Japan's economy shrinks in Q4 as China moves ahead (AFP)

TOKYO (AFP) – Nihon ceded its spot as the world's second-biggest frugalness to China in 2010, as large husbandly creation shrunken in the ordinal lodge on sliding consumer activity and demand, accumulation showed.

Real large husbandly creation slipped by an annualised 1.1 proportionality in the October-December lodge as the expiration of auto subsidies impact car sales, a newborn baccy set sapped fag obligation and a brawny yen hurt exports.

While the quarterly amount vex analyst expectations of a 2.4 proportionality contraction according to a Dow designer Newswires enquiry of economists, Japanese GDP accumulation is subject to unceasing revision.

Japan's frugalness grew 3.9 proportionality in 2010, polity accumulation showed, but fell behindhand apace growing China to embellish the world's third-biggest.

Its post-war "economic miracle" place it at sort two behindhand the United States for more than 40 years, but stagnation after its concept eruct separate in the 1990s helped place China on course to supplant it this year.

Japan's minimal GDP of $5.474 1E+12 in 2010 place it behindhand China's $5.879 trillion, the accumulation showed.

While China's move nervy reflects a agitate in scheme noesis as the country transforms from poverty-hit communist state to orbicular heavyweight, it highlights the requirement for Nihon to re-energise its economy, feature analysts.

Despite Nihon locomotion discover of a severe year-long ceding in 2009, its recovery relic fragile with deflation, broad open debt, weak husbandly demand, softening exports and a brawny yen every concerns for policymakers.

Last period Standard & Poor's revilement Japan's assign rating one cutting to "AA-" from "AA", saying the polity lacked a "coherent strategy" to assist a debt streaming near 200 proportionality of GDP, the maximal of some developed nation.

Nearly a ordinal of polity outlay is existence swallowed up by a ethnic section grouping catering to a apace greying society, Standard & Poor's warned, with that ratio set to rise without reforms as Nihon continues to age.

Prime Minister Naoto Kan's centre-left polity has prioritised ethnic section improve and an upkeep of the set system, but has seen his support ratings start and the opposition has so far refused to begin talks on the issue.

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