to a surging China. Nominal GDP of Japan last year to $5.4742 trillion less than China's total of $5.8786 trillion, came, said the Cabinet Office.
China Japan acknowledged world economy after the USA last year as having surpassed as no. 2 - a title which had held since 1968. But full-year Japanese confirmed it no data were available until Monday. The historical shift underscores a strongly changing fortunes of the two countries: China's fast growing and driving the global economy, while Japan never completely out of stagnation which followed, return its property bubble.
In view of the rise of China, now is the world's largest auto market and the largest energy consumer. Experts say that it could eventually overtake the USA as the No. 1 economy between 2020 and 2030 when growth rates are maintained the current bubble formation.
In the 1980s it was Japan's economic upswing provoked both admiration and fear now as China. Resolved the boom after real estate crash rates, leads to the so-called "lost decade" of 1990s.
The rise of its Asian neighbors was since then critical for Japan's economic engine, as it fights with persistent deflation, an aging population and ballooning national debt. China is Japan's largest trading partner and a major source of growth for Japanese companies such as Toyota Motor Corp. now
China remains far poorer with a GDP per person, one fifth of Japan differences covered the buying power in each country. But signs of rising incomes plenty. A record visited 1.41 million Chinese tourists eager to flaunt Japan through the purchase of Japanese brand were Canon digital cameras to Shiseido Cosmetics as compared to their newfound wealth.
Japan's economy Minister Kaoru Yosano described that as important for Asia expansion China and said he hopes for deeper economic relations between the two countries.
"As an economy are not competing for rankings, we work to improve the lives of citizens" Yosano told reporters after the GDP data is published. "We welcome China's economic advancement as a neighbouring country."
Last quarter GDP - a measure of the value of all were and services domestically produced - at an annualized rate of 1.1%, 3.3 per cent expansion a sharp turnaround from a revised shrunk in the third quarter.
A decline in exports and consumer home weaker demand led to the downturn that may be limited in time. The result was better than Kyodo News Agency average market forecast a return 2.2 percent decrease.
Prime Minister Naoto Kan has promised, revive the economy and important reforms in the tax and social systems of the country. Assent reviews are fast, but as voters question his Government ability, the country through its pressing problems eroding.
Kan must first convince opposition parties a record 92.4 trillion yen ($ 1.1 trillion) budget for the next fiscal year from April, as well as his own party in the midst of political funding scandal veteran democratic legislators unify.
Standard & poor's granted its own harsh criticism of Japan's political paralysis last month when it for the first time in nine years of the country's credit rating downgraded. He said the decision lacks a coherent strategy to reduce the debt of the country Democrats massive public now at twice the size of the GDP.
This is the year that must Japan serious discussions about the kind of reforms, the kan urges to start, and reach a political consensus, Masayuki Kichikawa, Chief Economist said Bank of America Merrill Lynch in Tokyo. But his hopes for Kan quickly fade.
"The political situation is so chaotic," said Kichikawa. "Lack of Prime Minister kan's leadership is very serious, and he is having some sort of identity crisis." "It seems that he has lost sight, where he stands."
In the fourth quarter figure translates to a declining 0.3 per cent from the previous period three months, according to the Cabinet Office's provisional data. Consumer spending accounts for about 60 percent of GDP, fell 0.7 percent. Car sales declined in the quarter after a period of government funding for "green" vehicles in September.
Exports fell 0.7 percent from the previous quarter in the middle of a strong yen and falling global demand. A rise in the Japanese currency the value of exporter profits were reduced overseas and Japanese in foreign markets makes it more expensive.
The road ahead looks brighter growth, with economists say GDP will increase in this quarter in tandem with rising global demand. The head of the Japanese Central Bank, Masaaki Shirakawa, said last week that Japan is recent signs indicate the "emerging and performing on par with other economies pause" Advanced.
"We believe the economy has bottomed with the contraction in the October-December and is now towards a clearer recovery," said Kyohei Morita, Chief Economist at Barclays Capital Japan in a note to clients.
The Bank of Japan begins a two-day policy Board meeting Monday but expected vacation interest is unchanged.
Under a "comprehensive monetary easing" politics of the Central Bank in October lowered its key rate to nearly zero percent and undertakes to keep the level again risen until prices start. It reveals also a temporary 5 trillion yen ($ 61 billion) Fund financial assets such as government bonds, to help CP and corporate bonds, lift to buy economy and reverse deflation.
The Central Bank expects real GDP to expand 3.3 percent of this fiscal year to March and 1.6 percent next year.
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