China Overtakes Japan to Reach No. 2 on List of Economic Output

China passed Japan on the list of the world's largest economies early Monday, taking the No. 2 spot behind the United States, after Japan released its economic output figures for the second quarter, The New York Times reported.

Japan reported a second-quarter gross domestic product of $1.288 trillion, which was less than the $1.339 trillion reported by China for the three-month period that ended June 30.

China has surpassed Japan in economic output before, but that was in the last quarter of the year when the Chinese economy sees a seasonal lift, according to The Wall Street Journal. "Once final numbers for all of 2010 are compiled, many economists expect China to overtake Japan as the world's second-largest national economy in U.S. dollar terms," the Journal said.

The Times quoted Nicholas R. Lardy, an economist at the Peterson Institute for International Economics, as saying: "This has enormous significance. It reconfirms what's been happening for the better part of a decade: China has been eclipsing Japan economically. For everyone in China's region, they're now the biggest trading partner rather than the U.S. or Japan."

The gap between China and the United States remains large and "it would take China a decade or more to match the U.S." at current growth rates, the Journal said.