An article was recently published on Baijiahao, Baidu's information dissemination platform that continues to operate from China, stating that the per capita GDP of Beijing and and Shanghai will surpass Japan this year (2026).

Shanghai's GDP for the first half of 2026 was 2,788.663 billion yuan (approximately 65 trillion yen), exceeding 400 billion dollars when converted at the average exchange rate for the same period.

Meanwhile, Japan's nominal GDP in 2025 was approximately 4.4 trillion dollars (approximately 690 trillion yen). The annualized GDP growth rate for the first quarter of 2026 (January-March) was revised downward from an initial 2.1% to 1.8%. The Bank of Japan predicted a GDP growth rate of 0.6% for fiscal year 2026 on July 31st, while the OECD predicted 0.7%.

In 2025, Beijing's per capita GDP was approximately 33,000 dollars (approximately 5.2 million yen) in dollar terms, Shanghai's was approximately 32,000 dollars (approximately 5 million yen), and Japan's was approximately 36,000 dollars (approximately 5.7 million yen). At this point, the per capita GDP of Beijing and Shanghai was extremely close to that of Japan.

Beijing's GDP grew by a real 5.4% in the first half of 2026, and Shanghai's grew by a real 5.6%. There is a high probability that the full-year real annual growth rate for both cities will be 5% or more. The Bank of Japan predicted Japan's full-year growth to be 0.6%, and the OECD predicted 0.7%.

China is emerging from deflation, and its nominal growth rate surpassed its real growth rate. Shanghai's nominal growth rate in the first half reached 6.3%, and Beijing's was approximately 5.5%. Japan's real growth rate is very low, and it is unlikely that its nominal growth rate will significantly exceed its real growth rate.

A further significant impact on Japan's GDP is the ongoing depreciation of the yen. On August 5, 2026, 1 yuan (base value) was approximately 23.31 yen. However, a year ago, 1 yuan was approximately 19.23 yen. This means the Japanese yen depreciated by nearly 20% against the renminbi in one year.

In the yen-dollar exchange rate, the yen started the year at approximately 156 yen to the dollar, briefly approached 164 yen in late July, and updated a 40-year low since 1986. After the coordinated US-Japan intervention on August 3, it temporarily pulled back to around 155 yen, but as of August 5, it returned to 157.66 yen.

The full-year average exchange rate for the yen in 2026 is highly likely to be in the range of 155-160 yen to the dollar. Japan's yen-dollar exchange rate in 2025 was approximately 140 yen to the dollar. This means the Japanese yen will depreciate by more than an additional 10% against the dollar in one year.

Beijing's per capita GDP in 2026 is projected to grow by a real 5.4%, with a GDP deflator of approximately 1.5%-2% and a nominal growth rate of approximately 7%-7.5%. Therefore, the full-year per capita GDP is expected to be approximately 265,000-270,000 yuan (approximately 6.2-6.3 million yen). Converted at the 2026 average exchange rate of 1 dollar = 6.7-6.8 yuan, this amounts to approximately 39,000-40,000 dollars.

Shanghai's per capita GDP in 2026 is expected to grow by a real 5.6%, with a nominal growth rate of approximately 7.5%-8%. The full-year per capita GDP is projected to be approximately 275,000-280,000 yuan (approximately 6.4-6.5 million yen). Converted at the 2026 average exchange rate, this amounts to approximately 40,000-42,000 dollars.

Japan's annualized nominal GDP growth rate in the first quarter of 2026 was 2.5%, while the real growth rate was only 1.8%. The full-year real growth rate will be 0.6%-0.7%, and the nominal growth rate will be approximately 2.5%-3%. Converted at the full-year average exchange rate of 1 dollar = 155-158 yen, Japan's GDP in 2026 will be approximately 4.3-4.45 trillion dollars (approximately 680-700 trillion yen), and its per capita GDP will be approximately 35,000-36,000 dollars (approximately 5.5-5.7 million yen). In other words, Japan's per capita GDP is expected to be overtaken by Shanghai and Beijing in 2026.

It is true that exchange rates are a major factor in Shanghai's and Beijing's per capita GDP surpassing Japan's. The appreciation of the renminbi and the depreciation of the yen make the comparison of figures more 'favorable' for the Chinese side. However, behind this is the 'improvement in capabilities' on the Chinese side.

Beijing's integrated circuit industry grew by 92.1% in the first half of 2026, and service robot sales tripled (3.3 times). Shanghai's GDP in the first half exceeded 400 billion dollars (approximately 63 trillion yen), and the production value of its three leading industries—integrated circuits, biopharmaceuticals, and artificial intelligence (AI)—increased by 14.5%. Industrial sophistication continues, and new quality productive forces are filling the wounds left by the real estate sector. The end of deflation has accelerated nominal growth rates, increasing the attractiveness of renminbi assets.

Japan's nominal GDP grew by 4.5% in 2025, but over 70% of that was driven by price increases, not actual production growth. While Japan's population decline is a factor that could boost per capita GDP, per capita GDP may still decrease because the contraction of the total economy outweighs the effect of population decline.

Japan's per capita GDP has been surpassed by Hong Kong, Macau, and Taiwan for about 20 years. For the full year 2026, it will also be significantly overtaken by Beijing and Shanghai. Following them will be provinces like Jiangsu, Zhejiang, and Fujian. (Translation/Editing by Kisaragi Hayato)