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China Surpasses Japan as World's Number Two Economy

Officials say Japan lost its place as the world's number two economy to China in the second quarter, as the island nation's economic growth slowed to a crawl.

Japan's Cabinet Office said Monday that gross domestic product rose an annualized 0.4 percent in the three months ended June 3, compared with a revised 4.4 percent expansion in the first quarter.

Monday's report said export growth slowed and consumer spending stalled. The expansion was weaker than economists estimated, with their predictions ranging from 0.6 percent to 3.4 percent.

Analysts say China's economy will almost certainly be bigger than Japan's at the end of the year, because of the big difference in each country's growth rates. China is growing at about 10 percent per year, while Japan's economy is forecast to grow three percent this year.

China continues to increase its global economic clout, and is already the world's biggest exporter, auto buyer and steel producer.

Some information for this report was provided by AP and Reuters.

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