The Chinese economy has been running at steady speed in the last few years, while Japan has been facing recession or very low growth rate. And all these have forced Japan from the position of being the world’s second largest economy. And China has snatched up the second spot , only after US.
Now, China is the world’s largest in many important parameters, be it population or be it automobile sales numbers or mobile phone connection numbers or iron ore consumption or steel production or exports value.
China has a huge demographic advantage in terms of middle aged active population longing to work for low salaries, and that is being put to effective use by the Chinese government. When the going is good, the government in power is going to remain popular. So expect more bolder measures from the Chinese government in the coming months which in turn could help the country to widen the gap with Japan. Then it may eventually become the permanent number two economy in the world for many years to come.