TOKYO, February 14, 2011 (AFP) – Japan ceded its spot as the world’s second-biggest economy to China in 2010, as gross domestic product contracted in the fourth quarter on sliding consumer consumption and demand, data showed. Real gross domestic product slipped by an annualised 1.1 percent in the October-December quarter as the expiration of auto subsidies hit car sales, a new tobacco tax sapped cigarette demand and a strong yen hurt exports.
While the quarterly figure beat analyst expectations of a 2.4 percent contraction according to a Dow Jones Newswires poll of economists, Japanese GDP data is subject to constant revision.
Japan’s economy grew 3.9 percent in 2010, government data showed, but fell behind rapidly growing China to become the world’s third-biggest.
Its post-war “economic miracle” put it at number two behind the United States for more than 40 years, but stagnation after its property bubble burst in the 1990s helped put China on course to supplant it this year.
Japan’s nominal GDP of $5.474 trillion in 2010 put it behind China’s $5.879 trillion, the data showed.
While China’s leap forward reflects a shift in economic power as the country transforms from poverty-hit communist state to gl