MercoPress. South Atlantic News Agency

Alleging national security, China plans to review foreign attempts to buy local companies

Japan confirms China as the world’s second largest economy

China is launching a body to review foreign attempts to buy local companies in a move that might add to strains over access to its markets.

The government's weekend announcement says the reviews are aimed at safeguarding national security. But it says reviews will apply to a range of industries including farming, energy, transportation and key technologies, in addition to military-related businesses.

Beijing faces mounting foreign complaints that it is trying to support Chinese companies by using regulations to limit access to key industries, in possible violation of its free-trade commitments.

The announcement comes when China was confirmed as the world’s second largest economy behind the US and ahead of Japan…

According to Japanese figures released Monday its nominal GDP figures for 2010. Japan's economy was valued at 5.4742 trillion US dollars while China was at 5.878,6 trillion US dollars.

Japan's economy did grow in 2010, but only 3.9%, according to the government. China's is expected to grow more than 10%. At the speed China is growing, Japan's government predicts China will overtake the United States as the world's largest economy in less than 20 years.

China has expanded domestic industries and infrastructure, driven by a surge in exports. Multinational corporations have expanded in China, taking advantage of low labor costs.

Japan, meanwhile, has been stuck in stagnation and deflation for two decades. Decisive economic policy has been lost in the revolving door of the country's top leader, with Japan seeing six prime ministers in just five years. Looking ahead, Japan is facing a demographic tsunami, with the world's fastest aging population and one of the globe's lowest birth rates.

On the national debt issue, Japan's parliament is struggling to cap its GDP-to-debt ratio, which is nearing 200%, the world highest among developed nations.

The size of an economy does not tell the entire picture: Japan's GDP per head is around 40,000 USD while China's is 4,500 USD. The standards of living remain remarkably different in the two countries.