NEWS this week that the size of China's economy surpassed that of Japan's in the second quarter of 2010 generated a good deal of excitement, not least among newspaper editors (this being the 'silly season' for news). But in the rush to report this 'epochal' event, many commentators got rather carried away and missed its essential significance.
The simple fact of China's GDP (measured in nominal dollar terms) surpassing that of Japan's for a single quarter is nothing new; it has happened on several occasions in the past as the two have run neck and neck, and then Japan has once more (barely) regained the lead. This seems to have gone largely unnoticed up until now.
Read Full Article »