Great leap forward in China's GDP

BEIJING - China is likely to declare itself the world's fourth largest economy next week, leapfrogging Italy, France and Britain, helped by a likely huge revision of its gross domestic product figures.

Economists say the National Bureau of Statistics, which is due to release part of the results of its first national economic census on Tuesday, is likely to put a much bigger figure on the size of China's services sector.

The South China Morning Post of Hong Kong says the agency will probably revise GDP up by as much as US$300 billion ($424 billion), or about 20 per cent of 2004 output.

A revision of that magnitude could catapult China from the world's seventh-largest economy into fourth spot, now occupied by Britain.

Jim O'Neill, chief global economist at Goldman Sachs in London, said China could attain that status even without such a big revision based on growth rates and currency changes in 2005.

China has grown far more quickly than Italy, France and Britain this year, but the yuan has risen about 2.5 per cent against the US dollar.

The euro and sterling, by contrast, have fallen.

"China could squeak in ahead of Britain even without a revision," O'Neill said. "It just goes to show how much it's contributing to the world economy."

Economists said an upward revision of 20 per cent would be in line with their own estimates - or could even be too modest.

- REUTERS