China GDP Expands 9.8% Despite Tightening Measures
China’s economy unexpectedly accelerated in the fourth quarter of 2010 despite a series of tightening measures, spotlighting Beijing’s difficulties managing growth and fueling market concerns about further government moves to combat inflation.
The fourth quarter’s 9.8% expansion in China’s gross domestic product makes it all but certain that China became the world’s second largest economy in 2010, ending Japan’s 42-year reign in that position—although Japan doesn’t report its year-end economic data until next month. Acknowledging the milestone and the anxiety its impending arrival has caused some Japanese, Japan’s minister of economic and fiscal policy, Kaoru Yosano, said it appears likely that China has surpassed Japan and that “the Japanese people should welcome our neighbor China’s growth.”
China’s economy surpassed Japan’s based on quarterly data for the two countries in the March-June period, but global rankings are generally based on full-year output. China’s economy remains much smaller than that of the U.S: For the full year, China’s GDP grew 10.3%—up from 9.2% growth in 2009—to about $5.88 trillion. The International Monetary Fund forecast in October that U.S. GDP would top $14.62 trillion.