Thirty years ago in its heyday Japan’s economy was bigger than the whole of Asia combined. Today it is the size of just three Chinese coastal regions.

Japan has been the economic powerhouse of Asia for decades. Not any more as China’s economic growth sprints past it and is now the largest economy in the world in PPP (purchase power parity) adjusted terms. And China is not alone: the other big economies of SE Asia have been accelerating and are closing in on Japan, which has been suffering from a lost decade since its economic meltdown at the start of the 1990s.

In 1995, Japan’s nominal gross domestic product stood at roughly $5.5 trillion, accounting for around 18% of global output and making it the world’s second-largest economy.

Today, however, Japan’s economy is estimated at about $4.2 trillion -$4.4 trillion in nominal terms, having been constrained by decades of low growth, demographic decline and persistent deflationary pressures. By contrast, China’s rapid industrialisation and export-led expansion have transformed the balance of economic power in Asia.

China’s wealthiest coastal province, Guangdong, generated output of approximately CNY14 trillion ($1.9 trillion) in 2025. From the other rich regions, Jiangsu produced roughly CNY13.7 trillion ($1.9 trillion), while Shandong’s economy exceeded CNY10 trillion ($1.4 trillion). Combined, the three provinces generated more than $5 trillion of economic output, surpassing Japan’s entire economy.

The rise of the BRICS has seen all the emerging markets catch up and now overtake the more developed nations. China overtook Japan in 2010, while India has emerged as one of the fastest-growing major economies. Southeast Asian nations, including Indonesia and Vietnam, have also increased their share of global output as their economic growth also accelerates.

The trend is even more pronounced when measured using purchasing power parity (PPP), which adjusts for differences in price levels between countries. According to International Monetary Fund data, the BRICS+ (Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Iran, Indonesia and the United Arab Emirates) now accounts for a larger share of global GDP on a PPP basis than the Group of Seven advanced economies. BRICS+ economies represented more than 35% of global GDP on a PPP basis in 2025, compared with roughly 29% for the G7.