China Set to Become World's No. 2 Economy

China is on track to overtake Japan to become the world's second largest economy and is expected to dethrone the U.S. in 2019.

Yi Gang, deputy governor of the People's Bank of China said Friday that the Chinese economy outpaced Japan's in the first half of this year. It is the first time that a Chinese official has made such a remark.

"China's GDP as of late last year totaled US$4.99 trillion, slightly lower than Japan's $5.07 trillion, but with China's 11.1 percent growth in the first six months of this year its GDP is already at $5.54 trillion," said Wang Songqi, deputy director of the Finance Research Center at the Chinese Academy of Social Sciences.

Once Japan announces its first-half GDP in mid-August, it will be clear that China has pulled ahead, Wang told Hong Kong's Wenweipo newspaper.

If Japan achieves its growth target of 2.6 percent this year its GDP will amount to $5.20 trillion for the January to June period. Even at 5 percent growth Japan's GDP would reach only $5.32 trillion, still behind China.

Meanwhile, the U.K.'s National Institute of Economic and Social Research forecast in a report released in late July that China will eclipse the U.S. in 2019. It assumed China to grow 11.6 percent this year and 8 percent on average afterwards, and the U.S. 3.1 percent and 3 percent respectively.

The World Bank and Deutsche Bank have predicted China to pull ahead of the U.S. in 2020, while Goldman Sachs has forecast 2027 and JPMorgan between 2020 and 2025.

englishnews@chosun.com / Aug. 02, 2010 08:40 KST