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Monday, 31 December, 2001, 14:12 GMT
China's economy 'overtakes Italy's'
Electronics production line
China's labour costs makes it highly competitive
China's continuing economic growth has taken it above Italy in world rankings, a financial information group has said.

China enjoyed 7.3% growth in economic output, or GDP, in 2001, the State Statistical Bureau's website said on Monday in a preliminary forecast.

Economic growth update
Year 2001
China: +7.3%
Vietnam: +6.8%
Georgia: +5%
Israel: -0.5%
Singapore: -2.2%

Others

Finland: -0.7% (Oct-Oct)
India: +5.3% (July-Sept)
Sri Lanka: -3.7% (July-Sept)
The growth, in line with forecasts, contrasts with that recorded by many other Asian countries, including recession-hit Singapore which on Monday revealed its economic output had shrunk by 2.2% this year.

Japan has also entered recession again, while Hong Kong and Taiwan are both on the brink of reporting an economic contraction.

And while Vietnam on Monday reported strong growth, of 6.8% in 2001, the figure was below forecasts.

China's figure confirms its place on the world economic stage, with financial information group Bloomberg predicting the country had overtaken Italy, and was challenging France, in the global rankings.

Outstripping France

"Compared to the rest of Asia, [China's] is definitely one of the highest economic growth rates," said Liao Qun, senior economist for Standard Chartered Bank in Hong Kong.

One report says that China's economy is growing faster than any other major country, and that it has surpassed Italy to become the sixth largest economy in the world.

At current exchange levels, China could overtake France next year, and the UK by 2005 or 2006, Bloomberg said.

China's trade volume is forecast to hit a record $500bn (344.4bn; 564.4 euros) in 2001, while its gross domestic product was about $1.16 trillion.

Unsustainable?

But there are also some indications that the pace of expansion is beginning to slow, with growth in the last three months of the year estimated to have slipped below 7%.

And experts say China will be hard-pushed to sustain such growth next year when its key export markets - Japan and the US - are suffering a severe slowdown.

China has set itself the target of achieving 7% growth until 2005.

While the growth figure was in line with expectations, some Western economists have questioned the accuracy of the report given that it is compiled before the end of the year.

Other countries reporting GDP figures on Monday included Finland, Georgia, India and Sri Lanka.

India blamed a GDP slowdown to 5.3% in the July to September period, from 6.2% last year, on a poor performance in the mining and manufacturing sectors.

Agriculture, fishing and forestry sectors saw their output rise by 3.4%, from a rate of 0.5% a year earlier.

See also:

31 Dec 01 | South Asia
Sri Lanka economy 'in recession'
31 Dec 01 | Business
Singapore prepares for lean times
28 Dec 01 | Business
China issues record stock fraud fine
13 Dec 01 | Business
China: an economic super power?
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