On Monday, August 16th, China presented irrevocable evidence that it is indeed on the fast track toward becoming a formidable world power. With its GDP amounting to $1.34 trillion, the country was able to overtake Japan as the second largest economy in the world.

Currently, Japan’s overall economic output totals $1.29 trillion. Its economy grew 0.4 percent during the second quarter, substantially less than forecasted.

Jesper Koll, an economist with JPMorgan in Tokyo, predicts that China’s economy may grow up to 8 percent per year over the next decade. Japan’s underlying growth rate, on the other hand, will be one percent.

Several factors are helping China rise up the world economic ladder. Unlike Japan and other established economies, China has only just started its boom of urbanization. There is a lot of room for growth within the country. It also has a lower standard of living, an aspect that has greatly appealed to outsourcing companies.

According to another economist, Frederic Neumann at HSBC in Hong Kong, if China continues its rapid growth, it may be able to solidify its position as the world’s second largest economy by the end of the year. By 2030, it may even overturn the United States as the reigning economic power. China has already overturned several established European economic powers over the last few years, including Germany, France, and Great Britain.

The implications are not limited merely to economics. The way I see it, as more wealth is distributed to China’s vast population, the quality of life can begin to equalize among its peoples, and relative to the citizens of other, more established, developed countries in the west. If China can become like Japan, Brunei and Singapore, with their excellent poverty ratings, a larger absolute number of people, by far, stand to benefit. And as China’s economy grows, its neighboring countries can also take advantage through trade and human resource exchanges.