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China's New Status of Second Largest Economy Met With Caution

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Uploaded on Aug 18, 2010

On Monday, China surpassed Japan as the world's second largest economy. That's based on second quarter GDP numbers. But economists say the new status does not necessarily mean improved living standards, and that the Chinese regime needs to do more than just pursue GDP.

If you look at the GDP numbers, China became the world's second largest economy on Monday. It overtook Japan by nearly three per cent in the second quarter this year.

But some experts hesitate to play it up.

[Victor Gao, Director, China National Association of International Studies]:
I think we need to be very philosophical about it and also very sober-minded about it. First of all, GDP is only one way to look at the economy and there is also a very important criterion, that is the quality of the GDP. For example, when China surpasses Japan as an economy, when we look at the Japanese economy, I would personally say we still have a lot of learn from the Japanese.

In China, GDP has become more than just an economic indicator. The regime has used it as a propaganda tool to improve its image both abroad and internally. NTD economics commentator Jason Ma says the regime's pursuit of GDP has come at the expense of many Chinese people.

[Jason Ma, NTD Economics Commentator]:
I would actually suggest that the communist regime stop using GDP as a measurement, because under the banner of 'GDP,' people's homes have been demolished, the environment has been polluted, and homes are so expensive they're no longer affordable.

Some Beijing residents said on Monday that the latest economic figures were a good indicator for China, but there were also areas needing improvement.

[Zhu Guansheng, Beijing Resident]:
I think it is a good thing. But I think China should develop in other aspects too, for instance, in environmental protection and real estate. If a country becomes stronger, people's quality of life and protection of the environment should catch up too.

[Liu Rui, Beijing Resident]:
I think it's just statistics. It does not represent China's economy. It's only an indicator of China's economic direction. We should be calm about it. In addition, the statistics may not bring good to China. If China is not calm about it, it could mislead China.

China's nominal GDP for the second quarter was $1.335 trillion U.S. dollars, clipping Japan's $1.286 (trillion). But in terms of the overall wealth of the population, China lags far behind. Its per capita GDP was just thirty-six hundred dollars last year, compared to more than ten times as much in Japan.

------1st on-screen animated bullet points with header------
2010 2ND QUARTER GDP
China: US$1.335 Trillion
Japan: US$1.286 Trillion

------2nd on-screen animated bullet points with header------
2009 PER CAPITA GDP
China: US$3,600
Japan: US$37,800

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