After looking at the financial results of the various countries for the last quarter, it is predicted that China will become the world’s No. 2 economy this year. The United States is still the world’s largest economy. In 2005, China flew past France, Italy, and the United Kingdom to become No. 4. Last year, it beat Germany to become No. 3. Now it looks like it is all set to bump Japan to take the No. 2 spot.
A country’s gross domestic product (GDP) is used to determine the size of a country’s economy. The GDP of a country is the total value of all the products and services that are produced by the companies and the people of that country over a year. When you get a haircut, you are using a service. When you buy a bike, you are consuming a product. So the value of all the lollipops, ice creams, books, cars, etc. sold and all the services of teachers, doctors, bus drivers, etc. are calculated and added. For comparison, here are the GDPs of the top three largest economies of the world in 2009. Just remember – a trillion is 1 followed by 12 zeros!
U.S.A.- $14.26 trillion
Japan – $5.07 trillion
China – $4.91 trillion
Another interesting number to look at is the amount of money made in a year per person in a country. This is calculated by dividing the GDP by the population. For example, the GDP per person in Japan last year was about $33,000 while that in China was under $4,000. So China still has a long way to go before it catches up with Japan on the amount of money each citizen makes.
China’s economy has been growing at a very fast rate. China bumped Germany and became the world’s biggest exporter (sells goods and services to other countries) in 2009. It is quite common to find the label “Made In China” on products you buy all around the globe. Not only that, the Chinese people are also buying more products. For example, last year there were more cars and vans sold in China as compared to any other country in the world.
Some of the world’s largest companies today are in China. PetroChina (oil and gas company) is the world’s biggest company. It is worth more than everything produced in all of New Zealand! Industrial and Commercial Bank of China is the world’s largest bank, China Life is the world’s largest life insurance company, and China Mobile is the world’s largest telecom company!
Both the Chinese currency (yuan) and Japanese currency (yen) use the same currency sign, which is a Y with two lines.