Aug. 2 – China has overtaken Japan to become the world’s second biggest economy according to a leading Chinese economist.

Yi Gang, the deputy governor of the People’s Bank of China said on Friday that the Chinese economy outpaced Japan’s in the first half of 2010.

“China, in fact, is now already the world’s second-largest economy,” Yi said.

China is the world’s biggest exporter, auto buyer and steel producer, and rising income levels have fueled domestic consumption that has increasingly fed the fortunes of international companies. But this growth has also created a growing income gap between the wealthy elite who have profited from China’s rise and a poor majority. China’s per capita income of US$3,600 is still a fraction of most industrialized nations – Japan’s per capita income in 2009 was US$37,800 while the United States, the largest economy in the world, was US$42,240.

The exact amount by which China has passed Japan has yet to be determined due to changing exchange rates and differing economic reports released by the two nations.