China closing in on Japan as worlds 2nd for GDP

China could replace Japan as the world’s second highest producer in gross domestic product, according to an expert at Japan’s Nomura Institute of Capital Market Research.

If China’s economic growth hit eight percent, as its leaders claim, the Chinese GDP will exceed Japan’s and stand only second to the United States in economic power, said Kwan Chi Hung, senior fellow at the Nomura Institute.

Kwan pointed out various indications that China has recovered quickly from the global economic shock, especially in auto sales. According to Kwan, auto sales in China dropped temporarily after the collapse of Lehman Brothers in September, but increased rapidly this year due to the government’s measure to reduce a tax on purchasing small cars.

“If the trend continues, both auto sales and production will exceed 10 million units this year, making China the largest car market in the world,” said Kwan.