Forex Chief: China's Economy Raced Past Japan

The head of the country's foreign exchange agency, Yi Gang, also expects 9 percent GDP growth this year but slower expansion over the next decade

China's economy is now larger than Japan’s and is likely to grow 9 percent in 2010, according to Yi Gang, head of the State Administration of Foreign Exchange.

In an interview with Caixin Media's China Reform magazine, Yi said China overtook Japan this year and now has the second-largest economy in the world after the United States.

China reached this milestone by averaging 9.5 percent growth every year since embarking on market reforms in 1978. Over the past 10 years alone, Yi said, GDP growth has exceeded 10 percent annually.

Now that the economy has swelled, Yi said, growth will gradually slow over the next decade to 7 or 8 percent annually.

He said the government's current concern should focus on the quality of growth based on adjustments in economic structure and the growth model.

Yi, whose agency manages China's foreign reserves, also said the government will insist on diversifying its currency as well as forex investments according to China's economic conditions.

The full interview appears in the August issue of China Reform.