China Surpasses Japan as World's Number Two Economy

New figures show China has overtaken Japan to become the world's second largest economy -- a development analysts describe as a milestone in China's meteoric rise as a world power.

The figures came Monday from the government of Japan, which noted its own growth was slower than expected in the second quarter of this year. Tokyo said its economy as measured by Gross Domestic Product, or GDP, stood at $1.288 trillion during April, May and June, compared to China's $1.337 trillion in the period.

With years of economic growth in the 10 percent range, China has been rapidly climbing the ranks of top economies, surpassing France, Britain and Germany before toppling Japan. But experts say it will be as much as 20 years before China can catch the United States, which remains almost three times larger with an annual GDP of more than 14 trillion.

China still has one of the lowest per-capita incomes because of its huge population -- about 1.3 billion people. But its impact on other countries has become immense as it purchases vast amounts of fuel and raw materials to feed its industries, and uses the profits from exports to purchase other countries' debt.

Analysts say China has played a key role in pulling the world out of the global recession, especially Asian countries that have been able to sell into the rapidly expanding Chinese market. Already this year, China has become the largest market for automobiles and -- according to one study -- the largest consumer of energy.

The growth has also translated into greater confidence on the world stage, prompting China to challenge the United States' strategic dominance in Asia. And with trade links becoming vital to its well-being, China is developing a viable navy for the first time in centuries.

For Japan, it is the end of 40 years as the world's second-largest economy.

While Japanese output exceeded that of China for the first six months of the year taken as a whole, experts say sluggish growth in the island nation means there is little chance it will be able to keep pace with fast-growing China through the remainder of the year.

Some information for this report was provided by AP and Reuters.