Closes in on Japan as second-largest economy.
China raised its 2008 growth estimate to 9.6 per cent from 9 per cent and said this year’s quarterly figures will increase, narrowing the gap with Japan, the world’s second-biggest economy.
Gross domestic product was 31.405 trillion yuan ($4.6 trillion) last year, the statistics bureau said at a briefing in Beijing today. That compares with a previous 30.067 trillion yuan and the World Bank’s estimate of $4.9 trillion for Japan.
China’s expansion will be more than 8 per cent in 2009, according to government officials, and the nation is poised to overtake Japan next year, International Monetary Fund projections show. Today’s figures result from an economic census which showed a bigger contribution from services and continue a pattern of China revising up preliminary growth estimates.
“The big underlying factor propelling China’s growth is the continued migration of people from the agricultural sector to the more modern economy — industry and services,” said David Cohen, an economist at Action Economic in Singapore. “There’s no stopping China.”
For 2009, revisions will mainly affect the value of the year’s gross domestic product, with a “very small” impact on the growth rate, said Peng Zhilong, the head of the bureau’s national economy calculation department.
China’s expansion in 2008 compares with US growth of less than 1 per cent. Japan’s gross domestic product shrank 1.2 per cent. The Indian economy expanded 6.7 per cent in the fiscal year ended March 2009.
This year, the Chinese economy grew 8.9 per cent in the third quarter from a year earlier, 7.9 per cent in the second and 6.1 per cent in the first. The government has pledged to maintain a “moderately loose” monetary policy in 2010 to sustain a rebound driven by a stimulus package and record lending.
The pace of growth is attracting more investment. Foreign direct investment climbed 32 per cent in November to $7 billion from a year earlier. Luxury carmaker Bayerische Motoren Werke AG said last month that it will build a new factory worth 5 billion yuan in China to tap an auto market set to overtake the US as the world’s largest.
“Investors are anxious to participate in what remains, with India, the biggest story that’s out there,” Action Economics’ Cohen said.
Today’s figures showed a 13.1 trillion yuan contribution from services in 2008, compared with 12 trillion yuan previously. The census, intended to give a better picture of the economy’s make-up, focused on industry and services rather than agriculture.
