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Economy

Confirmed: China Has World's No. 2 Economy; Passes Japan

Sparks flew at a steel mill in Hefei, in eastern China's Anhui province, on Dec. 23, 2010. AFP/Getty Images hide caption

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AFP/Getty Images

Sparks flew at a steel mill in Hefei, in eastern China's Anhui province, on Dec. 23, 2010.

AFP/Getty Images

A much-anticipated milestone was reached today:

"China passed Japan in 2010 to become the world's second-largest economy after the U.S.," The Wall Street Journal writes, adding that this is "a historic shift that has drawn mixed emotions in the two Asian powers: resignation tinged with soul-searching in long-stagnant Japan, pride but also caution in an ascendant China wary of shouldering new global responsibilities."

The Journal says "the Japanese government made official the long-expected flip Monday morning in Tokyo, reporting that the economy shrank at a 1.1 percent annual rate for the last three months of the year, a period when China's gross domestic product surged 9.8 percent from a year earlier. With those figures, Japan's full-year GDP was $5.47 trillion — about 7 percent smaller than the $5.88 trillion China reported in January."

America's GDP is approaching $15 trillion annually. And as the Brookings Institution reminded everyone over the weekend, on a per capita basis the U.S. economy is even further ahead of China's. In 2009, U.S. per capital GDP was nearly $42,000. China's was about $6,200.

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