China Officially World's Second-Biggest Economy

TOKYO - It was first reported last year that China had the world's second biggest economy, but data released from Japan Sunday finally confirmed that.


A late-year downturn was Japan's first quarterly contraction in more than a year, and is partly the reason for the change in international economic hierarchy.


Japan's real GDP expanded 3.9 percent in the calendar year in the first annual growth in three years, but it wasn't enough to hold off a surging China. Japan's nominal GDP last year came to $5.4742 trillion, less than China's total of $5.8786 trillion, the Japanese Cabinet Office said.


"It's realistic to say that within 10 years China will be roughly the same size as the US economy," Tom Miller of GK Dragonomics, a Beijing-based economic consultancy, told the BBC.

While China's economy is massive and growing at staggering rates, it is not entirely right to compare it to Japan's economy because of China's massive rural, poor population. China's per-capita income is about $3,600, less than one-tenth that of the United States or Japan, reports the New York Times.
http://www.cbsnews.com/8301-503983_162-20031720-503983.html

Question, if China creates so many goods, why is it in poverty?

Race to the bottom.

If China's per-capita income matched that of the US or Japan, it would be an economic powerhouse with no comparison in history.