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Last Updated: Friday, 16 September 2005, 07:40 GMT 08:40 UK
Chinese economy continues to boom

By Quentin Sommerville
BBC News, Shanghai

Construction work in Beijing
Beijing is enjoying a building boom
China's growth shows no sign of slowing, according a new report by the Organisation for Economic Cooperation and Development (OECD).

In its first analysis of China's economy, the OECD said the private sector now provided half its output.

It found much to praise in one of the most rapid economic transformations of modern times but said there was also room for progress in key areas.

China must do more to improve education spending and protect the environment.

Private sector engine

China's economy has grown by an average of 9.5% a year over the past 20 years and the OECD says it won't slow down any time soon.

In economic terms, the state's grip on the Chinese people is weakening

It predicts that China will overtake most Western economies in the next five years.

In economic terms at least, the state and communist party's grip on the Chinese people is weakening.

Well over half the national income now comes from the private sector, generating most of its new jobs.

China has to deal with its pollution problem, the report says

But China's cradle to grave welfare system has disappeared.

Only a fifth of the country's rural population, its poorest, have any kind of health cover.

Pollution problem

The OECD says the government needs to spend more on health and education.

The quality of the environment is also a serious cause for concern.

Five of the ten most polluted cities in the world lie in China.

The OECD warns that with the pace of economic change remaining strong, the state must work harder to reduce pollution.

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