Last quarter China surpassed Japan as the world's second largest economy, a title Japan had held since 1968. The Japanese cabinet reported on Tuesday that its country's economy had a nominal GDP of $5.47 trillion in 2010, behind China's $5.87 trillion.

Although China's booming economy shows off the efforts that the government has put into it over the past few years, the achievement hasn't aroused much enthusiasm from the Chinese public.

Early last year, many economic analysts from other countries predicted that China would surpass Japan, given China's rapid GDP growth over the past few years and Japan's stagnation over the last two decades. Nonetheless, Chinese people remain aware that their living standards lag far behind those in Japan.

Because most local governments are inclined to treat GDP as the holy grail of economic performance, they have blindly encouraged investment and production that is inefficient and has led to excessive environmental pollution, which have damaged people's standard of living. The central government invested 4 trillion yuan ($606.9 million) in a stimulus package to maintain its GDP growth in the aftermath of the global financial crisis. The stimulus helped the country emerge from the recession ahead of other major economies, but didn't improve the country's industrial structure.

Actually, such rapid GDP growth in general has strained the country's resources. It has been illustrated in a series of water pollution incidents in China's major rivers. Because the country's financial power is growing, China should shift its focus from pure economic growth to steady and sustainable economic development that does not come at the cost of its people's standard of living.

According to the International Monetary Fund, China ranks 124th worldwide in terms of GDP per capita, which is barely half the world's average; Japan ranks 32nd. Japan's GDP per capita is 10 times higher than China's.

GDP per capita is a far better indicator of individual living standards whereas GDP itself only gives a snapshot of the economy as a whole. For example, in some small countries in the northern Europe, whose GDPs are dwarfed by China, residents have far higher living standards because their household incomes are higher than in the world's major economies.

What's more, China's widening income disparity and lacking social services have made its residents indifferent to the country's global achievement.

Although China has jumped higher in the world rankings, only a small proportion of Chinese residents have benefited greatly. The growing tax burden and insufficient social services have made it harder than ever for residents to afford housing, education and daily necessities. China's tax revenue reached 7.3 trillion yuan ($1.11 trillion) last year, up 23 percent year-on-year.

China should work hard to deal with the income disparity between rural and urban regions and spend more of its growing revenue on public services to give its people a better standard of living.