China becomes world's third-largest economy

CHINA OVERTOOK Germany to become the world’s third-largest economy in 2007 after the Chinese authorities yesterday revised upwards the figures for growth during that year.

China’s National Bureau of Statistics said the economy expanded by 13 per cent in 2007, a sharp increase from the 11.9 per cent growth rate the authorities had previously stated.

With only the US and Japan larger than China, the new figures highlight the rapid transformation that the Chinese economy has undergone during the past 30 years since Mao-era controls were eased, although it is experiencing the toughest period in a decade as a result of the global financial crisis.

The fresh data will reinforce the case to give China and other large emerging economies a bigger role in global financial decision-making, even though China has been hesitant about taking on new responsibilities.

“It is symbolically significant that China is now bigger than Germany and it will not be too long before its economy overtakes Japan,” said Mark Williams at Capital Economics in London.

Many economists reckon that Chinese growth in 2009 will fall well short of the 8 per cent government officials are forecasting.

Growth in China has slowed sharply in recent months. However, given the steep declines forecast for many developed economies, China will remain one of the main contributors to global growth. – ( Financial Timesservice)