China ups 2007 growth estimate, now world's third largest economy

Posted Jan 14th 2009 1:16PM by Joseph Lazzaro
Filed under: Forecasts, China, Economic Data

Amid the global recession there has been one sign of economic growth, albeit retroactive growth.

China has revised its estimate for 2007 GDP growth to 13% from the previously-released 11.9%, the Associated Press reports. With the revision China's 2007 GDP totaled $3.5 trillion, passing Germany's $3.3 trillion for third place, globally. (The United States is first, followed by Japan. And I should note that Germany is part of the European Union, and if the E.U. were ranked collectively, it would be the largest economy in the world, followed by the United States, Japan, then China.)

Economist David H. Wang, a China expert, said it's not unusual to see a large change in an emerging market nation's GDP estimate given the frenetic nature of a developing economy's expansion.

"Developing markets are characterized by overbuilding, excesses, inflation, and isolated shortages, and this has been the case in China. We know that growth had been strong up until the financial crisis. My reading now is that China's GDP is currently growing at a 7-8.5% annualized rate," Wang said. "Like the rest of the world, there's been a pronounced slowdown in China, but that doesn't blot out the impressive growth registered from 2003 to 2007."

In fact, if evaluated on a purchasing power parity (PPP) basis, which accounts for a nation's cost of living, China's GDP is about $7.5-8.0 trillion, Wang said.

Economic Analysis: China's growth and economic development during the decade has indeed been impressive. What's needed now: efforts to encourage China's growing middle class and working class to consume more, creating another source of demand for the global economy, which will help end the global recession.

Tags: emerging markets, EU, European Union, gdp, Germany, Japan, purchasing power parity, U.S., United States

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Reader Comments (Page 1 of 1)

1-16-2009 @ 12:27AM

Sailingwindward said...

As China's economy is growing ours is shrinking, since 2001 our imports from China have increased over four hundred percent (400%) that's why the US is in a recession and unemployment keeps rising, free trade is unfair trade to the US and if we don't do something now our recession will deepen to a depression. If our elected leaders would stop taking bribe money from corporate & foreign lobbyists and actually do something for the people who elected them we might stand a chance to get out of this alive, if not I wish us all luck.