According to The Wall Street Journal‘s excellent new blog Japan in Real Time, Japan is still the second largest economy in the world.

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. (Link)

One commenter at Japan Real Time noted that under the Purchasing Power Parity method measuring economies, China passed Japan a long time ago. (Fortunately, most people in Japan likely don’t care.) The post goes on to say that even by GNP measurement Japan’s #2 position is on a death watch, as China is projected to almost certainly overtake Japan sometime this year. The question is: will we see a new prime minister by then?

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A contributor and editor at the blog War Is Boring, Kyle Mizokami started Japan Security Watch in 2010 to further understand Japan's defenses and security policy.
Kyle Mizokami has 596 post(s) on Japan Security Watch