China economy overtakes Japan

By Mure Dickie in Tokyo Published: February 14 2011 02:30 | Last updated: February 14 2011 19:59 China replaced Japan as the world¶s second-largest economy in dollar terms last year, Japanese data have confirmed, a long-awaited event that underscores Beijing¶s rapidly growing global clout. Gloomy outlook: Japanese domestic demand has been undermined by the revenue-strapped government¶s efforts to redirect spending away from public works

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beyondbrics: Another way to go long on China - Feb-14 China trade surplus drops as imports rise - Feb-14 Trade data hint at further pain for Japan - Dec-22 FT series: Retooling Japan - Feb-08 Support for Kan dips to new low - Feb-13 Japan boosted by GDP revision - Dec-09 In Japan, which had basked in the status of number two in global economic terms after the US for more than four decades, government leaders welcomed the passing of the baton as a reminder of the opportunities presented by China¶s modernisation. "The Chinese economy's advance is a happy thing for neighbouring countries," said Kaoru Yosano, minister for economic and fiscal policy. Tokyo¶s focus was on improving citizens¶ livelihoods, not "fighting for a ranking", Mr Yosano said. Monday¶s data showed that Japan¶s economy expanded 3.9 per cent in 2010 ± its fastest pace in two decades, but far behind the 10.3 per cent growth recorded by China. Japanese officials said Japan¶s nominal gross domestic product was worth $5,474bn in 2010 compared with China's $5,879bn. The shifting of the global ranking has few practical implications, given that China¶s economy has been bigger than Japan¶s in dollar terms since the second quarter of 2010. In purchasing

8 per cent drop in public investment. which was equivalent to a 1." said Kiichi Murashima.often a more telling measure of economic weight . Economists also expect a pick-up in domestic public works in the current quarter as spending approved as part of a "supplementary budget " last November starts to take effect. a vital driver of growth. "Exports. But trade data for December suggest that exports to the US are already recovering. Faltering demand from the US hurt Japanese exports. The fourth-quarter contraction. economist at Citigroup in Tokyo.7 per cent in the fourth quarter after the yen rose to a 15-year nominal high against the dollar. GDP fell 1. which were down 0.1 per cent decline on an annualised basis. was triggered in part by weakening private consumption caused by the expiry or reduction of government subsidies on car purchases and other consumer goods that had helped to inflate demand in the previous three months . which has been struggling to shake off the effects of its sharpest post-war recession and is suffering chronic deflation and rapidly growing government debt. which caused a sharp 5.China has been the world's second largest economy for years.3 per cent in 2009. while demand from China remains strong. Domestic demand was also undermined by the revenue-strapped government's efforts to redirect spending away from public works. In a reminder of the fragility of the recovery. But the symbolic shift is likely to fuel popular worries about the long-term prospects of Japan." Chevron fined for Amazon pollution by Ecuador court . analysts and officials say the economy is already regaining steam. Japan's output remains well below pre-financial crisis levels. However. its first contraction since mid-2009.2 per cent in 2008 and an exceedingly painful 6. While last year's growth outpaced that of other major advanced nations. Monday¶s preliminary data suggested GDP shrank 0.3 per cent quarter-on-quarter between October and December. housing and business investment and also public works spending are likely to more than offset the negative impact from declining consumption.power parity terms . "We expect a return to positive growth in the first quarter.

and called the ruling "illegitimate and unenforceable".Maria Eugenia Briceno lives in the area affected by the pollution Continue reading the main story Related Stories y y y Texaco faces $1bn lawsuit Ecuador's Amazon drilling pledge still to take shape Ecuador country profile A court in Ecuador has fined US oil giant Chevron $8.6bn (£5.9bn). which merged with Chevron in 2001. Campaigners say crops were damaged and farm animals killed. Chevron said it would appeal. and that local cancer rates increased. was accused of dumping billions of gallons of toxic materials into unlined pits and Amazon rivers. bringing the total penalty to $9.5bn (£5." he told the BBC.3bn) for polluting a large part of the country's Amazon region. lawyer for the plaintiffs. Pablo Fajardo. described the court ruling as "a triumph of justice over Chevron's crime and economic power". The company will also have to pay a 10% legally mandated reparations fee. A Chevron statement said the firm would appeal. "This is an important step but we're going to appeal this sentence because we think that the damages awarded are not enough considering the environmental damage caused by Chevron here in Ecuador. Hopes of precedent . The oil firm Texaco. Condemning the ruling as fraudulent.

Chevron has long contended that the court-appointed expert in the case was unduly influenced by the plaintiffs.000 Ecuadoreans. At that time. forcing companies operating in developing countries to comply with the same anti-pollution standards as in the industrialised world. Its statement described the ruling as "the product of fraud (and) contrary to the legitimate scientific evidence". The plaintiffs said the company's activities had destroyed large areas of rainforest and also led to an increased risk of cancer among the local population. farm animals killed and cancer increased among the local population.dumped more than 18 billion gallons (68 billion litres) of toxic materials into the unlined pits and rivers between 1972 and 1992. Ecuadorean Indian groups said Texaco . Crops were damaged. . Protesters said the company had destroyed their livelihood. they said.The lawsuit was brought on behalf of 30. The trial began in 2003 after almost a decade of legal battles in the US. in a case which dragged on for nearly two decades. Environmentalists hope the case will set a precedent. a US appeals court ruled that the case should be heard in Ecuador.which merged with Chevron in 2001 .

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